Transcript Project Management

Introduction to
Project Management
Welcome
• Please tell me about you;
– Name
– Company
– Years of Professional Experience
– What you hope to learn this week?
– When do you plan to take the test?
Day
Monday
Tuesday
Wednesday
Subject
Projected
Time
Number
Start
Finish
of Slides
Introductions to PMP
9:00
9:30
1 thru 13
Framework
9:30
10:15
14 thru 31
Break
10:15
10:30
Framework Exercises
10:30
11:15
Integration
11:15
12:00
Lunch
12:00
1:00
Integration Exercises
1:00
1:30
Scope
1:30
2:15
Break
2:15
2:30
Scope Cont
2:30
4:00
Scope Exercises
4:00
5:00
Time
9:00
10:15
Break
10:15
10:30
Time
10:30
12:00
Lunch
12:00
1:00
Time Exercise
1:00
2:15
Break
2:15
2:30
Cost
2:30
5:00
90 thru 107
Cost
9:00
10:15
107 thru 118
Break
10:15
10:30
Cost Exercises
10:30
12:00
Lunch
12:00
1:00
Quality
1:00
2:15
Break
2:15
2:30
Quality
2:30
4:00
Quality Exercise
4:00
5:00
234 thru 245
32 thru 42
42 thru 50
51 thru 71
72 thru 89
119 thru 130
130 thru 141
Project Management
Framework
Project Management Framework
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General Concepts and Terminology
Triple Constraint
Process Groups
Roles
Organizational Structures
“Must Knows”
Exercises
Project Management Framework
What is a Project Management?
What is a Project Management
Life Cycle?
The application of knowledge, skills, tools, and techniques to project
activities associated with a project in order to meet project needs.
Project management life cycle involves the processes to manage a
project. These are:
Initiation
Planning
IPECCs
Executing
Controlling
Closing.
These processes can be performed throughout the entire project, or they
may be applied phase-by-phase.
What is a Project Life Cycle?
It is the process of completing work on the project. It is the work
process such as the building process of creating a house or
developing a computer program. It coexist with the Project
Management Life Cycle.
What is a Project?
1.
2.
3.
What is a Program?
A program encompasses projects of similar work or correlated
activities managed in a coordinated way to attain benefits that could
not be achieved separately.
It has a specific purpose and will create specific results.
It has a definite beginning and definite end (temporary).
It is progressively elaborated.
Project Management Framework (1)
What is a Project Management
Office (PMO)?
Project Management vs
Operations Management
What is Progressive Elaboration?
It is an management organization with the following possible
configurations:
1. Centralized area for all project management personnel to work and be
loaned out to projects as they arise.
2. Centralized area for documentation and process support for project
management throughout the organization.
3. Centralized area for project management support and auditing of
projects in the organization.
Project Management is the creation of temporary specific initiatives.
Operations Management deals with the ongoing repetitive day-to-day
running the business.
When you work on a project where you might not know all the details,
you can plan what you can determine and begin the work. While
learning about the future details of a the known work, you learn more
about the work of the project.
Scope
What is Triple Constraint?
One of the basic foundations of
project management defined by
Scope, Time, and Cost. All three
constraints are equal in
importance. It is represented in
the Diagram A.
Quality
Cost
Time
Diagram A
Project Management Framework (2)
What is a Standard?
What is a Regulation?
Phases verse Process Groups?
A standard is a specification in place for an item or process that is
suggested and typically common. (Ex. Storage capacity of CDROM).
A regulation is a more like a law where compliance is required.
If a project has multiple components or phases, you could do
Initiating, Planning, Executing, Controlling and Closing for each
phase. PMI Project Management methodology uses the terms
process groups or phases representing initiating, planning,
executing, controlling, and closing.
Process Groups
What are the five process groups
in the project management
processes?
• Initiating processes (Authorizing the project or phase).
• Planning processes (Defining and refining objectives and selecting the
best of the alternative courses of action to attain the objectives that the
project was undertaken to address).
• Executing processes (Coordinating people and other resources to carry
out the plan).
• Controlling processes (Ensuring the project objectives are met by
monitoring and measuring progress regularly to identify variances from
plan so that corrective action can be taken when necessary).
• Closing processes (Formalizing acceptance of a project or phase and
bring it to an orderly end).
Initiating
Processes
Planning
Processes
Controlling
Processes
Links among Processes Groups in a Phase
Executing
Processes
Closing
Processes
Process Groups Definition
Give a high level summary
of Initiating?
In the initiation stage, the initial work is put into place on a project. A project
could continue or it could be killed at this point. Typically, when a project
moves beyond initiation, a project managers will be assigned, a sponsor
will be defined, and a high-level scope statement will be put into place.
These items should make it possible for a project to move forward to
planning. The initiation stage can also be applied to the beginning of every
phase of a project.
Give a high level summary
of Planning?
The planning stage is perhaps the most important of all the areas. If you
plan badly, your project will likely never be better than the plan. Therefore,
you need to spend as much time planning as allowed by the sponsor, your
company, or anyone else involved. In the area, the Project Manager makes
a plan for each of the knowledge areas: Scope, Time, Cost, Quality,
Human Resources, Communication, Risk, Procurement, and
Integration. The Project Manager also makes a plan for adjusting
(controlling) each area as changes occur. The team should be involved in
the majority of this planning. After all, they will be doing the work and
should have input with regards to their efforts.
Give a high level summary
of Executing?
It is in the execution stage that the scope of the project is built. In Planning,
we “planned the work”. Now, we “work the plan”. Throughout the process of
executing the plan, the project team will discover things they hadn’t
planned for or forecasted, and as a result, the controlling process area
comes into play where the team experiences variance from the plan.
Process Groups Definition (1)
Give a high level summary
of Controlling?
Give a high level summary
of Closing?
Phases verse Process Groups?
In this process area, the team maintains what it has planned. By putting a
plan (Planning) in place, the team executes the plan, and when the team
encounters variance (as usually happens), the Controlling stage comes into
play as a means to adjust the plan to compensate for new discoveries
(dates, resources, cost, scope, etc.).
In Closing, the project finishes. Assuming that the project has been
executed and worked to the point of nearing completion, the bulk of what
will be happening in this process area is contract and administrative
closure. In the case of contract closure, the main goal is to verify that what
should have been specified in the contract was completed, including
payment and signoff. The administrative closure involves contract closure
as well as archiving any project records, documents, etc.
If a project has multiple components or phases, you could do
Initiating, Planning, Executing, Controlling and Closing for each
phase. PMI Project Management methodology uses the terms
process groups or phases representing initiating, planning,
executing, controlling, and closing.
Position Descriptions
What is a Project Manager?
This is the primary role of our discussions and everything we consider
revolves around it. The general viewpoint is that this role involves
communication with all others and the integration of activities with all
others, as needed. Project managers:
• Describe to the team members what tasks need to be done per plan.
• Maintain scope control of the project.
• Communicate project status as it evolves.
They are the bus driver in this scenario (e.g. Person in charge of executing
the goals of a charter).
What is a Project Coordinator?
This role is put into place when the organization structure doesn’t support a
full-scale project, or it is used to support the project manager. Project
coordinators act as communication links to senior management and have
some decision making abilities.
What is a Project Expeditor?
Like the project coordinator, this role is put into place where the
organization structure doesn’t support a full-scale project or it is used to
support the project manager. Project expeditors act as the
communications links to senior management. They perform tasks such as
verifying if some assignments are complete, checking on status of some
undertaking, and communicating the information to a senior level manager.
Position Descriptions (1)
What is a Sponsor (Senior
Management)?
The sponsor is the key person or group who has secured financing for the
project, creates the project charter, and signs off upon project completion.
The project manager manages the expectations of the sponsor and
secures the signoff signature so the project team can move on to other
projects. Typically, the project manager consults the sponsor for approval
on changes to the project that could impact the charter. The sponsor could
also be referred to as a senior management, but senior management is the
management that works for the sponsor and helps accomplish the goals of
the company.
What is a Functional Manager?
This position doesn’t play much role in the process other than dealing with
people. Typically, you see this role conflicting with the project manager and
direction of the project. This potential conflict stems from the fact that the
functional manager has a primary interest in running some business
division or department and only secondary – if any – interest in a project
that often pulls people away from their regular jobs in that division or
department. An example is a manager in the accounting department.
What is Senior
Management (Sponsor)?
Senior management usually refers to management that supports the
sponsor, the charter, and ultimately the project. Some of the tasks that
senior management undertakes include helping to prioritize items
associated with other projects and helping to coordinate with other groups
or projects and helping to coordinate with other groups or activities that can
interfere with the project. Do not confuse senior management with the
functional manager or functional management. (E.g. Senior management is
a director of E-commerce for an E-commerce related project.
Senior management could also be referred to as the sponsor, but typically
senior management is the management that works for the sponsor and
helps accomplish the goals of the company.
Position Descriptions (2)
What are Team Members?
What is a Stakeholder?
What are Stakeholder
Management?
Team members are people who actually do the work that goes toward
meeting the scope of the project. They can be analysts, programmers,
tech writers, construction personnel, testers, etc. These people perform
tasks that generally need to be done by the project manager, who assumes
that they know enough to manager their own workload without the need for
micromanagement. If team members are unclear about their workload,
they can contact the project manager for direction. One main difference
between a team member and a stakeholder is that a team member bills
(cost) to the project.
Stakeholders can be anyone involved that can be impacted by the project.
They are not just people associated with the project’s creation and
completion, but they may be impacted by its result and functionality upon
project completion. An example is a consumer who depends upon the
project, or a person who is subsequently employed as a result of the
project completion and deployment.
Stakeholder management involves the following key areas:
• Identification and analysis of the stakeholders.
• Stakeholders goals and agenda.
• Provide appropriate input and contribution as the project evolves.
• Stakeholders sign off and formal acceptance during closure.
Differences between or among stakeholders should be resolved in favor of
the customer.
Organizational Structures
What are the five key types
of organizational structures?
Organizational
Structures
Functional
Weak
Matrix
Balanced
Matrix
Strong
Matrix
Projectized
Functional Organization
Describe a
Functional
Organization?
Functional Organization structure is the established more common structure used in business today.
It works more in an operations mindset, where projects typically aren’t a high priority and people of
similar skill set are grouped together and managed by someone with that same skill set (production,
marketing, engineering, accounting). This is sometimes called a “silo” organizational structure
because the people in the individual groups work among themselves more than with other groups
(or silos).
This structure makes managing resources in relation to project management activities rather
difficult because there is little reason for the resources to listen to project management role instead
of their functional supervisor.
CEO
Project
Characteristics
Organization
Structure
Functional
Marketing VP
Accounting VP
Engineering VP
Marketing Manager 1
Senior Accounting 1
Engineering Manager 1
Marketing Manager 2
Senior Accounting 2
Engineering 1
Project
Management
Authority
Little or None
% of Company
doing Full Time
Project Work
Literally None
Person’s Role as
a Project Manager
Part-time
Project
Management
Support Staff
Typical Title
Part-time
Project
Coordinator or
Project Leader
Matrix Organization
Describe a
Matrix
Organization?
Many companies use the Matrix Organization to accommodate established Functional Organization
structure while being flexible enough to implement projects. A company can retain its functional
foundation and use cross-functional teams, letting people from various silos work together on a
project. However, under the Matrix Organization, a team member may report to two different
supervisors and work under two different sets of priorities.
CEO
Project
Characteristics
Organization
Structure
Matrix - Weak
Matrix - Balanced
Matrix - Strong
Project Management VP
Accounting VP
Engineering VP
Marketing VP
Project Manager A
Senior Accounting 1
Engineering Manager 1
Marketing Manager 1
Project Manager B
Senior Accounting 2
Engineering 1
Marketing Manager 2
Project
Management
Authority
% of Company
doing Full Time
Project Work
Person’s Role as a
Project Manager
Project
Management
Support Staff
Typical Title
Limited
0 to 25%
Part-time
Part-time
Project Coordinator or
Project Leader
Low to Medium
15 to 60%
Full-time
Part-time
Project Manager or Project
Officer
Medium to High
50 to 95%
Full-time
Full-time
Project Manager or
Program Manager
Projectized Organization
Describe a
Projectized
Organization?
The Projectized Organization is a modern structure that has eliminated the silos of specification seen
in the functional organization. Although this structure has silos, they focus on the project instead of
on the specialization of the individual. This focus greatly increases the team’s ability to optimize focus
and performance because the project is the main focus.
One key consideration is upon project completion there might not be positions (jobs) for all team
members. In a Matrix or Functional environment, team members simply return to their former
department or project duties.
CEO
Project
Characteristics
Organization
Structure
Projectized
Project Manager A
Project Manager B
Project Manager C
Project Manager D
Team Member A
Team Member B
Team Member C
Team Member D
Team Member A
Team Member B
Team Member C
Team Member D
Project
Management
Authority
High to total
% of Company
doing Full Time
Project Work
85 – 100%
Person’s Role as a
Project Manager
Full-time
Project
Management
Support Staff
Typical Title
Full-time
Project Manager
or Program
Manager
Organizational Structure
Describe each characteristic of the different Organizational Systems.
Organization
Structure
Project
Characteristics
Matrix
Functional
Projectized
Weak Matrix
Balanced Matrix
Strong Matrix
Project Manager’s
Authority
Little or None
Limited
Low to Moderate
Moderate to High
