PROFESSIONAL
FIRSTEDITION
Abstract
ProjectmanagementprofessionalhandbookisakeyforpassingPMPexamandbuilding
conceptualbasisforprojectmanagement.
JavedAkhtar,CE,PE,PMP
Javed.engr@gmail.com
PROJECTMANAGEMENTPROFESSIONAL
INTRODUCTION
Project:
Atemporaryendeavorwithabeginningandanendwhichcreatesa,
Uniqueproduct,
Animprovementofexistingproduct,(SixSigmaProject)
Service,
Result.
NOTE:Progressiveelaborationisthecharacteristicsoftheproject.
ProjectManagement:
Itisbothscienceandartofapplyingprojectmanagementskills,knowledge,andtoolsandtechniques
inasystematicwaytomeettheprojectobjectivesandrequirements.
Thecorefunctionoftheprojectmanagementistomeetthebelowobjectives,
Skill
Scope
Time
Cost
Quality
CustomerSatisfaction
Knowledge
Tools&
Techniques
Project
Management
Itinvolvesfiveprocessgroups(05)whichincludesfortyseven(47)projectmanagementprocessand
balancingthecompetingprojectconstraints(Scope,Quality,Schedule,Budget,Resources,andRisks)
forpotentialchanges.
SuccessfulProject:
Aprojectistobesaidsuccessfulwhenitmeetstheobjectives.
Intime,
Withincostbaseline,
Withoutorminimalunexpectedchangerequestsandvariationorders,
Withinqualityspecifications,
Ultimately,buyerissatisfiedwiththeproduct,service,and/orresult.
ProjectCompletion:
SellerPerspective:Aprojectisannounced/declaredasCOMPLETED,when
Productisformallyandfinallyacceptedbythecustomer.
Procurementissuccessfullyclosed.
LessonslearnedaresubmittedtothemanagementorPMO.
Buyerperspective:Aprojectisannounced/declaredasCOMPLETED,when
Productisformallyaccepted.
Procurementissuccessfullyclosed.
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ProjectStakeholders:
Anyone who can positively or negatively impact the project and can be impacted by the project.
Stakeholderscanbe,
1.
2.
3.
4.
5.
6.
Sponsor(s),
FunctionalManager(s),
ProjectManager,
ProjectTeam,
Customer/Client/Owner/User/Buyer(s)
PMO,
Treatingstakeholdersasassistantteammembersmeansyoukeeptheminformabouttheprojectand
updates.
Operation:
Itisanongoingendeavorwithnoends.Itgeneratesrepetitiveproduct,serviceorresult.Operation
doesnotend,butattheterminationofproductitmayflowinotherdirectionwithanewproductor
modificationtotheprevious.
NOTE:Pointofviewisveryimportanttoconsiderwhenidentifyinganoperationalprocessoraproject.
Tothecustomer,theworkeffortmaybeaproject,howevertotheperformingorganizationthework
effortmaybepurelyoperationalandsomethingtheydoallthetime.
OperationalStakeholders:
Operational stakeholders should be engaged and their needs identified as part of the stakeholder
register and their influence (positive or negative) should be addressed as a part of the risk
managementplan.
Program:
Aprogramisagroupofprojectsandoperationswithsimilarobjectivesorgoals.Alsocanhavelower
levelprogramsunderahighlevelprogram.
Thepurposeinmanagingagroupofsimilarprojects:
Deriveeconomiestoabiggerscale.
Theresourceutilizationimprovedbytheconceptoflearningcurve.
Improvedskills,knowledge,lessonlearnedonsimilarprojects,therisksdecreasedtoacertain
degree.
Controlovertheprojectsincreases.
Organizationsbuildtheirprofileandexpertiseindeliveringspecificprojectsthatarethepart
ofaprogram,hencecapturingthebusinessandsettingmarketplacefortheirbusiness.
ProgramManagement:
Program management controls the programs and project and their interdependencies in order to
realizespecifiedbenefits.Actionsrelatedtotheseinterdependenciesmayinclude,
Resolving resource constraints and/or conflicts that affect multiple projects within the
program,
Aligning organizational/strategic direction that affects project and program goals and
objectives,
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Resolvingissuesandchangemanagementwithinasharedgovernancestructure.
Program management subdivide the large projects into smaller, more manageable pieces or
componentscalledsubprojects.Thisapproachofprojectdecompositionisadoptedtoensurethatthe
projectsuccess,benefitsandobjectivesareachievable.
Portfolio:
Aportfolioisagroupofprograms,projectsandoperationswhicharenotrelatedtoeachother.A
portfoliorepresentstheorganizationalentireinvestment.
Mostofthecases,portfoliosarebeinglaunchedbythegovernmentatlargescale.
PortfolioManagement:
Portfolio management aligns with organizational strategic goals by selecting the right program or
projectanddeterminestheprioritiesamongtheprogramsand/orprojects.
TopDownCommunication:
1.
2.
3.
4.
5.
Strategies&Policies,
ProgressiveElaboration,
Governance,
DispositiononChangeRequests,
ImpactsofChangeRequesttootherprojects.
OrganizationalProjectManagement:
Itistheframeworkforkeepinganorganizationasawholefocusedontheoverallstrategy.Itprovides
direction for how portfolios, programs, and projects, and other organizational work should be
prioritized,managed,executed,andmeasuredtobestachievethestrategicgoals.
OrganizationalProjectManagementprovidesstrategicframeworktouseandguideportfolio,
program,andprojectmanagementtodeliverorganizationalstrategy.
PortfolioManagementselectsandprioritizeprogramsandprojectsthatwillbestachievethe
organizationsstrategicgoals.
Program Management coordinates with the management of different projects to achieve
specificthatsupportstheorganizationalstrategicgoals.
ProjectManagementmanageseffortstodevelopspecificscope,whichsupportstheportfolio
orprogrammanagementobjectivesandultimatelyorganizationalstrategicgoals.
ProjectsarebeingalignedtoanddrivenbytheOrganizationalStrategyandbeingprioritizedbasedon
that.Ifanyprojectisnotalignedwithorganizationalstrategy,theprojectwillbelowprioritizedand
evencanbeterminatedmidway.
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OrganizationalProjectManagementMaturityModel:(OPM3)
OPM3standsforOrganizationalProjectManagementMaturityModel.Thismodelisdesignedby
PMItohelporganizationstodeterminetheirlevelofmaturityinprojectmanagement.
ProjectManagementOffice(PMO):
PMO is not a single entity. PMO role within an organization can be broadly divided into three
categories.
SupportivePMO:
SupportivePMOprovides
Templates,practices,policies,methodologies,andlessonlearnedfromotherprojects.
Ittypicallyexercisesalowlevelofcontroloverprojects.
ControllingPMO:
BesidesprovidingTemplates,practices,policies,methodologies,andlessonlearned,
Itprovidestraininginprojectmanagementandprojectmanagementsoftware(PMIS),
Assistswithprojectmanagementtools,
Ensurecompliancetotheorganizationalpractices,
Ittypicallyhasamoderatelevelofcontroloverprojects.
DirectivePMO:
ThisPMOdirectlycontrolstheprojectswithahighdegree.Alsoauditstheprojectsfortheirsuccess.
AllofthefollowingarethecharacteristicsofdirectivePMObutnotlimitedto,
1. Responsible for creating and distributing project management methodologies,
processesandprocedures(OPA).
2. Monitor compliance with the organizational project management methodologies,
processesandprocedures.
3. Responsibleforcompilinglessonlearnedfortheorganization,andprovidingtothe
projects.
4. Determinesprioritiesamongtheprojects.
5. Manageinterdependenciesbetweentheprojects.
6. Provideguidancetotheprojects.
7. Canhelpprovidingtheresources(projectmanagers).
8. PMOisthepartofChangeControlBoard(CCB).
9. Canrecommendprojecttermination.
NOTE: PMO role may vary from an advisory to full authority over projects. It is a liaison between
portfolios,programs,projects,andcorporatemeasurementsystem.
Sr.
Description
TypeofPMO
Compileslessonlearnedfortheorganization.
ALLPMO
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theperformingorganization.Itpromotesconsistencyandstreamlinethe
efforts.
3
Providessupport,trainingsandguidance,requiresalltheprojectwithin ControllingPMO
the organization to use designated project management software but
doesnotexertcontrolovertheprojects.
Manageallprojectsthroughouttheorganization.
DirectivePMO
Providesprojectmanagers.
DirectivePMO
Terminatesprojectmanagerorproject.
DirectivePMO
Hashighestlevelofcontroloverprojects.
DirectivePMO
Manageinterdependenciesbetweentheprojects.
DirectivePMO
PMOisthepartofChangeControlBoard(CCB).
DirectivePMO
10
PerformsPMOaudit.
DirectivePMO
11
12
13
Prioritizeprojectstoalignwithstrategicgoals.
Controlling+
Directive
14
Coordinatesallprojectswithintheorganization.
Controlling+
Directive
ProjectMonitoringUnit:PMU
PMUisthedepartmentorcompanytomonitortheprojectworksandprogress.Itcanbe,
Athirdpartyhiredbythebuyerforprojectmonitoringandreportingpurpose.
Adepartmentwithinthesellerorganizationmonitoringtheprojectandreportingtothehigh
managementandCEO.
ProjectObjectives:
BuyersObjectives:
Businessneed,marketplaceetc.
SellersObjectives:
1.
2.
3.
4.
5.
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Scope,
Time,
Cost,
Quality,
CustomerSatisfaction,
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ManagementbyObjectives:MBO
MBOisaphilosophyofprojectmanagementwithfollowingthreesteps,
1. Establishunambiguousandrealisticobjectives,
2. Periodicallyevaluatewhetherobjectivesarebeingmet,
3. Implementcorrectiveaction.
Forprojectmanagers,MBOmeansiftheprojectisnotinlinewiththeobjectivesordoesnotsupport
thecorporateobjectives,itislikelytoloseresources,assistanceandattention.MBOiseffectiveonly
whenmanagementsupportsit.
ProjectBasedOrganization:PBO
PBOcarrytemporarysystemformanagingprojects.Thetemporarysetupbeingestablishedbasedon
theprojectrequirementandsuccess/workisbeingmeasuredbythefinalresultratherthanbyposition
orpolitics.
PBOistypicallyProjectizedorganization.Sometimes,largePBOshavefunctionalsupportareas.
ProjectConstraints:
Projectconstraintsarelimitingfactorsthatdefineprojectboundaries.Therecanbeahundredsof
constraintsonaproject.Belowisthelistofthekeyprojectconstraints
1.
2.
3.
4.
5.
6.
7.
Scope,
Time/Schedule,
Cost/Budget,
Quality,
Resources,
Risk,
CustomerSatisfaction.
Definingprojectconstraintsandplanningthemprofessionallywill,
Ensureprojectsuccess,
Ensurecustomersatisfaction
Sometimes, project constraints may severely impact the project optimization. All constraints have
certainimpactoncustomersatisfactionwhichitselfisaconstraintontheprojects.
TheTripleConstraints:
JavedAkhtar,CE,PE,PMP
Scopeisbaselinetomeasuretimeandcost.
Scopeincreasemeansincreaseintimeandcost.ProjectscopeisdefinedinProject
ScopeStatementandcontrolledthroughWBS.Anychangeinprojectscopemustbe
subjecttoChangeRequest(CR).CostchangesaresubjecttoVariationOrderandtime
changesarerecordedthroughExtensionofTime(EOT).
Changestothetripleconstraintmustbeapprovedbythesponsor.
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ProjectRoles:
1.ProjectManagerPowers:
1.
2.
3.
4.
5.
Formal/Legitimate:Itispowerofpositiondefendingwithlogicsandjustification.
Rewarding:Itispowerofposition.
Penalizing/Coercive:Itispowerofposition.
Expert:ItisthepowerofPMhimself.
Referent:ItisthepowerofPMhimselfbutcomesthroughanotherperson.Ifanother
person/employee likes you and wants to be like you, definitely he will obey your
instructionsandwillbeaffectionatetoyouandprojectaswell.
2.ProjectCoordinator:
1.
2.
3.
4.
5.
Reportingtoexecutiveorfunctionalmanager.
Ensuringtaskcompletion.
Cantmakebudgetorprojectdecisions.
Havesomeauthoritytoreassignresources.
Foundinweakmatrixorfunctionalorganization.
3.ProjectExpeditor:
Itistheweakestofthethreeprojectmanagementroles.Itisanassistantstaffwhohaslittleorno
formalpower.
1.
2.
3.
4.
5.
Reportingtoexecutiveorfunctionalmanager.
Ensuringtaskcompletion.
Canttakedecisions.
Foundinfunctionalorganization.
Theirrolemaybeparttime.
4.SeniorManagement:
Anyonemoreseniorthanaprojectmanagercomesunderseniormanagement.
5.FunctionalManager:
Functionalmanagersarethedepartmentmanagersandhavetheirownresourceswhichcanbeloaned
totheprojects.Financemanager,procurementmanager,design&technicalmanageretc.
6.Stakeholders:
WheneverPMBOKsaysStakeholdersthatsmeansKeyStakeholdersandthoseareseniortothe
projectmanager.
7.Sponsor:
The person or a company who invests on the project. Sponsor may be internal or external to the
company.Itmaybeacustomer,companyorathirdparty.Sponsorleadstheprojectthroughinitiating
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processesuntilformallyauthorized,andplayasignificantroleindevelopinginitialscopeandcharter.
Forissuesbeyondprojectmanagercontrol,thesponsorservesasanescalationpath.Sponsormust
beinvolvedin,
Authorizingscopechanges,
Go/NoGodecisionswhenrisksareparticularlyhigh,
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ORGANIZATIONALINFLUENCESANDPROJECTLIFECYCLE
ORGANIZATIONALIMPMACTONPROJECTS
1. OrganizationalCulture:
Organizational culture affects the project management, progress, and success. It is enterprise
environmentalfactorandincludes,
Motivationandrewardsystems,
RiskTolerance,
Leadership,hierarchy,andrelationships,
Codeofconduct,workethic,andworkhoursetc.
2. OrganizationalCommunication:
Projectmanagementishighlydependentonaneffectivecommunicationstyle,especiallyintheface
oftheprojectmanagementprofession.Itisanenterpriseenvironmentalfactor.
3. OrganizationalStructure:
Organizationalstructureisanenterpriseenvironmentalfactor,whichmayaffecttheprojectbythe
availabilityofresourcesandprojectmanagerauthority.Thesearemostimportantfactorsinorderto
evaluatetheorganizationalstructure.
Differenttypesoforganizationstructureswillhaveapositiveornegativeeffectontheeffectiveness
ofprojectmanagementinyourorganization.Belowtableishelpfultocategorizethestructureofan
organization.
Tracetheorganizationstructureusingprojectcharacteristics.
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FunctionalOrganization:
Itisaverycommonorganizationalstructurewhereteammembersworkforadepartment.
Advantages:
1.
2.
3.
4.
5.
Coordinationattoplevelbetweenthedepartmentmanagers.
Highcompanyexpertisebyfunction.
Highdegreeofprofessionalspecialization.
Clearlydefinedcareerpathintheareasofworkspecialization.
Teammembersreporttoonlyonesupervisor.
Disadvantages:
1.
2.
3.
4.
Littleornoauthorityoftheprojectmanager.
Employeesemphasisontheirfunctionalspecialty.
Hence,givinglowprioritytotheprojects.
Resourcesareoftennotdedicatedtotheprojectandarerentedfromthefunctional
managers.
5. Projectmanagerandadminstaffrolesareparttime.
ProjectizedOrganization:
ProjectizedorProjectBasedOrganization(PBO).
Advantages:
1. ProjectManagerhascompleteauthority.
2. Resourcesarefullydedicatedtotheproject.Disagreement/contentionforresources
doesnotexist.
3. Communicationiseasiestandeffective.
4. Strongloyaltytotheteamandtheprojectaswell.
5. Projectmanagerandadminstaffrolesarefulltime.
Disadvantages:
1. NoHomeDepartmentfortheprojectteam.Aftertheprojectisover,teamwillmove
toanotherprojectorbacktohomes.
2. Lowemployeesexpertiseandlowprofessionalgrowth.
3. Duplicationoffacilitiesandjobfunctions.
4. Mayresultinlessefficientuseofresources.
5. Teammemberswillnotfocustocompletetheprojectjobsastheywillbelookingfor
anotheropportunity.
MatrixOrganization:
Matrixorganizationsreflectablendoffunctionalandprojectizedcharacteristics.Matrixorganization
can be classified as weak, balanced, or strong matrix depending on relative level of power and
influencebetweenfunctionalandprojectmanagerandtheresourcesavailability.
WeakMatrixOrganization:
Advantages:
1. SameasFunctionalOrganizationwithfollowingdisadvantages.
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Disadvantages:
2.
3.
4.
5.
Projectmanagerhasverylittleornopower.
Lowprioritytotheprojectsforfunctionalmanagersandteammembers.
Resourcesarepartiallydedicatedtotheproject.
Projectmanagerandadminstaffrolesarenotfulltime.
BalanceMatrixOrganization:
Advantages:
1. SameasFunctionalOrganizationwithfollowingdisadvantages.
Disadvantages:
1.
2.
3.
4.
Moderateprioritytotheprojects.
Resourcesarepartiallydedicatedtotheproject.
Projectmanagerandadminstaffrolesarefulltime.
Powerissharedbetweenprojectmanagerandfunctionalmanager.
StrongMatrixOrganization:
Advantages:
1. PMO exists in strong matrix organization as project managers are reporting to
centralizedprojectmanagementbodywhichcanserveasPMOaswell.
Disadvantages:
1. ResourcedonotreporttoprojectmanagerandlessloyaltoPM.
2. Resourcescauseaconflictbetweenprojectmanagerandfunctionalmanager.
NOTE:Abovetwofactorsdistinguishbetweenstrongmatrixandprojectizedorganizations.
OverallAdvantages&DisadvantagesofMatrixOrganization:
Matrix(balancedorstrong)organizationispreferredwhenprojectislarge&multi
disciplinary.
Matrixorganization
Advantages
Disadvantages
Highlyvisibleprojectobjectives.
Extraadministrationisrequired.
Improvedprojectmanagercontrolover
resourcesfromweektostrongmatrix.
Morethanonebossforprojectteam.
Moresupportfromfunctionalareas.
Resourceallocation/managementiscomplex.
Bettercoordination.
Multipleinputstoteammembers.
Improvedhorizontalandvertical
disseminationofinformationfromweekto
strongmatrix.
Complexcommunications.
Teammembersmaintainahome.
Nohome.
Teammembersgainexpertiseinthefieldof
theirprofession.
Higherpotentialofresourceconflicts.
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Projectmanagementstaffisworkingfulltime Requiresadditionalpoliciesandprocedures
fortheproject.
foremployees.
Administrationstaffisworkingfulltimefor
theproject.
Differentpriorities and/orobjectivesmay
exist.
Skilledresources,highexpertise.
Requiresmoreeffortsformonitoringand
controllingtheprojects.
CompositeOrganization:
An organization that uses a combination of organizational structures is called a composite
organization.Manyorganizationalstructuresincludecertainlevelssuchas,
StrategicLevel,
MiddleManagementLevel,
OperationalLevel.
Projectmanagermayinteractwiththeselevelsdependinguponfactorssuchas,
Strategicimportancetotheproject,
Capacityofkeystakeholderstoexertinfluenceontheproject,
Degreeofprojectmanagementmaturity,
Projectmanagementsystem,and
Organizationalcommunications.
Theaforesaidfactorsdefinetheprojectcharacteristicssuchas,
Projectmanagersauthoritylevel,
Resourceavailabilityandmanagement,
Entitycontrollingtheprojectbudget,
Projectmanagersrole,and
Projectteamcomposition.
Thesecharacteristicshelptodeterminethetypeoforganizationalstructure.
ProjectManagerPowerW.R.T.OrganizationalStructure:
ProductLifeCycle:
1.
2.
3.
4.
5.
JavedAkhtar,CE,PE,PMP
Productlifecyclegenerallyconsistsofsequentialandnonoverlappingphases.
Phasetophaserelationshipisdefinedbytheoperationandcontroldivision.
Aprojectlifecycleoccursinoneormorephasesofaproductlifecycle.
Startswithconceptofanewproductandendsatproductwithdrawal.
Productlifecyclemaybethesimilarforaproductindifferentindustries.
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ProjectLifeCycle:
1. Projectlifecycleistodeterminetheprojectphasesandtheirrelationship(sequential,
overlapping,oriterative).
2. Projectlifecycle(projectphases)aredeterminedduringinitiatingprocessgroupwhile
performinghighlevelplanning.
3. Projectlifecycledescribeswhatyouneedtodotocompletethework/project.
4. Projectlifecycleconsistsofdifferentphasessuchas,
5. Construction: Feasibility,Planning,Design,Execution,Turnover.
6. Information Technology: High level design, detailed design, Coding, Testing,
Installation,Conversion,andturnovertooperations.
ProgressiveElaboration:(Iteration)
Theprocessofcontinuallyrefiningscopeandprojectestimatesisknownasprogressiveelaboration.
It is ongoing definition of the project which means that the information on the project will
progressive be elaborated with the passage of time on the project. It involves continuous
improvement.
1.
2.
3.
4.
Rollingwaveplanning(6.1_DefineActivities)
Prototype(5.1_CollectRequirements)
Iterativerelationship(phasetophase)
Developingprojectmanagementplan
PhasetophaseRelationships:
Project manager is responsible to determine an appropriate phasetophase relationship for the
project.Followingarethephasetophaserelationships,
SequentialRelationship:
Previousphasewillbecompletedbeforestartofnextphase.
OverlappingRelationship:
Projectphasescanbeoverlapped.
ParallelRelationship:
Twoormoreprojectphasesarerunningparallel
PredictiveLifeCycle:
Predictivelifecyclesareonesinwhichprojectscope,andtimeandcostrequiredtodeliverthatscope,
aredeterminedasearlyintheprojectlifecycleaspracticallypossible.
Itis also known asplan driven orwaterfallapproach indeliveringthe project scope.Thebelow
graphicsrepresentsatypicalwaterfallimplementationofprojectphases.
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Workforeachphaseisdifferentinprecedingorsubsequentphase,therefore,theskillsetsrequired
fortheprojectteammayvaryfromphasetophase.
IterativeandIncrementalRelationship:
Due to undefined and uncertain environments, the phases of the project are being repeated
intentionally.Therepetitivephasessuccessivelyaddincrementalfunctionalitytotheproduct.Each
phase can be termed as iteration. The iterations may be performed in sequential or overlapping
fashion.Aniterationisanexampleofprogressiveelaboration.
AdaptiveLifeCycles:
These are called as change driven or agile. Adoptive methods or agile project management
approachesaregenerallypreferredtoaddresshigh
Levelofchanges,
Projectrisks,and/or
Uncertainties.
Thislifecycleisalsoiterativeandincrementalbuttheiterationsareplannedtoperformforashort
durationofusually2to4weeks.
ProductBacklog:Theprojectscopeisdecomposedtosmallelementsknownasproductbacklog.The
productbacklogsarefurtherprioritizebycollaborationofcustomerandtheperformingorganization.
The customer, product owner is ultimately responsible for what gets developed and in which
sequence.
PotentiallyShippableproductIncrement:Theprojectteamdevelopsanddeliveranincrementofthe
producttotheproductionstandardswhichisknownaspotentiallyshippableproductincrement.Itis
submittedtocustomerforreviewandacceptance.Incompleteordefectivefeaturesarenotaccepted
forsignoffataniterationendreview.
SCRUM:Itistheoneofthemosteffectivemethodscurrentlyusedinagileprojectmanagementspace.
Ascrumrepresentsagroupofpeopleworkingclosely(headtohead)andpushingagainsteachother
toachievethetarget.
SPRINT: A short attempt or iteration is known as sprint. The product features assigned to a short
attemptoriterationareknownassprintbacklog.
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CharacteristicsofProjectLifeCycle:
Withtheprogressiveelaborationandpassageoftimeontheproject,
CostofChanges
StakeholdersInfluence:
Higheratinitialphaseoftheprojectandgraduallydecreaseswiththepassageoftime.
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Resource/Staffing:
Loweratinitialphases(initiatingandplanning),Thengraduallyincreasesandhighestduringexecution,
monitoringandcontrolling,Lowersdownfromthepeaktotheminimumduringtheprojectclosing
phase.
ProjectCost:
Sameasprojectresources.Projectcostincreaseswiththeincreaseinprojectresources.
RiskImpact&probability:
Sameasstakeholdersinfluence.Higheratinitialphaseoftheprojectandgraduallydecreaseswith
thepassageoftime.