High to Almost Total
% of Performing
Organization’s
Personnel Assigned
Full Time to Project
Work
Virtually None
0 to 25%
15 to 60%
50 to 95%
85 to 100%
Part-time
Part-time
Full-time
Full-time
Full-time
Project
Coordinator
or Project
Lead
Project
Coordinator
or Project
Lead
Project Manager
or Project Officer
Project Manager
or Program
Manager
Project Manager
or Program
Manager
Part-time
Part-time
Part-time
Full-time
Full-time
Project Manager’s
Role
Common Titles for
Project Manager’s
Role
Project Management
Administrative Staff
Framework “Must Knows”
• Organizational Structure Influences on Projects (PMBOK
figure 2-6, page 19)
• The Project Management Life Cycle
• The Triple Constraint and how it functions
• The Organizational Characteristics
• The role of the Stakeholder and management of that
position
• The responsibility of and difference between a Project
Coordinator and Project Expeditor
• The responsibility and characteristics of the project team
• The characteristics of a project and a program
• The characteristics and benefits of a PMO
Framework Exercises
• 5.8.2 - Framework Quick Test – together
• 5.8.4 - Testing – individual
• 5.8.3 – Matching – individual
• How did you score?
• Would you like to review any test Q&A?
Scope Management
Scope Management
• Project & Product Scope
• Initiation
– Project Selection
– Project Charter
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•
•
•
•
•
•
•
Scope Planning
Scope Terms
Scope Definition
What is a Work Breakdown Structure?
Scope Verification
Scope Change Control
“Must Knows”
Exercises
Initiation
Scope Management
6.2
5.1
Initiation
Charter
5.2
Scope
Planning
Activity
Sequencing
6.1
Activity
Definition
6.3
Activity
Duration
Estimating
6.4
Activity Duration
Estimates
Schedule
Development
Scope Statement
Schedule
5.3 Scope
Definition
1.1
WBS
Scope Statement
7.1
Resource
Planning
Charter
Resource
Requirements
7.2
Cost
Estimating
11.1
Risk
Management
Planning
Cost Estimates
Project Plan
Development
7.3
Cost
Budgeting
Controlling
WBS
5.4 Scope
Verification
5.4
Scope
Control
Scope Management
What are the five major Project Scope Management processes?
Processes
Initiation
Description
Authorizing the project or phase.
Scope Planning
Developing a written scope statement as the base for future
project decisions.
Scope Definition
Subdividing the major project deliverables into smaller, more
manageable components.
Scope Verification
Scope Change Control
Formalizing acceptance of the project scope.
Controlling changes to project scope.
Scope Initiation
Initiation is the area where the project or project phase is authorized. When this area is
complete, a project or phase exists
What are the Key Inputs?
What are the Key Tools?
What are the Key Outputs?
Initiation (Initiating Process)
Key Inputs
Key Tools
Key Outputs
Product Description
Project Selection Methods
Charter
Project Selection Criteria
Expert Judgment
Project Manager Assigned
Tools include Project Selection
Methods, such as Net Present
Value (NPV), Internal Rate of
Return (IRR), opportunity cost,
etc.
The Charter is a document that
gives the project existences.
The Product Description
defines what the project is to
accomplished or create. The
strategic plan of any company
should allow Management by
Objectives to show where the
project (and it products) fit into
the strategic or enterprise view
sometimes known as the “big
picture”.
Product Selection Criteria are
critical and must be sufficient
enough to allow only those
project with good chances of
meeting business goals to pass
through. Otherwise, strategic
problems can result. Historical
information makes it possible for
the team to leverage what has
worked in the pass and avoid
what has not.
Expert Judgment is of great
value that can often be more
significant and accurate than
the best modeling.
The Project Manager
assigned, and any
assumptions and constraints
are defined. Assumptions can
be anything unknown at this
point, but with a “best guess”
applied to it. Constraints can
be factors such as project
completion deadline, budget
threshold, and limit on
number of employees to bring
to the project.
Project Selection
How are projects selected by
a company?
• Benefit and costs (Steering committee review,
project ranking and prioritization, or financial
performance).
Constrained
Optimization
This is a Project Selection technique that uses mathematical calculation with factors
such as linear programming, complex calculation, and algorithms. It ultimately comes
down to trying to forecast as many variables as possible and predict the outcome.
Weighted
Scoring Model
This technique could take into account economics, market conditions, resource
availability or other items that would be weighted from project to project.
Project Selection
Name the five Project Selections Tools in the Financial Metrics Table.
Project Selection Tool
Also Know As
Option to Select
The biggest number of the
percentage
Return on Investment
ROI
Internal Rate of Return
IRR
The biggest percentage
Net Present Value
NPV
The biggest number
(Years are already factored in)
Benefit Cost Ratio
BCR
The biggest ratio
Payback Period
The shortest duration
Example
$50,000 or 7%
15.5%
$47,500 US
3.5:1
7 months
Project Charter
What is a Charter?
Project Charter
A project charter gives the project life.
Includes the high level scope of the project plus any
constraints or assumptions with time and a cost goals.
Provides the project manager with the authority.
Business need or reason that the project was undertaken to
address.
Issues by a manager external to the project at a level
appropriated to the needs of the project.
Usually signed by senior management or the sponsor.
Should be a physical document.
Scope Planning
Scope Planning emphasis is on creating a written Scope Statement to be used in future
decision making.
What are the Key Inputs?
What are the Key Tools?
What are the Key Outputs?
Scope Planning (Planning Process)
Key Inputs
Key Tools
Key Outputs
Product Description
Product Analysis
Scope Statement
Charter
Benefit/Cost Analysis
Scope Management Plan
Expert Judgment
The Product Description helps
with the conformance to
requirements and fitness of used
(discussed in Quality).
Charter provides the foundation
for the project. Any constraints
or assumptions are factored into
the decision-making process as
well.
Product Analysis involves
developing a better
understanding of the product of
the projects.
Benefit/Cost Analysis can
help define the amount of
return (benefit) expected on
the project.
Expert Judgment is of great
value that can often be more
significant and accurate than
the best modeling.
The Scope Statement helps
define the project. Supporting
detail provides in-dept research
and planning that the Scope
Statement rolls into.
The Scope Management
Plan helps manage scoperelated items or project
changes.
Scope Terms
What is the Scope
Statement?
What is Management by
Objectives?
The Scope Statement is a document that develops and helps attain buy-in
on common interpretation of the project scope. This can describe what is,
as well what is not in the project.
Management by Objectives is used to determine where a project fits in the
“big picture” of planning at the company. If your project fails with where
the company is headed, you could find it de-prioritized or even cancelled.
Management by Objectives also could be used to address a goal setting
technique, which emphasizes setting attainable goals and monitoring for
variance and adjusting as needed.
What is the Delphi
Opinion/Technique?
The Delphi Opinion Technique is the process of using expert opinions,
which could come from people already on the project or those outside
the project, or the organization. Typically, the technique involves trying
to gain consensus of experts by keeping their identities protected and
working in iterations.
The Delphi technique helps reduce bias in the data and keeps any
person from having undue influence on the outcome.
Scope Definition
Scope Definition is where the major product deliverables are divided into smaller
components that can be easier estimated, managed, and controlled.
What are the Key Inputs?
What are the Key Tools?
What are the Key Outputs?
Scope Definition (Planning Process)
Key Inputs
Key Tools
Scope Statement
WBS Templates
Other Planning Outputs
Decomposition
The Scope Statement
describes what the project is
producing. Constraints and
assumptions deal with
parameters and estimates that
the project is attempting to
function within.
Other planning outputs can
be used to modify the WBS as
more is learned about the project
and the work involved.
WBS Templates can be
derived from previous similar
projects or industry standards
then potentially modified or
adjusted to fit the needs of the
project.
Scope Decomposition
involves the breaking down of
the major work pieces into
smaller pieces where they
end up in the work breakdown
structure (WBS).
Key Outputs
Work Breakdown Structure
The Work Breakdown
Structure (WBS) can
sometimes point out areas of the
Scope that were not sufficiently
addressed in the Scope
Statement, thereby resulting in
Scope Statement updates..
Scope WBS
What is the Work Breakdown Structure?
The Work Breakdown Structure (WBS) is one of the most important pieces of the
project management planning process. It is:
• The main output of the Scope Definition is the decomposition of the scope statement
and scope of the project.
• Generally created by the project manager and team doing the work.
• Describes the breakdown of work and restricts it contents to listing only project work.
• Work not in the WBS is outside the scope of the project.
Once the WBS is complete, a number of key items can start such as network diagram,
the schedule, the budget, and risk planning. If you fail to devote time and attention on
the WBS, you are likely setting your project up for failure, or best case, a lot of
challenges.
How is a Work Breakdown Structure created?
To create a WBS:
1.
2.
Define the main pieces of work on the project.
Decompose each of those pieces to encompass all of the work that would be on the project
down to an appropriate level of detail where each task is defined, traceable, and manageable.
Generally, work should be broken down into tasks that are 4 to 80 hours in length.
Scope WBS Example
WAN Project Work Breakdown Structure Example
WAN Project
1.0
Planning
1.1
Requirements
1.2
Scope
1.1.1
Joint Application
Requirements
1.2.1
Schedule
1.1.2
Joint Application
Designs
1.2.2
Cost
1.1.3
Requirements
Signoff
1.2.3
Implementation
1.3
Testing
1.3
Closure
1.5
Main pieces of the project are:
• Planning
• Requirements
• Implementation
• Testing
• Closure
WBS Numbering
Work Breakdown Structure (WBS) numbering allows people on the project to know
where work fits into the project. Look inside the PMBOK and you will see WBS
numbering system in place. For
Cost
Chapter
7.0
Resource Planning
7.1
Tools and
Techniques
7.1.2
Inputs
7.1.1
Work Breakdown
Structure
7.1.1.1
Historical Information
7.1.1.2
Cost Estimating
7.2
Scope Statement
7.1.1.3
Expert Judgment
7.1.2.1
Cost Budgeting
7.3
Outputs
7.1.3
Alternative
Identification
7.1.2.2
Resource
Requirements
7.1.3.1
Cost Control
7.4
Scope Verification
Scope Verification is secure signoff of the project scope as milestones or the entire
work of the project is completed.
What are the Key Inputs?
What are the Key Tools?
What are the Key Outputs?
Scope Verification (Controlling Process)
Key Inputs
Work Results
Key Tools
Inspection
Key Outputs
Formal Acceptance
Work Breakdown Structure (WBS)
Scope Statement
Project Plan
Work Results are what the Scope
Statement and WBS are compared to.
WBS is valuable for detailing exactly
what is being done. As this is what the
work results are compared to.
Scope Statement help with the high
level view and verifying that the
product has achieved Conformance to
the Requirements and Fitness of Use.
Project Plan helps provide supporting
detail to what should be created with
the project.
Inspection is used to
validate that the correct
work has been done.
Formal Acceptance is the
signoff. It is not “looks good”, but
a signature that can mean
approval to begin closure of that
phase or of the project itself.
Scope Change Control
Scope Change Control is the process for handling scope changes on the project.
What are the Key Inputs?
What are the Key Tools?
What are the Key Outputs?
Scope Change Control (Controlling Process)
Key Inputs
Key Tools
Key Outputs
Work Breakdown Structure (WBS)
Scope Change Control System
Scope Changes
Performance Reports
Change Requests
Performance Measurement
Adjusted Baseline
Scope Management Plan
WBS details what work is being done.
Performance Reports help show the
variance and provide information on the
scope performance.
Change Requests can be issued as a
result of variance on the project.
Scope Management Plan is the basic
rulebook for addressing scope
management issues on the project.
The Scope Change Control
System manages changes that
occur to the scope of the project.
Performance Measurement
provides a feedback loop to
evaluate if the work results are in
sync with the scope.
Scope Changes are any
modifications to the agreedupon project scope as defined
by the approved WBS.
Adjusted Baseline often result
when Corrective Action has
been taken to accommodate a
scope change or to apply
lessons learned thus far in the
project..
Scope Mind Map
Scope “Must Knows”
• The Key Inputs, Tools/Processes and Outputs for each
process area
• The principles, characteristics and importance of a WBS
• The Delphi concept
• Familiarity with Project Selection Techniques and their
importance
• How to define, decompose and verify Scope
• The importance and characteristics of a Scope
Statement
• What Management by Objectives (MBO) is and where it
fits in Project Management
Scope Exercises
•
•
•
•
6.9.1 – Quick test – together
6.9.4 – Practice test – individual
6.9.3 – Terminology matching #1
6.9.3 – Terminology matching #2
• How did you score?
• Are there any questions you would like to
cover?
Time Management
Time Management
• Activity Definition
• Activity Sequencing
–
–
–
–
–
–
Network Diagrams types, creation and analysis
Critical Path, Slack and Float
Backward and Forward pass
Estimating Techniques
Schedule Compression Techniques
Dependencies, Predecessor and Successor tasks
• Activity Duration
– Schedule Development
– Resource Leveling
• Schedule Control
• “Must Knows”
• Exercises
Time Management
6.2
5.1
Initiation
Charter
5.2
Scope
Planning
Activity
Sequencing
6.1
Activity
Definition
6.3
Activity
Duration
Estimating
6.4
Activity Duration
Estimates
Scope Statement
1.1
Schedule
5.3 Scope
Definition
Schedule
Development
WBS
Scope Statement
7.1
Resource
Planning
Charter
WBS
Resource
Requirements
7.2
Cost
Estimating
11.1
Risk
Management
Planning
Cost Estimates
Project Plan
Development
7.3
Cost
Budgeting
Controlling
6.5
Schedule
Control
Time Activity Definition
Activity Definition involves the tasks required to create the deliverables of the project.
What are the Key Inputs?
What are the Key Tools?
What are the Key Outputs?
Activity Definition (Planning Process)
Key Inputs
Work Breakdown Structure
Key Tools
Decomposition
Scope Statement
The Work Breakdown
Structure is the primary input to
activity definition and is the key
to what is involved in the project.
Scope Statement helps you
determine what the project is
going to create. Constraints and
assumptions come into play
when determining what the
needed activities for the project
will be. Also helpful is expert
judgment, which can guide you
in any estimations associated
with the project.
Key Outputs
Activity List
Updated WBS
Decomposition involves
decomposing the work to be
done and any templates that
provide standards of success
from past projects or industry
standards..
The Activity List describes
what needs to be done (all
activities that will be performed
on the project).
Other outputs include the
Updated WBS and
supporting details for both
items.
Time Activity Sequencing
Activity Sequencing involves the arranging of the tasks in the most efficient and
effective order.
What are the Key Inputs?
What are the Key Tools?
What are the Key Outputs?
Activity Sequencing (Planning Process)
Key Inputs
Activity List
Milestones
Dependencies (External,
Mandatory,
Discretionary)
The Activity List is the basis for
what is being done. The product
description provide the big
picture view to ensure that
sequencing produces the
desired results.
Milestones close things out in
defining major steps of the
project.
Mandatory, discretionary, and