CostofChangeRequests:
ThisfactorisoppositetoStakeholdersInfluenceandRiskImpact.Costofchangesislowatthestart
oftheprojectandbecomeshighwiththepassageoftime.
EnterpriseEnvironmentalFactor:(EEF)
TherearetwotypesofEEF,Internal&Externalandtheireffectcanbepositiveornegative.Following
canbetheInternalEEFactors,
InternalEEF:
1. OrganizationalCulture.
2. OrganizationalStructureandgovernance.
3. Company/Industry/OrganizationalStandards.
Standardsaresetofrulesorprincipleswhichshouldbeadoptedduringtheprojectphases.
Thesearenecessarytofollowbutnotobligatory.Notfollowingthesestandardsmaycausere
workorextracostandcanaffectthemarketplaceconditionsbutitwillnotletyourbusiness
tostoporcauseyoutoputinprison.
4. ExistingHumanResources:
Itincludestheexistingresourcesandtheircalendarswiththeinformationofresourcetype,
category,skill,discipline,workethicsetc.
5. OrganizationalInfrastructure:
Organizational Existing Facilities and capital equipment such as insurance policies,
transportationetc.
6. ProjectManagementInformationSystem:(PMIS)
Thesearetheautomatedtoolssuchasschedulingtools,
ProjectManagementSoftware,
InformationCollectionandDistributionSystem,
ChangeControlSystem,
ConfigurationManagementSystem,
ContractChangeControlSystem,
RecordsManagementSystem,
WorkAuthorizationSystem(WAS).
7. Company/ProductMarketplaceCondition:
8. OrganizationsEstablishedCommunicationChannels:
9. PersonalAdministration:
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Staffing,retentionguidelines,employeeperformancereviewsandrewards,trainingrecords,
timetrackingandovertimepoliciesetc.
10. EmployeesWorkEthics:
WorkAuthorizationSystem(WAS):
Workauthorizationsystemisparticularlydesignedto
Assignprojectworkstotheteam,
Ensurethatworkisapprovedbeforeitbegins,and
Ensurethattheworkisdoneattherighttimeandincorrectsequence.
WBSisaneffectivetooltoassigntheworkandtomonitor&controltheprojectscope.Workpackage
dictionaryisanexampleofWAS.Organizationsmayhavedifferentapproachestoassigntheworkto
theprojectteam.
ExternalEEF:
11. GovernmentRegulations:
12. PoliticalClimate:
13. CommercialDatabases:
CommercialdatabasemayincludetheResourceProductivityRatesandUnitCostRates
etc.
14. StakeholdersRiskTolerance(Canbeinternalorexternalbasedonstakeholdertype)
Standards:
1. Anapprovedanddocumentedguidelinesbyarecognizedbody.
2. Compliancewiththestandardsisnotmandatory.
3. Noncompliance to the standards may cause marketplace to become lower and
reducedchancesoffuturebusiness.
Regulations:
1. Anofficialguidelinesprovidebyagovernment.
2. Compliancewiththestandardsismandatory.
3. Noncompliancetoregulationsmaycauselitigation,closedbusinessandsometimeto
Jail.
OrganizationalProcessAssets:(OPA)
OPAarethetemplates,plans,processes,procedure,policies,methodologies,andknowledgebases
specific to and used by the performing organization. OPA are the input to most of the planning
processes.OPAprovidesguidelinesandcriteriafortailoringeithertheorganizationsprocessesorPMI
processestothespecificneedoftheproject.OPAsarebroadlydividedintotwomajorcategories.
1. ProcessesandProcedures,
2. CorporateKnowledgeBase.
ProcessesandProcedures:
ProcessesandProceduresarefurthercategorizedtothreesubcategoriesasbelow,
1. InitiatingandplanningPNP.
2. Executing,MonitoringandControllingPNP.
3. ClosingPNP.
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InitiatingandPlanning:
Specific organization standards such as HR, HSE, Ethics, Project management, and quality
policiesandprocedures.
Templates used/adopted by the organization for project initiating and planning processes.
Thesetemplatesmayincludeavarietyofformsandformatsaslistedbelowbutnotlimited
to,
Executing,MonitoringandControlling:
Scope,time,cost,andqualitycontrolprocedures.
Changecontrolproceduresincludingstepsbywhichthemedications/changeswillbe
initiated,approved,performedandvalidated.
Financialcontrolprocedures(costcontrolaccountsandpolicies,fundingcontrolplans,
paymentmethods(cash,checks,LCetc.)andpaymentterms.
Issueanddefectmanagementproducersdefiningissueanddefectidentification,issueand
defectcontrol,resolutionandactionlists.
Organizationalcommunicationrequirements,technology,methodsetc.
Proceduresforprioritizing,approvingandissuingworkauthorizations.
Riskcontrolproceduresandtemplates.
Procurementcontrolproceduresandtemplates.
Listofthetemplatesusedformonitoringandcontrolmayincludebutnotlimitedto
Closing:
Projectclosingguidelinesandrequirements(e.g.,lessonedlearned,financialaudits,project
evaluationbyPMO,productvalidation,acceptancecriteria,listofrequiredprojectarchives
etc.)
CorporateKnowledgeBase:
Corporateknowledgebasereferstothedatabasesandsystemforstoringandretrievingtheproject
recordsandinformation.Someorganizationsduetotheirimmatureprojectmanagement,havetheir
databasesintheformoflogs.
Itmayinclude,
ConfigurationManagementSystem:
Thissystemordatabasecontaintheversionsandbaselinesofallorganizationalstandards,
procedures,policies,methodologiesandprojectdocuments.
FinancialDatabase:
Itcontainslaborhours,incurredcosts,budgets,costoverruns,fundingrequirements(cashinout
graphs)etc.
HistoricalInformationandLessonLearnedDatabase:
Itcontainsprojectrecords,documents,projectclosureinformationanddocumentation,project
selectionsandprojectperformanceinformationandinformationfromriskmanagementactivities.
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LessonLearned:PostMortem
Lesson learned are the historical records containing (variances, causes of variances, selected
correctiveactions,documentedpreventiveactions,andreasonsforselectedcorrectiveaction)which
arehelpful,
o
o
o
Asaninputtotheprojectforeffectiveplanningbyavoidingmistakesandadoptinggood
practicesdonebyothers.
Asanoutputoftheprojecttobeusedashistoricalrecordsforfutureprojects.
Toidentifythepersonswhoareaccountableformistakes.
NOTE:Aprojectmanagerwilluselessonlearnedforpoints1&2whileacompanywillusethemfor
point#3.
Lessonlearnedshouldbedocumentedwhenexecuting,monitoringandcontrolling,andclosingthe
projectorphaseandarchivedwhileclosingtheprojectorphase.Ifyoudocumentlessonlearnedwhile
closingtheprojectorphase,thosewillbeuselessforyourproject.
IssueandDefectManagementDatabase:
Itcontainsissuesanddefectslogswithinformationofstatus,control,resolutionandactionlists.
ProcessMeasurementDatabase:
ItcontainstheprocessesmeasurementdataandQAaudits,resultsofauditsand
corrective/preventiveactionlists.
ProjectLibrary:
Itcontainsfilesfrompreviousprojects(scope,cost,schedule,performancemeasurementbaselines,
projectcalendars,projectschedulenetworkdiagrams,riskregisters,plannedriskresponse,defined
riskimpacts,ingeneralitincludesallprojectfilesashardcopyandsoftcopyformat).
ProjectGovernance:
Projectgovernanceisaframeworkformakingprojectdecisions,definingrolesandresponsibilities,
andaccountabilitiesforprojectsuccessanddeterminestheeffectivenessoftheprojectmanager.
PMOmayplaysomedecisiveroleintheprojectgovernance,andtheprojectgovernanceframework
mayincludeanyorallofthefollowingelements:
Deliverableacceptancecriteria,
Escalationprocessforresolvingissuesduringtheproject,
Relationshipbetweenprojectteam,organizationgroups,andexternalstakeholders,
Projectorganizationchart,
Processesforprojectcommunications,
Decisionmakingprocessesfortheproject,
Aligningprojectgovernanceandorganizationalstrategy,
Projectlifecycleapproach,
Processforphasereview,
Processforreviewandapprovaloftheprojectchanges(Budget,scope,quality,schedule),
Processforaligninginternalstakeholderswithprojectprocessrequirements.
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PhaseEndReview:
Atthecompletionofeachphase,amanagementreviewofdecisiongateisexecutedtodetermine
whethertheprojectcancontinue,needsfurtheradjustments,orshouldbecancelled.
Thusaphaseendreviewcanachievetwogoalsfortheproject:
Authorizationtoclosethecurrentprojectphase.
Authorizationtoinitiatethesubsequentprojectphase.
Implementingtheprojectphasestructureinaprojectcandeliverthefollowingbenefits:
Breakingdowntheworkintophasesenablesmoreaccuratebudgetandtimelineestimates.
Ihelpspreventscopecreep.
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PROJECTMANAGEMENTPROCESS&PROCESSGROUPS
Process:
Aprocessisasetofinterrelatedactionsandactivitiesperformedtocreateaperspecifiedproduct,
service,andresult.
Inorderforaprojecttobesuccessful,theprojectteamshould,
Selectappropriateprocessesrequiredtomeettheprojectobjectives,
Useadefinedapproachtomeetrequirements,
Establishandmaintainappropriatecommunicationandengagementwithstakeholders,
Balancethecompetingconstraintsofscope,time,cost,quality,resources,andrisktoproduce
thespecificproduct,serviceorresult.
Theprojectprocessesaregenerallyfallintotwomajorcategories.
ProjectManagementProcess:
Aprojectmanagementprocessisacombinationofinputs,tools&techniques,andoutputs(ITTO).
OPAandEEFshouldbetakenintoaccountforeveryprocess,eventheyarenotexplicitlylistedasan
inputinthePMIprocessspecification.
APMprocessensuretheeffectiveflowoftheprojectthroughoutitslifecycle.
Input:
Everyprocessrequiressomeinformationtoapplycertaintoolsandtechniquetogetvaluable
output.Thisinformationisintheformofdocumentandservesasinputtotheprocess.
Tool&technique:
Tools and techniques are the methods and/or actions that are used to evaluate, manipulate, and
transform inputs to outputs. Tools can be software, calculation sheets, formulas etc. Tools and
techniquesarealsousedtosolvetheproblemsincasetheinputisaproblem.
Output:
Everyprocessgeneratesatleastoneoutput.Outputistheendofyourefforts.Itcanbeadocument,
product,service,oraresult.
Outputfromoneprocessisusedasaninputtoanother.
ProductorientedProcess:
Theseprocessesdemonstratetechnicalityoftheproduct.Inotherwords,theseprocessescarriedout
tomeettechnicalrequirementsandspecificationoftheproduct.Forexample,variousconstruction
toolsandtechniquesneedtobeconsideredwhendeterminingtheoverallcomplexityofthehouseto
bebuilt.
ProcessGrouping:
Projectmanagementprocessesaregroupedintotwocategories.
ProcessGroups
KnowledgeAreas
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KnowledgeArea:
Aknowledgearearepresentstheareaofspecializationandgroupedsimilarprocesseswithcomplete
setofconcepts,terms,andactivitiesthatmakeupaprofessionalfield.Therearetenknowledgeareas
coveringtheprofessionalprojectmanagementandarelistedbelow,
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
ProjectIntegrationManagement,
ProjectScopeManagement,
ProjectTimeManagement,
ProjectCostManagement,
ProjectQualityManagement,
ProjectHumanResourceManagement,
ProjectCommunicationsManagement,
ProjectRiskManagement,
ProjectProcurementManagement,and
ProjectStakeholdersManagement.
ProcessGroups:
Morethanoneprocesseswithsimilarrelatedactivitiesmakeaprocessgroup.Thisisverticalgrouping
of the processes in processes in table 3.1. There are five process groups involved in project
managementandarelistedbelow,
1.
2.
3.
4.
5.
InitiatingProcessGroup,
PlanningProcessGroup,
ExecutingProcessGroup,
MonitoringandControllingProcessGroup,and
ClosingProcessGroup.
InitiatingProcessGroup:
Thesesetofprocessesisperformedtodefineanewprojectornewphaseofanexistingproject.The
projectinitiatingprocessesmaybeperformedatprogramoportfolioleveloutsidetheprojectslevel
ofcontrol.Thestepsinvolvedinprojectinitiatingare,butnotlimitedto
Assignaprojectmanager,(itispreassignment)
Documentbusinesscaseandprojectselectioncriteria,
Determineinitialprojectscope(projectstatementofworkforRFQ/RFP/Bids/Tenders)
Dividelargeprojectintophases,
Definemeasurableprojectobjectivesandrelatedsuccesscriteria
Definehighlevelprojectassumptions,constraints,andrisks,
Describeproduct/deliverableaspracticalascanbe.
Determineprojecttimeframe(ROM+ExpertJudgment),
Estimateprojectcost(ROM+ExpertJudgment),
Defineprojectacceptanceandsuccesscriteria,
Authorizeprojectmanager(obtainformalapprovalofprojectcharter)
Identify stakeholders involved, their requirements, powers, influences, and interests are
importanttoknowatearlystageoftheprojectwhichhelpsbettertoplan,execute,monitor
andcontrol,andclosetheproject.
Alignprojectpurposeswithstakeholdersexpectations.
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CommonTNT:
ExpertJudgment,
FacilitationTechniques,and
StakeholdersAnalysis
CommonOutputs:
ProjectCharter,and
StakeholdersRegister.
Initiatingprocessandprojectlifecycle:
Staffinglevelandresourcesarelow,
ProjectCostsarelow,
Costofchangesislow,
Chanceofsuccessislow,
Riskstotheprojectsuccessarehigh,
Stakeholdersinfluenceishigh.
PlanningProcessGroup:
Startingfrombusinesscase,projectcharter,andstakeholdersregister,itistimetodevelopaplanhow
to execute, monitor and control, and close the project in order to achieve its objective. A project
management plan consists of different subsidiary management plans, documents and baselines.
Planningprocessesgrouphelpstodevelopprojectmanagementplan.
CommonOutputs:
Projectdocuments,
ManagementPlans,and
PerformanceBaselines.
ExecutingProcessGroup:
Executingprocessesgroupincludestheprocessesto
Executetheworkpackages,
Collectanddistributeworkperformanceinformation,
Performqualityassurance,
Managestakeholdersexpectations.
CommonOutputs:
Thegeneraloutputsoftheprocessesare,
Thedeliverables(product,service,orresult),
Workperformanceinformation,
Changerequests,
Conductprocurementoutputs,
Monitoring&ControllingProcessGroup:
Monitoringandcontrollingprocessesgroupincludestheprocessesto
Performinspections.
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Measureworkperformance,
Performintegratedchangecontrol,
Carryoutvarianceanalysis(EVM),
Performforecasts,
Identifyandanalyzetrends,
Projectperformanceappraisals.
CommonTNT:
Inspections,
PerformanceReviews,
VarianceAnalysis,
TrendAnalysis,
Forecasting.
CommonOutputs:
Thegeneraloutputsoftheprocessesare,
Lessonlearned,
Performancereports,
Changerequests,
Validatedchanges,(QC)
Validateddeliverables,(QC)
Completedchecklists,(QC)
Validatedcorrective/preventiveactions,(QC)
PMP,OPA,riskregister,andprojectdocumentsupdates.
Note:Therecanbesomanychangerequeststhatarepouringinduringexecutionandmonitoringand
controllingstage.Insuchcases,itisrequiredtoreplantheprojectmanagementplan.Therootcause
of unexpected changes can be improperly defined project scope. The find out the root cause, PM
shouldreviewthefollowingsindescendingorder,
ProjectScopeStatement,
ProjectCharter,and
BusinessCase.
ClosingProcessGroup:
Closingprocessesgroupisthelastgroupofprocessesinaphaseorproject.Itincludes,
Closethephaseorproject,
Closeprocurement.
CommonTNT:
Audits,
ExpertJudgment,
AnalyticalTechniques
CommonOutputs:
Thegeneraloutputsoftheprocessesare,
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Accepteddeliverable(productverification),
Lessonlearned,
Customerfeedback,
Projectarchives.
Closingprocessandprojectlifecycle:
Staffinglevelandresourcesarelow,
ProjectCostsarelow,
Costofchangesishigh,
Chanceofsuccessishigh,
Riskstoprojectsuccessarelow,
Stakeholdersinfluenceislow.
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ProcessChart:
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ProcessGroupsInteraction:
WorkPerformanceData:
DeliverableStatus,Physicalpercentcomplete,
Executedquantities,
Actualstartandfinishdates,
Actualduration,
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Actualcosts,
Numberofdefects,
Numberofchangerequests,and
Executedchangerequests.
WorkPerformanceInformation:
Theworkperformancedatacollectedfromprojectexecutionisbeinganalyzedwithvariousanalysis
andcomparisontools.Theoutputoftheanalysisiscalledworkperformanceinformation.
WorkPerformanceReport:
Workperformanceinformationiscompiledintoprojectdocuments(presetformats)knownasproject
performance reports and distributed to the project team and stakeholders through project
communicationsmatrix.
ProjectExecution
WorkPerformanceData
ProjectControl
WorkPerformanceInformation
Updated/Revised
ProjectManagement
Plan
OverallProject
Control
WorkPerformanceReports
Project
Change
Control
ApprovedChange
Request
Project
Management
Plan
ProjectTeamMembers
ProjectStakeholders
Project
Communications
Reports
WorkPerformanceData,Information,andReportsFlowChart
Projectexecutiongeneratestheworkperformancedata.
Workperformancedataisbeinganalyzedthroughcontrolprocessestogetthework
performanceinformation.
WorkperformanceinformationintheformofareportissubmittedtoProjectChange
Control,teammembers,andprojectstakeholders.
Projectchangecontrolapprovetherequiredchanges.
Projectmanagementplanismodified/revisedfortheapprovedchanges.
Themodifiedprojectmanagementplanisdistributedtoprojectteamforexecution.
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4.PROJECTINTEGRATIONMANAGEMENT:
Projectintegrationmanagementincludestheprocessesandactivitiestocombine,unify,andmanage
interdependenciesamongtheprojectmanagementknowledgeareas.
Please refer to the attached table for processes, inputs, tools & techniques, and outputs those
constitutetotheprojectintegrationmanagement.
KeyoutputsofProjectIntegrationManagementprocessesare,
Initiating
Planning
Executing
Monitoring&
Controlling
Closing
Project
ProjectCharter Management
Plan
Deliverables,
WorkPerformance
Data,
ChangeRequests
ChangeRequests,
CRStatusUpdates
Accepted
Product
Updatesto
PMPlan
ProjectDocuments
OPAUpdates
4.1:DevelopProjectCharter:
Itistheprocessofdevelopingaformaldocumentthatauthorizestheexistenceoftheprojectand
providesprojectmanagerthepowertoapplyorganizationalresourcesforprojectactivates.Project
worksstartaftersighingofftheprojectcharter.
Itissimilartocontractualdocument(contract)insenseofobligations,bondage,andauthorization.
Contract:Legalbondagebetweensellerandbuyer.
Charter:Internalbondage/contractbetweensponsorandtheprojectteam.
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4.1.1.Inputs:
1.ProjectStatementofWork(SOW):
Statement of work (SOW) is narrative (practical as possible as can be) description of
product/deliverable.SOWisthepartofbiddocument(RFP,RFI,RequestforBid,oraspartofcontract).
Itisusuallycreatedbythecustomer/sponsor.SOWincludes,
BusinessNeed,
ProductScopeDescription,
OrganizationStrategicPlan(OSP).
Forinternalprojects,thedetailsofSOWcanbedevelopedinWBS&WBSdictionary(Iprefertocreate
aninternalprojectrequirementsdocumentcontainingtheSOW).
Forexternalprojects,theSOWiscalledprocurementstatementofwork.Itisalegaldocumentand
mustbereviewedbycontractsadministrativeprofessional
2.BusinessCase:
Business Case is the document which includes business need and project selection to initiate the
project.Businesscaseisdevelopedbasedontheproject(business)needandselection.
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2.1.BusinessNeed:
Belowarethefactorscausingtoinitiateaproject,
1.
2.
3.
4.
5.
6.
7.
MarketDemand
CustomerRequest
OrganizationalNeed
TechnologicalAdvance
LegalRequirement
SocialNeed
EnvironmentalRequirements
2.2.ProjectSelection:
Projectselectionisthepartofbusinesscase.Therearetwobroadmethodsforprojectselection:
MathematicalApproach:
Theseareconstrainedoptimizationmethods.
LinearProgramming
IntegerProgramming
DynamicProgramming
MultiObjectivePlanning
ComparativeApproach:
Thesearethemethodstomeasuretheprojectbenefits.
MurderBoard
PeerReview
ScoringModels
EconomicModels
EconomicModeling:
Belowaretheeconomicmodelsandbasedoncomparativeanalysis.
Mostcommonprojectselectioncriterionareasfollow,
1. BenefitCostRatioBCR,(Sellerandbuyer)
2. PlaybackPeriod,(Buyer)
3. PresentValuePV,IfBCRandpaybackperiodisgiven,theselectioncanbemadeonPresent
ValueConcept.
PresentValue(PV):
SelectprojectwithhighestPV.Presentvaluemeansthevalueoftodaycomparedwiththefuturevalue
(FV).PValwayslessthanFVduetothedenominatorwhichismorethan1inallthecases.
PV=FV(1+r)n
Where,r=Interestrate,n=No.oftimeperiod
NetPresentValue(NPV):
SelectprojectwithhighestNPV.Theequationis
NPV=PVIPVC
Where,PVI=PresentValueofIncome,PVC=PresentValueofCost.TheprojectwithgreatestNPVis
typicallyselected.Again,usethesameformulatocalculatepresentvalueeitherforcostorincome.
Interestratewillbethesameforbothcostandincome.
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InternalRateofReturn(IRR):
ProjectwithhigherIRRpercentageshouldbeselected.
NOTE:InterestrateisappliedtotheloanswhileIRRisappliedtotheinvestment.
PaybackPeriod:
Projectwithlowestpaybackperiodshouldbeselected.Itisthetimetorecoverthecostoftheproject.
PaybackPeriod=NetInvestmentPeriodicCashInflow
CostBenefitAnalysis:
Benefitisthesameasrevenueandthesearenottheprofit.Forexamperspective,therecanbeeither
CBRorBC.
CBR>1.0meanscostismoreandbenefitisless.LOSS
CBR=1.0meanscostandbenefitareequal.LOSS
CBR<1.0meanscostislessandbenefitismore.PROFIT
AndviceversafortheBenefitCostRatio.Ifitismorethan1.0,projectwillbebeneficial.Iflessthan
1.0orequalmeansLOSS.
EconomicValueAdded(EVA):
Itisconcernedwithwhethertheprojectreturnstothecompanymorevaluethantheinitiativecost.
ItisdifferentfromEarnedValueAnalysis(EVA).
OpportunityCost:
Itrepresentstheopportunitygivenupbyselectingoneprojectoveranother.Itisthevalueofthe
projectnotselected.
SunkCost:
Itis the actualcostexpended for the project. Sunk costs should notbe consideredwhen deciding
whethertocontinuewiththetroubledproject.
LawofDimensioningReturns:
Itstatesthataftercertainpoint,addingmoreresourceswillnotproduceaproportionalincreasein
theproductivity.
WorkingCapital:
Itistheamountthatcanbeinvestedforcertainproject(s).
WorkingCapital=InvestmentAvailable+CurrentInvestmentLiabilities
Depreciation:
Itisthelossofvaluewiththepassageoftime.Therearetwotypesofdepreciations.
StraightLineDepreciation:
Itisperiodicdepreciationandisconstantoverthelifecycleforcertainno.ofperiods.Sameamount
ofdepreciationforeveryperiodoftime.
AcceleratedDepreciation:
a. DoubleDecliningBalance
b. Sumoftheyearsdigits
AccelerateddepreciationisdepreciatesfasterthantheStraightLineDepreciation.
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ReturnonInvestment(ROI):
Higherisbetter.
ROI=NetincomebeforetaxTotalInvestment;
Netincomebeforetax=BenefitCost
ROI=NetincomeaftertaxTotalInvestment;
Netincomeaftertax=BenefitCostTax
ReturnonInvestedCapital(ROIC):
Higherisbetter.
ROIC=NetIncomeaftertaxTotalcapitalinvestedintheproject
ReturnonSales(ROS):
Higherisbetter.ROS=NEBTorNEAT/TotalSales
ReturnonAssets(ROA):
Higherisbetter.ROA=NEBTorNEAT/TotalAssets
3.Agreements:
An agreement can take the form of acontract, service level agreement (SLA), letterofagreement
(LOA), letter of intent (LOI), or memorandum of understanding (MOU). Contract is required if the
customerisexternaltotheorganization.