external Dependencies are
also considered when verifying
that the task order is correct.
Key Tools
Activity on Node
Diagramming Method
(AON)
Arrow on Arrow Method
(AOA)
Key Outputs
Network Diagram
Activity List Updates
Templates
Activity on Node Diagramming
Method (AON) is the technique most
used by modern project scheduling
software. It shows the tasks on the
blocks or boxes with arrows
connecting them.
Arrow on Arrow Method (AOA) is
an older more restrictive technique
that uses the arrow for the tasks and
dots to connect them. Conditional
networking technique such as
Graphical Evaluation Review
Technique (GERT) is used for items
such as testing for which a feedback
loop is needed.
Any network diagram
Templates are helpful as well..
The Network Diagram shows
the logical flow of tasks on the
project. It focuses on the
sequence in which tasks are
connected, not how long each
task will take.
The Activity List Updates are
updates to the Activity List.
Dependencies
When you create a project schedule, you must consider dependencies for the sequencing.
Dependencies might be flexible, causing no real impact on you and your team. They also might
be inflexible, giving you no option other than to work around them.
What are the definitions of the following Dependencies?
Type of Dependencies
Definition
Example
A constraint that must be
completed before the
subsequent items can start.
Mandatory dependencies are
also called hard logic.
You must have the roof on before
you can begin to apply shingles to
it.
Discretionary
A constraint that should be
completed but is not absolutely
required to be completed before
the subsequent items can start.
Discretionary dependencies are
also called preferred logic,
preferential logic, or soft logic.
You prefer but do not absolutely
have to finish System Testing
before beginning User Acceptance
Testing.
External
.
A constraint put in place by
something external to the project
team or organization
The city inspector must approve
any construction before issuing a
certification of occupancy so the
tenant can move in.
Mandatory
Time - Network Diagram
The network diagram is a schematic of project activities. It shows how various tasks
are connected as a result of activity sequencing. This diagram gives you a picture of
how the work of the project will flow. It is also the tool used to evaluation schedule
compression techniques such as crashing and fast tracking.
3
4
2
6
A
C
E
G
Start
Finish
3
5
2
4
B
D
F
H
Diagramming Methods
As discussed in Activity Sequencing, there are two types diagramming methods that are
used in network diagramming. Precedence Diagramming Method uses the activity on
node and Arrow Diagramming Method uses the Activity on Arrow or Line.
Time – Diagramming Type AON
The Activity on Node (AON) diagramming method is what most people use when they
used modern project management scheduling software. In this method, the task or
activity is in the box and the arrow connects the tasks.
3
4
2
A
C
E
Start
5
G
3
5
2
B
D
F
Finish
Time – Diagramming Type AOA
The Activity on Node (AON) diagramming method is older. In this method, the task or
activity is on the arrow or line and the circle or box connects the tasks. A dummy is also
used in this diagramming type where needed. A dummy is a dashed line that connects
two tasks where a relationship is needed, but the diagram doesn’t otherwise connect the
relationship. A dummy is not task and has zero duration. The AOA drawing can display
tasks in another format as well. This is the point where the appearance is more like the
AON diagram, and the tasks are represent in the format of “Start-A”, “A-C”, and HFinish”.
C
F
H
A
D
Start
Finish
I
B
E
Nodes connect
the Activities
G
Diagramming Methods
Describe two different diagramming methods and their characteristics?
Diagramming
Method
Abbreviated
Name
Predecessor
Type
Maximum # of
Relationship
Types
Special Diagram
Types &
Characteristics
Application
No Dummies
allowed
Most modern
project
scheduling
software
Graphic
Appearance
Finish-Start
Precedence
Diagramming
Method
PDM
Activity on Node
AON
Start-Start
4
Finish-Finish
See
Diagramming
Type AON
Start-Finish
Arrow
Diagramming
Method
ADM
Activity on Line
AOL
Finish-Start
Activity on Arrow
AOA
1
CPM
PERT
Dummies
allowed
Outdated
manually
drawn mostly
See
Diagramming
Type AOA
Time – Critical Path and Slack
What is the critical path?
The critical path is:
• The longest path on a project network diagram.
• It has no slack, but can change as the project evolves.
• It can have multiple critical paths.
• It has the greatest project risk. The project end date can be delayed if
anything on the critical path has a problem. The increase or slippage of
any task on the critical path can cause the overall finish date to slip.
What is Slack or Float?
Slack is the amount of time that a task can slip or be delayed without
delaying the finish date of the project (or task, or published project
completion date). Slack is calculated using a forward or backward pass
technique. If a task has no slack it is on the critical path and if it slips it will
push out the finish date. Negative and positive float can also exist. This is a
scenario in which the actual finish date extends past a targeted finished
date (negative float), or would be completed before the targeted finish date
(positive float).
What are the three types of
slack?
Free slack is the latest that a task can start without delaying the tasks that
follow it.
Total slack is the latest that a task can start without delaying the project
finish date
Project slack is the amount of time something can be start with delaying
the published finish date.
Time –Network Diagram Creation
When the project starts, Task A and B can begin. When Task A is done, Task C can begin. When Task
B is done, Task D can begin. Tasks C and D must finish before Task E can begin. Task F can begin
when Task D is completed. Task G can begin when Task E and F are completed. When Task G is
completed, the project is complete. The durations are in the table below.
Task
Duration
Task
Duration
A
4
E
6
B
5
F
1
C
4
G
5
D
2
4
4
6
A
C
E
5
Start
G
5
2
1
B
D
F
Network Diagram
Finish
Network Diagram Paths and Durations
4
4
6
A
C
E
5
Start
G
5
2
1
B
D
F
What are the different paths
and time?
Path A,C,E,G Duration of 19
Path B,D,E,G Duration of 18
Path B,D,F,G Duration of 18
What is the critical path?
Path A,C,E,G Duration of 19
Finish
Calculating Critical Path Steps
4
4
6
A
C
E
5
Start
G
5
2
1
B
D
F
Finish
Network Diagram
1. If given a word problem, draw the network diagram and double check that you have connected
everything correctly and have labeled the tasks and durations correctly.
2. List out all paths on the network diagram (Example A, C, D, F, G, etc.) then add up the
durations path by path so you can see the overall duration of each path. It is recommended
that you use a top to bottom approach when listing out the paths. This means that you would
list the paths as they start at the top of the diagram and work toward those on the bottom. In
this example you would list the paths in the following order: Paths ACEF, BDEG, and BDFG.
By working from the top to bottom you can ensure that you don’t accidentally miss a path. Be
sure to use the letters of the path, not the durations, as that can get confusing during exams
questions. For example use ACEG instead of 4,4,6,5 in listing the paths.
3. Determine the longest (duration) path of all that are listed. This is the critical path.
Critical Path Exercise
• 7.9.1 – Exercise A – individual
– Draw the Network Diagram
– Define the critical path
• 7.9.1 – Exercise B – individual
– Draw the Network Diagram
– Define the critical path
Forward and Backward Pass
Calculation
A Forward and Backward Pass Calculation is a standard calculation:
•
Used to determine the Critical Path of the Network Diagram.
•
Shows how much Slack (or Float) there is for a task (task Slack), which is the amount of time a
task can slip before delaying the next task.
•
Shows how much total Slack there is which is how much time a task can slip before it delays
the project finish date.
•
Tasks are represented by early start date, early finish date, late start date, late finish date,
duration, and slack time as shown below:
Early Start (ES)
Duration
Early Finish (EF)
Task Name
Late Start (LS)
Slack
Late Finish (LF)
Calculating Forward Pass
Forward Pass
Forward Pass Formula
Variables
Provides the early start (ES) and early finish (EF) of each task on the network diagram.
EF = ES + Duration -1
Early Start (ES) – The earliest a task can start based on the Network Diagram logic.
Early Finish (EF) – The earliest a task can finish based on the Network Diagram logic.
Duration – The length of the task.
Convergence – Where the output of more than one task is the predecessor to a task
on the network diagram.
Assumptions
A day starts at 8:00 a.m. and finishes at 5:00 p.m.
Starting Point
At the left of the Network Diagram, typically the start task
1. Set the Early Start (ES) of Task A to 1 because it is the first day of the project.
2. Apply the Forward Pass formula (EF = ES + Duration - 1) to the Network Diagram task-by-task from
start to finish. If you encounter a Convergence return to the beginning of the diagram and continue this
step for all task leading into the Convergence. As you move from one task to another, increment the
Early-Finish (EF) of the current task by one to give you the Early-Start (ES) of the next task. For
example, Task A has an Early-Finish (EF) of 3; the Early-Start (ES) of the following task is 4.
3. Whenever you encounter a convergence, select the larger of the Early-Finish (EF) values and
continue applying the Forward Pass formula from start to finish of the Network Diagram.
4. Perform steps 2 and 3 until you have applied the Forward Pass formula to all tasks. The Forward Pass
is complete at this point.
Calculating Forward Pass (2)
Task B
Duration 2
Task D
Duration 2
Task F
Duration 3
Task H
Duration 5
Task A
Duration 3
Start
Task C
Duration 1
Task E
Duration 4
Finish
Task G
Duration 4
Legend
ES
Duration
EF
EF = ES + Duration -1
Task Name
LS
Slack
LF
EF = 4+2-1
4
2
5
EF = 6+2-1
6
B
2
7
EF = 8+3-1
8
D
3 10
F
EF = 1+3-1
1
Start
3
EF = 13+5-1
3
13
Convergence
A
5
17
H
EF = 4+1-1
4
1
C
4
EF = 5+4-1
5
4
E
8
EF = 9+4-1
9
4
G
12
Convergence
Finish
Backward Pass Calculation
Backward Pass
Forward Pass Formula
Variables
Provides the late start (LS) and late finish (LF) of each task on the network diagram.
LS = LF – Duration + 1
Late Start (LS) – The latest a task can start based on the Network Diagram logic.
Late Finish (LF) – The latest a task can finish based on the Network Diagram logic.
Duration – The length of the task.
Burst – Where a task has multiple outputs that are Predecessors to more than one
task.
Assumptions
A day starts at 8:00 a.m. and finishes at 5:00 p.m.
Starting Point
At the right of the Network Diagram, typically the finish or end task.
1. The Late Finish (LF) becomes the same as the Early Finish (EF) on the last task (also the
duration of the Critical Path).
2. Apply the Backward Pass formula (LS = LF - Duration + 1) from the finish (right) to the start
(left) of the Network Diagram. If you encounter a Burst return to the finish (right) of the diagram
and continue this step for all tasks leading (from the right to the left) into the convergence. As
you move from one task to another, decrement the Late-Start (LS) of the current task by one to
give you the Late-Finish (LF) of the next task. For example, Task H has an Late-Start (LS) of
13; the task that precedes it would have a Late-Finish (LF) of 12.
3. At any burst on the Network Diagram, select the smaller of the Late Finish (LF) values.
4. Perform steps 2 and 3 until you have applied the Backward Pass formula to all tasks.
Calculating Backward Pass (2)
Legend
ES
Duration
EF
4
Task Name
LS
2
5
6
B
Slack
LF
1
Start
6
3
2
7
8
D
7
8
LS = 7-2+1
Slack = 7-5
3
2
2
3 10
LS = LF - Duration +1
Slack = LF - EF
F
9
LS = 9-2+1
Slack = 9-7
10
2 12
LS = 12-3+1
Slack = 12-10
13
A
1
0
3
Burst
13
4
1
4
5
4
0
4
LS = 4-1+1
Slack = 4-4
4
2
5
Burst
5
Start
2
8
9
4 12
G
0
8
9
0 12
LS = 8-4+1
Slack = 8-8
6
B
6
4
E
C
3
0
Finish
2
7
LS = 12-4+1
Slack = 12-12
8
D
7
8
2
0 17
LS = 17-5+1
Slack = 17-17
3 10
F
9
10
2 12
3
13
A
1
17
H
LS = 3-3+1
Slack = 3-3
1
5
5
17
H
Critical Path
3
4
1
4
5
0
8
9
4 12
G
8
9
0 12
E
C
4
4
13
4
5
0
0 17
Finish
Forward and Backward Pass
Substitute Technique
To calculate the slack (float) of a path (or task):
• Calculate the critical path of the network diagram.
• Determine which paths have the task you are calculating slack for (All the paths the have Task
B in them, if they are the paths you are calculating the slack for).
• Determine which path is the longest (If it is the critical path, you have zero slack).
• Subtract the total duration of the longest path (with the task for which you are determining
slack) from the critical path; the difference is the slack for that path or task.
If the path under review is not at the end of the path, you can still use this method. Other
methods show subtracting all the tasks one by one until you have the slack value you are
calculating for. You only need to do that method if you must calculate an early start or early
finish of a task.
Forward and Backward Pass
Substitute Technique(2)
Task B
Duration 2
Task D
Duration 2
Task F
Duration 3
Task H
Duration 5
Task A
Duration 3
Start
Task C
Duration 1
Task E
Duration 4
Path ABDFH
3+2+2+3+5=15
Path ACDFH
3+1+2+3+5=14
Path ACEGH
3+1+4+4+5=17 (Critical Path)
Task G
Duration 4
1.
Calculate slack for Task F
2.
Path ABDFH (15 days) and ACDFH (14 days) contain task F in their paths
3.
Path ABDFH is the longest path for Task F of 15 days
4.
Subtract the longest path from critical path to calculate the slack time.
Path ACEGH – Path ABDFH = 17 – 15 = 2 day slack
Finish
Network Diagram Analysis
To calculate the duration or slack from a Network Diagram Analysis:
• The arrows and formula show what you need to calculate the duration or slack.
• The arrows point in the direction that you start the formula from (Late Start or Late Finish for
calculating slack).
• Use the formula LF-EF (Late Finish – Early Finish) or LS – ES (Late Start – Early Start) to
calculate the slack of a task by using the date provided in the exercise.
• If the difference is zero, the task is on the critical path. If the value is negative, the task has a
negative float and could be on the critical path or another task depending on the health of the
project.
Early Start (ES)
Duration
Late Start (LS)
Task Name
(-)
Early Finish (EF)
Slack
(-)
Late Finish (LF)
Duration = LF – LS +1
Slack = LF - EF
Slack = LS - ES
Duration = EF – ES + 1
Slack Exercises
• 7.9.1 – Exercise A – individual
– Answer Questions 2- 6
• 7.9.1 – Exercise B – individual
– Answer Questions 2- 7
Estimating Techniques
What is Monte Carlo
Simulation?
It is a computerized tool that simulates the outcome of the project to
determine things such as the time and cost outcomes, or the number of
resources needed.
What are the three type of mathematical analysis
Graphical Evaluation Review Technique (GERT) is a technique in which there is a feedback loop between
tasks.
A
B
Critical Path Method (CPM) is used with the Activity on Arrow diagramming technique. It uses one estimate per task
with the goal of consistency being on cost and flexibility on schedule. Do not confuse this method with the concept
of calculating the critical path on a network diagram. Although they have the same name, they are different items.
The concept of a critical path being on a network diagram is the case with every network diagram, include AOA and
AON diagrams plus PERT estimating.
Program Evaluation Review Technique (PERT) uses three estimates per task. It performs a weight average of
the pessimistic, optimistic, and most likely (realistic) estimates. The theory is that having three estimates provides
a more accurate PERT estimate. The goal is consistency on time and flexibility on cost. You can use the PERT
formula to calculate time or cost. The following are the formulas for PERT calculations.
Pert Formula
Standard deviation of a task (PERT)
(P + 4R + O)
6
P-O
6
Variance of a Task (PERT)
P-O ²
6
PERT Variables
P = Pessimistic
R = Realistic
O = Optimistic
Estimating Techniques
Name the characteristics for the three estimating techniques?
Estimating Technique
Abbreviated
Name
Number of
Estimates
Characteristics
Graphical Evaluation Review Technique
GERT
1
Has a feedback
loop for repetitive
type tasks
Critical Path Method