4.EnterpriseEnvironmentalFactors:
Companycultureandstructure,
Governmentalregulationsandindustrialstandards,
Marketplaceconditions.
Beforedevelopingprojectcharter,itismostimportanttounderstandabovementionedEEF.
5.OrganizationalProcessAssets:
TemplatesofProjectCharter,
Projectchartersfrompreviousprojects,
Organizationalstandardprocesses,proceduresandpolicies,
Historicalinformationandlessonlearned.
4.1.2.Tools&Techniques:
4.1.2.1.ExpertJudgment:
Expertjudgmentisatoolusedextensivelyandbroadlyinprojectmanagementprocessesthroughout
PMBOKtoassesstheinputdataandinformation.
SubjectMatterExperts,
KeyStakeholders,
ProjectManagementOffice(PMO),
ProfessionalsandTechnicalAssociates,
Consultants,
IndustrialGroups,
Otherunitswithintheorganization,
4.1.2.2.FacilitationTechniques:
Thesearethetechniquesexplainedin5.2CollectRequirementprocess.
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4.1.3.Outputs:
4.1.3.1.ProjectCharter:
Benefitsofprojectchartercanbe,
Itformallyrecognizetheprojectexistence.
Itformallyauthorizeprojectmanagertoutilizeresourcesandbudget.
Canbeusedtolinktheprojecttotheorganizationalstrategicplan.
Theprojectchartermayinclude,butnotlimitedto;
ProjectTitle,
BusinessCase/PurposeandJustificationoftheProject,
MeasurableProjectObjectivesandRelatedSuccessCriteria,
ResourcePreassigned,
HighLevelProduct/DeliverablesDescription,
KeyStakeholders,
StakeholdersHighlevelRequirementsasknown,
HighLevelProjectRisks&Constraints,
SummaryMilestonesSchedule,
SummaryBudget,(ROM)
ProjectApprovalRequirements,Itexplainswhowillensuretheprojectsuccess?Whowill
measureprojectsuccess?Andwhowillsignofftheproject?
AuthorizedProjectManager,
ProjectOwner/Sponsorsignoff.
Inadditiontoabove,aprojectchartermayincludeSMART(Specific,Measurable,Agreed,realistic,
Timebound)organizationalstrategicgoalswhichwillbehelpfultoaligntheprojecttoOSP.
NOTES:
1. In order to develop project charter, it is important to assign a project manager who will
performhighlevelprojectplanning&estimateswhicharethepartofprojectcharter.
2. Beforemovingtoplanningprocessgroup,itisimportant,
TounderstandOrganizationalStrategicPlan&Culture,
Toensurethattheprojectselectedfulfilsorganizationalstrategicplan,
Toensurethattheproductscopeisasfinalaspractical.
4.2:DevelopProjectManagementPlan:
Itistheprocessofintegratingandconsolidatingallsubsidiarymanagementplansandbaselinesintoa
comprehensiveprojectmanagementplan.Allsubsidiarymanagementplansarebeingassembledinto
one document in order to attain its formal signoff from key stakeholders and approval from the
customer.
Theprojectmanagementplandefineshowyoullexecute,monitorandcontrol,andclosetheproject.
Projectmanagementplanisnotetchedinstone,itisaprogressiveelaborationwheretheproject
teamlearnsmoreabouttheprojectwiththepassageoftimeonproject.
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Keyoutputistheprjectmanagementplan.
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4.2.3.Outputs:
4.2.3.1.ProjectManagementPlan:
ProjectManagementPlan(PMP)isnotasingledocument.
PMPisbeingcreatedbytheprojectmanagerwithinputfromkeystakeholders.
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ItisateambuyinefforttodevelopPMP.
Projectmanagementplanincludessubsidiaryplanswhichcanbe,
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
RequirementsManagementPlan,
ScopeManagementPlan,
ConfigurationManagementPlan,
ChangeManagementPlan,
ScheduleManagementPlan,
CostManagementPlan,
QualityManagementPlan,
ProcessImprovementPlan
HumanResourcePlan,
CommunicationsManagementPlan,
RiskManagementPlan,
StakeholdersManagementPlan.
Baseline:
Abaselineisanapprovedversionofworkproductthatcanbechangedonlythroughformalchange
controlproceduresandisusedasbasisofcomparison.
Thebelowarethetypicalprojectbaselines,
1. ScopeBaseline(ProjectScopeStatement+WBS+WBSDictionary),
2. ScheduleBaseline,
3. CostBaseline.
The performance measurement baseline (PMB) is an approved ScopeScheduleCost Plan for the
projectwork.
NOTES:
Itisnotnecessarytohavealltheplanesstatedaboveinvolvedinyourproject.Theproject
managershouldcarefullyaddresseachprocessanditsinput,tools&techniques,andoutputs
anddeterminewhichareapplicabletotheprojecttheyareworking.Thiseffortisknownas
TAILORING.
Anotherapproachcanbeadoptedinpreparationofprojectmanagementplan.ThePMOmay
combine the subsidiarymanagement plans basedontheprocessgroupstoformaproject
management manual. The project management manual can be helpful for the project
managerstodefineandcreatetheprojectmanagementplan.
ProjectManagementplanitselfisabaselinedocumentwhichrequiresformalapproval,to
bechangedforapprovedchanges,andisusedtomeasuretheprojectperformance.
ProjectDocuments:
Thereareanumberofprojectdocumentsthatareusedtohelpmanagetheproject.These
documentsarenotthepartoftheprojectmanagementplanbutarefrequentlycreated,used,and
updatedthroughouttheproject.Belowaremoreorlessgeneralprojectdocuments.
ProcurementSOW
Agreements
ProjectCharter
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ChangeRequests
ChangeLog
WatchList
LessonLearned
RFI&Log
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StakeholdersRegister
Requirement
Documentation
Requirement
TraceabilityMatrix
ProjectScopeStatement
ActivityList
ActivityAttributes
MilestoneList
ScheduleNetwork
Diagram
ActivityResource
Requirement
ResourceBreakdown
Structure
ProjectCalendars
ActivityDuration
Estimate
BasisofEstimates
ScheduleData
ProjectSchedule
ActivityCostEstimate
BudgetEstimate
Forecasts (Schedule&
Cost)
QualityMetrics
QualityChecklists
QualityControl
Measurements
ProjectStaff
Assignments
Responsibility
AssignmentMatrix
(RAM)
ResourceCalendars
IssueLog
CommunicationMatrix
Teamperformance
Assessment
ProcurementDocuments
SellerProposals
RiskRegister
WorkPerformanceData
WorkPerformance
Information
WorkPerformance
Reports
RiskBreakdown
Structure
MIR&Log
NCR&Log
SSN&Log
RFS&Log
DWGSubmittalLog
DocumentSubmittalLog
MaterialSubmittalLog
Supplier/Manufacturer
SubmittalLog
SubcontractorSubmittal
Log
TechnicalQueriesLog
ConcessionRequestsLog
BookofQuantities
DailyProgressReports
WeeklyProgressReports
MonthlyProgressReports
ProjectOBS
SourceSelectionCriteria
4.3:Direct&ManageProjectWork:
Keyoutputsare,
Deliverables,
ChangeRequests,and
WorkPerformanceData.
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4.3.3Outputs:
4.3.3.1Deliverables:
DeliverableistheoutputofDirect&ManageProjectExecutionProcess(4.3)whichwillbesubjectto
8.3_PerformQCforitsvalidationandthenitissubjecttoprocess5.5_ValidateScopefordeliverable
acceptance.
4.3.3.2WorkPerformanceData:
WorkPerformanceInformationistheoutputof4.3_Direct&ManageProjectExecution.Itincludes,
DeliverableStatus,
ScheduleProgress,
CostIncurred.
Inthelistofprojectdocuments,startingfromRFIloguptodailyprogressreportaretheresultsof
executingprojectworks.
4.3.3.3ChangeRequest:
Change Requests is the output of 4.3_Direct & Manage Project Execution. It includes following
documentation,
PreventiveAction:
PreventiveactionisaPROACTIVEapproachtoavoidthedefecttohappenincaseyouare
prematureandexperiencedsuchcasesbefore.Chronically,preventiveactionfollowsthe
correctiveactioninordertoavoidthedefecttohappenagaininfuture.
CorrectiveAction:
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Correctiveactionisanapproachtorectifytheproductfaultwithoutapproachingtothe
reworkstage.Toapplyacorrectiveaction,youmusthavequalitymetricssetinadvance
toidentifytherootcauseanditsjustification.
DefectRepair:
Theprocessorprojectcomponenteithertoberepairedorreplacedbasedontheresult
plottedoverthecontrolcharts.
Defectrepaironlycanhavetwooptions,
1. Rework:
Theoutputdoesmeettotheproductspecificationsandneedtobebroughtback
intocompliance.Reworkisalwaysmoreexpensivethanthepreventiveaction.
2. Scrap:
Itrepresentstotallossofworkandinvestmentandisexpensivethananyofthe
abovescenarios(corrective,preventive,rework).
Updates:
Changestoprojectdocuments,planes,andbaselinesasaresultofCRapproval.
Changemayhappeninfollowingprojectobjectives,
Scope,
Schedule,
Cost,
Quality,
ProjectPoliciesandProcedures,
ChangeRequest(CR)maybeofmanykindsdependinguponthewayyouaregoingtodealwith,
Internal&External,
Direct&Indirect,
Optional&Mandatory.
4.4:Monitor&ControlProjectWork:
NOTE:PMImissedanimportantinputthatisdeliverableswhicharetobesubjectto8.3_Perform
QualityControltovalidatethedeliverables.
Keyoutputsare,
ValidatedDeliverables,
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WorkPerformanceReports(Generatedthrough4.3processanddistributedthrough10.2
process),and
ChangeRequest.
4.4.2:Tools&Techniques:
4.4.2.2.Analyticaltechniques:
RegressionAnalysis,
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GroupingMethods,
CausalAnalysis,
RootCauseAnalysis,
ForecastMethods,
FailureMode&EffectAnalysis(FMEA),
FaultTreeAnalysis(FTA),
ReserveAnalysis,
VarianceAnalysis,
EarnedValueManagement,
TrendAnalysis.
4.5:PerformIntegratedChangeControl:
KeyTools&Techniquesis
ChangeControlTools
Andkeyoutputis
ApprovedChangeRequests.
ChangeLog.
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4.5.2Tools&techniques:
4.5.2.1.ChangeControlBoard(CCB):
ChangeControlBoardisaformallycharteredgroupresponsibleforreviewing,evaluating,approving,
delaying or rejecting changes to the project and recording and communication the decisions. The
followingmustbethepartofCCB,
ProjectManager,
Sponsor,
PMO.
NOTE:AllchangesmustbeapprovedbyCCBandonlyapprovedchangesmustbeincorporated.
4.5.2.2.ChangeControlTools:
Changecontroltoolsaretheautomatedandcomputeraidedsoftware.ExamplescanbeChange
controlsystemandconfigurationcontrolsystems.Forsmallorganization,thechangecontroltools
canbeintheformofexceloraccessdocument.
ChangeControlSystem:
Change Control System is a tool to track approved and disapproved changes to the project
deliverables, planes, baselines, and documentations. It can be a part of Project Management
InformationSystem(PMIS).
ConfigurationControlSystem:
ConfigurationmanagementSystemisthepartofPMISwhich
DocumentsthetechnicalandfunctionalcharacteristicsoftheProduct.
Recordsandreportseachchangetothosecharacteristics.
ChangeControlVSConfigurationControl:
ChangeControl
Itfocusesonchangestotheprojectcharacteristics.
Itmaintainslatestversionsofprojectdeliverables,
documents,plan,andbaselines.
Itensuresthateveryoneisworkingwiththelatest
andsameversionofdocuments,planes,and
baselines.
ConfigurationControl
Itfocusesonchangestotheproductcharacteristics,
Itmaintainslatestversionsofproducts,their
technicalandfunctionalcharacteristics.
Itensuresthateveryoneisworkingwiththelatest
versionofproductwithitstechnicalandfunctional
characteristics.
ProcessofMakingaChange:
Bysequence/descendingorder.
1.
2.
3.
4.
Preventtherootcauseofchanges,(Proactiveapproach)
Identifychange,
Evaluatethechangeimpact,
CreateaChangeRequest(CR),
Theprojectmanagerisresponsibletoperformtheaboveactionsinthecontextofchange
request.Ifthechangeisbeingidentifiedbytheteammember,beforeapproachingtothe
projectmanagertheteammembermustperformtheaboveactions.
5.
PerformIntegratedChangeControl(ICC),
5.1 Assessthechange,
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5.2
Lookforoptions,
The project manager is responsible (either by himself or with the help of team
member)toperformtheaboveactionsbeforeapproachingtoCCBforCRapproval.
5.3 CRApproved/Rejection,
5.4 UpdatetheCRstatusinChangeControlSystem,
6.
ProjectManagementPlanand/orBaselinesUpdates,
7.
Implement,trackandupdatetheapprovedchange,
8.
Communicatethechange&itsstatustostakeholders.
4.5.3Outputs:
4.5.3.2ChangeLog:
Changelogisthepartofprojectdocumentsandisusedtorecordthechangesoccurredinproject.
Thechangelogcontainschange,changeapproval,implementation,andvalidationstatus,andtheir
impactonprojectintermsofcost,time,andrisk.
Note:Allchangesshouldbeloggedwitherapprovedorrejected.
4.6:CloseProjectorPhase:
TheKeyinputsare,
ProjectManagementPlan,
AcceptedDeliverables,
Andkeyoutputsare,
ProductTransition/Handover,
OPAupdates,
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ProjectCloseoutDocumentation:
Alsoknownasprojectarchivesandbecomepartoforganizationalprocessassets.
ProjectFiles:
AllfilesrelatedtotheprojectincludingRFI,MIR,NCN,SSN,AccidentReports,TestReports,SiteStaff
DailyReports,RiskRegister,andalllogsassociatedtoprojectactivities.
Project/PhaseClosureDocuments:
1.
2.
3.
4.
ProjectCompletionCertificate,
ProjectAcceptanceCertificate,
ProjectHandoverCertificate,
ProjectTerminationandTransferDocument.
LessonLearned:
Lessonlearnedarearchivedduringphaseorprojectclosure.
ProjectorPhaseClosureActivities:
1.
2.
3.
4.
5.
6.
7.
8.
Performproducttransition(acceptance,handover),
Completeprojectandcontractperformance(successorfailure)report,
Obtainformalacceptanceofprojectfromcustomeraswellasfromsponsor,
Performlessonlearned,
Createprojectarchives,
Reportperformanceappraisals,
Releaseresource,and
Celebrate!
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Belowactivitiesarepartofcloseprocurementprocesswhicharetobeperformedinconjunction
withthecloseprojectorphaseprocess.
1. Conductprocurementaudits,
2. Createprocurementfiles/record
NOTES:
1. Itisbettertoassignprojectmanagerbeforeauthorizingprojectcharter.Itwillhelptoperform
highlevelplanningtoestablishprojectcharter.
2. Projectfeasibilityreportistobepreparedbeforeprojectcharterisassigned.Projectselection,
businesscase,andprojectscopeofworkarethepartsoftheprojectfeasibilityreport.
3. Phaseendreviewmustbeperformedforperformanceevaluation.
4. Contractclosuremustbeperformedbeforeadministrativeclosureofphaseorproject.
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5.SCOPEMANAGEMENT:
ProductScope:
The technical and functional features of the product. Product scope is determined based on
stakeholders(Customer,Client,and/orSponsor)requirements.
ProjectScope:
Theworkrequiredtodeliveraproduct,serviceorresultwithspecifiedfeaturesandfunctions.Usually
itevolvesaroundscope,time,cost,andquality.
NOTES:
1. ScopeManagementinvolvesmanagingbothprojectscopeaswellasproductscope.
2. Change Management Plan deals with the changes to Project Scope while Configuration
ManagementPlandealswiththechangestoProductScope.
ScopeCreep:
Scopecreepreferstouncontrolledchangestotheprojectwhichareintentionallyorforcefully
imposedtotheproject.Therearetwosubsetsofscopecreep.
ClassicScopeCreep:
Scopechangeoradditionimposedtotheprojectbythecustomerorsponsorwithoutallowing
additionaltimeandcosttoimplementthechangeoraddition.
GoldPlating:
Theelementsorscope(unapproved)addedtotheprojectbytheperformingteam.Therecanbe
manyreasonsbehindgoldplating.
Offeringadditionalfeaturesoftheproducttothecustomertomakethecustomerhappy.
Addingadditionalfeaturestotheproductforenhancedperformance.
Inanycase,goldplatingisprohibitedact.Sinceitisanunapprovedscopechangeoraddition,itmay
costthemoneyandtimethatwasnotincludedinthecostandtheschedulebaselines.
Requirements:
Arequirementisaconditionorcapabilitythatmustbepossessedbytheproduct,service,orresult
tosatisfyorfulfilcontractorotherformallyimposedspecifications.
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5.1PlanScopeManagement:
Thekeyinputsare,
ProjectManagementPlan,
ProjectCharter,
Andkeyoutputsare,
ScopeManagementPlan,
RequirementsManagementPlan.
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5.1.3Outputs:
5.1.3.1ScopeManagementPlan:
Thescopemanagementplanisacomponentofprojectmanagementplanthatdocumentshowthe
projectscopewillbedefined,executed,validated,andcontrolled.Scopemanagementplanisaffiliated
withorganizationalstrategicplan(OSP).Thedevelopmentofscopemanagementplanstartsfromthe
informationcontainedintheprojectcharter.
Scopemanagementplanincludesprocessesto,
DevelopProjectScopeStatement,
EstablishWBSandWBSDictionary,
Approveandmaintainscopebaseline,
Obtaindeliverableformalacceptance,
Controlscopechanges,(changemanagementplanandchangecontrolsystem)
ChangeManagementPlan:
Change Management Plan describes how changes to project objectives (Time, Cost, Quality, and
Scope)willbemanagedandcontrolled.ItdealswiththeProjectCharacteristicsandmayinclude,
ChangeControlProcedure
Approvallevelsforauthorizingchanges
ChangeControlBoard
Planoutlininghowchangeswillbemanagedandcontrolled.
Organizationaltoolsusedtotrackandcontrolchanges
5.1.3.2RequirementsManagementPlan:
Therequirementmanagementplanisacomponentofprojectmanagementplanthatdocumentshow
requirementswillbecollected,analyzed,documented,andmanaged.Inadditiontotherequirements,
theprojectmanagermustchooseanappropriateandeffectivephasetophaserelationshiptomeet
the project and productrequirements and document that approach inrequirements management
plan.
Requirementmanagementplanincludes,
Howrequirementswillbeplanned,tracked,andreported.
Howconfigurationmanagementactivitieswillbeperformed.
Howtherequirementswillbeprioritized.
HowtherequirementsarebeingreflectedinRTMandhowrequirementsattributeswillbe
capturedfromRTM.
ConfigurationManagementPlan:
Configuration Management Plan includes how the latest version of technical and functional
specificationsoftheproductwillbemaintainedanddistributedtothestakeholdersandensuresthat
everyoneisawareofthelatestchanges.Whendealingwithsoftwareproducts,avarietyofproduct
versionsarereleasedinthemarketplaceduetoimprovement.Theconfigurationmanagementmust
documentthesechangessothatthecustomerreceivesthecorrectversionoftheproduct.
ConfigurationManagement&controlsystemdealswiththeProductCharacteristics.
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NOTES:
5.2CollectRequirements:
5.2.2:Tools&Techniques:
1.Interviews:
Interviewingstakeholders/subjectmatterexpertsoneononebutmayinvolvemultipleinterviews.
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2.FocusGroups:
Focus groups bring together prequalified stakeholders and subject matter experts. A trained
moderatorguidesthegroupthroughinteractivediscussion.Itismoreconversationalandeffective
thanaoneononeinterviewandbrainstorming.
3.FacilitatedWorkshops:
Crossfunctional stakeholders (Designer/Suppliers + End Users/Customer) are brought together to
defineproductrequirements.Examplesare,
JADJointApplicationDevelopment,usedinsoftwaredevelopment.
QFDQualityFunctionDeployment,usedinmanufacturingandalsoknownasVOCVoice
ofCustomer.
Advantagesoffacilitatedworkshops,
Buildtrust,
Promoterelationships,
Improvecommunication
4.GroupCreativityTechniques:
Thesearedata/information/requirementgatheringtechniques.Thesearedividedintotwotypes,
ADatagatheringtechniques:
4.1Brainstorming:
Brainstormingisnotanindividualeffort.Itisgroupcreativitytechnique.Oneparticipantwillgenerate
anideawhichmayleadtogenerateideasbyotherparticipant,whichleadstoyetanotherandsoon.
4.2NominalGrouping:
Ideasgeneratedbybrainstormingarefurtherrankduringthesamemeetingorinaseparatemeeting
forrequirementsgroupingandprioritization.
4.3TheDelphiTechnique:
Withthistechnique,aRFI(requestforinformation)issenttoconcernedstakeholdersanonymously,
their response are further compiled and results are sent back to the stakeholders for their final
approval/review.Thisisverygoodtechniqueespeciallywhen
Therearechancesthatthestakeholderscanopposeeachother.
Iftheinformationistobekeptsecured.
ItisessentialtoofficiallydocumenttherequirementinRFI.
BDataAnalysisTechnique:
4.4MindMapping:
It is data analysis technique. Ideas generated through brainstorming are plotted as tree. Colors,
picturesandnotationscanbeusedtomakethediagrammorereadable.
Mindmappingishelpfulin
Detailedstudyofrequirementsordata,
Problemsolving,
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Decisionmaking.
4.5AffinityDiagram:
Also known as KJ (Kawakita Jiro) method. This is requirements grouping technique. Similar
requirementsaregatheredintogroupsandeachgroupisgivenwithaname.Thisgroupingmakesit
easiertoseeadditionalareasofscope(orrisks)thathavenotbeenidentified.
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Note:MindMappingandAffinityDiagramhelptoverifythescopewithprojectcharter.
4.6MulticriteriaDecisionAnalysis:
Thistechniqueisusedtogroup,sort,andprioritizethedecisionsusingdecisionmatrix.Thedecisions
madeareanalyzedfordifferentcriteriasuchasrisklevel,uncertainty,andvaluation.
5.GroupDecisionMakingTechniques:
It is used to generate, assess, classify and prioritize the product requirements. Decision making is
carriedoutwithdifferenttechniques,
A. AnalyticHierarchyProcess(AHP):
Thisprocessisusefulwhen
Requirementsareextremelycomplex,or
Difficultdecisionsneedtobemade.
B. Voting:(UMPD)
Unanimity:
Everyoneagreesonspecificrequirements.
Majority:
Morethan50%agreesonspecificrequirements
Plurality:
If50%isnotachieved,thelargestblockinthegroupdecides.
Dictatorship:
Oneindividualmakesthedecisionforthegroup.Itcanhavenegativeimpactsontheproject.
6.QuestionnairesandSurveys:
Thesearewrittensetsofpredesignedquestions.Thistechniqueisusedforlargegroups.
7.Observations:
ItisalsoknownasJobShadowing.Itisdoneexternally(externalobserver)whileuserisperforming
hisjob.Itcanalsobedonebyaparticipantobserverwhoactuallyperformaprocesstoexperience
howitisdonetouncoverhiddenrequirements.ThisisakeytoolforQFDtocaptureVOCinfacilitated
workshops.
8.Prototypes:
ItisanexampleofProgressiveElaboration.Theseareexperimentalmodelswhichcanbesubjectto
revisionstograduallycollectthestakeholdersrequirements.
9.ContextDiagrams:
AsusedinPMBOKfordataflowdiagramsshowinginputsandtheelementsprovidingtheinputsas
wellasoutputsandtheelementsreceivingtheoutputs.
10.DocumentAnalysis:
Analyzing project documentations (business plans, agreements, RFP, RFQ, processes, policies,
procedures,issuelogs,codes,guidelinesetc.)canrevealthenewrequirements,risks,andinformation.
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5.2.3:Outputs:
RequirementDocumentation:
Requirementdocumentationincludesfollowinginformation,
1. BusinessRequirements:
a. Businessandprojectobjectivesfortraceability,
b. Businessrules,
c. Guidingprinciples,
2. StakeholdersRequirements:
a. Impactstootherorganizationalareasorgroups,
b. Impactstootherentitiesinsideoroutsidetheorganization,
c. Stakeholderscommunicationsandreportingrequirements.
3. SolutionRequirements:
a. Functionalandnonfunctional(physicalandtechnical)productrequirements,
b. Technologyandstandardcompliancerequirements,
c. Supportandtrainingrequirements,
d. Qualityrequirements,
e. Reportingrequirements,etc.
Solutionrequirementscanbedocumentedtextuallyorinmodelsorboth.