CPM
1
Consistent Cost
and Flexible on
Schedule
Program Evaluation Review Technique
PERT
3
Consistent on Time
and Flexible on
Cost
Schedule Compression Techniques
After the initial schedule has been put together or after the project is in execution, you may
have to compress the schedule to achieve a more aggressive time goal. Two main techniques
are crashing and fast tracking. To achieve an earlier completion date, you could apply either
technique or both to a schedule.
Crashing mainly involves putting more people on the critical path items. This doesn’t include
re-sequencing activities.
Fast Tracking involves analyzing the network diagram and sequencing of the tasks to take
into consideration benefits from adjusting the sequencing to accelerate the completion of work.
Fast tracking does include risk exposure associated with re-sequencing. When schedule
compression is needed, you may consider both options at the same time.
Schedule Compression Example
The network diagram below shows two paths: Path ABDEF for a total duration of 13 and Path
ACDEF with a total duration of 12. Path ABDEF is the critical path with a duration of 13 days.
Task B
2 Days
Start
Task A
3 Days
Task D
2 Days
Task E
4 Days
Task F
2 Days
Finish
Task C
1 Day
If you need to compress the overall duration of the Network Diagram and wanted to use the
fast tracking technique, you could re-sequence the diagram as shown below.
Task B
2 Days
Start
Task A
3 Days
Task C
1 Days
Task E
4 Days
Task D
2 Days
Task F
2 Days
Path ABEF has a total duration of 11. Path ABDF has a total duration of 8. Path ACDF has a
total duration of 8. Path ABEF is the new critical path. Because it is the longest of the three
paths. Fast tracking has reduced the critical path from 13 to 11 days.
Finish
Schedule Compression Techniques
Characteristics of Crashing and Fast Tracking are listed in the table below
Type of
Compression
Technique
Crashing
Fast Tracking
Key
Characteristic
Cost
Quality
Characteristic Characteristic
Additional
Characteristic
Putting more
resources on
Critical Path
tasks
Usually
increase Cost
Minimal risk
exposure
Think of this as
a party. You
have more
people that
originally
planned.
Do activities in
parallel that
would normally
be in sequence
Flexible, but
increase cost
from potential
rework
Additional risk
exposure
because of
possible
rework
Can require
additional
communication
to coordinate
activities
Predecessor
When you create a project schedule, you can use predecessors to establish the sequencing
needed to accomplish work.
What are the definitions of the following Predecessors?
Predecessor
Finish-Start
Finish-Finish
With the Finish-Start predecessor, Task A must be
completed before Task B can begin.
It is usually the default predecessor type for
modern project scheduling software and is usable
in the Activity on Arrow (AOA) and Activity on Node
(AON) diagramming techniques. The other types
(start-start, finish-finish, and start-finish) are used
only on the Activity on Node (AON) diagram.
With the Finish-Finish predecessor, Task B must
finish by the time Task A is finished.
You can use this predecessor n situations where
two or more teams are developing something, and
all activity must finish at the same time to be
converged into the total system.
Diagram
A
B
A
B
Predecessor (2)
What are the definitions of the following Predecessors?
Predecessor
Start-Start
Start-Finish
Diagram
A
Under the Start-Start predecessor, when Task A
starts, Task B can start.
You can use this predecessor when multiple tasks
can start simultaneously.
Under the Start-Finish predecessor, Task B would
start before Task A finishes.
You would use Start-Finish predecessor in
situations where the new system must start before
you could finish (shutdown) the old systems.
This is the orphan of predecessors. Think about it:
how many of you have used this compared to any
of the other predecessors when you create a
schedule? One example that seems to be ideal for
this type predecessor is a project in which you are
creating a new system to replace an existing
system.
B
A
B
Lag and Lead
Type of Compression
Technique
Definition
Example
Lag
A Lag is a delay between tasks.
You use it where there is some
type of constraint in which
something must wait before it
can continue.
An example would be if you were building the
interior of a house, you would have to wait a day
for texturing on the walls to dry before you would
paint the walls.
Lead
Lead is the acceleration to a
successor from the predecessor.
A lead would allow you to start
ahead of schedule.
An example would be to begin user testing
software if the system testing was significantly
complete.
Do not confuse Lag and Lead with Slack or Float on the exam.
Time Activity Duration Estimating
Activity Duration is the process of estimating the number of work days or hours to
complete each task.
What are the Key Inputs?
What are the Key Tools?
What are the Key Outputs?
Activity Duration Estimating (Planning Process)
Key Inputs
Activity List
Resource Requirements
Key Tools
Analogous Estimating
Reserve Time
Key Outputs
Activity Duration Estimates
Activity List Updates
Constraints
Assumptions
Identified Risks
The Activity List helps you
determine what tasks their
durations estimated.
Constraints, Assumptions,
Resource Requirements and
capabilities are factored in as
items that can cause
adjustments to estimates.
Historical Information and
Identified Risks are factored in
to calculating duration.
Analogous Estimate (Top-down
estimating) requires expert judgment
and is created by an expert or group
of experts not just an executive
pulling a number from the air. It is a
high level estimate, not a detail
estimate. Quantitatively based
duration estimates are used and can
include Program Evaluation Review
Techniques (PERT) estimations and
other math-based models.
Reserve (contingency) time is
considered as well in this area.
The Activity Duration
Estimates reveal how long the
task will take along with
supporting evidence of those
estimates and any updates to
the Activity List.
Schedule Development
Schedule Development involves reviewing resource needs, activity sequencing, and duration estimates to
develop the project schedule.
What are the Key Inputs?
What are the Key Tools?
What are the Key Outputs?
Schedule Development (Planning Process)
Key Inputs
Key Tools
Network Diagram
Duration Compression
Duration Estimates
Resource Requirements
Simulation
Calendars
Software
Key Outputs
Project Schedule
Schedule Management Plan
Resource Leveling
Leads and Lags
Risk Management Plan
The Network Diagram helps you establish the sequential flow of
project tasks. Remember the key purpose of the network diagram is
to show how tasks are connected on the project, not necessary how
long tasks should take to complete.
The Activity Duration Estimates tell the length of each task and
ultimately the project. However, adding up duration will not give you
the project total duration; examining the duration of the critical path
does.
Resource Requirements help create the schedule and describes
the resource pool.
Calendars allow you to factor in work schedules, holidays, etc.
You must address constraints and assumptions to determine
where the “speed bumps” in the project might occur. Factor any
assumptions into the creation of the schedule, with the supporting
documentation behind them in case they must be modified later.
Addressing Leads and Lags help prevent unnecessary “speed
bumps” form slowing down the project..
The Risk Management Plan help you ensure that adequate
risk planning is factored into the schedule creation.
Duration Compression techniques
such as crashing and fast tracking are
used for optimization.
Mathematical analysis and Simulation
are the basis for estimates.
Resource Leveling helps you attain
a consistent level of hours (usually
either daily or weekly) for the
resources on the project.
Use project management Software to
create Software to create the schedule.
Finally, a coding structure such as a
Work Breakdown Structure (WBS)
numbering system helps you keep track
of the tasks and where they fit in the
WBS.
The Project Schedule is a key
output with the tasks, start and
finish dates, resources, and
sequencing (at a minimum)
integrated into it. Supporting
detail helps provide the logic
behind the decisions that
created the schedule.
The Schedule Management
Plan addresses how the
schedule is to be maintained
throughout the project.
Resource Leveling
As a schedule is created, you assign resources and when you have your schedule
complete, you usually notice a patter of peaks and valleys as depicted in the graphic
below. These peaks and valleys represent resources that can be applied for 12 hours
one day, but only 4 hours the next. Leveling is the process of adjusting these peaks and
valleys to create a level usage of resources, as depicted in the post leveling graphics.
Typically, when you apply resource leveling to your schedule, you do so at the sacrifice
of the overall finish date, and it’s not uncommon to see your schedule stretch out a little.
Resource Allocations (Post Leveling)
Resource Allocation (Pre Leveling)
9
14
8
12
8
Hours Per Day
6
4
Hours Per Day
Hours Per Day
7
10
6
5
Hours Per Day
4
3
2
2
1
0
0
Mon Tue Wed Thur Fri Mon Tue Wed Thur Fri
Mon Tue Wed Thur Fri Mon Tue Wed Thur Fri
Days
Days
Gantt Chart
The Gantt Chart is the common chart used in project management. It has the table of
information (usually tasks, dates, resources, etc.) on the left, and the horizontal bars
showing when those tasks are happening on the right. You use the Gantt Chart to track
day-to-day details of the project. One key thing to remember about how PMI defines
Gantt Chart, compared to the software most of us use, is that the Gantt Chart DOESN’T
have lines connecting the Gantt bars. To see the sequencing, you must use the network
diagram, not the Gantt Chart.
Oct 2004
ID
1
Task Name
Start
Finish
Duration
Application Development Project
11/11/2004
12/20/2004
28d
2
Task 1
11/11/2004
11/17/2004
5d
3
Task 2
11/24/2004
11/26/2004
3d
4
Task 3
11/29/2004
12/03/2004
5d
5
Task 4
12/07/2004
12/20/2004
10d
6
Task 5
12/14/2004
12/14/2004
0d
Nov 2004
Dec 2004
Milestone Chart
The Milestone Chart is the typically used in executive reporting. It lacks detail, generally listing
only the main project milestones as diamonds instead of the Gantt bars. Like the Gantt Chart, as
defined by PMI, the milestones chart does not have lines connecting the milestones diamonds
either.
Executives usually don’t want much detail so the milestone chart fits their needs, but because
project teams require more detail, they typically use the Gantt Chart.
Oct 2004
ID
1
Task Name
Start
Finish
Duration
Application Development Project
11/11/2004
12/14/2004
23d
2
Planning
11/11/2004
11/11/2004
0d
3
Development
11/24/2004
11/24/2004
0d
4
Integration
11/29/2004
12/29/2004
0d
5
Integration
12/07/2004
12/07/2004
0d
6
Closure
12/14/2004
12/14/2004
0d
Nov 2004
Dec 2004
A common misunderstanding about a milestone is the duration. This is something you should
know for the exam. A milestone has 0 (zero) duration.
Schedule Control
Schedule Control is the point where changes to the schedule are managed and controlled.
What are the Key Inputs?
What are the Key Tools?
What are the Key Outputs?
Schedule Control (Controlling Process)
Key Inputs
Key Tools
Key Outputs
Project Schedule
Schedule Change Control System
Schedule Updates
Performance Reports
Performance Measurement
Corrective Action
Change Requests
Variance Analysis
Schedule Management Plan
Software
The Project Schedule displays
the baseline against which
activity is measured.
The Schedule Change Control
System addresses proposed changes
to the schedule.
Performance Reports
communicate how accurate the
plan is being worked and
measure any variance.
Performance Measurements and
Variance Analysis determine if the
variance or required changes exist.
Change Requests address any
adjustments to the schedule.
The Schedule Management
Plan communicates specifically
how those changes are to be
implemented..
Project Management Software is
utilized to perform the schedule
modification or changes..
Schedule Updates are
applied as change control
or variance analysis
dictates.
Corrective Action
potentially help get the
schedule back on track.
Lessons learned are helpful
for eliminating any bad
planning and repeating good
planning in the future.
Time Mind Map
Time “Must Knows”
•
•
•
•
•
•
•
•
•
•
•
Key Inputs, Tools/Processes and Outputs for each process area
Schedule development concepts
Characteristics and benefits of Fast Tracking and Crashing
Principles, types and how to draw Network Diagrams
Concepts of PERT, CPM, Monte Carlo and GERT estimating
methods
How to recognize a Critical Path and why it is important
How to do a forward pass and backward pass on a Network diagram
Four Predecessor types FS, SS, FF, SF for scheduling
Characteristics of Free Slack/Float, Total Slack/Float and Project
Slack/Float
Definition of Lag and Lead
Characteristics of the Mandatory, Discretionary, External
Dependencies
Time Exercises
• 7.9.2 – Quick Test – together
• 7.9.5 – Practice Test – individual
• 7.9.4 – Matching Exercises
• How did you score?
• Do you have any questions?
Cost Management
Cost Management
•
•
•
•
•
•
•
•
Types of Costs
Cost Based Project Selection
Future and Present Value
Cost Terms
Resource Planning
Cost Estimating
Cost Budgeting
Cost Control
– Earned Value
• Cost Forecasts
• “Must Knows”
• Exercises
Cost Management
6.2
5.1
Initiation
Charter
5.2
Scope
Planning
Activity
Sequencing
6.1
Activity
Definition
6.3
Activity
Duration
Estimating
6.4
Activity Duration
Estimates
Scope Statement
1.1
Schedule
5.3 Scope
Definition
Schedule
Development
WBS
Scope Statement
7.1
Resource
Planning
Charter
WBS
Resource
Requirements
7.2
Cost
Estimating
11.1
Risk
Management
Planning
Cost Estimates
Project Plan
Development
7.3
Cost
Budgeting
Controlling
7.4
Cost
Control
Type of Costs
There are four types of Cost on a project: Direct, Indirect, Fixed, and Variable.
You can combine them with Direct and Indirect mixing with Fixed or Variable
(such as Fixed Direct Cost).
Type of Cost
Description
Direct Costs
Direct Costs are directly attributable to the project and spent only on the
project work. An example would be computer servers used for a software
project.
Indirect Costs
Indirect Costs are those needed for a project, but not restricted to it. They
could be used by other projects as well. Such a cost could be rent or electricity
for the building where work on the project is performed. There would likely be
other groups or activities benefiting from the items such as this, and your
project would pay its part as well.
Fixed Costs
Fixed Costs are those that are consistent on the project regardless of how
many are used. Creating a book cover for a large quantity of books would be a
good example. In this case, you would pay once to have the cover created,
regardless of the number of books you printed it on.
Variable Costs
Variable Costs are the costs that fluctuate with what is produced. The more of
something produce, the more of this type of costs you incur. An example
would be the cost of printing each copy of a book. The more you print, the
greater your cost.
Cost Based Project Selection Techniques
Cost based project selection techniques are applied to help ensure that your
organizaton makes prudent selection decisions.
Project Selection
Technique Name
Return On Investment
Internal Rate of Return
Also Known As
Option to Select
Example
ROI
Select the biggest number or
percentage.
It is a general term that is
calculated in a variety of ways.
$50,000 or 7%
IRR
Select the biggest percentage.
Often used in capital budgeting,
interest rate makes the net
present value of all cash flow
equal zero.
15.5%
Net Present Value
NPV
Select the biggest number
(Years are already factored in)
Benefit Cost Ratio
BCR
Select the biggest ratio
Opportunity Cost
The amounts that are not
selected
Payback Period
Select the shortest duration
$47,000 US
3.5:1
Choose Project A ($7,000)
over Project B ($5000). The
opportunity cost is $5000 to
select Project A.
7 months
Cost Based Project Selection Discussions
Project Selection
Technique
Return On Investment
(ROI)
Internal Rate of Return
(IRR)
Net Present Value
(NPV)
Discussion
Return on Investment (ROI) is a general term, you may calculate it a variety of ways.
Typically, you would choose the biggest number or percentage among the projects
under consideration.
Often used in capital budgeting, interest rate makes the net present value of all cash
flow equal zero. In the case of IRR and project selection, select the larger number.
Net Present Value (NPV) is used in capital budgeting where the present value of cash
inflow is subtracted for the present value of cash outflows. NPV compares the value of
a dollar today versus the value of that same dollar in the future after taking inflation
and return into account.
Although it’s unlikely the exam will ask you to calculate this, you should know how to
select a project using it. For example, with Project A have a NPV of $150,000 and 6
months or Project B having a NPV of $295,000 and 1 year, you would select Project B
because it has the bigger number AND the years are already factored into the dollar
amount.
Cost Based Project Selection Discussions (2)
Project Selection
Technique
Discussion
Benefit Cost Ration (BCR) is the project selection and analysis technique that involves
comparing the benefit to the cost of the initiative. The format is 3.65:1 that means that
the benefits of the project outweighs the costs 3.65:1.
Benefit Cost Ratio
(BCR)
Opportunity Cost
Payback Period
Some questions on the exam could ask about profit in this area. That is simply noise;
the benefit, cost, and ratio between them are the main components. There could also
be a project hat has a BCR of less then one (.75:1) for example. This would mean that
the project had a benefit of $.74 for ever $1.00 invested. Typically, you would not
approve such a project unless there was some underlying factor such as Y2K issues.
Opportunity Cost is associated with taking another opportunity. It is what you give up or
leave on the table to take the other opportunity. For example, if you take a $75,000 a
year job over a $60,000 a year job, then the opportunity cost of taking the $75,000 is
$60,000.
Payback period is the amount of time needed to earn back the original investment on
the project. PMI suggest that you select the project with the shortest payback period.
Future Value
What is Future Value?
Future Value is the value of something such as cash or an investment at a
specific point in the future. For example, if you had $5,000 now and get 8%
interest, what would the future value be?
Don’t expect to calculate this on the exam. Focus on the concept, such as:
to get the desired amount in the future, would a future amount at a certain
interest rate require more or less money than that amount now:? The exam
could present something that looks like a calculation, so be sure all the
formula components are there, if not “not enough information” would be the
best option.
What is Future Value Formula?
FV = PV * (1+r)ⁿ
where:
FV = Future Value
PV = Present Value
r = Interest Rate
n = Number of Periods
Present Value
What is Present Value?
Present Value is the value of something today that you need to create a
certain amount of investment in the future. Here’s an example: if you
wanted to have $10,000 in 3 years, what amount of money would you need
today to get this amount if the money was earning 7%?
Don’t expect to calculate this value on the exam. Instead, recognize the
concept, such as: Would you need more or less than a future amount now
to have that amount in the future? You could also have something that
looks like a calculation, but be sure all the components of the formula are
there, as if “not enough information” would be the best
What is Present Value Formula?
PV =
FV
( 1+r)ⁿ
where:
FV = Future Value
PV = Present Value
r = Interest Rate
n = Number of Periods
Cost Terms
What is the Sunk Costs?
Sunk Costs are costs that have already been spent on a project. Do not
consider these costs when making future project decision. Here’s an
example” If a project has a budget of $175,000 and has already spent
$200,000, the $200,000 wouldn’t be considered when deciding whether to
continue on the project or not.
What is Depreciation?
Depreciation is the process of devaluing an asset in the tax system. Over a
period of time (Schedule), the worth of an asset decreases until it has no
value or a predefined value at the end of its depreciation schedule.
Generally, calculating depreciation is a complicated process involving
tables, formulas, and more.
Although you will not be asked to do any complex calculations in this area
on the exam, you need to know what standard depreciation and
accelerated depreciation are as well as ho to calculate a basic depreciation
situation.
Standard Depreciation is performed with basic division. There are 3
variables to know about something before you can depreciate it.
What is Standard
Depreciation?
1. What is the start value or purchase price?
2. What is the scrap value?
3. What is the depreciation time frame?
For an example a $5,000 video editing system has a 5 year depreciation
schedule with a scrap value of $0. How much will it depreciate per year?
$5,000 / 5 years = $1,000 / year
Cost Terms (2)
What is the Accelerated
Depreciation?
Accelerated Depreciation is a littler more complex and generally requires
tables of data to calculate.
For the exam, you must know that there are two main types used:
1. Sum of the year’s digit.
2. Double declining balance
Accelerated depreciation does what its name implies. It depreciates faster
than standard depreciation.
What is Life Cycle Costing?
Life Cycle Costing is the process of examining all the costs associated with a
project and its product once it goes into production. Without this focus, you
could potentially create an environment that would cause our company to
incur additional costs associated with the product after it goes to production.
By taking production and the post project life into account, you could
determine that you strategy to build the project might differ. Such an approach
could result in a increase in project costs, but a savings in operation costs,
which would save company money in the long-run.
Here’s an example: A vendor wants to charge your company $50,000 to
create a prototype of something, then charge $2,000 per item after that. The
$50,000 might be higher than you would prefer or had forecasted. You find
another vendor that has a lower upfront coast, but charges $4,000 per item.
You can easily calculate that, by selecting the vendor with higher upfront cost,
you would actually see a cost saving after the production of only 25 devices.
Resource Planning
Resource Planning involves determining all the resources required for the project.
What are the Key Inputs?
What are the Key Tools?
What are the Key Outputs?
Resource Planning (Planning Process)
Key Inputs
WBS
Scope Statement
Key Tools
Expert Judgment
Key Outputs
Resource Requirements
Software
Activity Duration Estimates
Resource Pool Description
Work Breakdown Structure (WBS) is used
to be able to determine what areas of the
project need what type of resources.
Scope Statement helps ensure that the
correct types of resources are assign per the
scope of the project.
Activity Duration Estimates is used to
ensure that the resources are planned for the
appropriate duration of the project.
Resource Pool Description is used to let
the project manager and planning team know
what the characteristics, skills, and
experience are of the available resources.
Expert Judgment is helpful in
determining resources specifics
and quantities.
Software tools such as
spreadsheets or scheduling
software can help show how
resources are utilized on the
project.
Resource Requirements provides
the resource needs for the project.
This could include non-people
resources such as infrastructure
and conference rooms or personnel
such as programmers and
architects. This could include
quantity, start and finish dates,
needed skill sets and experience
levels of the needed resources.
Cost Estimating Summary
Cost Estimating is a key area in time and cost because good estimates can determine projects success
or failure as time evolves. In Cost Estimating, you conduct a high level estimate of the project costs. At
this point, you should have the schedule significantly completed and know what resources will be
performing what tasks (as well as the rates of those resources). You will also know what materials and
equipment the projects requires.
What are the four costestimating methods?
Analogous Estimate - Compare to a previous project.
Parametric - Parameters around which the estimate is
built.
Bottom Up - Individuals items are estimated, then
summed for the total cost.
Computerized Tools - Individuals items are estimated,
then summed for the total cost.
Cost Estimating
Cost Estimating involves developing a high level estimates of the project cost.
What are the Key Inputs?
What are the Key Tools?
What are the Key Outputs?
Cost Estimating (Planning Process)
Key Inputs
Work Breakdown Structure (WBS)
Resource Requirements
Key Tools
Key Outputs
Estimating Methods
Cost Estimates
(Analogous, Parametric,
Bottom Up, Computerized)
Cost Management Plan
Resource Rates
Activity Duration Estimates
Historical Information
Work Breakdown Structure (WBS) provides the
breakdown of the project and allows costs to be
estimated from it.
Resource Requirements and Rates provides
resource parameters that can be applied to create
the Cost Estimates. They should describe what is
needed, how much of it is needed, and what it
should cost/unit.
Activity Duration Estimates provide the durations of
the task that the resources are needed for. They can
include Analogous, Parametric, Bottom Up, and
Computerized estimates.
Historical Information provide information about
pass project that succeeded or failed.
There are four main
Estimating Methods
(Analogous, Parametric,
Bottom Up, Computerized).
Cost Estimates are your most
accurate estimates of project costs
to date. Supporting Detail shows
how the estimates were developed.
Cost Management Plan helps you
determine how to manage project
cost.
Cost Estimating Methods
Method
Description
Scenarios
Analogous
(Top Down)
This estimate is usually a total time or cost estimate that
has no significant detail. The main advantage of this
estimate is that you can create it quickly. The
disadvantage is that it lacks detail or individual piece
estimates.
An executive or someone who is
subject matter expert (SME) creates a
high estimates based on experience or
past project history with the company.
Bottom Up
As to compared to the analogous estimate, the main
advantage is the detail and accuracy associated with it.
The disadvantage is that it can take significant time to
create and the team can pad the estimates to
compensate for unknowns.
A project manager and the team work
together to create a complete estimate
from the bottom (task level) up and roll
it up to the total estimate.
Parametric
Based on existing parameters, this method is usually
created by industry standards or past experience. The
advantage is that it can be done quickly and u usually
accurate.
A house builder quotes a house for
$75.00 per square foot. A carpet
installer quotes $2 per square foot for
installation.
This estimate involves using a computerized program to
simulate different variables associated with project
outcome. The main advantages are the accuracy of the
estimate and the “what-if” analysis that can be
performed. The main disadvantages are the ramp-up
time and costs associated with the setup of the tool.
Variables simulated could include the
overall time and cost estimates as well
as the confidence levels of the
estimates. Variables could also
include the number of people needed
to achieve project goals.
Computerized /
Monte Carlo
Cost Budgeting
Cost Budgeting involves the overall cost estimates to individual activities or work packages to establish
a cost baseline for measuring project performance.
What are the Key Inputs?
What are the Key Tools?
What are the Key Outputs?
Cost Budgeting (Planning Process)
Key Inputs
Cost Estimates
Key Tools
Key Outputs
Cost Budgeting Tools
Cost Baseline
Cost Budgeting Tools can
be used to establish the cost
budget of the project and
position it to be used for
establishing the detail of the
budget and the tracking of
actual expenses against it.
Cost Baseline is the cost estimate
for the project planning team puts in
place to work the details of the
project to. This is the number (or
numbers if it’s broken down
throughout the project) that the
pieces of work are estimated to
cost.
Work Breakdown Structure (WBS)
Schedule
Risk Management Plan
Cost Estimates provides the overall cost
estimates to the project that can be broken down
and later applied to the work packages and tasks.
Work Breakdown Structure (WBS) provides the
breakdown of the work of the project to allow the
application of cost elements to the work packages
defined in the Work Breakdown Structure..
Schedule allows viewing of the timeline of the
project to show when the costs are expected to hit
the project.
Risk Management Plan provide the rules as they
relate to risk for the project. In this area it
potentially lets the project planning team know
where to allocate risk reserve, and how to address
risk in the cost budgeting area of the planning.
Cost Control
Cost Budgeting involves the overall cost estimates to individual activities or work packages to establish
a cost baseline for measuring project performance.
What are the Key Inputs?
What are the Key Tools?
What are the Key Outputs?
Cost Control (Controlling Process)
Key Inputs
Cost Baseline
Performance Reports
Change Request
Key Tools
Key Outputs
Cost Change Control System
Revised Cost Estimates
Performance Measurement
Estimate at Completion (EAC)
Earned Value Management
Project Closeout
Cost Change Control System is the
system that is used to evaluate Change
Requests as they relate to cost and
process the approval of these requests.
Revised Cost Estimates are budget
updates (higher or lower) that can
happen as a result of reviewing
project activities, timelines, and costs
Performance Measurement is the act
of measuring what is happening on the
project and comparing it to what should
be happening on the project.
Estimate at Completion (EAC) is
the overall cost estimated of the
project based on budget (BAC) and
the current spending efficiency (CPI).
Earned Value Management is the
three-dimensional (Scope, Time and
Cost) tracking system for project
management.
Project Closeout happens when the
project is complete and the various
cost measurements occur such as
evaluation if final payments are ready
to be made upon satisfactory
completion of work
Cost Management Plan
Cost Baseline provides the overall cost standard
that the project is trying to achieve. This could be
viewed as the budget.
Performance Reports serves as the
communication vehicle to show how the project is
performing compared to what should be
accomplished. The difference between the two is a
variance.
Change Requests comes about as performance
reports show a variance, or additional changes are
needed to the project. Remember this is a request
not an approval (yet!).
Cost Management Plan is the rulebook as it
relates to cost management on the project. It
should address how cost related items are
addressed on the project.
Fixed Formula Progress Reporting &
Earned Value Management
What is the Fixed Formula
Progress Reporting?
Fixed Formula Progress Reporting is a technique that creates a
consistent status report for project tasks. Instead of having a “gut
feel” of percent completion form each person on a project, this type
of reporting is essentially binary. The project planning process
defines the split of percentages (ex. 25%/75%, 50%/50%).
This process works as follows: When a task starts, it receives the initial
percentage (ex. 25%). It receives the remaining percentage (ex.
75%) only when the task is complete, thereby reporting 100%
complete to the task.
What is Earn Value Management?
Earned Value Management is a technique that integrates time and
cost into quantifiable reporting method for project status reporting of
actual performance compared to the baseline estimate.
It communicates project status via key metrics, including performance
indexes, variance, and estimates associated with completion of the
project. It allow a project manager to see how the project is
performing in relation to spending (cost) and activity completion
(time).
Earned Value Variables
Describe the different Earned Value Data Variables?
Data Variables
Description
Actual Cost (AC)
What you have spent at a point in time. This is the sum of all the accrued costs to
date on the project. This is also known as Actual Cost of Worked Performed
(ACWP) from 1996 PMBOK.
Earned Value (EV)