4. ProjectRequirements:
a. Performance,safety,complianceetc.
b. Productacceptancecriteria.
5. TransitionRequirements:
6. Requirementassumptions,dependencies,andconstraints.
RequirementTraceabilityMatrix:
Itshouldbedividedintotwopartsasbelow,
A.RequirementAttributes:
Requirementattributematrixcontains,
Requirements,
Owner,
Source,
Priority,
Stability,
ComplexityLevel,
Version,
Status(Completed/Approved/Added/Deleted/Deferred/Cancelled)
AcceptanceCriteria.
B.RequirementTraceability:
Ithelpstolinktherequirementstotheprojectobjectivesorproductfeaturesandtotrace&balance
thestakeholdersrequirements.Helpfultotracemissedand/orextrarequirements.
ResolvingCompetingRequirements:
Requirement must be prioritized and balanced. One technique to balance the competing
requirementsistoselect/accepttherequirementswhichbestcomply(inorder)withthebelow,
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BusinessCase,
ProjectCharter,
ProjectScopeStatement,
ProjectConstraint,
RequirementsNotes:
Ifitisnotrelatedtothereasontheprojectisinitiated.
Ifyes(above)butnotfallwithintheprojectcharter.
Changes to the project charter should be brought into sponsors attention for
approval.
Requirements delaying/affecting the project constraint (schedule or cost or
scope)shouldnotbeaccepted.
Requirementsenhancingtheprojectconstraintshouldbeaccepted.
5.3DefineScope:
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5.3.2:Tools&Techniques:
5.3.2.2.ProductAnalysis:
Itincludesthefollowingtechniquestouseinordertobreakdownhighlevelrequirementsintotangible
deliverables,
ProductBreakdown/Decomposition,
RequirementsAnalysis,
System/ProcessAnalysis,
ValueAnalysis,
System/ProcessEngineering,
ValueEngineering.
5.3.2.3.AlternativeIdentification:
Define/identify/generatedifferentapproachesinordertoselectappropriateonebyBrainstorming.
5.3.2.4.FacilitatedWorkshops:
Explainedinprocess5.2_CollectRequirements.
5.3.3:Outputs:
5.3.3.1.ProjectScopeStatement:
ProjectScopeStatementincludes,indetails,theprojectdeliverablesandworkrequiredto
createthosedeliverables.
Inenablesprojectteamtoperformmoredetailedplanning.
Guidestheprojectteamsworkduringexecution.
Providesbaselineforevaluatingthechangeswhetheradditionalworkiswithinoroutsidethe
projectboundaries.
DetailedProjectScopeStatementincludes,
1.
2.
3.
4.
5.
6.
7.
ProductScopeDescription,
ProductAcceptanceCriteria,
ProjectDeliverables,
ProjectExclusions,
ProjectAssumptions,
ProjectSpecifications,
ProjectConstraints.
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5.4CreateWBS:
Keyinputisprojectscopestatementandkeyoutisscopebaseline.
ScopeBaseline:ProjectScopeStatement+WBS+WBSDictionary
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5.4.2:Tools&Techniques:
5.4.2.1.Decomposition:
Itisthetechniquetosubdividetheworkrequiredforeachdeliverableintofundamentalcomponents.
Correctnessofdecompositioncanbedeterminedbythecomponentsbyverifyingeitherthoseare
sufficientforcompletionofcorrespondinghigherleveldeliverables.
Itisateambuyinprocess.
5.4.3:Outputs:
5.4.3.1.WBS:WorkBreakdownStructure
Detailedworkrequiredtodeliverprojectdeliverablesisdecomposedintomanageabledeliverables.
WBSisacompletehierarchyofallthescopeoftheproject.
ToplevelofWBSiscalledSummaryLevel.
LowestlevelisknownasWorkPackageLevel.
SecondlowestlevelisknownasControlAccountLevel.
WBSiscreatedwiththehelpofteam(creatingWBSisteambuyinprocess).
WBS is used to track and verify the project scope. It helps prevent changes, prevent work
slippagethroughcracks.
Itfocusestheteammembersonwhatneedstobedonewithanincreasedquality.
WithWBS,projectiseasytomanage.
AgenericWBScanbeatemplateinOPA.
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Helpspeopletogettheirmindaroundtheproject.
Preventsscopecreepandgoldplating.
DoesNOTshowdependenciesamongtheworkpackages.WBSdictionaryhelpstoovercome
thissituation.
WBScanbepreparedinthefollowingforms,
OrganizationChart/Graphical,
Outline(List),
FishboneDiagram
WorkPackages:
ItisthelowestlevelofWBSandcontainsactivitiesandmilestone,atwhichthecost,resourcesand
schedulecanbeestimatedeasily.AlsoknownasLevelofDeliverables(deliverablefocused).
ControlAccounts:
Thelevelnexttoworkpackageinascendingorderismostlyconsideredascontrolaccount.Acontrol
accountcanhavemorethanoneworkpackagesorcanhaveonlyone butaworkpackagecanbe
associatedwithonlyonecontrolaccount.
Controlaccountsareusedforearnedvalueforperformancemeasurement.
5.4.3.2.WBSDictionary:
Itissimilartoprojectcharter.Itisausefuldocumentswhich,
Preventsscopecreepandgoldplating,
ItisusedaspartofWorkAuthorizationSystem.
Itisusedtocontrolthework.
Itcontainsinterdependenciesbetweenworkpackages.
Itincludesallinformationoftheworkpackages,
1. WorkPackageDescription,
2. AcceptanceCriteria,
3. Assumptions,
4. Technicalreference(drawingno.etc.)
5. AgreementInformation(Optional)
6. Risks,
7. Resourceassigned,
8. Duration,
9. ScheduleMilestones,
10. Cost,
11. ContractInformation,
12. Completiondate,
13. Quantifieddeliverables.
14. PredecessorandSuccessorworkpackages.
AnexampleofWBSdictionaryisshownonthefollowingpage.
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5.4.3.3.ScopeBaseline:
Scopebaselineconsistsofthreedocuments,
ProjectScopeStatement,
WBS,
WBSDictionary.
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5.5ValidateScope:
Itistheprocessofformalizingtheacceptanceofthecompletedprojectdeliverables.
Thekeyinputisverifieddeliverableandkeyoutputsareaccepteddeliverables,changerequestsand
workperformanceinformation.Keytools&techniquesisInspection(RFI).
5.5.3:Outputs:
AcceptedDeliverables
ChangeRequest,
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ProjectDocumentsUpdates,
NOTE:ValidateScopeisthelastprocessbeforemovingtonextphaseoftheproject.Inthisprocess,
deliverablesaresubjecttoverificationandacceptancewhichyieldsACCEPTEDDELIEVRABLE.
5.6ControlScope:
5.6.2:Tools&Techniques:
VarianceAnalysis:
Comparison/VarianceanalysisofScopeBaselinevs.WorkperformanceInformation
Note:Importantaspectsofprojectscopecontrolare,
Determinethecauseanddegreeofvariancew.r.t.baseline.
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Decidetherequiredcorrectiveandpreventiveactions.
5.6.3:Outputs:
1.WorkPerformanceMeasurement:
It can include planned vs. actual (technical and/or physical) performance. This information is
documentedandcommunicatedtostakeholders.
2.ChangeRequests:
Refertoprocesses4.3and4.5inthebookfordetails.
3.OPAUpdates:
Causeofvariance,
Correctiveactionchosenandthereason,
Lessonlearned.
4.PMPUpdates:
ScopeBaseline,
CostBaseline,
ScheduleBaseline
5.ProjectDocumentsUpdates:
RequirementDocumentation,
RequirementTraceabilityMatrix.
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6.TIMEMANAGEMENT:
6.1PlanScheduleManagement:
It is the process of developing the scheduling tools, procedures, templates, formats, policies, and
methodologiesforplanning,developing,executing,andcontrollingtheprojectschedule.
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6.2DefineActivities:
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6.2.2:Tools&Techniques:
RollingWavePlanning:
Itisaprocessofprogressiveelaboration.Neartermprojectactivitiesareplannedindetailsandfuture
workisplannedathigherlevelofWBS.ItismostlyusedindevelopmentofITsystemandlessoften
usedforconstructionprojects.Itisperformedforthe,
Complexprojectswithlessdetails/informationareavailableatthebeginning,
Projectswhichareuniqueinnatureanddonothaveanyhistoricalinformationorprevious
example.
5.4.2.1.Decomposition:
Itisthetechniquetosubdividetheworkrequiredforeachdeliverableintofundamentalcomponents.
Correctnessofdecompositioncanbedeterminedbythecomponentsbyverifyingeitherthoseare
sufficientforcompletionofcorrespondinghigherleveldeliverables.
Itisateambuyinprocess.
Decomposesworkpackagesintosmallercomponents,
o Whichareeasytomanage,
o Thatgiveareasonableresourceestimate,
o Thatgiveareasonabledurationestimate,
o Thatgiveareasonablecostestimate,
TheWorkpackagesaretobecomposedtofollowtheheuristics,
4/40Forsmallprojects,
8/80Forlargeprojects,
The 8/80 rule is used as a reminder to project managers to limit the size of WBS work packages.
Following these guidelines will prevent micro management or the creation of work packages that
becometoolargetomanage.
Workpackagesshouldbe:
Nosmallerthan8hours,
Nolargerthan80hours,and
Between1and10daysinduration
Thisrulesuggeststhattaskdurationsbetween8hoursand80hoursaregenerallysizedaboutright.
Tasksshorterthanonedaymightbetoogranularortasklongerthan2weeksmightbetoolongto
manageproperly.
6.2.3:Outputs:
1.ActivityList:
Itincludestheactivitydescriptionandidentifier.Togenerateactivitylisttherequiredinputsaredesign
drawings,billofquantities,andscopebaseline.
ActivityTypes:
It is important to understand the activity types to plan the project activities. Task and resource
dependentactivitiesarediscreteeffortsandLOEisapportionedeffort.
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TaskDependent:
Activities are scheduled using the activity's calendar rather than the calendars of the assigned
resources. Choose task dependent when you want to control the duration of the activity yourself (that
is, no resources are assigned), or when one or more resources assigned to the same activity can work
according to the same calendar. The activity is scheduled according to the activitys calendar, not the
resource calendars. For example, you might have an activity to cure concrete; you know how long the
task takes and the addition of resources wont complete the task any earlier. You would designate this
activity as task dependent.
ResourceDependent:
Activitiesarescheduledusingthecalendarsoftheassignedresources.Thistypeisusedwhenseveral
resourcesareassignedtotheactivity,buttheymightworkseparately.Chooseresourcedependent
when you want to schedule each resource according to his/her own time schedule, or resource
calendar,nottheactivitycalendar.Theassignedresourceavailabilitydeterminesthestartandfinish
datesoftheactivity.Typically,youusethistypewhenmultipleresourcesassignedtothesameactivity
canworkindependently,orwhenavailabilitycanaffecttheactivitysduration.Forexample,anactivity
thatrequiresanInspectormightbedelayedifthatresourceisassignedtomultipleprojectsorison
vacation.
Resourcedependentactivitywillfollowtheresourcecalendarsandthedurationwillbechangedupon
resourcelevelling.
WBSSummary:
Activitiesthatareusedtorollupdate,duration,andpercentcompletevaluesforagroupofactivities
thatshareacommonWBScodelevel.ChooseWBSSummarytoindicatethattheactivityisasummary
levelWBSactivity.AWBSSummaryactivityrepresentsagroupofactivitiesthatshareacommonWBS
level.ThesummarylevelWBSactivityenablesrollupsofdatesfortheactivitygroup.Thedurationof
aWBSSummaryactivityextendsfromthestartoftheearliestactivityinagrouptothefinishofthe
latestactivity.WBScodescontrolwhichactivitiesarepartofaWBSSummaryactivity;P6incorporates
anyactivitiesthatshareacomponentoftheWBSSummaryactivity'sWBScodeintotheWBSSummary
activity.Forexample,allactivitieswhoseWBScodesbeginwithA(A.1,A.1.1,A.1.2,etc.)canbepart
ofoneWBSSummaryactivitywhoseWBScodeisA.Atalowerlevel,allactivitieswhoseWBScodes
startwithA.1(A.1.1,A.1.2,etc.)canbepartofaWBSSummaryactivitywhoseWBScodeisA.1.
LevelofEffort:
Activities have a duration that is determined by its dependent activities and are typically
administration type. Choose level of effort to indicate that the activitys duration depends on its
predecessorand/orsuccessoractivities.Alevelofeffortactivityisusuallyonethatisongoing,suchas
clericalwork,changemanagement,orprojectmanagementtasks.Forexample,sitecleanupcouldbe
considered alevel ofeffortactivity; it occursrepeatedly and is dependent on the completion of a
phase.
DiscreteEffort:
Discrete effort is a term used to describe the work that can be measured and traced to the
componentsintheworkpackages.Itistheactualworktocreatetheprojectdeliverables.Discrete
effortreferstotheparticularworkeffortthatcanbeidentifiedandtracedashavingadirecttietothe
finalcompletionoftheprojectrelatedworkbreakdownstructurecomponentsandthedeliverables.
Itisnecessarythatalltheeffortshaveaspecificmeasurableendproductorendresult.
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ApportionedEffort:
AnotherkindofactivitythatmustbeaccommodatedisApportionedEffort,sometimescalledfactored
effort. Many inspection activities are dealt with on an apportioned basis. For example, a
manufacturingworkpackagerequiresinspectionpriortoitscompletion.Ratherthancreateaseparate
work package, the budget for the inspection activity can be included in the manufacturing work
packageasapercentageoftheoverallbudgetandthatamountcanbeearnedautomaticallyasthe
workpackageisaccomplished.Ifdesired,aseparateworkpackagecanbeestablishedwithitsbudget
apercentageofthebudgetforthetasktowhichitisapportioned.Astheprimarytaskisaccomplished,
thevalueoftheapportionedefforttaskisearnedconcurrently.
2.ActivityAttributes:
Activityattributesareupdatedanddetailedversionofactivitylist.Theseareactivitycharacteristics,
1.
2.
3.
4.
ActivityID,
ActivityCodes,(Location,discipline,workpackage,projectphase,steps,etc.)
ActivityDescription,
ActivityType,(Startmilestone,finishmilestone,taskdependent,resourcedependent,
WBSsummary,levelofeffort(LOE),discreteeffort(DE),apportionedeffort(AE)).
5. LogicalRelations,Predecessor,Successor,Leadsandlags,
6. Imposeddates,
7. Responsibleperson,etc.
3.MilestoneList:
Amilestoneisasignificant/keyeventintheproject.Itisdifferentthantheactivityinthecontextof
duration.Activitieshavedurationmorethanzero(0)hours/dayswhilemilestoneshavezeroduration
Milestonecanbe
Milestonescanbeusedforaproject,
TorepresenttheprojectprogresstohighmanagementCEO(MilestoneChart).
Tocontroltheprojectprogress(Controlmilestones).
Itisadvisabletohavecontractualaswellascontrolmilestoneintheprojecttimescheduleforeffective
schedulecontrol.
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6.3SequenceActivities:
6.3.2:Tools&Techniques:
1.MethodstoDrawNetworkDiagrams:
PrecedenceDiagrammingMethod(PDM),
ArrowDiagrammingMethod(ADM),
GraphicalEvaluation&ReviewTechnique(GERT).
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PrecedenceDiagrammingMethod:(PDM)
ThismethodisusedforCriticalPathMethod(CPM)todrawnetworkdiagram.Anetworkdiagramcan
beoftwotypes,
1. AONActivityOnNode(AlsocalledPDM)
2. AOAActivityOnArrow(AlsocalledADM)
LogicalorPrecedenceRelations:
1. StarttoStart,
2. StarttoFinish,
3. FinishtoStart,
4. FinishtoFinish.
AONActivityonNode:
Nodesrepresentactivities,
Arrowsrepresentlogical/precedencerelations.PDMcanhaveallfourlogicalrelations.
Afterestimatingactivityduration,durationsareshownabove/belowthearrows.
Nodummyactivities.
Widelyusednowadays.
AOAActivityonArrow:
Arrowsrepresentactivities,
Nodesrepresentsstartandfinish,
Lengthofarrowrepresentsactivityduration,
Onlybearsfinishtostartrelationship.
Itcanhavedummyactivities.
Rarelyusednowadays.
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GraphicalEvaluation&ReviewTechnique:
Itisamodificationtonetworkdiagrammingmethod.
Itiscomputersimulationtechnique.
Itallowsconditionalbranchingandloopsbetweenactivities.
ExampleofGERTisatypicalprocesschart.
TheconditionalbranchingorloopsarebasedonYesNoorTrueFalsecriteria.
Usedforprocessevaluationanddecisionmaking.
2.DependencyDetermination:(NatureofLogicalRelation)
Dependenciesareoffourtypes,
1.
2.
3.
4.
MandatoryDependencies,
DiscretionaryDependencies,
ExternalDependencies,and
InternalDependencies.
MandatoryDependencies:
AlsoknownashardlogicE.g.,Regulations,ContractualConstraints,etc.
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DiscretionaryDependencies:
Alsoknownaspreferred,preferentialorsoftlogic.Thesearedefinebytheprojectmanagementteam
andmayhavecertainleadsandlags.Softlogicsmustbedocumentedasthesecanlimitthescheduling
options.Whenfasttrackingtechniqueisusedtocompresstheschedule,softlogicsarereviewedand
modifiedorremoved.
ExternalDependencies:
When the dependency is external to project. For example, your contract is to provide installation
servicesforWaterTreatmentPlanandyourclienthascontractwithanothersuppliertosupplythe
plant material. The dependency of equipment installation will be externally dependent to the
equipmentdelivery.Butifyouhavesupplyandinstallationcontract,thenthenatureofdependency
willnotbeexternal.
ExternaldependenciesshouldberecordedinRiskRegisterandshouldbetrackedcarefully.
InternalMandatoryDependencies:
ThesearethemandatorydependencieswhichrepresentthephysicalLimitationsunderprojectteam
controlsuchas,
RoofslabcantbecastedwithoutcastingRCCcolumns.Thecontroloverthedependencyis
undertheprojectteam.
Testingcantbeperformedunlessplantisinstalled.
3.Applyleadsandlags:
Leads and lags are being determined by the project management team based on the dependency
determination.Leadsandlagsareappliedtothelogicalrelationshiptofulfildecenciesrequirements.
LEAD:
Itistheaccelerationofsuccessoractivity.
Overlappingofactivities.
ItbearsVEmathematicalsign.
Dont introduce too many leads in the initial plan. It will helpful later on for schedule
compression(crashing).
LAG:
Itisthedelayofsuccessoractivity.
Freetimebetweentwoactivities.
Itbears+VEmathematicalsign.
NOTE:
1. Inprojectmanagementsoftware(primavera),onlytermLAGisused.Ifitis+VEmeanslagand
ifitisVEmeanslead.
2. Forschedulecompression(fasttracking),leadsareintroducedandlagsareoptimized.
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4.ScheduleNetworkTemplates:
Purposeofusingschedulenetworktemplates(fromOPA)istoexpeditethepreparationofschedule
networkdiagram.Atemplatemaycontainapertorsegmentfrompreviousproject.Thissegmentis
knownassubnetworkorfragmentednetworkschedule.
6.3.3:Outputs:
1.ProjectScheduleNetworkDiagram:PSND
ProjectScheduleNetworkDiagramissimilartoaflowchartinappearance.ScheduleNetworkDiagram
ishelpfulasit,
Justifiesyourtimeestimateforproject.
Showsworkflows.
Helpseffectiveplanning,execution,monitoringandcontrol.
Showslogicalrelations(interdependencies)betweentheactivities.
Showsprojectprogresswhenusinginprojectcontrollingprocess.
Identifiesopportunitiestocompressthescheduleinplanningandthroughoutthelifeof
theprojectaswell.
NOTES:
1. Projectschedulenetworkdiagramdoesnotchangeduetochangeinthestartorenddate.
Changingstart,finish,anddurationswillchangethelengthofcriticalpathortheproject.
2. PSNDchangesduetochangeinthelogicalrelations.
3. Atthisstageofplanning,ScheduleNetworkDiagramdoesnotshowactivityduration.After
conducting 6.5_Estimate Activity Durations Process, activity durations are introduced to
projectschedulenetworkdiagram.
Pleaserefertotheprojectschedulenetworkdiagramonthefollowingpage.
2.ProjectDocumentsUpdate:
1. ActivityList,
2. MilestoneList,
3. ActivityAttributes(forlogicalrelations,leads,andlags),and
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4. RiskRegister(forexternaldependencies).
6.4EstimateActivityResources:
Itistheprocessofestimatingresourcesrequiredtoperformtheactivities.Thisprocessinvolvesthe
followingactions,
AnalyzeWBSandactivitylist,
Estimatetheresourcesrequiredtodeveloptheproduct.
Ifrequired,decomposetheactivitiesfurtherforaccurateresourceestimation.
List the estimated resource under their respective category with the units and estimated
quantity.
Reviewtheresourceestimationforskillsandtypesofresourcesrequiredtoimplementthe
project.
GenerateResourceBreakdownStructure(RBS).
Determine/confirmresourceavailabilityfortheproject.
Therearefourtypeofresources,
1. LaborResources(HumanResource/Manpower),
DirectLabor:Themanpowerperformingtheactivitieswhicharetobesubject
toinspectionandacceptanceandaregoingtobepaid.Usuallyforemanand
thelowerstaffisconsideredasdirectlabor.
IndirectLabor:Projectmanagementteamisconsideredasindirectlabor.The
manpowerperformingthemobilizationactivitiesarealsofallunderindirect
laborifthemobilizationisnotthepartofcontractBOQ.
2. Nonlaborresources(Equipment/Machines),
Directequipment:Theequipmentthatwillbeusedtoperformtheactivities.
IndirectEquipment:Theequipmentthatwillbeusedtoperformsomework
requiredtocarryoutforstatementofprojectactivities.Suchasequipment
requiredformobilization,generators,concretevibrators,lighttowersetc.
3. Metricalresources
DirectMaterials:Thematerialsrequiredtodeveloptheproductwhichwillbe
subject for validation, inspection, and acceptance and being paid for them
e.g.,reinforcedconcrete,blocksetc.
Indirect Materials: The materials used to support the execution activities
suchasformwork,shutteringetc.
4. Money/Expense
Thepurposeofdividingtheresourcesintodirectandindirectcategoriestoestimatethedirectand
indirectcosts.
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6.4.1:Inputs:
6.4.1.4.ResourceCalendars:
Resourcecalendarsarethetimescaledresourcerequirements.
Resourcecalendarsaretobecreatedduringprocesses9.2_AcquireProjectTeamprovidingHuman
Resource Calendars and 12.2_Conduct Procurement provides Material and NonLabor Resource
Calendars. To generate resource calendars, the inputs required are 6.4_Activity Resource
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Requirement and 6.5_Activity Duration Estimates in order to generate time scaled resource
requirements(resourcecalendars).
6.4.2:Tools&Techniques:
NOTE:
Itispreferredtocombine/compare/averagetheresultsofthreetoolsandtechniquesusedto
estimatetheresourcerequirements.
1. ExpertJudgment(AnalyzeitbyPERT),
2. PublishedEstimatingData,and
3. BottomUpEstimate(Ownestimates)
6.4.2.2.AlternativeAnalysis:
Alternativeanalysisincludesanalyzing,
Differentskilllevels,
Differenttypesandsizesofmachine,
Differenttoolsandapproaches(handversusautomatedtools),
MakeorBuydecisionregardingtheresourcesbasedoncost(activitycostestimates)
andriskanalysis(riskregister).
6.4.2.3.PublishedEstimatingData:
Publisheddataforproductionrates&unitcostsofresources.Itisanenterpriseenvironmentalfactor.
Ifyouusethecompanyestablishedunitrates,thedatawillfallunderorganizationalprocessassets.
6.4.2.4.BottomUpEstimate:
When an activity cant be estimated with a reasonable degree of confidence, the work within the
activityisfurtherdecomposedintomoredetails(ActivitySteps),resourceneededareestimatedand
thenaggregatedforeachresources.
Itismoreaccurateandbasedondetailedanalysisoftheproject.
Itisteambuyineffort.
Providesabasisformonitoringandcontrollingperformancemeasurements.
Ittakestimefordecompositionoftheprojectandisexpensive.
Providesatendencytotheteamtopadtheirestimatesexceptwhentheyunderstand
theuseofreserves.
It requires that project should be well defined and understood before estimating
begins.
6.4.2.5.ProjectManagementSoftware:
Project Management Software can help to create Resource Breakdown Structure (RBS), Resource
RatesandCalendars,andtolevel/optimizeresourceutilization.