The value of the project at a point in time. What you must show for your effort. This is
the percent complete of the tasks multiplied by the planned value of the tasks, the
addition of the product of various multiplications. This is also known as Budgeted
Cost of Work Performed (BCWP) from the 1996 PMBOK.
Planned Value (PV)
Budget At
Completion (BAC)
Actual Cost of
Work Schedule
(ACWS)
What you should have spent at a point in time. This is the sum of the planned value of
all tasks. (or relative percentage) through the point in time being measured. This is
also known as Budgeted Cost of Work Scheduled (BCWS) from the 1996
PMBOK.
This is the total cost amount expected to be spent on the project.
WARNING: This phrase doesn’t apply to Earned Value. It is used as noise. If you see
it on the test, do not select it because it is not a valid answer.
Earned Value Variables (2)
Describe the different Earned Value Index Variables?
Indices Variables
Cost Performance
Index (CPI)
Schedule
Performance Index
(CPI)
Description
Formula
Measures how many cents of return on each dollar spent.
CPI = EV / AC
Measures progress at percent of the rate originally planned.
SPI = EV / PV
Describe the different Earned Value Variances?
Variance Variables
Description
Formula
Cost Variance (CV)
The difference between work completed (earned value) and what
was spent to complete it (actual cost).
CV = EV – AC
Schedule Variance (SV)
The difference between work completed (earned value) and what
should have been accomplished (planned value).
SV = EV – PV
This is the difference between the original or revised budget (BAC)
and the anticipated completion costs based on project spending
efficiency (EAC).
VAC = BAC – EAC
Variance At
Completion (VAC)
Earned Value Variables (2)
The earned value management table is ideal to memorize for the exam because it gives you the
answers to any questions dealing with the calculation of (cost or schedule) variances or performance
indexes. Here are some of the keys to memorizing it.
•
•
•
•
•
•
•
•
•
Performance indexes are listed first (vertically).
Variances are listed last (vertically).
Performance indexes are calculated by dividing.
Variances are calculated by subtracting.
The AC (ACWP), EV (BCWP), and PV (BCWS) are listed alphabetically (horizontally).
If a variance is negative, you are either behind schedule or over budget.
If a variance is positive, you are ahead of schedule or under budget.
If a performance index is less than one, you are behind schedule or over budget.
If a performance index is greater than one, you are ahead of schedule or under budget.
Earned Value Management Table
Cost
Time
AC
(ACWP)
PV
(BCWS)
EV
(BCWP)
CPI
=
÷
÷
=
SPI
CV
=
-
-
=
SV
Earned Value Calculation
Calculations
Calculate Total Planned
Value (PV or BCWS)
Calculate Total Actual
Cost (AC or ACWP)
Steps
1. Determine the date or “Completed through” level.
2. Add the planned values of the tasks that should have happened as of the date
or “Completed through” level. Do not add planned value of tasks that have
started that are ahead of schedule. (ex. Today is June 6 th and there are two
tasks that shouldn’t start until June 8th, but have already started.
3. If a task should be partially complete at the point you are measuring the
percent (%) complete will have to be provided or assumed (Ex. A 4 day tasks
generally would be 50% done 2 days into the work.
1.
Added the all “Actual Cost”.
a) Regardless of status (1% to 100%) even if it was started ahead of
schedule.
b) Any and all costs related to the project.
1.
List the Planned Value (PV) of all the following type of tasks:
a) Tasks that have been completed.
b) Tasks that should have started and haven’t started yet.
c) Tasks that should have started and have actually started.
d) Tasks that shouldn’t have started and have started ahead of schedule.
Determine the % complete of each task found in Step 1.
Multiply the Planned Value (PV) by the % complete fore each task. This will
give you the earned value of each individual task.
Add all the earned value measurements calculated in Step 3 from each task
to get the total earned value for the project or situation.
Calculate Total Earned
Value (EV or BCWP)
2.
3.
4.
Earned Value Management Example
Task Name
Day
Actual Cost (AC) ($)
Earned Value (EV) ($)
% Complete
Planned Value (PV) ($)
Task A
Day 1
$300
$300
100%
$300
Task B
Day 2
$200
$150
100%
$150
Task C
Day 2
$150
$100
100%
$100
Task D
Day 3
$225
$200
100%
$200
Task E
Day 3
$100
$100
100%
$100
Task F
Day 3
$300
$150
60%
$250
Task G
Day 4
$140
$130
65%
Task H
Day 4
$100
20%
Task I
Day 5
Task J
Day 5
$1,515
$0
Total Actual
$0
Cost
$80
$1,210
$0
Total Earned
Value
$0
$1,100
$ 200
Total Planned
$400
Value
0%
$300
0%
$200
Budget At
Completion
$2,100
Calculate this figure by totaling the Planned Values for all the tasks. The total Budget at Completion
is at
$2,200
Budget
Completion
Planned Value
To calculate Planned Value add up the Planned Value for each task through Day 3. This total is $1,1,00. This value
represents the work that should be complete through Day 3. When looking at Planned Value in this case, even
though some work is ahead of schedule, you should look only at the work that should have done through Day 3.
Actual Cost
Total what you have actually spent to date. This total includes any and all costs, even if the work was started ahead
of schedule. The Actual Cost is $1,515.
Earned Value
Earned value is the Planned Value of each task (regardless if it should have started or not) multiplied by the
percentage completed (%). This value provides the Earned Value (EV) for each task. The next step is to add the
Earned Value (EV) of each of the tasks for the total Earned Value (EV) for the project. The Earned Value is $1,210.
Translation
Translation means that through Day 3, you should have spent $1,100 and Task A through F should be complete.
You have spent $1,515 but have an Earned Value ( the work to show you have spent) of only $1,210.
. Using the Earned Value Management Table we noticed that the project has the following metrics:
CPI: 1210 / 1515 = .8
CV: 1210 – 1515 = -$305
SPI: 1210 / 1100 = 1.1
SV: 1210 – 1100 = $110
The CPI shows that the project is getting 80 cent value for every dollar spent with a CV which shows that it is presently $305 over
budget. The SPI shows that the project is only progressing at 110% of that planned and should have accomplished $110 more in
work than is scheduled. This project is ahead of schedule but over budget.
Forecasts
Forecasts
Description
Formula
The Estimate at Completion (EAC) represents the current projected
final costs based on the current spending efficiency (CPI).
Estimate at
Completion (EAC)
Estimate to Completion
(ETC)
Variance at
Completion (VAC)
If you have a CPI greater than one (1), the number will be less than
the BAC.
If you have a CPI of less than (1), the number will be greater that
the BAC.
EAC = $2200/.8 = $2,750
EAC = BAC / CPI
The Estimate to Completion (ETC) represents the amount needed
to finish the project based on the current spending efficiency of the
project. This figure is the EAC without the Actual Costs to date.
ETC = $2,750 - $1,515 = $1,235
ETC = EAC - AC
The Variance at Completion (VAC) is the difference between the
Budget at Completion (BAC) and the Estimate At Completion
(EAC). This difference tells how much over or under budget the
project finished. Using the sample data in the example, the
following values for EAC, ETC, and VAC are:
VAC = $2,200 - $2,750 = -$550
VAC = BAC -EAC
Cost Range
The table below shows the cost range of estimates as well as the names and process area in
which they occur.
In the case of Order of Magnitude, this estimate is done at the beginning, still early in the life of
the project.
The budget estimate follows, when you must put a budget together and when you move
forward with the project.
When you are ready to commit, you create the definitive estimate. It is the definitive estimate
that you use to manage the project costs.
It is imperative that you know this table for the exam as you will likely see one or two questions
from this table relating to name, process area, or range of error.
Describe the different cost ranges?
Estimate Name
Process Area
Range
Order of Magnitude
Initiation
-25%
to
+75%
Budget
Planning
-10%
to
+25%
Definitive
Planning
-5%
to
+10%
Cost Range Funnel
Use the cost funnel graphics below to get a feel for how these estimates come into the initiating and planning
processes. At the top of the funnel, the estimate has the widest tolerance with the order of magnitude estimate.
When the budget estimates comes about, the tolerance narrows, and the final definitive estimate has the least
tolerance.
If a project had a $100,000 estimate (assuming it didn’t change as it went through the estimating process), the
Order of Magnitude tolerance would be $75,000 to $175,000. The budget estimate tolerance would be $90,000
to $125,000. The definitive estimate tolerance would be $95,000 to $110,000.
Order of Magnitude Estimate
(Initiation) -25 to +75%
Budget Estimate
(Planning) -10 to +25%
Definitive Estimate
(Planning)
-5 to +10%
Cost Mind Map
Cost “Must Knows”
• Key Inputs, Tools/Processes and Outputs for each process area
• Characteristics and concepts of Earned Value (EV), Actual Costs
(AV), Planned Value (PL) , Budget at Complete (BAC)
• Cost Range – Order of Magnitude, Budget and Definitive
• Key characteristics and difference of the estimating methods
• How to recognize and differentiate between the Cost types
• Understand and know how to calculate the Benefit Cost Ratio (BCR)
• Principles of the Payback Period and Sunk Costs
• Understanding Straight Line Depreciation and Accelerated
Depreciation
• Principles of Life Cycle Costing and Opportunity Cost
• Net Present Value (NPV) and Internal Rate of Return (IRR)
Cost Exercises
• Exercises
• 8.16.1 – Quick Test – together
• 8.16.5 – EV Exercise
– #1&2 together What is the current state of the
project?
– 3-10 – individual completion
•
•
•
•
•
8.16.6 - together
8.16.3 – Project Selection - individual
8.16.4 - Cost Types - individual
Practice Test – individual
7.9.4 – Matching Exercises
Quality
Quality
• Definition of Quality
• Quality Planning
– Cost of Quality
•
•
•
•
•
Quality Terms
Sigma δ
Quality Responsibility
Quality Assurance
Quality Control
– Pareto Diagram
– Control Chart
• “Must Knows”
• Exercises
Quality
Planning
8.1
Quality
Planning
Quality Management Plan
Quality Management Plan
Checklists
Executing
8.2
Quality
Assurance
Controlling
8.3
Quality
Control
Definition of Quality
What is the quality?
Conformance to requirements - Conformance to requirements as a
standard you used to determine whether the project built what it was
supposed to build, according to requirements.
Fitness for use – Fitness for use means does the product of the project
function as it was intended.
What is Total Quality Management
(TQM)?
Total Quality Management is a quantity management philosophy
conceived by Dr. Deming. In short, it focuses on a proactive attitude
toward quality with a detail toward statistical analysis to document
improvement. Dr. Deming felt that quality should be planned, not
inspected when the work was complete. This view eliminates the endof-process activity when people test functionality. Instead, it suggest that
those who build the product must also test it as development
progresses. Testing while developing provides an immediate feedback
loop. Process problems are more likely o be detected early on, instead
of at the end. Continuous improvement of the process is a key
foundation of his view on TQM.
What is Zero Defects?
Zero defects is a concept created by Philip Crosby. Its basic
foundation is to do something right initially and you shouldn’t have to
repeat it. As with most quality initiatives, if the money is spent upfront,
the effort will eliminate the need for rework if the defects occur.
Definition of Quality (2)
What is Continuous Improvement?
Continuous improvement takes a proactive stance to development,
one that makes improvements throughout a process. Corporate culture
generally focuses on not accepting that things are as good as they can
be, but instead seeks process improvement.
Unless there is a major environment change, the bigger process
improvements will likely be at the beginning of the initiative with smaller
improvements coming later.
What is the Gold Plating?
Gold Plating is the practice of providing more than what the customer
requested. Per PMI, this practice is unacceptable and professionally
irresponsible. The project manager and team should provide only that
which was approved. At Crosswind public courses, we are often asked
why gold plating is bad. Some ask us: why is it wrong if customers
receive something that increases the usage or value of what they have
are getting? The answer is straightforward and reflects all the process
practices we have been discussing: you give your customers exactly
what they ask for and what they approve in the charter, no more or no
less.
Here’s an example of gold plating. You go to a car dealership, looking for
a new care. The scope of what you want is affordable basic 4-door car.
You aren’t interested in “add-ons” like rust proof undercoating or
Scotchgard protection on the fabric. You explain to your salesperson
what you want. Your find a car you like and begin to discuss the price.
Your salesperson explains in the pricing that car has the rust proof
undercoating and the Scotchgard protection on the fabric, and that the
two items cost $1,100 together. While there might be some perceived
value of these products, it’s not what you are after in the product you
want.
Quality Planning
Quality Planning is involves defining the rules that will define quality and establish them to verify that
the product will adhere to Conformance to Requirements and Fitness of Use.
What are the Key Inputs?
What are the Key Tools?
What are the Key Outputs?
Quality Planning (Planning Process)
Key Inputs
Key Tools
Key Outputs
Quality Policy
Benefit/Cost Analysis
Quality Management Plan
Scope Statement
Flowcharting
Checklists
Product Description
Cost of Quality
A Quality Policy is vital so that
the rules are known as thy relate
to quality.
Benefit Cost Analysis focuses on
the cost of quality instead of project
selection techniques (where benefit
cost analysis is also used).
Flowcharting helps in documentation of
process for stability and analysis (for quality
improvement). The design of experiments
deals with using experiments that test
multiple criteria or situations
simultaneously.
The Scope Statement and
Product Description are used
so the overall product can be
verified against these items.
Standards and regulations come
into the equation as well
because your product cannot be
substandard or violate regulatory
standards.
The Cost of Quality deals with money
spent on quality initiatives compared to
the benefits received from those
initiatives. Benchmarks are also useful
in establishing the standard you want the
product of the project (or the project for
that matter) to perform by.
The Quality Management
Plan defines the quality
standards, processes and
procedures to be used on
the project.
Checklists help define the
step-by-step items needed
to attain quality standards.
Cost of Quality
What is the Cost of Quality?
Cost of Quality is the cost of conforming or not conforming to a continuous improvement approach to quality. A
company pays for quality one way or another. Conformance or nonconformance to quality is the key here.
Conformance to quality typically has a positive effect on the morale and corporate bottom line. Under this approach,
a company pays for quality in a proactive way, typically up front in the planning areas of a project. The company take
initiatives and makes training available for improved quality. It focuses on the activities for planning quality into the work
instead of working the defects out, thereby resulting in lower inventory needed and reduce warranty support.
A nonconformance view to quality means the company pays for quality in a reactive way, on the back end of the
project. Nonconformance typically has a negative impact on the morale, customer perception and the bottom line of a
company. The cost of nonconformance comes from an organization that is reactive to issues and waits for problems to
come up. They end up paying for quality in areas such as excessive inventory, waste, and warranty support.
Cost of Conformance and Cost of Non-Conformance
Cost Item
Conformance
Non-Conformance
Excessive Inventory

Throwing away defective products

Warranty support

Reacting to problems after the happen

Proactive analysis of process improvement

Company training relating to quality and
continuous improvement

Lower inventory needed

Reduced warranty support

Quality Terms
What is the Just in Time?
Just in Time is an inventory management process that lets a company have
little or no excess inventory in stock other than what they need to build existing
orders. Ideally, a company stocks zero inventory with supplies arriving only
when needed for products being built. Remember, inventory costs money. So
an increase in quality that allow you to use JIT can save money for your
company.
What is Flowcharting?
Flowcharting is a technique used in quality planning to map out the flow of a
process or technique. Flowcharting can help improve quality by increasing the
stability and repeatability of a process.
What is Normal Distribution?
Normal Distribution means that the project activity met with a typical outcome,
nothing abnormal. Normal Distribution is sometimes shown where the curve is
tighter or the “hill” is steeper. This depiction is still normal and merely means the
data is much closer in the measurement.
Sigma σ
What is the Sigma?
Sigma is also known as standard deviation. The formula of standard deviation is (P-O)/6 where P=Pessimistic and
O=Optimistic. PMI doesn’t require you to be statistician to become a PMP, so let’s apply a Crosswind concept called
“Realistics®”. Realistics is simply a concept that attempts to apply a realist way to use something like this.
If we look at the diagram below, we see that 1 sigma is 68.26%. What that translates to in the workplace is a quality
standard. If our quality standard is 1 sigma (68.26%), the minimum acceptable quality standard is 68.26%. If we build
100 of something with a 1 sigma quality standard, we are saying that we have a success as long as 68.26% of whatever
we build works. That means that 31.74% (100%-68.26%) of what we build could be expected to fail, potentially leading
to high costs of rework or scrap.
By increasing the quality standard to 2 sigma (95.46%), we increase the quantity of expected passing product to
95.46 units out of 100, or no more that 4.54 units would fail. This decrease the cost of rework and waste, but there will
likely have to be spending on quality training and other proactive activities to achieve this standard.
Normal Distribution
1 sigma
68.26%
Mean
2 sigma
95.46%
3 sigma
99.75%
6 sigma
99.9997%
-1σ
+1σ
-2σ
+2σ
-3σ
+3σ
+6σ
-6σ
68.26%
95.46%
99.75%
99.9997%
Quality Terms
What is Probability?
What is 6 Sigma?
What is ISO 9000?
A Probability is the likelihood that something will happen. It can be
expressed in a percentage (1%, 75%, 100%) or in a more conventional
number format (.01, .75, 1.0). This decimal translates to a percentage.
For the exam, it is key for you to know to understand that the sum of all
probabilities equal 100% or 1.0.
6 Sigma is a modern quality philosophy made popular by Motorola and
other companies in the late 80s. It involves setting very high standards of
6 Sigma for products or processes that the company produces. In
essence this philosophy states that approximately 99.9997% of
everything a company creates or the processes it execute are error-free.
The International Standards Organization (ISO) standard is associated
with companies that wish to document their processes and adhere to
those processes. While quality improvement is not always a given with
this standard, the repeatability associated with it will typically show a
positive benefit. This standard can also be used to ensure that partners
a company works with have defined repeatable processes.
Quality Responsibility
Who is responsible for quality is something that will come up on the exam, as it’s an
easy way to pass the responsibility and let something slip if you aren’t careful. The
table details what you need to know.
Describe the different roles and responsibilities?
Role
Level of Responsibility
Example
Team member or
worker
They are responsible for the quality of their own work.
The electrician is accountable
to ensure that work on the
job is satisfactory.
Project Manager
They are responsible for the quality standards on the
project.
Senior/Executive
Management
They are responsible for the quality standards at the
company.
The Project Manager is
responsible for the quality on
the networking project.
The CEO and senior
management is responsible
for quality at the company.
Quality Function Table / Checklists
Quality Function Table
There are a number of functions used in the quality process and address on the exam. Use the table below as a
memorization item to help you differentiate in what process you would potentially use the tools. Be sure to focus on
when the item is used, not just created!
Quality Function
Quality Planning
Quality Assurance
Quality Control
Flow Charts