6.4.3:Outputs:
6.4.3.1.ActivityResourceRequirements:
6.4_EstimateActivityResourcesprovides,
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Resourcequantity&availability,
Resourcetype(Labor,Nonlabor,Material),
ResourceCategory(w.r.t.skill,experienceorgradelevel)
Theactivityresourcerequirementsarethenaggregatedtoestimatedresourcerequirementsforeach
workpackageforthepurposeofrecordingresourcerequirementsinWBSdictionary.
NOTE: Basis of resource estimation and assumptions associated with the estimates should be
documented.
6.4.3.2.ResourceBreakdownStructure:
RBSisagraphicalrepresentationofresourcerequirementswithaninformationofresourcetypeand
its category. It is useful for organizing and reporting project schedule with resource utilization
information.ResourcesaregroupedbytheirtypeinRBS.
6.4.3.3.ProjectDocumentsUpdate:
ActivityList,
ActivityAttributes,
ResourceCalendars(9.2&12.2)
RiskRegister,fortherisksassociatedwithresources(skills,availability,etc)
6.5EstimateActivityDurations:
Keutoolsandtechniquesare,
ParametricEstimate,
ThreePointEstimate(PERT),and
ReserveAnalysis,
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6.5.2:Tools&Techniques:
6.5.2.2.AnalogousEstimate:
Comparingtheprojectwithprevioussimilarproject.
ItestablishesanideaoftheprojectBudgetEstimate.(refertocostmanagement)
Itistopdownestimationusedforcomparisonandroughestimate.
Itislesscostly,lessaccurateandproduceroughorderofmagnitude(ROM).
Itcanbeappliedtototalprojectorapartoftheproject.
Itcanbeusedinconjunctionwithotherestimationtechnique.
6.5.2.3.ParametricEstimate:
Itisbasedonhistorical/publisheddata.
Theunitratefromhistoricaldataismultipliedbythequantityofworkrequired.E.g.,duration
forplastering1sq.marea(frompublishedunitrates)willbemultipliedbythetotalquantity
(area)ofplasteringwillgiveyouthedurationrequiredforplasteringactivity.
Parametric estimate generate a parametric model that can be used for estimations in the
tendering,planningandestimationdepartmentsservingasOPA.
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Therearetwowaystocreateparametricrelationship,
1.1 RegressionAnalysis/ScatterDiagram,
Data isplotted inthe formofa scatterdiagrambetweentwovariablesandanalyzedtodevelopa
mathematicalrelationshipbetweenthevariables.
1.2 LearningCurveEffect,
Learning Curve effect should be considered while developing a relationship (linear) between two
variables.Ifaroom(unitdimensions)willtake2daystopaintit,10similarroomsmaytakelessthen
(02x10=)20daysduetolearningeffect.
1.3 Heuristics:
Heuristicsmeansaruleofthumb.Heuristicscanbeusedtodevelopparametricmodels.AHeuristics
canbedevelopedforlearningcurveeffect.ExampleofHeuristicsis80/20principlewhichisapplied
toquality,suggestthat80%ofqualityproblemsarecausedby20%ofpotentialsourcesofproblems.
NOTE:Heuristicscanbeusedtodevelopparametricmodelsandtheresultofparametricestimatecan
becomeheuristics.
6.5.2.4.ThreePointEstimate:
Therearetwomethodsusedforthreepointestimates.
1. PERT:
ItistheProgramEvaluationandReviewTechniquealsoknownasBeatDistribution.
Itisweightedmean/averageofthreevalues,optimistic,mostlikely,andpessimistic.Themost
likelyvalueisthemostaccuratevalueandisbeinggivenaheaviestweightbymultiplyingwith
4.TheaccuracyofPERTestimationcanbeupto95%basedonthedatasource.PERTcanbe
derivedfrompublishedestimatingdataorexpertjudgment.
2. TriangularDistribution:
Itisrarelyusedinestimations.
Mean
StandardDeviation,
()
Variance
PERT
TRIANGLARDISTRIBUTION
tO +4*tML +tP
6
tP tO
6
2
tO +4*tML +tp
3
tP tO
3
2
Where,
toOptimisticValue,(Bestcaseorhappyscenario)
tMLMostLikelyValue,
tPPessimisticValue.(Worstcaseorscenario)
ProjectDurationEstimate=SumofPERTdurationsforallactivitiesoncriticalpath.
ProjectVariance=Sumofallactivityvariances
ProjectStandardDeviation=SQRT(ProjectVariance)
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Projectstandarddeviationprovidestheuncertaintyinprojectcompletionandtheconfidencelevelof
yourestimate.
NOTE:HighervalueofProjectStandardDeviationdecreasestheconfidencelevelinaccuracyofyour
durationestimate.
6.5.2.5.ReserveAnalysis:
Durationestimatesmayincludecontingencyreservesknownas timereservesorbufferstoaccount
forscheduleuncertainty.Timereservescanbeestimatedbyquantitativeanalysisofschedulerisks.
Progressiveelaborationontheprojectreducestheuseandamountoftimeandcostreserves.
6.5.2.1.OnePointEstimate:
Itisbasedonexpertjudgmentandhasnegativeeffectsontheproject.
Easyforteammemberstopadtheestimates,
Resourcestrytopleasethebossinsteadofmeetingtheneedsoftheproject,
Estimatesarehighlyunreliableandcontributetohiddenrisks,and
Schedulesareatbest,unrealisticandatworst,unattainable.
6.5.3:Outputs:
1.ActivityDurationEstimates:
Theprocessof6.5_ActivityDurationEstimateprovidesactivitydurationswithpossibleranges(range
ofestimate)anddoesnotincludetheleadsand/orlags.
RangeofEstimate(ROE)=MEANStandardDeviation
ActivityDurationEstimateincludes,
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Forscheduleflexibility,standarddeviationsindurationestimatemustbetakenintoaccount.Itmay
helpful,lateron,forschedulecompression.
+Standarddeviationcanbeconsideredaslagoraddedtotheactivitymeanduration,and
Standarddeviationcanbeconsideredaslead.
2.ProjectDocumentsUpdate:
ActivityList,
Assumptions made for activity duration estimates such as skill, experience, availability of
resources.
RiskRegister,consideringtherisksassociatedwiththetypeofestimationperformed.
6.6DevelopSchedule:
Developscheduleistheprocessofanalyzingprojectschedulenetworkdiagramandaddingthe
belowinformationtoprojectschedulenetworkdiagramusingschedulingtooltocreatetheproject
schedulemodel.
ActivityDurations,
ResourceBreakdownStructure,
ActivityResourceRequirements(assignestimatedresourcestotheactivities),
Thekeyoutputsoftheprocessare,
ScheduleBaseline,
ProjectSchedule,
SchedulingData,and
ProjectCalendars.
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6.6.2:Tools&Techniques:
1.ScheduleNetworkAnalysis:
Ititselfisnotatoolbutitisincludesvarioustoolssuchasalltoolslistedbelowfrom2to8.
2.CriticalPathMethod(CPM):
CriticalPath:ItistimeconstraintlongestpathintheProjectScheduleNetworkDiagramwithZERO
float(slack)whichdeterminestheshortesttimetocompletetheproject.
Provides&proveshowlongtheprojectwilltake.
Helpstofocusontheprojectmanagementefforts.
Helpstoprioritizetheissues&problems.
Float/Slack:
Floatisthedelayorlazytimebetweentheactivities.
LEGEND:
ES=EarliestStartTime,
EF=EarliestFinishTime,
LS=LatestStartTime,
LF=LatestFinishTime,
Float=LSES=LFEF
Forward Pass is performed on early start and early finish dates for floats computation and to
determinethepathofzerofloat(CP).
ForwardPass,EF=ES+DUR1
BackwardPassisperformedonlatestartandlatefinishdatestoreconfirmthefloatcomputationand
toanalyzeVEfloats.
BackwardPass,LS=LFDUR+1
Therearetwokindsoffloats,
1. ActivityFloat:(PrimaryFloat)
Activityfloatisfurtherclassifiedintotwotypes,
a. FreeFloat:
Theamountoftimeanactivitycanbedelayedwithdelayingtheearlystartdateofitssuccessor(s).
b. TotalFloat:
Theamountoftimeanactivitycanbedelayedwithoutdelayingamilestonedateorprojectenddate.
2. ProjectFloat:
The amount of time a project can be delayed without delaying the externally imposed project
completiondaterequiredbythecustomer.
NOTE: Float can be negative and it shows delay. Negative float results in schedule compression
(crashingorfasttracking).
CriticalPathAnalysis:
Itisrequiredtoanalyzethecriticalpathforbelow,
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a. NearCriticalPath:
It is necessary to identify the path(s) which is/are close to the critical path in duration because
sometimeeithertoshortenthecriticalpathorduetodelaysintheproject,nearcriticalpathbecomes
critical.
b. NumbersofCriticalPath:
Therecanbemorethanonecriticalpathswhichshouldbeidentified.Thenumbersofcriticalpaths
increasetheriskontheprojectsandshouldbedocumented.
3.CriticalChainMethod(CCM):
CriticalChain:
Resourceconstrained critical path is known as critical chain. It includes the effects of resource
allocation,resourceoptimization,resourcelevelling,andactivitydurationuncertaintyoncriticalpath.
DurationBuffers:
Additionalnonworkscheduleactivities.
FeedingBuffers:
Duetolimitationsinresources,additionaldurationbuffersknownasfeedingbuffersareaddedtothe
activitydurations.Hencechangingthecriticalpathtocriticalchain.
ProjectBuffer:
AbufferaddedtotheprojectdurationisknownasProjectBuffer.
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4.ResourceOptimization:
ResourceLevelling:
ResourceHistogramorResourceUsageProfileshowsoverandunder allocationofresourcewhich
mustbeoptimized.Thetechnique/toolusedtooptimizeresourceutilizationisknownasResource
LevellinganditisacomponentofProjectManagementSoftware.
Performing resource levelling will change the activities durations if the activities are resource
dependent.Changeinactivitydurationswillchangethecriticalpath.Henceitisadvisabletoanalyze
thecriticalpathafterresourcelevelling.
ResourceSmoothing:
Resourcesmoothingincludesresourcelevellingforactivitieswithfreeand/ortotalfloats.Hencenot
effectingthecriticalpath.Resourcesmoothingwillnotoptimizealltheresources.
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5.ModelingTechniques:
WhatIfScenarioAnalysis:
Thisisatechniquetoanalyzetheprojectschedulenetworkdiagramconsideringdifferentoptions&
conditions.Thesescenarioscanbe,
Bestcase/Happyscenarios,
Worstcasescenarios.
InPrimavera,creatingdifferentscenariosinthereflectionsandmergingthereflectionstothesource
file (project schedule model) helps to analyze the effects of different scenarios on the project
schedule.
Simulation:
ThisisprobabilityanalysistechniqueandmostcommonexampleisMonteCarlosAnalysiswhichis
usedtodeterminethepossibleprojectdurationanduncertainty.
6.ApplyingLeads&Lags:
Applyingleadsandlagsisatoolthatisusedtomodify,change,and/oranalyzeschedulenetwork
diagram.Thistoolisalreadyexplainedin6.3_SequenceActivitiesbutitseffectiveuseisin6.6_Develop
ProjectScheduleandlateroninFastTrackingduring6.7_ControlSchedule..
7.ScheduleCompression:
Schedulecompressionoptionsareappliedduringthe6.6_DevelopProjectScheduleprocessandlater
onduring6.7_ControlSchedule.
NOTE:
Schedulecompressionisperformedonthecriticalpathusingbackwardpass(LS=LFDUR+1).
PMshouldinvestigateschedulecompressionoptions(fasttrackingandcrashing).
Therearetwowaystocompresstheschedule.
1. Crashing:
Thistechniqueinvolvesadditionalresourcestodecreaseactivityduration.Itreplacestimewithcost
asitisCostTimeTradingoff.Impactsare,
IncreasedResources,
IncreasedCost(tomanageadditionalresources),
IncreasedRisks(forresourcemanagement).
2. FastTracking:
Itisalsoknownasleadscan.Itinvolvesintroducingleadsanddecreasingorremovinglagsfromthe
projectscheduletoreducetheprojectduration.Itmayresultin,
Rework,
Increased/additionalriskinvolvedinsubsequentactivities.
NOTE:Itisnecessarytoidentifyallpossibleoptionsforcrashingandfasttracking.Ifintheexam,itis
givenachoicebetweencrashingorfasttracking,selectthechoiceorcombinationofchoiceswithleast
negativeimpactontheproject.
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8.SchedulingTools:
ThistoolisthepartofProjectManagementSoftware.
6.6.3:Outputs:
1.ScheduleBaseline:
The project schedule approved by customer, sponsor, key stakeholders, and functional managers
serves as schedule baseline that will be used for 6.7_Control Schedule for comparison and
performancemeasurement.Schedulebaselineincorporatesonlyapprovedchanges.
2.ProjectSchedule:
Ithasthreeparts,
1. MilestoneChart:
Itcontainstheschedulemilestones(startandfinish)andisusedtoreporttotheseniormanagement.
2. BarChart:
BarchartsalsoknownasGanttchartshowssummaryactivities(hammockactivities)withfinishand
start dates without showing logical relations. It is also used for progress presentation to project
managementteam.
3. ProjectScheduleNetworkDiagram:
Project schedule can be presented in the form of AON diagram format or TimeScaled Schedule
NetworkDiagramshowingactivitytableandGanttchartwithlogicalrelations.
3.ScheduleData:
It contains the following data and requires documentation of all identified assumptions and
constraints.
ProjectScheduleNetworkDiagram,
ScheduleActivities,
ScheduleMilestones,
ActivityAttributes,
Resourcerequirements/ResourceHistogram,
Scheduling options (resourcelevelled, best case, worst case, with or without
imposeddates)
4.ProjectDocumentsUpdate:
Duetoresourceleveling,thefollowingdocumentsmaybeupdated,
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ActivityResourceRequirements,
ResourceCalendars,
ActivityAttributes,
ActivityDurationEstimates,
RiskRegister(Resourcerisks)
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6.7ControlSchedule:
6.7.2:Tools&Techniques:
1.SchedulePerformanceAnalysis/Review:
PerformanceanalysisiddonebydeterminingSchedulePerformanceIndex(SPI).
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SchedulePerformanceIndex=EarnedValue/PlannedValue;
SPI=EVPV
Results:
i)SPI=1.0
AsScheduled.
ii)SPI<1.0
BehindtheSchedule.
iii)SPI>1.0
AheadofSchedule.
2.VarianceAnalysis:
1.ScheduleVariance:
Schedulevarianceisdeterminedasbelow,
ScheduleVariance=EarnedValuePlannedValue
SV=EVPV
Results:
i)SV=0
AsSchedule.
ii)SV<0(Value)
BehindtheSchedule.
iii)SPI>0(+Value)
AheadofSchedule.
2.TotalFloatVariance:
TotalFloatVariance=CurrentTotalFloatPlannedTotalFloat
Result:TotalFloatVarianceisanindicatorofprojectdelay.IfTFVisanegative(VE)value,means
projectisbehindthescheduleandifthistrendcontinuesinthefuture,itwillleadtototalfloatvalue
tobecomeVEindicatingdelayinprojectcompletion.Hencerequiringtoapplyschedulecompression
techniquestoovercomethenegativetotalfloat.
ALLBELOWAREEXPLAINEDUNDERPROCESS6.6_DEVELOPPROJECTSCHEDULE.
ProjectManagementSoftware:
SchedulingTool:
WhatIfScenarios:
ResourceLevelling:
ApplyingLeads&Lags:
ScheduleCompressionTechniques:
3.ResourceOptimizationTechniques:
Resourcesarebeingoptimizedfortheirusage(underandoverallocation).Thesetechniquesare
alreadyexplainedinarticle6.6.2underresoiurcelevellingandresourcesmooting.
6.7.3:Outputs:
1.WorkPerformanceMeasurements:
Workperformancemeasurements(SPI,SV,andTFV)shouldberecorded/documented.
2.ChangeRequests:
Referto4.5_IntegratedChangeControlProcess.
3.ProjectManagementPlanUpdates:
ScheduleBaseline:Shouldbeupdatedforapprovedchangerequests.
ScheduleManagementPlan:Forbadorpoorscheduleperformance,schedulemanagement
planmaybeupdatedtoreflectthechangeinthewaythescheduleismanaged.
CostBaseline:Costbaselinemaybeupdatedbasedonoutputfrom7.3_ControlCostProcess.
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4.ProjectDocumentsUpdates:
ScheduleData,Projectschedulenetworkdiagrammaybeupdatedbasedonchangerequests.
UpdatedProjectSchedule,ProjectSchedulewhichisupdatedforthereportedprogressreport
(workperformanceinformation).
RiskRegister,
5.OPAUpdate:
RequiredtoupdatedOPAfor,
Causeofvariance,
Correctiveand/orPreventiveActions,andreasonsfortheseactions.
LessonlearnedonScheduleControl.
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7.COSTMANAGEMENT:
LifeCycleCosting:
Itistheconceptoflookingatthecostofthewholelifeoftheproduct(setupcost,operationcost,
maintenancecost,terminationcost),notonlytheprojectcost.
ValueAnalysis:
AlsoknownasValueEngineering.Itsfocusistofindoutthelesscostlywaytodothesamework.The
selectedwayshouldnotaffecttheprojectobjectives.
CostRisk:
Itisageneralriskrelatedtothecostduetoinflation.Forexample,inafixedpricecontract,sellerhas
thecostrisknotthebuyer.
AccuracyofEstimate:(RangeofEstimate)
1.RoughOrderofMagnitude(ROM):
Theestimatemadeduringinitiatingphaseoftheproject.ThetypicalrangeofROMis 25%to+75%
w.r.t.actualprojectcostbutitcanbevarieddependingonhowmuchisknownabouttheprojectwhen
theestimateiscreated.
2.BudgetEstimate:
Theestimatemadeduringplanningphaseoftheprojectanditsdeviationfromtheactualcanbe10%
to+25%.
3.DefinitiveEstimate:
Itismorerefinedestimatemade/revisedasprojectprogresses(asaresultofprogressiveelaboration).
AccordingtoPMIitsdeviationfromactualprojectcostcanbe5%to+10%.
ProjectCostManagement:
Threeportionsofprojectcosts,
1.Direct&IndirectCosts,
DirectCost:
Costs directly incurred to execute the project works, team travel, team wages, and recognition,
materialandequipmentcosts.Inotherwords,directcostisthecostof
DirectLabor,
DirectMaterials,and
DirectEquipment.
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IndirectCosts:
It cant be directly traced to a specific project. Taxes, Fringe benefits, and Janitorial services.
Preferably,itcanbeincludedatactivitylevelbutalsocanbeaddedtohigherlevel.Examplesare,
IndirectLaborCosts,
IndirectMaterialsCost,
IndirectEquipmentCost,
ManagementCost,
SupervisionCost,and
CorporateExpenses,FringeBenefits,Overheadetc.
ContingenciesReserves:
Contingencyreservesaccountsforbothdirectand/orindirectcosts.Itisthecostreservedforthe
knownprojectrisksandtheirresponses.
ManagementReserves:
Aprojectmanagerisresponsibletoestimateandconsumethecontingenciesreservebutnotauthorize
to consume management cost. PM needs approval of high management for disposition of change
requestfrommanagementreserves.
2.FixedandVariableCosts:
FixedCosts:
Coststhatareconstantthroughouttheprojectsuchasequipmentleases.Fixedcostsarecoststhat
are independent of output. These remain constant throughout the relevant range and are usually
consideredsunkfortherelevantrange(notrelevanttooutputdecisions).Fixedcostsofteninclude
rent,buildings,machinery,etc.
VariableCosts:
Coststhatarechangedwiththeamountofworkbeingperformed.Variablecostsarecoststhatvary
withoutput.Generallyvariablecostsincreaseataconstantraterelativetolaborandcapital.Variable
costsmayincludewages,utilities,materialsusedinproduction,etc.
7.1PlanCostManagement:
Itistheprocessofestablishingpolicies,proceduresanddocumentationforplanning,managing,
expendingandcontrollingtheprojectcosts.Itprovidesguidancehowtheprojectcostwillbe
managedthroughouttheproject.
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Keyinputsare,
ScopeBaseline,
ScheduleBaseline,and
RiskRegister.
7.1.3Outputs:
CostManagementPlan:
Costmanagementplanmayestablishthefollowings,
1. LevelofAccuracyandprecisionincostestimation,
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2.
3.
4.
5.
UnitsofMeasure,
ControlAccounts,
ControlThresholds,
RulesforEVM,(RefertoEarnedValueofWBSinPrimavera)
5.1.1. Activity%complete,
5.1.2. WBSMilestone%complete,
5.1.3. 0/100(Start/End)
5.1.4. 50/50(Start/End)
5.1.5. Custom%complete,thecustomvaluesshowsto%completionoftheactivityatstart
tilltotheend,atenditwillbe100%.
5.1.6. EstimatetoComplete(ETC),
5.1.7. EstimateAtCompletion,(EAC)
6. ReportingFormants,
7. CostManagementProcessesDescription.
8. Proceduresforprojectcostrecording,
7.2EstimateCosts:
Costestimateisgenerallyexpressedinunitsofcurrencybutinsomecases,itisexpressed
inManHours.
Itisquantitativeassessmentofthelikelycosts(direct+indirect)forresourcesrequiredto
completetheactivities.
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7.2.1:Inputs:
1. Scope Baseline, 5.3 (Requirements with contractual and legal implications such as Health,
Safety,Security,generalinsurance,licenses&permits)
2. ProjectSchedule,6.5(Activities,Durations,Resources)
3. HumanResourcePlan,9.1(ProjectStaffingAttributes,RewardPoliciesetc.)
4. RiskRegister,11.1(ToestimateRiskMitigationCost/ReserveAnalysis)
5. QualityManagementPlan,8.1(ToestimateCOQ)
6. EEF,
7. OPA.
7.2.2:Tools&Techniques:
1. ReserveAnalysis:
CostestimatesmayincludecontingencyreservesknownasCostReservesorbufferstoaccountfor
costuncertainty.Costreservescanbeestimatedbyquantitativeanalysisofriskscost.
Progressiveelaborationontheprojectreducestheuseandamountoftimeandcostreserves.
2. CostofQuality:
Referto7.1_PlanQualityProcess
3. VendorBidAnalysis:
Projectcostcanbeestablishedbycomparingthebidvaluesfromqualifiedvendors.
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7.2.3:Outputs:
1. ActivityCostEstimates:
2. BasisofEstimates:
Mustdocumentthefollowing,
Estimationmethods,
Assumptionsmadeforestimation,
Costconstraints,
Rangeofpossibledeviation
Confidencelevelofestimate
3. ProjectDocumentUpdate:
RiskRegister
7.3DetermineBudget:
7.3.1:Inputs:
1. ActivityCostEstimate,7.1
2. BasisofEstimates,7.1
3. ScopeBaseline,5.3
3.1.
ProjectScopeStatement(FundingConstraints)
3.2.
WBS(WorkBreakdownStructure)
3.3.
WBSDictionary
4. ProjectSchedule,6.5
5. ResourceCalendars,9.2+12.2
6. Contracts,12.2(contractvalues)
7. OPA
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7.3.2:Tools&Techniques:
1.CostAggregation:
Activitiescostsarerolleduptoworkpackagelevel,costaccountlevelandsoon.
2.ReserveAnalysis:
BudgetReservesAnalysiscanestablishtheboth,
ContingenciesReserves:
These are cost allowance for unplanned but potentially required changes that can result from
identifiedrisks.
ManagementReserves:
These are budget reserves for unplanned changes to the project scope and cost result from
unidentifiedrisks.ManagementReservesarenotthepartofProjectCostBaselineandnotincluded
asapartofEVM.
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4.HistoricalRelationships:
Anyhistoricalrelationshipsthatresultinanalogousorparametricestimatecanbeusedtodevelop
mathematicalmodelstopredicttototalprojectcosts.
ParametricEstimate:UnitCost/M2xTotalCoveredArea
5.FundingLimitReconciliation:FLR
In some cases, due to funding limitations (from sponsor, company management) may require to
rescheduletheprojectworktoleveloutthefundinglimitations.Itcan,
Delaytheproject,
Project delay can be overcomewith available additional funding at anyperiod oftime
usingschedulecompressiontechniques.
7.3.3:Outputs:
1.CostPerformanceBaseline:
ItisanauthorizedtimephasedBACusedtomonitorandcontrolcostperformanceontheproject.It
is also known as Cost SCurve. It also includes cost thresholds/allowances over the estimated
expenditures.
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2.ProjectFundingRequirements:(CashOutflow)
Theseareperiodicfundingrequirements,mostlyexpressedinmonthlybasis.