Fishbone/Ishikawa/Cause and Effect Diagram

Benchmarking


Kaizen (Design of Experiments)


Inspection



Checklists

Control Charts

Pareto Diagrams

Statistical Sampling

Checklists
Checklists are good tools you can used to ensure that everything that should be done in a process have been
completed as planned. When you follow them, you can eliminate defects thus improving quality. Think about it this way,
if you were on a flight, would you want the pilot to complete the startup procedure with a checklist? If the pilot had 20
years experience, would that make you feel more comfortable? It seems it might be less risky to have them use a
checklist.
Checklists/ Flowcharts
Checklist Example
PMP Exam Preparation Checklist
 Verify experience is sufficient for exam qualification.
 Evaluate training companies for exam prep class and products
 Select a company for products or training (www.crosswindpm.com)
 Create a study plan
 Execute study plan
 Apply for the exam
 Receive approval from PMI for exam
 Schedule exam
 Final study preparation
 Take exam
 PASS TEST with PMP Success Series
What is a Flowchart?
The Flowchart is a good tool for defining what steps need to be
completed and in what order to achieve a particular goal or output.
Flowcharts can take a variety of formats. A common format is listed
below:
Determine Training Provider
and/or Products for the
PMP Exam
Start Class for
PMP Exam
Preparation
Fill Out Application
for PMI
Membership
Fill Out
Applications for
PMP Exam
Complete PMP Exam
Preparation Course
Receive Approval
for PMP Exam
Register for PMP
Exam
Take PMP Exam
Fishbone Diagram
What is the Fishbone (Ishikawa, Cause and Effect) Diagram?
This is a tool that can be used initially in a project to evaluate what could potentially cause defects in a project or
process. It could also be used after the project has started to review symptoms occurring to determine what the real
problem is. Some people view this similar to work decomposition other than the fact that it involves problems and
symptoms instead of tasks needing to be completed.
Requirements
Testing
Scope Change
Incomplete
Misinterpretation
Software Defects
Potential Causes
Integration
Design
Effect
Quality Assurance
Quality Assurance verifies or validates the quality standards defined for the project will meet the
desired standards.
What are the Key Inputs?
What are the Key Tools?
What are the Key Outputs?
Quality Assurance (Executing Process)
Key Inputs
Quality Management Plan
Results of Quality Control
Measurements
A Quality Management Plan
defines what standards to work
to.
Operational Definitions and
Results of Quality Control is
use to verify what the product
should do as well as validate
that the product performs as
expected at the completion of
the creation process.
Key Tools
Quality Planning Tools
Key Outputs
Quality Improvement
Quality Audits
Quality Planning Tools are cause
and effect diagrams and process
flowcharts.
Quality Audits is the process of reviewing
quality activities that apply to lessons
learned (about quality on the project) and
can be applied to current and future
projects. Quality audits help you verify
process and output compliance.
Quality Improvement is
primarily established by
process analysis and
improvement in this area.
Quality Control
Quality Control measures the output of a process or product against the specification.
What are the Key Inputs?
What are the Key Tools?
What are the Key Outputs?
Quality Control (Controlling Process)
Key Inputs
Key Tools
Work Results
Inspection
Quality Management Plan
Control Charts
Checklists
Trend Analysis
Key inputs include Work
Results to be measured.
Use the Quality Management
Plan and operational definition
for an accurate definition of what
is to be measured and what to
do if things don’t meet those
standards.
Checklists are use to verify that
the process is followed.
Key Outputs
Quality Improvement
Rework
Acceptance Decisions
Process Adjustments
Work Inspection is the process of
verifying that the work was built as
intended. Inspection and Control Charts
help you measure and track output.
Pareto diagrams show what areas are
causing the most issues. Statistical
sampling is used to test an appropriate
amount of output to detect defects, but
quality tested is not enough that the cost
would out weight the benefit. This often a
key challenge in quality assurance.
Flowcharting help verify that the process
is followed accurately.
Trend Analysis shows if there is an
ongoing problem or if an issue is
isolated.
As items are developed,
key outputs include an
improvement in quality,
rework of defective
product, and completed
checklists.
The Acceptance Decision
on completed work products
is a key output.
Process Adjustments are
key also when output is
coming up out of
specification and requiring
excessive rework.
Quality Terms (2)
What is the testing?
Quality control involves testing the process output. There are many items to consider when
testing. Typically, you address these items in quality planning because you would use them in
this area. Focus on determining if testing will occur with the population or a sample and what the
sample criteria will be. During testing, define the attributes and variables that are important. In
addition, gain an understanding of the concept of statistical independence and mutual exclusivity.
What is Sample vs.
Population?
In population testing you test the entire particular item (such as every airplane that is built).
In sample testing you determine how much of something needs to be tested to ensure that
defects would be caught.
Sample testing process would then test that many of the items, for example one of every five.
You could adjust the sample later if quality assurance showed that it was too aggressive (not
showing any failures) or not aggressive enough (catching a lot of failures, leaving you to wonder
haw many truly were bad items slipping through). In sample testing, there is a “confidence
level”. The more of something you test, the higher the confidence level.
What is a Variable?
A Variable is the characteristic that the quality control process is going to measure. It is a
generic characteristic or property, such as capacity or height.
What is a Attribute?
An Attribute is the specific measurement being recorded. For example, square feet,
inches, or meters. To remember the difference between a variable and an attribute,
remember that an attribute is a unit of measurement.
What is a Statistical
Independence?
Statistical Independence is where the outcome of processes are separate from one
another. For example, buying a lottery ticket last week doesn’t increase your odds of
winning the lottery this week.
What is a Mutual
Exclusivity?
Under mutual exclusivity one choice will not include any other choices. For example,
shipping product air overnight does not overlap with shipping the save product ground
saver. They are separate options.
Pareto Diagram
The Pareto Diagram is a cumulative histogram you can use to see where the key problems lie. It is not uncommon to
have only so much time to spend on issues or problems. If you must “Choose your battles,” this is good radar screen to
determine which battles to choose. With it, you can see what is causing the most frequency of problems plus a
cumulative percentage of problems. Pareto diagrams do not necessarily dictate priority, unless that priority is by
frequency of occurrence. The general rule with a Pareto diagram is the 80/20 rule, meaning that: as a general rule, 80%
of the problems come from 20% of the issues. Therefore, if you can eliminate the issues, you eliminate the problems.
Pareto Diagram
100
75
20
50
10
Printer Problems
Other
0
Driver
Issue
Cable
Disconnect
Paper
Jam
0
Toner/Ink
Empty
25
% of Defects
Number of Defects
30
Control Chart
The Control Chart gives you a picture of the process output over time. The upper and lower control limits represent the
control points of the process. The process is under control if the data falls between the lower and upper control limits. This
applies in all but one case (7 Run Rule).
The upper and lower specification limits represent the specification points of the process. The process is within
specification if the data falls between the lower and upper specification limits. This applies in all but one case (7 Run Rule).
Think of a road. The mean is the middle of the road. The control limits are the stripes near the edge of the road and the
specification limits are the actual edges of the road.
The following graphic shows a control chart and the number of different pieces of it. The mean represents the middle of
the chart and the target measurement.
Upper Specification Limit (USL)
Upper Control Limit (UCL)
Mean
Lower Control Limit (LCL)
Lower Specification Limit (LSL)
Quality Terms (3)
What is the Heuristic?
Heuristic is a rule of thumb and can apply to a variety of knowledge areas. It servers
as a general rule to use when a rule specific to the situation might be too timeconsuming or costly to generate for what is needed.
What is Run of Seven
Rule?
In Run of Seven Rule states that if you have seven consecutive data points on
either side of the means, without crossing the other side, the process is out of
control and need investigation.
What is Assignable
Cause?
An Assignable Cause is a measurement on the Control chart that must be researched
before you can determine the reason for the failure (out of specification or out of control).
Upper Specification Limit (USL)
Violation of the
Run of Seven Rule (out of control)
Upper Control Limit (UCL)
Mean
Problem C
Assignable
Cause
Lower Control Limit (LCL)
Problem A
Lower Specification Limit (LSL)
Out of Control
Data Point
Out of Specification
Data Point
Problem B
Quality Mind Map
Quality “Must Knows”
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Key Inputs, Tools/Processes and Outputs for each process area
The percentages 1, 2, 3 and 6 Sigma
The principles and components of a Control chart
What specification, control and mean limits represent
Definition of Quality
Pareto diagram
Concept of prevention over inspection as it relates to quality
What is Gold Plating
Continuous improvement concepts
At what point the worker, the Project Manager, and Senior Management are all
responsible for quality
Cost of conformance and non conformance
The basics of probability and that the sum of all possible probabilities must equal
100%
What attributes and variables are as they relate to quality
Statistical independence and mutual exclusivity
What a Fishbone (aka Ishikawa or Cause/effect) diagram is and in what environment
it is used
The basics of Just in Time inventory and the amount of inventory needed is 0%
The principles of measuring a sample compared to the population
The Seven Run Rule
Quality Exercises
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9.13.1 – Quick Test – together
9.13.4 – Quality Practice test – individual
9.13.5 – Control Limit Chart - individual
9.13.3 – Matching - individual
Human Resources
Human Resources
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Organizational Planning
Motivational Theory
Theory X and Y
Power
Staff Acquisition
Resource Histogram
Responsibility Assignment Matrix
Human Resource Terms
Team Development
Conflict Resolution
Problem Solving and Situational Questions
“Must Knows”
Exercises
Human Resources
Executing
Planning
9.1
Organizational
Planning
Staffing Management Plan
Staffing Management Plan
9.2
Staff
Acquisition
9.3
Team
Development
Organizational Planning
Organizational Planning involves determining what roles, what reporting structure, and what
relationships the project needs.
What are the Key Inputs?
What are the Key Tools?
What are the Key Outputs?
Organizational Planning (Planning Process)
Key Inputs
Staffing Requirements
Key Tools
Stakeholder Analysis
Human Resource Practices
Key Outputs
Role and Responsibility Assignments
Staffing Management Plan
Organization Chart
Key inputs include any constraints
that will potentially limit the project.
Constraints could be things such as
time frame or total budget amount,
or location or cost dependent
among other things. Also
addressed are project interfaces
(examples include handing off
between phases, or groups, as well
as reporting structures where there
is a connection between people or
levels on the organizational chart).
Stakeholder Analysis comes into
the equation in delivering resources
that meet the needs of the
stakeholder. Organizational Theory
works to provide the layout of the
organization related to a matrix,
functional or projectized
organizational structure. This is key
in knowing what form of an
environment the project consists of,
so that fits and optimization can be
utilized.
In Staffing Requirements you
determine what types of skills and
experience the project needs plus
the number of people in possession
of those skills.
Key tools include utilization of the
Human Resource Practices of the
company as well as any templates that
help with the organization and structure
of the resources.
Role and Responsibility Assignments
also aide in allowing personnel to know
exactly what their position is on the project,
as well as what is expected of that position
by those in charge of the project.
Key outputs include a Staffing
Management Plan to address how staffing
needs will be filed on the project.
An Organization Chart (also known as
Organizational Breakdown Structure) is
used for graphical display of reporting
relationships on the project.
Motivational Theory
Maslow’s Hierarchy of Needs
Maslow’s hierarchy of needs is a tool that you can use to determine what can be used to motivate an employee. The
key is to finding out where someone is in the triangle and using items from that area to motive.
For an example, in the physiological area, the focus is on the basics of existence, such as shelter, food, survival. If
someone on your team has a house, expensive car, goes on extravagant vacations every year, you aren't’ going to
motivate them with something from the physiological area. Esteem or self actualization will more likely represent things
that will motivate that person. Things like the more expensive car, the promotion at work, the extended vacation will be
the hot buttons for that person.
Maslow’s Hierarchy
Self Actualization
Self
Actualization
Someone who is performing a calling, someone with everything
going right and feeling like life can’t get much better.
Esteem
How we are perceived and feel about ourselves.
Belonging
Friends, finding love, existence and association.
Esteem
Belonging
Safety
Physiological
Safety
Physiological
Things that make us feel comfortable or protected.
Basics needed for survival, things such as shelter and food.
One basic assumption of motivational theory is that in most cases, money does not create motivation. Instead things
like improving the workplace, showing appreciation toward the worker, and additional responsibility typically motivate
workers more than simply throwing money at them.
Motivational Theory
Herzberg’s Motivational Theory
Herzberg had two main factors for workplace success.
Hygiene – This focuses mainly on the areas associated with the workplace. Factors such as a safe work environment,
steady pay, and a stable job are examples.
Motivating Agents – This focuses on non-financial characteristics of work. Examples can include the opportunity to
improve and do more, education, and responsibility.
One basic assumption of motivational theory is that in most cases, money does not create motivation. Instead things
like improving the workplace, showing appreciation toward the worker, and additional responsibility typically motivate
workers more than simply throwing money at them.
Herzberg’s Theory
Theory X and Y
McGregor’s Theory X and Y
The X and Y theories can apply to management or labor. As you read the tables below, try to imagine a manager from
theory X and labor from theory Y or the other way around. Is it a nightmare waiting to happen? The tables below
describe the characteristics of both types.
What is Theory X?
Theory X is more an “old school” mentality when factories produced the majority of the work and people went to
work , were told what to do, and didn’t want to have to evaluate what needed to be done, but wanted the boss to tell
them.
Theory X
Labor and Management Characteristic
Labor wants to be told what to do.
Management feels the need to supervise.
Labor is not necessarily motivated to work.
Labor does not want work.
Theory X and Y
What is Theory Y?
Theory Y is more modern perspective on labor and management. It is an environment where management typically lets
labor know what needs to be done and when, and direct them toward it. This main difference here stems from motivation.
If labor can (and wants to) see the big picture of where work is going, then management can set expectation, and lead
instead of only manage.
Theory Y
Labor and Management Characteristic
Labor can work with an end goal in mind.
Management can minimize supervision.
Labor is motivated to do what is necessary for work.
Labor wants to work and enjoy it.
Management Styles
There are a number of management styles that could appear on the exam. To a seasoned Project Manager, many are
somewhat instinctive, but if you aren’t familiar with their names, situational problems could cause you problems.
Remember a Project Manager doesn’t need to have just one of these styles. Styles can vary as the situation dictates.
What are the six different Management Styles?
Style
Description
Coach
The Coach brings out the best in the team, coaching members to their potential or where they need to
be with regard to a project
Director
The Director drives the direction of the team or team members to accomplish specific tasks or goals.
Facilitator
The Facilitator helps keep things progressing, making them happen. This style is not super proactive or
ownership.
Mediator
The Mediator tries to find a common goal when there is disagreement. This style is ideal when there
are varying technical opinions or disagreement among resource managers.
Mentor
The Mentor is similar to a Coach but focuses more on showing someone how to improve and be better,
helping them take on new skills and roles.
Visionary
The Visionary sees what can be, where the company or team needs to go, focusing on the big picture
of the company, with other focusing on the day-to-day events..
Roles and Responsibilities
The following table helps you understand who is ultimately responsible for what type of problem. Typically, the situation
questions will reference a matrix environment unless otherwise stated.
What are the six different roles and their responsibilities?
Roles
Sponsor
Senior
Manager
Functional
Manager
Area of Responsibility
Project sponsorship and money
for the project.
Supporting the sponsor and the
project; help resolving disputes
between project and functional
managers/areas.
Example
The implementation company has said
they need more money as part of a
change control process to create the
needed work for the project.
The project needs more resources on it
after some key resources were removed
from it to focus on operation of the
marketing department. The functional
manager says they are short staffed as
it is, and can spare no more resources.
The project has a potential schedule
slippage that will cause the project to be
5 weeks late.
Functional manager controls the
resources on the project and run
the functional area of the
business.
The project needs more resources on it
after some key resources were removed
from it to focus on operation of the
marketing department.
Solution
While the project manager might present to
the sponsor the details of the change, the
sponsor would be the ultimate person to
approve the change and additional money for
it.
Senior management would work with the
project and functional manager to determine
priorities between the two areas, thus
supporting the project by resolving high level
disputes.
Senior management would become involved
after the project manager reviewed options
and presented them to senior management to
approve a solution since the issue violated
the triple constraint.
If the functional manager can put other
resources from this area on the project this
should solve the problem on the project.
Roles and Responsibilities(2)
Roles
Area of Responsibility
Project
Manager
Project manager executes the
project plan and completes the
project in scope, on time, and
within budget.
The project has an item that will not be
available as planned, but shouldn’t
delay the finish of the project.
The project manager would adjust things to
complete the project by the due date, as that
is their responsibility. If things were to slip
past the due date, they would have to get
approval from senior management.
Team members do work
assigned by the project plan and
project manager. They are
responsible for their own nonproject related effort.
According to the schedule, the database
development should begin this week.
The developer has reviewed the schedule
and begun work on the database creation
this week as the schedule say the
developer should.
Team
Member
Stakeholder
Example
The team is have an argument about
where to go for lunch.
Solution
The team comes to a resolution on where
to go. Remember, it’s not the Project
Manager’s job to be the baby sitter of the
team..
If not defined above, their role
would be to know the
requirements of their area and
voice those to the project
manager and ensure those
requirements are met on the
project.
The finance department contact has said
that they are impacted by the reporting of
the new sales tracking project. They are
not sure if the project will accommodate
their needs..
The finance person contacts the project
manager to let them know that they are
impacted on the project and should be
involved in any requirements gathering.
They put together the needed requirements
for the project as it effects them and work
with the project manger to ensure that the
project meets their requirements and
needs.
Power
One of the keys to successful project management is the ability top use the power of the project manager to accomplish the
challenges of the job. On the exam, you can expect to be quizzed on five different types of power and which is the best,
worst, and what type you have to earn on your one. The table that follow displays the five type of power with examples.
Describe the five types of Power?
Role
Level of Responsibility
Example
A reward is usually the best form of power to use. With reward,
someone receives a benefit (reward) for doing something that is
needed.
If you complete your work on the project ahead of
schedule, we will send you to that training class you have
been wanted to attend.
Expert
This form of power is one that project managers must earn on
their own. With expert power, the project manager is perceived as
an expert on the subject by those on the team or at the company.
We need to listen to what he says regarding project
management. He created PMP Success Series of
products.
Formal
This is legitimate power. This is the type of power that comes
from the senior management at a company authorizing you to be
the project manager, and whatever authority comes that.
As you saw at the kickoff meeting, the sponsor said that I
am the project manager on this project and the team
would take direction from me on matters related to the
project.
This type of power comes from an attitude or “presence” that a
person has and the corresponding type of influence this person
has on the team. It could also come from someone who would
align with other people in powerful position at the company or on
the team.
Ex. #1: We need to do what the project manager asks.
She has lunch with our VP every week, and they play
golf together a lot as well. If we let her down, he will
definitely hear about it.
Ex. #2: I want to stay late and finish this before the
morning like I promised the Project Manager I would. He
has always been good to me and the rest of the team
and I don’t want to let him down.
A penalty is the work form of power to use. With a penalty, people
experience negative impacts if they do not do what is desire.
If you don’t complete the work as planned, I will make
sure that you don’t get your bonus like the other
people will.
Reward
Referent
Penalty
Staff Acquisition
Staff Acquisition involves getting the needed human resources (individuals or groups) assigned to
and working on the project.
What are the Key Inputs?
What are the Key Tools?
What are the Key Outputs?
Staff Acquisition (Planning Process)
Key Inputs
Staff Management Plan
Key Tools
Negotiations
Key Outputs
Project Staff Assigned
Project Team Directory
The Staffing Management Plan
is used to see what type of skill set
is needed and can include location
and time frames. This requirement
is then compared to the staffing
pool description for any matches.
Next, recruitment comes into the
picture to satisfy any remaining
gaps.
Techniques utilized can include
resource Negotiation, preassignment (or pre-allocation) to the
project and contacting any outside
companies to help with the
procurement needs of staff
acquisition.
When this process is completed the Project
Staff is Assigned to it and know when they
will start on the project.
At this point a Project Team Directory
should be able to be available. This would
list among other things who is on the
project, how to contact them, what they do
on the project (title) and where they are
located.
Resource Histogram
The Resource Histogram is a tool you can use to see quantity of staffing over time. It can be setup to show by month,
hours by week, total people on the project over time, or a particular skill set over time. The example below shows total
staffing hours by month.
Resource Histogram
350
300
Hours
250
200
Staffing hours by month
150
100
50
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Month
Responsibility Assignment Matrix
This tool lets the project team know who is involved in each area and what they are responsible for in that area. This
can eliminate the “I didn’t know” excuse and finger pointing that can come from not utilizing this tool. For the exam, you
need to recognize the graphics below and know what the tool is used for.
Task / Resource
Planning
Sergio
Ramya
Randy
Kanaks
Shirley
A
I
L
I
I
Design
T
Development
L
T
T
Testing
T
T
I
Closure
Legend:
L
Team leader = L
Input potentially needed = I
Team member = T
Approval needed = A
L
T
L
I
HR Terms
What are the two
types of benefits?
From time to time, the exam can cover employee benefits as a motivational tool. There are two
main types of benefits: fringe benefits and perks.
Fringe
These are the type of benefits that everyone receives in the company or project. These are
typically not a motivator because the person is already getting the benefit. Examples could
be health insurance or paid holidays.
Perks
These are special benefits offered for being on a certain project or doing certain things.
These are not available to everyone, thus the ability to use them for motivation. Examples
could be going to a special training class or seminar.
What is the Halo
Theory?
Halo Theory is the process (in project management) of assuming that someone would make a
good project manager because that person is good in his or her technical field. The theory
could also be used to imply that if someone was not good in his or here technical field that
person wouldn’t be good at project management. This theory often becomes reality when
someone is promoted to a project manager from technical or hands on position and hasn’t had
the opportunity to receive any project management training.
What is a Expectancy
Theory?
This is a theory where the employee works a great deal on the project and assumes that
the reward will be relative to the amount of their effort or perceived effort. This can usually
be quite a disappointment for those believing they will be greatly rewarded when the project
is done.
What is Team
Development?
Team Development or team building is an event that will go on throughout the project. In
some ways it is the organized activities and communication that pulls people together in
other ways it is the unspoken things that occur as people work together which forms a bond
of a team. Key to achieve this is the staff and the project plan. This aligns the people of the
project with the details of the project so they know what direction they are to work.
Team Development
Team Development includes organized activities and communication pulling people together to form
a team bond.
What are the Key Inputs?
What are the Key Tools?
What are the Key Outputs?
Team Development (Executing Process)
Key Inputs
Staff Management Plan
Key Tools
Key Outputs
Team Building Activities
Performance Improvements
Key tools include general management skills to
help you organize and runt things. Training is a
key to team development as well. Training
focuses on developing of the individual which
helps make the team stronger. Co-location can be
used to help build an even bigger team. Given
today’s global business environment, there is a
strong probability that any large project will utilize
co-location across the country (or countries).
Key outputs are Performance
Improvements as well as data that
can serve as key to performance
appraisals.
Performance Reports
Project Plan
The Staffing Management Plan
comes into play when needed to
address managing of the staff.
Performance Reports and
external feedback help with the
optimization of the team via a
communication loop.
Project Plan describes the
technical context within which the
team operates.
Team Building Activities are helpful with team
development, as there is more to team
development than just putting people together in a
group. This could be something such as group
lunches or evenings away form work in a social
environment. Reward and recognition is helpful
also as a motivational and appreciation tool for
individual work efforts.
Source of Conflict
Scheduling
Priorities
Biggest Source of Conflict
Resources
Technical
Direction
Methodology
Details
Cost
Personality
Least Source of Conflict
Source of conflict are an issue that is imperative to understanding conflict. If Project Managers are aware of variables that
can cause conflict, they can take a proactive approach to eliminating conflict before it occurs, or know that it is likely to
come as the project addresses areas that simply can’t be ignored, such as scheduling and resources.
Most people think that personality is the main reason for conflicts. Studies have shown that this is rarely the case.
Traditionally, conflict occurs as planning evolves. Items such as scheduling, priorities, and resource utilization are most
likely sources of conflict. Personality is typically the least source of conflict.
Conflict Resolution
Given the complexity of projects today conflict is bound to happen. The days of eliminating conflict before it happens are
gone. The process of resolving conflict is a key of the project manager.
Describe the five methods of conflict resolution?
Conflict
Resolution Mode
Description
Example
Problem Solving
(Confrontational)
This is where an attempt is made to solve the actual
problem.
If you can’t do what is needed with your current
computer, get an upgrade that lets you accomplish what’s
needed for your job.
Compromise
This is where an attempt is made to get everyone involved to
give (concede) a little to find a common ground and
resolution. This is sometimes viewed as not that desirable as
everyone giving up something up, can cause the solution to
(potentially) not meet anyone’s needs..
If we can get labor to give in on benefits a little and
management to increase their raise increase a little I
think we can find agreement that both sides can live
with.
Forcing
This is where a direct order to resolve something is given.
This is typically the worst type of conflict resolution mode.
You will stop using that software and switch to the
authorized version or you will not around here for long.
Smoothing
This is where the focus is on the positive and trying to
distract the focus from the negative.
Look at how good the requirements on the project went.
We just have to apply that same view to this phase of the
project as well
Withdrawal
This is where the Project Manager ignores the problem and
hopes it either fixes itself or disappears. This typically is not
viewed by PMI as a conflict resolution mode because it’s not a
proactive approach to resolving conflict.
I know he is a pain to work with and takes longer to do his
work than we like, but maybe if we leave him be, he will
just quit and take a new job.
Form, Storm, Norm, Perform (FSNP)
Team development involves convergence of a group of people into a performing organization. A common evolutional life
cycle is characteristic with team development. The team development process includes Form, Storm, Norm, Perform, and is
typical when a term is put in place
Describe the FSNP?
Process
Description
Form
Form refers to the creation of the team, when the people on the team are put
together per the organizational planning needs of the project.
Storm
Storm refers to the chaos that occurs as people start to get accustomed to working
together.
Norm
Perform
Norm refers to the point in time when team behavior starts to normalize and team
members are accustomed to each other. The newness of the group of people has
worn out.
Perform refers to the activity that transpires as the team works as a team instead of
as a group of people. The group should be working at an optimal level in this phase.
HR Terms (2)
Reward and
Recognition
Problem Solving
and Situational
Questions
A Reward and Recognition System is needed for team development and for optimizing
performance. Such systems need to be defined, but they also need to be adaptable because
different things motivate different people. A Reward and Recognition System could provide
compensatory time for overtime hours worked or paying for a certification test or training. A
successful Reward and Recognition System is possible when management follows through on
its promises. Breaking your word to you team not only hurts the reward system, but your
creditability as a Project Manager as well.
The exam uses situational questions to verify your understanding of who is responsible for
solving various types of problems. Problem solving and situational questions are challenging
areas given that everyone has a different opinion of who is responsible for when studying begins
for the exam.
Human Resource Mind Map
Human Resources “Must Knows”
• The Key Inputs, Tools/Processes and Outputs of each process
group
• The roles and responsibilities within the Project
• The characteristics and differences of Formal, Reward, Penalty,
Expert and Referent power of the Project Manager
• The characteristics and differences of Conflict Resolution techniques
• What each level of Maslow’s hierarchy of needs is and what it
overall represents
• The principles of a responsibility chart, a Resource Histogram and
responsibility matrix
• What perquisites and fringe benefits are, and the differences
• The halo and expectancy theories
• The principles of McGregor’s theory X and Y management and labor
HR Exercises
• 10.7.1 – Quick Test – together
• 10.7.4 – Practice test – individual
• 10.7.3 – Matching - individual