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3.ProjectDocumentUpdates:
DuetoFLR,followingmeberevisedand/orupdated,
RiskRegister,
CostEstimate,
ProjectSchedule,
7.4ControlCost:
Itistheprocessofupdatingandmonitoringtheprojectcostsandmanagingchangestothecost
baseline.
7.4.1:Inputs:
1. CostManagementPlan,7.1
2. CostPerformanceBaseline,7.3
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3. Fundingrequirements,7.3
4. WorkPerformanceInformation,4.3
5. OPA
7.4.2:Tools&Techniques:
1.EarnedValueManagement:(EVM)
PlannedValue(PV):
Itistheauthorizedbudgetassignedtotheworkschedule(inclusiveofcontingencyreserves).Also
knownasbudgetedcostofworkschedule(BCWS).
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EarnedValue(EV):
Itistheauthorizedbudgetfortheworkperformed(inclusiveofcontingencyreserves).Alsoknown
asbudgetedcostofworkperformed(BCWP).
EV=PV*%Complete.
ActualCost(AC):
Itisthecostincurredfortheworkperformed.Alsoknownasactualcostofworkperformed(ACWP).
BudgetAtCompletion(BAC):
Budgetedcostoftheprojectatcompletion.Itisinclusiveofcontingencyreserves.
1.ScheduleVariance:SV
SV=EVPV
2.CostVariance:CV
CV=EVAC
3.SchedulePerformanceIndex:SPI
SPI=EVPV
4.CostPerformanceIndex:CPI
CPI=EVAC
TherulesforEVMmustbedefineanddocumented.
0/100Rule:0%atstarttillcompletion,becomes100%atcompletion.
50/50Rule:50%atstarttillcompletion,becomes100%atcompletion.
20/80Rule:20%atstarttillcompletion,becomes100%atcompletion.
0/100Rule:0%atstarttillcompletion,becomes100%atcompletion.
Custom%Complete:
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Activity%Complete:
WBSMilestone%Complete:
2.Forecasting:
1.EstimateatCompletion=EAC
a)EAC=AC+ETC
(IRequiresnewestimate)
ThisisEACwithactualtodateplusbottomupestimatetocomplete(ETC)forremainingwork.
b)EAC=AC+(BACEV)
(IISameBAC)
ThisisEACwithactualtodateplustheremainingbudgetatcompletion.Itshowsthatforremaining
work, must to consume the reaming budget and there is no additional budget to execute the
remainingwork.
c)EAC=BACCPIC
(IIIProgresscontinueswithsamerate)
ThisisEACifprojectwillprogressatthesamerate(CPI).
d)EAC=AC+[(BACEV)(CPICXSPIC)]
(IVWeightedBAC)
ThisisEACwithactualtodateplusweightedremainingBACbyperformance,
2.EstimateToComplete=ETC
a)ETC=EACAC
b)ETC=BottomupReestimation
3.ToCompleteCostPerformanceIndex=TCPI
TCPI(BAC)=(BACEV)(BACAC)
TCPI(EAC)=(BACEV)(EACAC)
4.VarianceatCompletion=VAC
VAC=BACEAC
NOTE:CPI iscumulativecostperformanceindexandSPICisthecumulativescheduleperformance
index.
CPIC=EVCACC
C
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SPIC=EVCPVC
5.TrendAnalysis:
Itistheanalysisofperformancetrendoverthepasttonoteimprovementordeterioration.
PossibleScenarios:
1. SPI>1.0&CPI>1.0:
2. SPI=1.0&CPI=1.0:
AheadSchedule&UnderBudget
Onschedule&OnBudget
Bothaheadoftarget.
Bothontarget.
Theabovescenariosaremostfavorableones.Therestofthecasesrequirescorrectiveactionbased
ontheprojectpriority(timeorcost).
3.
4.
5.
6.
7.
SPI>1.0&CPI=1.0:
SPI>1.0&CPI<1.0:
SPI<1.0&CPI=1.0:
SPI<1.0&CPI>1.0:
SPI<1.0&CPI<1.0:
AheadSchedule&OnBudget
AheadSchedule&OverBudget
BehindSchedule&OnBudget
BehindSchedule&UnderBudget
BehindSchedule&OverBudget
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8.QUALITYMANAGEMENT:
ImportantDefinitions:
Quality:
Thedegreetowhichproduct/deliverablefulfillsrequirements.ItismeasuredintermsofSIGMA.
Grade:
Acategoryorrankusedtodistinguishitemsthathavethesamefunctionaluse.Usually,itismeasured
intermsofnumberofstarslikethreestar,fivestar,sevenstaretc.
Probability:
This term refers to likelihood that something will occur. Chances of occurrence of any event.
Probabilityisusuallyexpressedasadecimalorafractiononascaleofzerotoone.
NormalDistributionChart:
Itismostcommonchartintheshapeofabellcurveusedtomeasurevariationsfromthemean.
StandardDeviation():
=(PO)6
Itisthemeasureofthedeviationfromthemean.Youmayusethistermtosetyourcontrolpointsor
thresholds.
QualityManagementPlan:
Itincludescreatingandfollowingpoliciesandprocedurestoensurethattheprojectmeetsthedefined
needs.Itensuresprojectcompletionwithnodeviationfromprojectrequirements.
InternationalQualityStandards:
I.UNConventiononContractsforInternationalSalesofGoods(CISG).
II. International Organization for Standardization (ISO 9000) refers to quality of organizational
processes&procedures.
III.OccupationalSafety&HealthAdministration(OSHA)referstosafetystandards.
QualityTheorists:
JosephJuran:Developed80/20principlewhichisaruleofthumb,Heurist.
W.EdwardsDeming:Hedeveloped14pointstoTotalQualityManagementandadvocatedthatplan
docheckactcycleasthebasisforqualityimprovement.
PhilipCrosby:Hepopulatedcostofpoorqualityandadvocatedpreventionoverinspectionand
zerodefects.Hebelievedthatqualityisconformancetorequirements.
TotalQualityManagement:
Thisphilosophyencouragescompaniesandtheiremployeestofocusonfindingwaystocontinuously
improvethequalityoftheirproductandtheirbusinesspracticesateveryleveloftheorganization.
Thebasicconceptisthatanyonewillcontributethequalityimprovementprocess.
MarginalAnalysis:
Itisthetoolusedtoweightheprosandconsofthespecificprocess.Itisalsousedtoevaluatecurrent
businesssituationsandobstaclestogoalattainment.
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Itreferstolookingforapointwherethebenefitsorrevenuetobereceivedfromimprovingquality
equalstheincrementalcosttoachievethatquality.
Sometimesaddedattentiontoqualitydoesnotproduceaddedvaluewithsameincrement.PMmust
belookingforthatpointandwhenthepointisreached,hemuststoptryingtoimprovequality.
JustInTime(JIT):
Companies working with JIT approach must have very high level of quality in their practices and
processes.JITcanbeariskfortheprojectifperformingprocessisnotsubjecttothequality.
JITleadstoZEROinhouseinventory.Since,itisJIT,therecanbeariskofinventoryarrivinglateand/or
missinginventoryandmustberecordedinriskregister.
MutualExclusivity:
Whentwoeventsorresultscantoccurinasingletrial,thosearecalledmutualexclusive.Eventhough,
youtryandrepeatyoureffortorprocessmanytimesbutbothresultscantoccuronetime.Onetrial
willyieldoneresultandanothertrialwillyieldtheotherresultorthesameresult.
Condition:Onetrialoneresult.
StatisticalIndependent:
Iftheresultsofoneeventoractivityhavenobearingontheresultsofothereventoractivity,thetwo
eventsoractivitiesareknownasstatisticallyindependent.
ImpactsofPoorQuality:
Increasedcost
Lowmorale
Lowcustomersatisfaction
Increasedrisk
Rework
Scheduledelays
ImpactsofHighQuality:
Increasedproductivity,
Increasedcostperformance,(decreasedcosts)
Decreasedrisksandreworks,and
Increasedstakeholderssatisfaction.
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8.1PlanQualityManagement:
It is the process of identifying the quality requirements and standards for the project and its
deliverables.Itdocumentshowprojectwilldemonstratecompliancetothosequalityrequirements
andstandards.
Keyinputsare,
ScopeBaseline,(forprojectspecificationsandproductdescription)
ScheduleBaseline,
CostBaseline,
RiskRegister,
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OrganizationalQualityManagementPlan,
Templates,
Keyoutputsare,
QualityManagementPlan,
ProcessImprovementPlan,
QualityMetrics,and
QualityChecklists.
8.1.2Tools&Techniques:
1.CostBenefitAnalysis:
PMmustweighthebenefitsversescostofqualitytodeterminetheappropriatequalitylevelinorder
tomeetprojectrequirements.
2.CostofQuality:
Costofqualitycanbedividedintotwobroadcategories.
1. CostofConformance,and
2. CostofNonConformance.
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2.1.CostofConformance:
Itisthecostspenttoavoidthefailures.
2.1.1PreventionCost:
Itisthelowestcostspentoneffortstobuildaqualityproduct.Itincludesthecostof,
Qualityplanning,
Trainingsonqualityassuranceandqualitycontrol.
Costofqualitymanagementstaff.
2.1.2AppraisalCost:
Itisthecostofqualityassessmentandincludesthecostsforthefollowings,
DestructiveandNonDestructiveTesting,
QualityInspectionsandAudits,
DestructiveTestingLoss.
2.2CostofNonConformance:
Itisthehighestcostspentbecauseoffailures.
2.2.1InternalfailureCosts:
Failurereportedbyprojectteamitself(QC).Canbereworkanddisposalofscrap.
2.2.2ExternalFailureCosts:
Failurereportedbycustomer.Itcancauserework,disposalofscrap,liabilities,warrantywork,lost
businessandreputation.
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3.7QCbasicTools:
3.1CauseandEffectDiagram:(RootCauseAnalysis)
ItisalsoknownasIshikawaorFishboneDiagram.Thisdiagramisusefultotracktherootcauseof
defectingraphicformat.BelowfishbonediagramillustratesadefectLowSalesontherightand
potential/highlevelcausesandsubcauses/contributorycausesontheleftinordertofindoutthe
rootcause.
Causeandeffectdiagramscanbeused,
Tolookatthecausesofaproblem.
Toorganizethoughtsandtogeneratediscussions.
Toexplorethefactorsthatwillresultindesiredfutureoutcome.
Thehighlevelcausesaredividedinto5Ms.
1.
2.
3.
4.
5.
Methods(processes),
Materials,
Machinery(Equipment),
Manpower(People),and
MotherNature(Environment).
In general, the cause and effect analysis revolves around the project resources, processes and
enterpriseenvironmentalfactors.AnotherMcanbeaddedformoneyifnecessary.
FiveWhysMethod
Fivewhysisasimplemethodforroutecauseanalysis.Askingwhyatleastfivetimesandlookingfor
justifiable reason will either get you to the route cause or to a point where you need further
informationtounderstandthecause.Itisillustratedindiagramonthefollowingpage.
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3.2.Flowcharts:
Also known as process charts. Flowcharts help to identify process flow, logic and method for
performingaspecificactivityorgroupofactivities.Itmayproveusefulinunderstandingthecostof
qualityinaprocess.Atraditionalexampleofflowchartisshownbelow.
Flowchartsareusefultoidentify
Failingprocesssteps,and
Processimprovementoptionsandopertunities.
ASIPOCdiagramisaformofflowchart.
SIPOC:Supplier,Input,Process,Output,Customer
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3.3.ParetoChart/Diagram:
ItisdevelopedbyItalianeconomistWilfredoPareto.
Itisspecializedhistogramandprioritizationtoolforissues,defects,problems,risksetc.
Itissimilartohistogrambutitsortsthedataindescendingordertoprioritizethedefectsand
tofocusonthecorrectiveactions.
ParetochartreferstoParetoLawof80/20whichstatedthat80%ofItalianwealthwasheld
by20%ofpopulation.Dr.JosephJurantookParetosideaandappliedtogeneralbusiness
processtoseeifthisruleisapplicabletothebusinessenvironment.Hestated80/20ruleas,
20%ofbusinessproduces80%ofthewasteandrework.
80%ofthedefectsareproducedbythe20%ofthepotentialcauses.
20%ofyourcustomersproduce80%ofyourrevenues.
80%ofyourcustomercomplaintscomefrom20%ofyourcustomers.
Solvetheproblemwithhigherfrequencyorrateofeffectfirstwhichisthemostcritical.
ParetoChartseparatesthecriticalfewfromthenoncriticalmany.
ItisakeytoolinKaizen.
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3.4.CheckSheets:
Checksheethasavarietyofusewhichcanincludebutnotlimitedto,
Collectingdataaboutpotentialqualityissues,
Capturingrequiredsignoffontheprojectdocuments,
Stepstakenforadefectanalysis,
Collectingatallyofallrequiredstepsfortestingaproduct.
Anexampleappearsbelow,
3.5.Histogram:
Ahistogram(BarChart)displaysdataintheshapeofbarsorcolumns.Histogramshelptofindoutover
andunderallocationorusages.AtypicalexampleisResourceprofile/Histogram.
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3.6.ControlCharts:
Controlchartsareusedto,
Determineprocessstabilityandidentifypredictableperformance.
Identifyupperandlowercontrollimits(controlthresholds)establishedbythePM.
Identifyupperandlowerspecificationlimitsestablishedbythecustomer.
Assesstheaccuracyofdata.
Assesstheprecisionofdata
3.6.1.Mean:
Meanistheaverageormeanofallthedata.
3.6.2.SpecificationLimits:
Thesearethecontractrequirementswithmin.(lower)andmax.(Upper)valuesallowed.Theseare
customersacceptablequalitylimits.
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3.6.3.ControlLimits:
Controllimits(upperandlower)aredefinedbytheprojectmanagerandappropriatestakeholderto
reflectthepointsatwhichcorrectiveactionwillbetakentopreventexceedingspecificationlimits.
Controllimitsareachievedbyaddingtolerance/thresholdstotheapprovedbaselines.
Forrepetitiveprocesses,controllimitsare3.
3.6.4OutofControl:
Aprocessisconsideredoutofcontrolledwhen
Adatapointexceedsacontrollimit.
Seven consecutive points are above or below the mean, the process is considered out of
control.
3.6.5.RuleofSix:
Ifsixdatapointsareeithersideofthemeanevenwithincontrollimitsmayindicateandoutof
controlsituation.
3.6.6.RuleofSeven:(Heuristic/ThumbRule)
Ifsevenconsecutivepointsareinthesametrendwithbelowandabovethemeanasinfig.86,this
meansthesituationisoutofcontrolandanimmediatecorrectiveactionisrequiredbeforeitcrosses
thecontrollimit.
3.6.7.AssignableCause/SpecialCauseVariation:
Ifruleofsevenisapplicabletoanyprocess,PMmustinvestigateforthecauseofvariationinorderto
findoutassignablecauseanddocumentthecorrectiveandpreventiveactions.
3.7.ScatterDiagram:
Scatteredchartsareusedintrendandregressionanalysis.ScattereddataisplottedinXYgraphand
thentriedtointerrelatetheresultsbymappingthemwithaline.
Thecloserthepointsaretoadiagonalline,themorecloselytheyarerelated.
3.8.RunCharts:
Runchartsaresimilartocontrolchartsbutwithoutlimits.Theyshow,
Trendsinprocessoverthetime.
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Variationsintheprocessovertime.
DeclinesorImprovementsintheprocessovertime.
Trendanalysisisperformedusingrunchartsandinvolvesmathematicaltechniquestoforecastfuture
outcomesbasedonhistoricaltrends.
Trendanalysis(positive,negative,orneutral)isoftenusedtomonitor,
TechnicalPerformance,
CostPerformance,
Scheduleperformance,
4.BenchMarking:
Makeanyotherproject(internalorexternal)asbenchmarktogetideasforimprovementoncurrent
projectandtosetbasisorbenchmarktomeasurequalityperformance.ThistechniqueusesOPAor
EEF.
5.DesignofExperiment(DOE):
This technique uses experimentation to statistically determine what variables will improve
quality.
DOE should be used during plan quality to determine the number and type of tests to be
performed(statisticalsamplingplan)andtheirimpactonthecostofquality.
Itisverytimeconsumingapproachandrequiredspecialtraining.
6.StatisticalTestSampling:
Ifyouwillinspectallproductsonebyone,itwill
Taketoolong,
Costtoomuch
Beingtodestructive
Thistechniqueisusedtodocumentthesamplesizeandfrequencyofmeasurements/testsduringthe
8.1PlanQualityprocessandactualsamplingisdoneduring8.3PerformQualityControl.
7.AdditionalQualityPlanningTools:
7.1LossFunction:
Thistoolisusedtofinanciallymeasurethecustomerdissatisfactionwiththeproductsperformance.
7.2MatrixDiagrams:
Matrixdiagramsareestablishedtoimprovetheprocessandproductivitywithintheacceptablequality
limits(controlorspecificationlimits).ExampleisHouseofQualityHOQwhichisutilizedinQuality
FunctiondeploymentQFD.
7.3KanoModel:
Thismodelisusedtoseparatetheproductfeaturesintobelowthreegroupsforfurtheranalysisand
improvements.
Whatsatisfiescustomer,
Whatdelightscustomer,
Whatdissatisfiescustomer.
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7.4MarginalAnalysis:
Thistoolisusedtoweighthebenefitsorrevenuesfromimprovingqualityversesthecosttoachieve
thequality.
7.5ForceFieldAnalysis:FFA
Itisthetoolusedtoweightheprosandconsofthespecificprocess.Itisalsousedtoevaluatecurrent
businesssituationsandobstaclestogoalattainment.
8.ProprietaryQualityManagementModels:
8.1.SixSigma:
3or6sigmarepresentsthelevelofqualitythatacompanyhastodecideortrytoachieve.3islower
controllimitand6isuppercontrollimit.
o
o
o
o
o
+isontherightsideofmeanandisontheleftsideofmean.
1 = 01*Standard Deviation. If control limits are 1, 68.27% of results will fall
betweenupperandlowercontrollimits.
2 = 02*Standard Deviation. If control limits are 2, 95.45% of results will fall
betweenupperandlowercontrollimits.
3 = 03*Standard Deviation. If control limits are 3, 99.73% of results will fall
betweenupperandlowercontrollimits.
6=06*StandardDeviation.Ifcontrollimitsare6,99.9999998%ofresultswillfall
betweenupperandlowercontrollimits.
The%agesrepresenttheconfidencefactorandlevelofqualitycontrol.QClevelincreaseswiththe
increaseofstandarddeviation.6isthehighestqualitystandard.
14PointsofQualityManagement:
W.Edwardsdevelopedthe14pointsofqualitymanagement.Hedefinedtwotypesofvariationsas,
SpecialCauseVariation:Itisthevariationwhenprocesscrossesthecontrollimits.
CommonCauseVariation:Itistherandomnessintheprocess.
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14Kaizen:
Itistheconceptofconsistentandincrementalprocessorqualityimprovement.
8.1.3Outputs:
1.QualityManagementPlan:
Itdescribeshowthequalitypolicywillbeimplementedandincludesfollowingthreeprocesses.
PlanQuality
QualityAssurance
QualityControl
2.QualityMetrics:
QualitymetricsincludeproductattributesthatwillbevalidatedbyQAandmeasuredbyQC.Quality
metric is an operational definition and is used inQA andQCprocesses but itis developed inPlan
Qualityprocess.Examplesarecontrollimitsetc.
3.ProcessImprovementPlan:
ProcessImprovementPlanhelpsto,
Savetimebyincreasingefficiencyandpreventingproblems.
Savemoneyaswell.
Gaincustomersatisfaction.
4.QualityChecklists:
Checklistsareusedto,
Verifytheprocesssteps,
Ensureconsistencyinfrequencyinperformedtasks.
8.2PerformQualityAssurance:
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8.2.2Tools&Techniques:
1.QualityManagementandControlTools:
AffinityDiagrams:
Alreadydefinedin5.2_CollectRequirementsProcess.
ProcessDecisionProgramCharts:(PDPC)
Itisausefulmethodforcontingencyplanningbecauseitaidsteaminanticipatingintermediatesteps
thatcouldderailachievementofthegoal.
InterrelationshipDigraphs:
Itisanadoptionfrominterrelationshipdiagram.Itprovidesaprocessforcreativeproblemsolvingin
moderately complex scenarios that possess intertwined logical relationships for up to 50 relevant
items.
TreeDiagrams:
Alsoknownassystematicdiagrams.ExamplesareWBS,RBS,andOBS.
PrioritizationMatrices:
Identify the key issues and the suitable alternatives to be prioritized as a set of decision for
implementation.
ActivityNetworkDiagram:
Alreadyexplainedin6.3_SequenceActivities.
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MatrixDiagrams:
Thistoolisusedtoperformdataanalysis.
2.QualityAudits:
Tocheckthecompliancewiththequalitypolicies,standards,processesandprocedures.Qualityaudits
can confirm the implementation of approved change requests including corrective actions, defect
repairsandpreventiveactions.
QualityauditshelptoimprovethequalityandresultsinreducedCostofQuality.QualityAuditisatool
of QA process and verifies either the quality process is being followed. Also, to verify the quality
reports.
3.ProcessAnalysis:
Most of the time, processes are repeated throughout the project phases. If you will analyze the
processfirsttimeandnotedownthelessonlearned,itwillhelptoimprovethequalityoftheprocess
whenitwilloccurnext.
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8.3PerformQualityControl:
8.3.2Tools&Techniques:
1.
2.
ProcessFlowcharts:
ProcessControlCharts:
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8.3.3Outputs:
1.QualityControlMeasurements:
ThedocumentedresultsofQCprocess.
2.ValidatedChanges:
Any changed or repaired item is inspected and either accepted or rejected. Accepted items are
referredtovalidateddeliverablesandrejecteditemsmayrequirerework.
QualityManagementActionList:
Identifyatwhatlevelyoushouldcontrolthequality(workpackagelevel,activitylevelor
moredetailedlevel).
Identifyanyqualitystandardsandprocessesthatareapplicabletotheproject.
Determinethequalitystandardsandprocessestouse, when,andonwhatpartofthe
project.
Setstandardstoreachdesiredlevelofperformanceforactivitiesandtheproject.
Setmatrixtomeasurequalityfromthecustomersandorganizationalperspective.
Decide what you will do to make sure the processes are followed and standards are
met.YourQualityControlSystem.
Determine how you will improve the processes on the project.Your Process
ImprovementPlan.
Testthevalidityofassumptionsbeforetheyresultsindefects/problems.
Makesureyourteammembersunderstandwhatqualityisfortheirwork.
Inspecttheworkasitisbeingdone,notafter.
Measureperformanceagainststandards.
Collect problems, error and complaints. Review them and see what can be done to
preventthemfromreoccurringontheproject.
Holdmeetings,issuereports,takemeasurementsandperformcalculations.
PerformQA.
PerformQC.
Reassessthequalitystandards.
Evaluatetheeffectivenessofqualitycontrolsystem.
Managequalitywiththesameeffortastime,costorscope.
Requestchanges,includepreventiveandcorrectiveactionsanddefectrepair.
Includequalityissuesinthelessonslearned.(QualityIssueLog)
Feedlessonlearnedbackintotheproject.
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9.HUMANRESOURCEMANAGEMENT:
HighleveloutputsrequiredforHumanResourceManagement,bytheprocessgroup,arelisted
below.
Initiating
Planning
HumanResourcePlan
Executing
ProjectStaffAssignments
ResourceCalendars
Teamperformance
Assessment
ChangeRequest,
DocumentsUpdates
Monitoring&
Controlling
Closing
9.1.DevelopHumanResourcePlan:
Keyinputsare,
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ActivityResourceRequirements,
ResourceBreakdownStructure,
ResourceHistogram,
EnterpriseEnvironmentalFactor,(Existingresource,Administrationpolicies,Organizational
cultureandstructure)
OrganizationalProcessAssets,
9.1.2Tools&Techniques:
1.OrganizationalCharts&PositionDescription(Roles):
I.HierarchicalTypeCharts:
Thesechartsshowpositionandrelationshipsinagraph,topdownformat.Itcanhavetwopartsas
OrganizationalBreakdownStructure(OBS)andResourceBreakdownStructure(RBS).OBSisbasically
human resource chart. RBS contains resource category other than human resources is helpful in
trackingprojectcostsandcanbealignedwithorganizationalaccountingsystem.
II.MatrixBasedCharts:
AResponsibilityAssignmentMatrix(RAM)isusedtoillustrateconnectionbetweenworkpackagesor
activitiesandprojectteammember.ExampleofRAMisRACI(Responsible,Accountable,Consult,and
Inform) chart. RACI chart is particular important when the team consists of internal and external
memberstoensurecleardivisionofrolesandresponsibilities.
TheproposedRACIwithscoringcardfortenderrequirementsishereinbelow,
S
N
Document
Score
Document
Responsible
Accountable
Consult
Inform
(Personnel)
(Section/
Personnel)
(Section/
Personnel)
(Section)
Due
Date
Actual
Date
Anticipated
Risk
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III.TextOrientedFormats:
It is sort of Job Description (JD) which consists of Role (civil, electrical engineer), Competencies,
Qualification,Responsibilitiesandauthorities.Thetrickofthetradeinthisformisthatitincludesa
sentenceNOTLIMITEDTOand/orTASKSGIVENBYIMMEDIATEMANGER.
IV.OtherSectionsofPMP:
Someresponsibilitiesarelistedandexplainedinothersectionsofprojectmanagementplansuchas
RISKOWNER,QA/QCENGINEER/MANAGERetc.
NOTES:
RolesandResponsibilitiesaredefinedwhiledevelopinghumanresourceplanandassigned
whenprojectteamisacquired(9.2).
Project Organizational Chart is prepared while developing human resource plan and
populatedafteracquiringprojectteamduringprocess9.2.
ResponsibilityAssignmentMatrix(RACI)ispreparedforeachprocesstobecarriedoutduring
initiating,planning,executing,monitoring&controlling,andclosingtheproject.
2.Networking:
Meetings,Socialism,Formalgathering,Lunch,Dinneretc.
3.OrganizationalTheories&Rewards:
Arbitration:
Inarbitrationaneutralpartyhearsandresolvesadispute.
Perquisites(Perks):
Someemployeesreceivespecialrewardssuchasassignedparkingspaces,cornerofficesandexecutive
dinningetc.
FringeBenefits:
Thesearestandardbenefitsgiventoallemployeessuchaseducationallowance,insurance,annual
bonus,paidannualvacations,airticketsetc.
MotivationTheories:
Itisrewardingtheemployeesinsuchawaytomotivatetheirinterestandconcernstotheproject.
Herearesomemotivationtheories,
MaslowsHierarchyofNeeds:
Also known asThe Theoryof Human Motivation.Itstatesthat people will notbemotivatedand
ascendtonextlevelunlessthelevelsbelowarefulfilled.Forexampurposeyouneedtoremember
theseneedsinascendingorder.Thetopmostistheselfactualization.
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HerzbergsTheory:
Herzberg studied the factors causing satisfaction and dissatisfaction in a work environment.
Herzbergs theory deals with hygiene factors and motivating agents. This theory is known as
motivationhygienetheory.
HygieneFactors:Poorhygienefactors(workingenvironmentalfactors)maydestroymotivationbut
improving them under most circumstances will not improve motivation. Hygiene factors are not
sufficienttomotivatepeople.
Workingconditions,
Salary,
Personallife,
Relationshipsatwork,
Security,and
Status.
MotivatingAgents:Motivatingagentsare,
Responsibility
SelfActualization
ProfessionalGrowth
Recognition
So, the most important motivation factor is recognition (Best employee awards, bonus, favorable
incrementsinbenefitsetc.)whichisdonebyrewardingtheemployeesandlettingthemgrow.Giving
raisesisnotmosteffectivemotivator.
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ExpectancyTheory:
Employeeswhobelievetheireffortwillleadtoeffectiveperformanceandwhoexpecttoberewarded
fortheiraccomplishmentswillremainproductiveasrewardsmeettheirexpectationsandviceversa.
Vroomstatedthata person to bemotivated,themotivation andperformance must be linked.He
createdthreevariablestoaccountforthislink.Thesevariablesare,
Expectancy:ThisvariableistheemployeesbelievethatifIworkhardthebosswillrewardtheextra
efforts.Thiswillbeaffectedbysuchthings,
Havingtherightresourceavailable(time,money,rawmaterials),
Havingtherightskilltodothejob,
Havingthenecessarysupporttogetthejobdone.
Theabovefactorsaccountsforthehardwork.Ifabovefactorsarelackingfor,thehardworkwillnot
producethevaluableoutput.Henceshouldnotberewarded.
Instrumentality:Thisvariablesomehowisdifferentfromexpectancy.Thisistheemployeesbelieve
thatIfIdoagoodjobandperformwell,thereisrewardorrecognitionIcanreceive.
Valence:Thisistheimportancethatanindividualplacesupontheexpectedoutcome.ForexampleIf
Imainlymotivatedbythemoney,Imightnotcareaboutthecomptime.
DavidMcClellandsTheoryofNeeds:
ItisalsoknownasAcquiredNeedsTheoryandAchievementTheory.Thistheorystatesthatpeople
aremostmotivatedbyoneofthethreeneedslistedinthefollowingtable.Apersonfallingintoone
categorywillbemanageddifferentlythanaPeronfallingintoanothercategory.
LeadershipTheories:
McGregorsTheoryofXandY:
Itismanagementtheory.Therearetwogroupsofprojectteam.XandY.
TheoryX:Managerswhobelievethatemployeesneedtobewatchedeveryminute.Theybelievethat
employeesareincapable,avoidresponsibilityandavoidworkwheneverpossible.
TheoryXisapplicabletoHandWorkers.
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TheoryY:Managerswhobelievethatemployeesarewillingtoworkwithoutsupervisionandwantto
achieve.Theybelievethatemployeescandirecttheirownefforts.
TheoryYisapplicabletoMindWorkers.
TheoryZ:
TheoryZfocusedonincreasingemployeeloyaltytothecompanybyprovidingajobforlifewitha
strongfocusonthewellbeingoftheemployee,bothonandoffthejob.
TheoryZmanagementtendstopromotestableemployment,highproductivity,andhighemployee
moraleandsatisfaction.
SituationalLeadershipModel:
ThisisalsocalledtheSituationalContinuum.Thistheorystatesthatthemanagershouldapplyhis
leadershipskillstomanagetheinexperiencedemployees.Astheteammembersgrowinskills,the
projectmanagermovesfromdirecting/coachingapproach(tellingtheemployeeexactwhattodo)to
adelegatingapproach(theemployeeknowsthejobs,doesthejobs,needsverylittleguidance,and
willengagethemanagerwhenneeded).
9.1.3Outputs:
1.HumanResourcePlan:
Itdefineshowprojecthumanresourcesshouldbedefined,staffed,managed,controlledandreleased.
Itshouldinclude,
RolesandResponsibilities:
Itmustincludethefollowing,
Role:
Labeldescribingthepositionofahumanresourceintheproject.
Authority:
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ProjectOrganizationCharts:
Graphicaldisplayofprojectorganization.ItshouldincludeOrganizationalBreakdownStructure(OBS).
RBSisthepartofTimeManagementandisanoutputof6.3EstmateActivityResources
StaffManagementPlan:
Itisthepartofhumanresourceplanandmayinclude,
StaffAcquisition:
Staffacquisitioncanbeofmanytypes,eitherarrangethestallinternallyorbyoutsourcingdepending
upontheimpactonthecostsassociatedwitheachlevelofexpertiseneededfortheproject.
ResourceCalendars:
Itdescribesresourcetimeframes.ResourceHistogramgivesthespecificresourcemanhoursrequired
toperformtheactivity.Italsoindicatesoverandunderallocationoftheresourcewithlazydurations
aswell.Characteristicsofahistogramare,
1)
2)
3)
4)
Weeklyormonthlymanhours,
Overand/orunderallocation,
Resourcelimits,
Resourcelevelling
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ResourceHistogram:
StaffReleasingPlan:
Itincludes,
1. Method and timing of releasing team members benefits both the project and team
members.
1. Releasingteammemberstoanotherproject.
2. Cuttingoffthecostsofresourcefromtheproject.
Morale is improved when a smooth transition to upcoming projects are already planned. Staff
releasingplanalsohelpsmitigatehumanresourcerisksthatmayoccurduringand/orattheendof
theproject.
TrainingNeeds:
Whentheteammemberisnotexpectedtohaverequiredcompetencyleveltoachievethetarget.
Recognition&Reward:
Clearcriteriaforrewardsandaplannedsystemfortheiruse helpspromoteandreinforcedesired
behaviors, cause motivation. Recognition and rewards are the part of 9.3 Develop Project Team
process.
Compliance:
Compliancetothecontract,HRpolices,governmentregulationsetc.
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Safety:
Policies & procedures that protect team member from safety hazards can be included in the staff
managementplanaswellastheriskregister.
9.2.AcquireProjectTeam:
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9.2.2Tools&Techniques:
Failuretoacquirethenecessaryhumanresourcemayaffecttheprojectschedule,budgets,customer
satisfaction, quality and risks. It could decrease the probability of success and ultimately result in
projectcancellation.
1.Preassignment:
Itisselectioninadvance.Someofpreassignmentcanbefoundinprojectcharter.
2.Negotiation:
NegotiatingwithFunctionalManager(isthemainlyresponsibleforprovidingtheresources),Project
Managerforanotherproject,ManPowerSuppliers/Recruiter,Contractors,HRManagerEtc.
3.Acquisition:
Whenperformingorganizationlackstheinhousestaffneededtocompleteaproject,therequired
servicemaybeacquiredfromoutsidesource(rentalmanpower,recruiter,subcontractingetc.)
4.VirtualTeams:
Teamsthatdonotmeetfacetofacearecalledvirtualteams.
5.MultiCriteriaDecisionAnalysis:
Multicriteriadecisionanalysistoolisusedtodevelopthecriteriawhichareusedtorateorscorethe
potentialteammembers.Someexamplesoftheselectioncriteriawhichcanbeusedtoratethe
teammembersare,butnotlimitedto:
Availability,
Cost,
Experience,
Ability,
Knowledge,
Skills,
Attitude,and
InternationalFactors:
Consideringteammemberlocation(colocated,virtualteammember),timezone,and
communicationcapabilities.
HaloEffect:HaloEffectissomethingtobeawareofwhendealingwithteammembers.Youcanrate
theteammembershighorlowtoALLfactorsduetotheimpressionofahighorlowrankingonSOME
factors,whichmayleadtothebadimpactontheproject.
9.3.DevelopProjectTeam:
Improvingteamcompetencies,skills,mutualinteractionsandoverallteamenvironmenttoenhance
projectperformance.Teamworkisthecriticalfactorforprojectsuccessandprojectmanagershould
createanenvironmentthatfacilitatesteamwork.Impactsofteamdevelopment,
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LoweringtheCost,
ReducingSchedule,
ImprovingQuality,
RaisingMorale,
LoweringConflict,
9.3.2Tools&Techniques:
1.InterpersonalSkills:
Thesearealsoknownassoftskills.Thesearethebehavioralcompetenciesoftheteammembersthat
include abilities and proficiencies such as communication skills, conflict resolution, negotiation,
influence,teambuilding,andgroupfacilitation.Thesesoftskillsarevaluableassetswhendeveloping
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the project team. For example, the project team member can use emotional intelligence by
identifying,assessing,andcontrollingtheteammembersconcernsandfollowupontheirissues.
2.Training:
Teammembersoftenrequiretrainingsessionsinordertodeveloptherequiredskillsandknowledge
inordertoachievetheprojecttargets.Therecanbeavarietyoftrainingsforteammembers
workingontheproject,butnotlimitedto:
ProjectManagementTrainings,
HSETrainingsandToolBoxTalks,
QA/QCTrainings,and
TrainingsonAnimatedTools,etc.
3.TeamBuildingActivities:
Therearefivestagesofteambuildingprocess.ThesestagesarefirstproposedbyBruceTuckmanin
1965andcalledasTheTuckmanModelafterhisname.
Forming:Teammeetsandlearnsabouttheproject,theirrolesandresponsibilities.
Storming:Beginningtoaddresstheprojectworkwithtechnicalandmanagementapproach.
Norming:Teammembersstartworktogetherandadopthabitsandbehaviorthatsupport
theteam,
Performing:Teammembersstartperformingthefunctionsaswellorganizedunit.
Adjourning:Teammemberscompletetheworkandmovetootherproject.
Teambuildingactivitiescanbe,
Takingclassestogether,
MilestoneParties,
Holidayand/orbirthdaycelebration,
Trips
TeamBuyinforWBS
Involvingeveryoneinsomewayinplanningtheproject.
4.GroundRules:
Clearexpectationsandguidelinesregardingtheacceptablebehavioroftheteammembers.Ground
rulescanbe,
Honestytotheprojectandworkassigned.
Thewayateammembershouldresolvetheconflictwithanotherteammember.
Whentonotifytheimmediatesupervisororprojectmanagerifhavingdifficultywiththework.
Meetingethics,howandwhentospeak,meetingtimein&timeoutrestrictions.
Coordinationmethodsandapprovedchangesinteammemberscalendar.
5.CoLocation:
ItisoppositetoVirtualTeaming.Examplesaremeetingrooms,workstations,warroometc.Impacts
ofcolocation,
Improvescommunication
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Decreasetheimpactofconflicts
Improveteammemberidentity
WarRoom:AcolocatedplacewithWBS,NetworkDiagram,Baselinesetc.postedonthewalls.
6.Recognition&Reward:
Describedearlierinprocess9.1DevelopHRPlanunderOrganizationalTheories.
9.3.3Outputs:
1.TeamPerformanceAssessments:
Teamperformanceassessmentmeanstoevaluateandenhancetheeffectivenessoftheteamasa
whole,andtomeasuretheeffectofimprovementinindividualskillsontheteamperformance.
9.4.ManageProjectTeam:
Itistheprocessoftrackingteammembersperformance,providingfeedback,resolvingissues,and
managingchangestooptimizeprojectperformance.
Thekeytoolsandtechniquesare,
ProjectPerformanceAppraisal,and
ConflictManagement,
InterpersonalSkills.
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9.4.2Tools&Techniques:
1.ObservationandConversation:
Observingtheteammemberattitudewhenperformingthegiventaskorassignment.
2.ProjectPerformanceAppraisals:
Project performance appraisals/assessments should periodically be performed using OPAs to
evaluate employees skills & performance and issues which were remained unresolved and
suggestionstoimprovetheskillsandperformance.
3.ConflictManagement:
Conflictisinevitabletotheprojectenvironment.
ConflictSources:Rememberthesewiththeorder,
1.
2.
3.
4.
5.
Schedule,
ProjectPriorities,
Resources,
TechnicalOpinions,
AdministrativeProceduresandOverheads,
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6. Cost,
7. PersonalityDifferences,
MinimizingtheConflict:Followingfactorsmayminimizetheoccurrenceofaconflict.
1.
2.
3.
4.
GroundRules,
GroupNorms,
EffectiveCommunicationPlanning
RolesandResponsibilities
ConflictResolutionTechniques:
Thebesttechniquesisconfronting/problemsolving/collaborating.
Theworsttechniqueisforcing/directing.
Compromising,smoothingandwithdrawalcanleadtoloselosesituation.
Confronting/ProblemSolving/Collaborating:
Solving the problem personally. It is BEST conflict resolution technique. Sometimes, it requires to
incorporatemultipleviewpointsandinsightsfromdifferentperspectiveandthengoforconsensus
andthencommitment.
Compromising/Reconcile:
Findingsolutionthatwillbringsomedegreeofsatisfactiontobothparties.
Withdrawal/Avoiding:
Retreatingorpostponingtheconflictresolutionandlettingitsolvedbytheteammembers.Itisnot
theBESTchoiceforconflictresolution.
Accommodating/Smoothing:
Gofororemphasisagreementbetweentheparties,ratherthandisagreements.
Forcing/Directing:
Pushingoneviewpointattheexpenseofanother.
4.IssueLog:
Loggingoftheissuesandtheirresolutionsthatcanblocktheteamfromachievingthegoals.
5.InterpersonalSkillsofPM:
Interpersonalskillsofaprojectmanagercanbe,
LeadershipSkills,
TeamBuildingSkills,
MotivationSkills,
CommunicationSkills,
InfluencingSkills,
DecisionMaking,
NegationSkills,
PoliticalandCulturalAwareness.
A.LeadershipSkills&Styles:
Directing,
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Facilitating,
Coaching,
Supporting,
Autocratic:Everybodydowhatmanagerswantsthemtodo.
Consultative:Manageractsasteamservantandobtainsopinionsfromemployees.
ConsultativeAutocratic:InputfromteammembersbutdecisionmakingbyPM.
Census:Teamsinputbutdecisionmakingbasedongroupagreement.
Delegating:Givesufficientauthoritytoprojectteamtocompletethework.
Driver:Drivestheteamtowin.
Influencing:Teamwork,teambuilding,teamdecisionmaking.
Analytical:Managersowntechnicalknowledgeandability.
Bureaucratic:Followingtheproceduresexactly.
Charismatic:Energizingandencouragingemployeestoperformwell.
Democratic:Energizingandencouragingtheteambyparticipatinginthedecisionmaking.
LaissezFaire:Allowtodo.Thisstyleisapplicabletohighlyskilledteam.
B.Powers:
Formal/Legitimate:
Itispowerofposition.
Rewarding:
Itispowerofposition.
Penalizing/Coercive:
Itispowerofposition.
Expert:
ItisthepowerofPMhimself.
Referent:
ItisthepowerofPMhimselfbutcomesthroughanotherperson.Ifanotherperson/employee
likes you and wants to be like you, definitely he will obey your instructions and will be
affectionatetoyouandprojectaswell.
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10.COMMUNICATIONMANAGEMENT:
10.1PlanCommunicationsManagement:
Project Communications Management identifies the processes required to assure the collection,
generation,distribution,storage,retrieval,andtimelydisbursementoftheprojectinformationtoall
projectstakeholdersandprojectteammembers.
Whoneedsinformation,
Whatinformationisneeded,
Wheretodelivertheinformation,
Whentodeliver,and
Whatisthefrequencyofdelivery,
Whatistheformatofinformationtobestored,and
Howtodeliver(distributionmethods)theinformation.
ThekeyinputisStakeholdersRegisterandkeyoutputisCommunicationsManagementPlan.
CommunicationsManagementPlan:
ItisthekeyoutputofPlanCommunicationsManagementprocessandisasubsidiaryplanofthe
projectmanagementplan.Itdescribeshowprojectcommunicationswillbeplanned,executed,
monitoredandcontrolled.Theplancontainsthefollowinginformation,
Project/stakeholderscommunicationsrequirements,
Informationtobecommunicatedincludinglanguage,format,contents,andlevelofdetails,
Timeframeandfrequencyofinformationdistribution,
CommunicationMatrix,
Flowchartsforcommunicationsflow,
Communicationsconstraints,
Escalationprocessandpath,etc.
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10.2.2:ToolsandTechniques:
1.CommunicationRequirementAnalysis:
The project manager should consider the numbers of potential communications channels. The
numbersofcommunicationchannelsaretheindicationoftheprojectcommunicationscomplexityand
arecalculatedasbelow,
n(n1)/2;
Wheren=noofstakeholders
2.CommunicationTechnology:
Communicationtechnologiescanbeselectedbasedonthefollowingfactors,
Urgencyoftheneedofinformation:
Availabilityoftechnology:
Easeofuse:
Projectenvironment:
Sensitivityandconfidentialityoftheinformation:
3.CommunicationModels:
Abasicmodelisshownasbelow,
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Encode:Totranslateideasintoalanguagethatisunderstoodbyothers.
Message/FeedbackMessage:Outputofencoding.
Medium:Themethodusedtoconveythemessage.
Noise:Anythingthatinterfereswiththetransmissionandunderstandingofthemessage.
Decode:Totranslatethemessagebackintomeaningfulthoughtsorideas.
4.CommunicationMethods:
Communicationmethodscanbeclassifiedas,
InteractiveCommunication:
Itismultidirectionalexchangeofinformation.Itismostefficientcommunicationmethod.
PushCommunication:
Itensuresthatinformationisdistributedbutdoesnotcertifiesitactuallyreachedornot.SMS,
emails,letters,memos,reports,faxes,pressrelease,andvoicemailsetc.
PullCommunication:
Itisusedforverylargevolumeofinformation,orforaverylargestakeholders/recipients.It
requirestherecipientstoaccesstheinformationattheirowndiscretion.Intranetsites,shared
servers,shareddatabasesetc.
5.CommunicationTypes:
FormalWritten(FW)
Complexproblems,
projectmanagement
plan,projectcharter,
memos,longdistance
JavedAkhtar,CE,PE,PMP
FormalVerbal(FV)
Presentations,
Speeches,mass
communications.
InformalWritten(IW)
Email,handwritten
notes,textmessages,
instantmessaging.
InformalVerbal(IV)
Meetings,
Conversations,
MilestoneParties,
discussions.
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communication,
contracts,legalnotices.
Almost55%ofcommunicationsarenonverbal(bodylanguage).
Almost38%ofthemessagetransmittedcomesthroughvocalinflection(paralingual).
Only7%ofthemessageconsistsofactualwordsthatyoucanuse.
Projectmanagerspent90%ofhistimeandeffortsoncommunication.
Projectmanagercantcontrolallcommunicationsbutheshouldtrytocontrol.
10.2ManageCommunications:
Itistheprocessofcreating,collecting,distributingandstoring,retrieving,andultimatedispositionof
theprojectcommunicationsaccordingtothecommunicationsmanagementplan.
10.2.1:Inputs:
1.
2.
3.
4.
CommunicationManagementPlan,10.1
PerformanceReports,4.4
OPA,and
EEF.
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10.2.2:Tools&Techniques:
1.
2.
3.
4.
5.
CommunicationMethods,
InformationDistributionTools,
HardCopyDocumentation,
ElectronicCommunications,Emails,Faxes,
InformationManagementSystems.
10.2.3:Outputs:
1.OPAUpdates:
StakeholderNotifications,(ResolvedIssues,ApprovedChanges,etc.)
ProjectReports,(IssueLogs,ChangeLogs,PerformanceReportsetc.)
ProjectPresentations,
Project Records, (Correspondences, Memos, MOM, and other documents describing the
project)
StakeholdersFeedbacks,regardingthePerformanceRepots.
LessonLearned.
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2.ProjectCommunications:
Projectcommunicationsareregisteredincommunicationsmatrix.
10.3ControlCommunications:
It is the process of monitoring and controlling project communications in order to ensure that
informationrequirementsoftheprojectstakeholdersaremet.Italsoinvolvesperformancereporting.
Thekeyoutputsareworkperformanceinformationandchangerequests.
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10.3.3:Outputs:
1.PerformanceReports:
Basedonprojectprogressinputs(WorkPerformanceInformationanddata)andworkperformance
measurements(fromthemonitoringandcontrollingprocesses),performancereportsareprepared
andcommunicatedtoconcernedstakeholders.Performancereportsmayinclude,
Trendsfromthepastreports,
ResultsofVarianceAnalysis,
ResultsofPerformanceAnalysis,
Forecasts,
WorkCompletedduringthereportingperiod,
Worktobecompletedduringthenextreportingperiod,(LookAhead),
CurrentStatusofRisksandIssues,
Correctiveorpreventiveactions,(Additional)
2.OPAUpdates:
Lessonlearned,
Reportingtemplates,
3.ChangeRequests:
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11.RISKMANAGEMENT:
RISK:
Anyeventwhichmayaffecttheprojectobjectives/baselines(scope,schedule,cost,quality).
RiskcanbearVEimpacts(threats)or+VEimpacts(opportunities).
Riskscanbeatactivitylevel,workpackagelevel,orprojectlevel.
Riskcanbeknown(contingencyreserves)andunknown(managementreserves).
RiskiscombinationofProbabilityandImpact.
R=PxI
Uncertainty/Probability:
Itisthelackofknowledgeaboutaneventforitsoccurrence.
RiskFactors:
Followingarethefactors,
Probability,chanceofoccurrenceoftherisk,rangeis0to1.
Impact,ofriskonprojectobjectives,itismeasuredinrespectiveunitsofobjective.For
time,itismeasureintimeunit,forcostitismeasuredincostunit.
Timing,whenwilloccur.
Frequency,howmanytimesitwilloccur.
RiskTypes:
Twotypes,
1.
2.
BusinessRisks:Bothgainorloss.
PureRisk:Onlyloss(fire,theft,injuries).
RiskCategories:
Therearetwomaintypes,
1. KnownRisks:
Thesecanbeofthreekinds.
External:Regulatory;environmental;government;marketshiftsetc.
Internal: time, cost, scope changes; inexperience; poor planning; people; staffing;
materials;equipment.
Technical:Changeintechnology.
2. UnknownRisks:
Onlyasmallportionofrisks(somesaysabout10%)isactuallyunforeseeable.
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RiskAttitudes:
Organizationsandindividualscanacceptrisksdependingupontheirattitudetowardstherisks.The
following factors are helpful in risk analysis and creating risk response and fall under enterprise
environmentalfactors.
RiskAppetite:
It is the degree of uncertainty that an entity is willing to take on in anticipation of a reward. Risk
appetiteisrelatedtotheuncertaintyleveloftheriskandhelpsincreatingriskresponse.
RiskTolerance:
Itisthedegree,amountorvolumeoftheriskthatanorganizationorindividualcanwithstand.Itis
relatedtotheimpactoftheriskandhelpsincreatingriskresponse.
RiskThresholds:
Riskthresholdsarethecontrollimits.Belowthatriskthreshold,theorganizationwillaccepttherisk.
Abovethatthreshold,theorganizationwillnottoleratetherisks.
RiskAverse:
SomeonewhodoesnotwanttotakeriskisknownasRiskAverse.
RiskManagementKeyOutputs:
Thekeyoutputsoftheriskmanagementknowledgeareaare,
RiskManagementPlan,
RiskRegister,
RiskRelatedContractDecisions.
RiskManagementOverview:
Risk identification, management, and response strategies impact every area of the project
managementlifecycleandthetenkeyknowledgeareasdefinedbythePMI.Itincludes,
Identify,quantify,evaluate,andmanagerisks,
Knownrisksversesunknownrisks,
Monitoridentifiedrisksfortriggersorachangeinuncertainty,impact,andseverity,
Monitorfornewrisks,
Riskscanhavepositiveornegativeimpacts.
RiskManagementPlan:
Itdescribeshowriskmanagementwillbestructuredandperformedontheproject.Itincludes,
MethodologyofRiskManagement,
Howriskmanagementwillbeperformed.
RiskManagementOrganizationChart,
Whowilldoriskmanagement.
RolesandResponsibilitiesofriskmanagementteam,
Whattodoinriskmanagement.
ResponsibilityAssignmentMatrix(RACIChart),
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Assigningresponsibilitiesinatabularchart.
Riskbudgeting/ContingencyReserves:Assigningresourcesandestimatingtheircosts,
Whatcostwillbespentforriskmanagementincludingcontingencyreserves?
Timing:
Schedulecontingencyreservesandestablishingriskmanagementactivities,
RiskBreakdownStructure:
RBS,riskcategorization.
RevisedStakeholdersTolerance:
ReportingFormats:
Tracking:
Howtheriskactivitieswillbetrackedanddocumentedinlessonlearned.
Audits:
Auditstobecarriedoutforriskprocessesandmanagementeffectiveness.
Definitionsofriskprobabilityandimpact:
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ProbabilityandImpactMatrix:
RiskRegister:
Riskregisterisanimportantandkeydocumentofprojectriskmanagement.Itincludesallthe
summarydetailsabouttheprojectrisksandtheoutputsofriskmanagementprocesses.
NOTE:Riskregistermustbeupdatedafterconductinga(any)projectmanagementprocessinsteadof
concentratingontheoutputsrecognizedbyPMBOK.
PleaserefertothegeneralformofRiskRegisterintheprojectmanagementtemplates.
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11.1PlanRiskManagement:
Thevery effective tool in risk management isdocuments/plans reviewsand analysis.Planningrisk
managementshouldstartearlierintheprojectwhenitisbeinginitiatedandshouldbecompleted
earlyduringprojectplanning.
11.1.1Inputs:
1.ProjectManagementPlan:
CostManagementPlan:
ItprovidesRiskBudget,ContingencyReserves,andManagementReserves.
ScheduleManagementPlan:
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ScheduleReserves
CommunicationManagementPlan:
Communicationrequiredforriskmanagement.
2.ProjectCharter:
Highlevelrisksassociatedwiththeproject.
3.ProjectScopeStatement:
Projectassumptions.
4.StakeholdersRegister:
5.OrganizationalProcessAssets:
Riskcategories,
Commondefinitionsofconceptsandterms,
Riskstatementformats,
Standardtemplates,
Rolesandresponsibilities,
Authoritylevelsfordecisionmaking,and
Lessonlearned.
11.1.2Tools&Techniques:
1. Meetings:
2. ExpertJudgment:
3.AnalyticalTechniques:
StakeholderRiskProfileAnalysis:
Togradeandqualifytheprojectstakeholdersriskappetiteandtolerance.
RiskScoringSheets:
11.1.3Outputs:
1.RiskManagementPlan:
Riskmanagementplanisalreadyexplainedabove.
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11.2IdentifyRisks:
Thekeyoutputistheriskregister.
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11.2.1Inputs:
1.RiskManagementPlan:
ItprovidesRBS,Roles&ResponsibilitiesofRiskManagementTeam.
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2.CostManagementPlan:
Projectspecificapproachofcostmanagementplanmaygeneratetherisktotheproject.
3.ScheduleManagementPlan:
Projectspecificapproachofschedulemanagementplanmaygeneratetherisktotheproject.
4.QualityManagementPlan:
Projectspecificapproachofqualitymanagementplanmaygeneratetherisktotheproject.
5.CommunicationManagementPlan:
Projectspecificapproachofcommunicationmanagementplanmaygeneratetherisktotheproject.
6.HRManagementPlan:
ProjectspecificapproachofHRmanagementplanmaygeneratetherisktotheproject.
7.ScopeBaseline:
WBS is critical input to identify and track the risks at Summary Level, Account Level and/or Work
PackageLevel.Projectscopestatementprovidesprojectassumptionstoevaluatetheuncertaintyin
projectassumptionsaspotentialcausesofprojectrisk.
8.StakeholderRegister:
Tointerviewthestakeholdersinordertoidentifytherisks.
9.ProjectDocuments:
Earned Value Reports, Work Performance Reports, Network Diagram, Baselines, Assumptions Log,
ProjectCharter,QualityChecklists,IssueLog
10.ProcurementDocuments:
Rentalsresources+contracts
11.ActivityCostEstimates:
Toidentifytherisksrelatedtocostestimation.
12.ActivityDurationEstimates:
Toidentifytherisksrelatedtodurationestimation.
13.EEF:
Publishedinformation,
Academicstudies,
Publishedchecklists,
Benchmarking,
Industrialstudies,
Riskattitudes,
14.OPA:
Lessonlearned,
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Riskstatementformats,
Templates,
Projectfiles,historicalinformation,
Organizationalandprojectprocesscontrols.
11.2.2Tools&Techniques:
1.InformationGatheringTechniques:
BrainStorming,DelphiTechnique,Interviews,Surveys&Questioners,meetings,rootcauseanalysis.
Brainstorming:
Therearefourfundamentalstepsofbrainstormingtechnique.
FocusonQuantity:
TheconceptbehindthisstepisQuantitybreedsquality.Theideaassumesthatthegreater
thenumbersofideagenerated,thehigherthechanceofproducinganeffectiveoutcomeor
solution.
WithholdCriticism:
While ideas are being generated, there are chances of ideas criticism. The team should
postponethecriticismandfocusonextendingoraddingnewideas.
WelcomeUnusualIdeas:
Togetalongandgoodlistofideas,information,ordata,unusualideasmustbewelcomed.
Thenewwayofthinkingmayprovidebettersolution.
CombineandImproveIdeas:
Goodsideasmaybecombinedinteractivelytoformasingleimprovedideaorinformation.
TheDelphiTechnique:
Thisisagoodinformationgatheringtechniquewhichishelpfulwhen,
Therearechancesofopposition,
Haloeffect,
Bandwagoneffect.
TheinformationcollectedthroughRFIorinterviewiskeptanonymousandtheparticipantisallowed
toexpresshisideasfreely.
RootCauseAnalysis:
Root cause analysis is reactive method of problem detection and solution. The analysis has been
performedafteraneventhasoccurred.Thisallowsanalysttoidentifythetriggersorindicatorsforthe
problemsto beoccurred. Inotherwords, itallows toforecastthepossibilityof abevent beforeit
mightoccur.Hence,becomesaproactivemethod.
RCAisnotasinglemethodology.Itcanbedividedintofivebroadcategories.
1.
2.
3.
4.
5.
SafetybasedRCA
ProductionbasedRCA
ProcessbasedRCA
FailurebasedRCA
SystembasedRCA.
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SeveralRCAtechniqueshadbeendevelopedwhichincludebutnotlimitedtothefollowings,
IshikawaorFishboneDiagram,
ParetoChart,
FailureModeandEffectAnalysis,FMEA
KepnerTregoe,
Bayesianinference(conditionalprobability).
ExpertInterviewing:
Itistheprocessofinterviewingsubjectmatterexpertstoobtaincriticalinformationfortheproject.
SWOTAnalysis:
Thistechniqueisusedtoanalyzehowtheorganizationalstrengthsandweaknessesplayagainstthe
opportunitiesandthreats.Thepossiblescenarioscanbe,
1. StrengthsOpportunities:
Howorganizationalstrengthshelptheorganizationtocapitalizeonopportunities.
2. StrengthsThreats:
Itidentifieshoworganizationalstrengthshelpustodealwiththecompetitorsorthreatening
situations.
3. WeaknessesOpportunities:
How necessary improvements can be made to enable the organization to capitalize on
opportunities.
4. WeaknessesThreats:
It identifies howorganizationalweaknesses leaveus vulnerabletoexternal competitors or
threats.
2.ChecklistsAnalysis:
RiskChecklistscanbedevelopedbasedonhistoricalinformationandknowledge.
3.ProjectAssumptionAnalysis:
4.DiagrammingTechniques:
Fishbone,SystemorProcessFlowCharts,InfluenceDiagrams,
5.DocumentationReview:
6.ProjectDocumentationReviews:
7.ExpertJudgment:
11.2.3Outputs:
1.RiskRegister:
Entriesofrisksidentifiedtoriskregister.Riskregisterwillcontaininformationfromotherprocesses
ofRiskManagementaswell.
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11.3PerformQualitativeRiskAnalysis:
Itissubjectiveevaluationofriskinqualitativetermseventhoughnumbersareusedfortherating.The
benefitofthisprocessisthatitenablesprojectmanagertoreducethelevelofuncertaintyandto
focusonhighpriorityrisks.
11.3.2:Tools&Techniques:
1.RiskProbability&ImpactAssessment:
ProbabilityAssessment:
Toinvestigatethelikelihoodthateachspecificriskwilloccur.Probabilityrangeis0to1
(0.1to0.9).Probabilitylevel(VeryLow,Low,Medium,High,andVeryHigh)isassessed
duringmeetingorinterviews.
ImpactAssessment:
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Toinvestigatethepotentialeffectonaprojectobjectives(schedule,cost,scope,quality).
These effects can be positive/opportunity or negative/threats. Impact level (Very Low,
Low,Medium,High,andVeryHigh)isassessedduringthemeetingorinterviews.
TheinitialassessmentofprobabilityandimpactisbasedonqualitativetermssuchasVeryLow,Low,
Medium,High,andVeryhigh.Laterduringthequantitativeriskanalysis,thesequalitativeassessments
areconvertedintodigitsandnumbers.
BasedonQualitativeand/orQuantitativeRiskAnalysis,Risksarebeingcategorizedintotwolists.
Hit/TopList:
Riskswithmedium,highandveryhighprobabilityand/orimpact.
WatchList:
Riskswithlowandverylowprobabilityand/orimpact.
2.RiskProbability&ImpactMatrix:
RiskProbabilityandImpactMatrixisusedtoclassifytherisksbasedonquantitativeriskanalysis.
R=PxI,
As,
Where,
P=Probability
P=0.1forVL,
P=0.3forL,
P=0.5forM,
P=0.7forH,
P=0.9forVH.
And
I=Impact,andwillbequantitativelyassessedas,
ImpactAssessment:
1. Weights are assigned based on the priority of the project objective during the planning
process.
Risk
Weights
M
L
H
R1
R2
R3
Prob.
Scope
2
L
H
M
ImpactonProjectObjectives
Time
Cost
1
3
M
H
VH
VL
VL
M
Quality
2
VH
M
L
2. Settingbasicvaluesforqualitativetermsfromfig.115asbelow,
VeryLow,VL
0.05
Low,L
0.1
Medium,M
0.2
High,H
0.4
VeryHigh,VH
0.8
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3. Let us use these basic values to set ProjectBased Values for impact assessment. Impacts
calculationsforvariousriskswillbeasfollowed,
Impact=WeightxBasicvalue
TotalImpactonproject=S+T+C+Q
Impact
Scope
R1
R2
R3
Time
2x0.1=0.2
2x0.4=0.8
2x0.2=0.4
1x0.2=0.2
1x0.8=0.8
1x0.05=0.05
Cost
Quality
Total
3x0.4=1.2
2x0.8=1.6
3x0.05=0.15 2x0.2=0.4
3x0.2=0.6
2x0.1=0.2
3.2
2.15
1.25
4. Projectbasedimpactrangescanbedefinedtoclassifytheimpactasfollows,
Sumofthepriorityweights=S+T+C+Q=2+1+3+2=8
Max.Range
=VeryHighImpactxSumofthePriorityWeights
=0.8x8.0=6.40
Min.Range
=VeryLowImpactxSumofthePriorityWeights=
=0.05x08=0.20
Nowsettingthevaluesofqualitativetermsfortheprojectasbelow,
VeryLow,VL
<1
Low,L
12
Medium,M
23
High,H
35
VeryHigh,VH
56.8
Basedonabovescale,wecancalculatetheimpactvaluesfortherisksasbelow,
Risk
Impacts
1
2
3
Impact
Value
3.2
2.15
1.25
Category
H
M
L
Basic
Value
0.8
0.2
0.1
Prob.
Category
M
L
H
Prob.
Value
0.5
0.3
0.7
R=PxI
0.4
0.06
0.07
THISCALCULATIONHASBEENPERFORMEDTOCONSIDERTHECUMMULATIVERISKIMPACT
ONTHEPROJECTOBJECTIVES.
5. Wehaveassessedtheriskimpactsandtheirnumericvaluesasshowninabovetable.Thefinal
riskvaluewillbeconvertedtothequalitativetermsusingtheProbabilityandImpactMatrix
asbelow,
XProbability,YImpact&ValuesforThreatsandopportunitiesXxYi.e.R=PxI
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Impact
RiskLevelsinabovefigureare,
o
o
o
LowRisk:MediumGrey,LowestValues,0.05
MediumRisk:LightGrey,>0.050.14
HighRisk:DarkGrey,HighValues,>0.14
Hencetheresultsofqualitativeriskassessmentare,
1. R1=
2. R2=
3. R3=
0.4
0.06
0.07
=HighRisk,
=MediumRisk,
=MediumRisk.
3.RiskDataQualityAssessment:
Toassessthereliability,quality,accuracyandintegrityofriskdataandtodeterminethedegreeto
whichtheriskisunderstood.
Usinglowqualityriskdatamayleadtoaqualitativeriskassessmentoflittleusetotheproject.
4.RiskCategorization:
Riskcanbecategorizedbasedon,
RiskBreakdownStructure(RBS),
ProjectPhases,and/or
ProjectArea(WBS)
5.RiskUrgencyAssessment:
Determinationofriskprioritization/ranking/ratingisnecessarytoplantheRiskResponse.Nearterm
responsesmaybeconsideredmoreurgenttoaddress.
11.3.3:Output:
1.RiskRegisterUpdate:
Riskregisterisupdatedfor,
Ranking/rating/priority,
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RiskGrouping/Categories,
Neartermriskresponse,
TrendsinQualitativeRiskAnalysis
Watchlist.
11.4:PerformQuantitativeRiskAnalysis:
QuantitativeRiskAnalysisisalsoknownasRiskAssessment.Itisnumericalevaluationofriskinthe
respectiveunitsofprojectiveobjectives.Itisbeingperformedfortherisksprioritizedinthequalitative
riskanalysisprocess.
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11.4.2:Tools&Techniques:
1.Information/DataGatheringtechniques:
1.Interviews:
Conduct interviews of stakeholders and collect data based on their experience which refers to as
historicaldata.AnalyzethedatawithThreePoint(PERT)estimate.
2.ProbabilityDistribution:
Continuous probability distributions are used to represent uncertainty in data/values. Probability
distributionscanbe,
BetaDistribution,
TriangularDistribution,
Uniform/LinearDistribution,itisusedonlywhenmostlikelyvaluesarenotobvious.
NormalDistribution,
LognormalDistribution.
3.TheDelphiTechnique:
4.ExpertJudgment:
5.HistoricalRecords:
2.QuantitativeRiskAnalysis&ModelingTechniques:
1.SensitivityAnalysis:
Thisanalysishelpstodeterminewhichriskshavethemostimpactontheproject.Onetypicalexample
ofsuchanalysisisTARNADODiagram,plottingtheimpactsintornadoshapeasshownbelow,
InTornadoDiagram,Impactisalongthehorizontalaxisandparametersareinverticalaxis.
2.ExpectedMonetaryValue(EMV)Analysis:
EMVisbettermeasuretodetermineanoverallriskranking.
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EMV=PxI
TheEMVoftheopportunitiesisgenerallyexpressedaspositivevalueswhereasthoseofthreatsare
expressedasnegativevalues.
Expectedmonetaryvalueanalysisiscommonlybeingperformedusingdecisiontreeanalysisasshown
inbelowexample.
3.ModelingandSimulation(MonteCarlos)Technique:
Itiscomputerbasedanalysisasitisintricate.
Evaluatesoverallprojectrisk.
Determinesprobabilityofcompletingtheprojectonanyspecificday.
Determinesprobabilityofanactivitybeingonthecriticalpath.
Takesintoaccountpathconvergence.
Translateuncertaintiesintoimpactstothetotalproject.
Canbeusedtoassesscostandscheduleimpacts.
Resultsinprobabilitydistribution.
PrimaveraRiskAnalysisincludessimulationtechniqueforquantitativeriskassessment.
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4.DecisionTrees:
Ittakesintoaccountfutureeventsinmakingadecisiontoday.
ItcalculatesEMVinmorecomplexsituations.
ItinvolvesMutualExclusivity:
5.FailureModeandEffectAnalysis(FMEA):
Thistechniqueutilizesthreeparametersinordertoassesstheprojectrisks.
Severity:
Severitylevelofriskrepresentsanumericvaluerangingfrom1to10.1representsnoeffect
whereas10representsahighhazard.
Probability:
1to10where1representsaprobabilitylessthan0.0007%and10representsaprobability
of20%andgreater.
Detectability:
1to10where1representsariskwhichishighlydetectableand10representsariskthatis
completelyundetectable.
RiskPriorityNumber(RPN)=SeverityxProbabilityxDetectability
11.4.3:Output:
1.RiskRegisterUpdate:
Riskregisterisupdatedfor,
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QuantitativeRiskRanking/rating/priority,
Amountoftimeandcostcontingencies,
Possible,realisticandachievableprojectcompletiondatewithconfidencelevel,
Quantitativeprobabilityresultsofmeetingprojectobjectives,
TrendsinQuantitativeRiskAnalysis,
11.5.2:PlanRiskResponse:
Thekeybenefitofthisprocessisthatitaddressestherisksbytheirprioritiesandinsertsactivities,
resources,costs,anddurationstotheprojectmanagementplan.
11.5.2:Tools&Techniques:
1.ThreatResponse:
Accept:
Donothingandacceptthethreatasitis.Itisleastdesirableoptionincasesofthreats.
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Avoid:
Removethethreatbyremovingthesource/causeoftherisk.E.g.,removetheworkpackage.
Itissecondleastoption.
Mitigate:
Reduce/minimizetheprobabilityand/orimpactofthethreat.
Transfer:
Deflect,Allocate:Makeanotherpartyresponsibleforthethreatsby,purchasinginsurance,
performancebonds,warrantee,guarantee,orbyoutsourcingthework.
2.OpportunityResponse:
Accept:
Donothingandaccepttheopportunityasitis.Alsoaleastoptionforopportunities.
Exploit:
Itisthereverseofavoid.Addorchangetheworktomakesurethattheopportunityoccurs.
Enhance:
Itisthereverseofmitigate.Increasetheprobabilityand/orimpactoftheopportunity.
Share:
Allocateownershipoftheopportunitytoathirdparty(partnership,team,orjointventure)
thatisbestabletoachievetheopportunity.
Acceptisthecommonstrategyb/wthreatandopportunityresponse.Theriskacceptancemay
besubjecttobelowriskresponseapproaches.
RiskResponseApproaches:
ActiveRiskResponse:
ActiveRiskResponsemayinvolvecreationofcontingencyplan,allocationoftimeandcostreserves
forriskacceptance.
PassiveRiskResponse:
PassiveRiskResponseleavesactionstobedeterminedasneeded.
Note:Adecisiontoaccepttheriskmustbecommunicatedtostakeholders.
3.ContingentResponseStrategy:
Some responses are designed for use only if certain events occur. This strategy contains certain
predefinedconditionstomakeariskresponse.
11.5.3:Output:
1.ProjectContingencyPlan:
The key output of this process is the contingency plan for each risk which has been evaluated
quantitatively.Eachriskmayhavetwotypesofcontingencyplans.
ContingentResponse(PlanA):
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Acontingentresponseforariskwhichhavebeendevelopedtocopupwiththerisk.
FallbackPlan(PlanB):
Fallbackplansareimplementedwhenacontingentresponseisnoteffective.
2.Contingency&ManagementReserves:
ContingencyReserves:
Costsfortheriskresponsesofknownunknownsarethecontingencyreserves.Contingencyreserves
arethepartofthecostbaseline.
ManagementReserves:
Management reserves handle unknown unknowns and are calculated based on overall project
uncertainty.Managementreservesarethepartofprojectbudgetbutarenotconsideredinthecost
baseline.
3.RiskRegisterUpdates:
Atthisstageriskregistermusthavefollowinginformation,
Identifiedrisks_11.2
Riskownersandidentifiedresponsibilities_11.5
Riskranking_11.4
RiskGrouping_11.3
Agreedriskresponsestrategies_11.5
Actionsrequiredtoimplementthechosenresponsestrategy_11.5
Budgetandscheduleactivitiesrequiredtoimplementthechosenresponsestrategy_11.4
4.RiskrelatedContractDecisions:
Asaresultofriskresponsessuchasmitigation,transfer,enhancingandsharing,decisionsshouldbe
madeduringtheplanresponseprocesswhichwillbeaninputto12.1PlanProcurement.
5.ProjectManagementPlanUpdates:
ScheduleManagementPlan,
CostManagementPlan,
QualityManagementPlan,
ProcurementManagementPlan,
HRManagementPlan,
ScheduleBaseline,
WorkBreakdownStructure,
CostPerformanceBaseline.
6.ProjectDocumentsUpdates:
AssumptionLog,
TechnicalDocumentation,and
ChangeRequests.
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11.6:ControlRisks:
11.6.2:Tools&Techniques:
1.RiskAssessment:
Monitor & control risk process sometimes identifies new risks, reassessment of current risks and
closingofthatareoutdated.
2.RiskAudits:
Riskauditsexamineanddocumenttheeffectivenessofriskresponseindealingwithidentifiedrisks
andtheirrootcauses.
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3.Variance&TrendAnalysis:
Variance&trendanalysisareperformedtocomparetheactualversesplannedriskresponsesand
impacts.Basedontheanalysis,projectcompletiondate,EACandscheduletargetsareforecasted.
4.TechnicalPerformanceMeasure:
Itisrelatedtothefunctionalityofthedeliverables.Knowingno.ofdelivereddefects,deviationssuch
asmoreorlessfunctionalitythanplannedatamilestonecanhelptoforecastthedegreeofsuccessin
achievingtheprojectobjectives.
5.ReserveAnalysis:
Remainingreservesanalysiseithertheyaresufficientforremakingrisks.
6.RiskStatusMeetings:
11.6.3:Output:
1.
2.
3.
4.
5.
6.
RiskRegisterupdates:
OPAupdates:
ChangeRequests:
PMPUpdates:(RiskManagementPlanUpdate)
ProjectDocumentsUpdates:(Assumptionlog,TechnicalDocumentation)
Residualandsecondaryrisks.
6.ResidualRisks:
Residualrisksaretheidentifiedriskswhichremainafterariskresponsestrategywasimplemented.
Residualriskscanbeidentifiedintheplanningprocessinwhichcasetheyaresubjecttocontingency
andfallbackplanning.
Forexample,ifyouknowthatanemployeeworkingontheprojectwillleaveaftercompletinghis
contractdurationbeforetheprojectisover,youmayplanacrosstrainingofalowerlevelresourcein
ordertopreparehimforreplacement.Thoughyouwillreplacetheresourceonceheshallleavebut
stillthereisariskoflowperformanceofthereplacement.Insuchcases,youmayneedtoprepare
contingencyandfallbackplanforthelowperformanceresidualrisk.
7.SecondaryRisks:
Secondaryriskistheriskthatresultsinfromimplementingariskresponsestrategy.Secondaryrisks
canmeidentifiedintheplanningprocessorthatmayoccurasaresultofdiscovery.
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