Anda di halaman 1dari 260


Walid M. Abdelrahman, PMP, PMI-SP, CCP, PMI-RMP

Program Introduction
Training objectives

 Gain knowledge of PMI Project Management Methodology

 Earn 35 PDUs required to be eligible for the PMP Exam

 collect hints for answering PMP exam questions

Save Your time

Program Introduction
PMI (Project Management Institute)

 Established in 1969 with Global HQ in

Pennsylvania USA
 250 chapters in approx 70 countries
 Has more than 1,000,000 members
 Run by a group of volunteers
 Promotes Project management best practices
 Offers Certifications which have become an
industry standard
Program Introduction
Format of PMP exam

 200 MCQs
 175 are scored, 25 are not scored
 106 correct out of 175 i.e. 61%
 Only Pass or Fail
 Questions will test knowledge, application & analysis

 4 hours
 15 minutes familiarization
 Books not allowed
 Mobiles not allowed
Program Introduction

Project Project
General No. of
Category Management Management Experience
Education Questions
Education Experience
Bachelor’s 3 years within
1 4,500 hours
degree 35 contact last 6 years
High school hours 5 years within
2 7,500 hours
graduate last 8 years


 What is a Project?

 What is Project management?

 Project, Program, Portfolio management

 Role of the project manager

Introduction Project Management Body of Knowledge
PMBOK® Guide
 Contains the standard for managing most projects most of the time
across many types of industries

 Unique to the project management field and has relations to program

and portfolio management

 Doesn’t address all details of every topic

 It contains the “good practices” of professional project management.

 Other PMI standards:

 The standard for program management

 The standard for portfolio management

7  Organizational project management maturity model (OPM3®):

examines an enterprise’s project management process capabilities
Introduction What is a Project?

 A project is a temporary endeavor undertaken to create a unique

product, service, or result.

 Temporary
 has a definite beginning and a definite end, not ongoing efforts.
 Ceases when objectives have been attained.

 Unique:
 the product or services is different in some way from other products or
 The presence of repetitive element does not change the fundamental
uniqueness of the project work.

Projects versus operations

 Similarities between project and operations

 Both performed by people even 1 person.
 Both are constrained by resources.
 Both are planned, executed and controlled.
 Both are done for a purpose and have interrelated activities.

 Difference between projects and operations

 Operations are ongoing and repetitive.
 Projects are temporary and create unique products.
 They have different management techniques

What is Project Management?

 The application of knowledge, skills, tools, and techniques to

project activities in order to meet the project requirements.

 Managing a project includes:

 Identifying requirement
 Addressing stakeholders expectations
 Establishing SMART objectives
 Balancing the competing demands for quality
,scope, time and cost

Introduction Relationships among Project, Program, Portfolio,
and Organization

Introduction Relationships among Project, Program, Portfolio,
and Organization

 Program
 Group of related projects and other work that have a common
outcome or goal
 Coordinating between project for greater benefits
 Focuses on projects interdependencies: objectives, conflicts,
issues, shared resources, …etc.

 Portfolio
 Centralized management to achieve strategic business goal
 Group of programs, projects and other work that may not be
directly related.
12  Focuses on prioritization and resource allocation
Comparative Overview of Project, Program , and
Portfolio Management

Projects Programs Portfolios

Scope Projects have defined Have a larger scope and Portfolios have a business
objectives. Scope is provide more significant scope that changes with the
progressively elaborated benefits strategic goals of the
throughout the life cycle organization

Change Project managers expect The program manager Portfolio managers

change and implement must expect change from continually monitor changes
processes to keep inside and outside the in the broader environment
change managed and program and be prepared
controlled to manage it

Planning Project managers Program managers develop Portfolio manages create

progressively elaborate the overall program plan and maintain necessary
high level information and create high level plans processes and
into detailed plans to guide detailed planning communication relative to
throughout the project at the end of the the aggregate portfolio
life cycle component level

Introduction Projects and strategic planning

Projects are typically authorized as a result of one or more of the

following strategic considerations:

 Market demand: Response to market changes (Gasoline shortage - fuel

efficient cars).

 Organizational need: Change organization structure for cost effectiveness

 Customer request: (contract).

 Technological advance: electronic devices, electronic systems.

 Legal requirement: (Guidelines for handling toxic material).

 Ecological (Environmental) impact: Reduce pollution (electric cars).

 Social need: (for community, poor people).

Project management office (PMO)

 Structure for centralized management of projects

 Roles of PMO vary in degree and influence:

 Supportive: Provide PMs with templates, mentoring and training,

best practices and lessons learnt

 Controlling: Audit the compliance with standards, policies &

procedures, and templates

 Directive: Directly manage projects, manage shared resources,

coordinate communication across projects
Role of the project Manager
 Assigned by the organization to lead the team that is responsible for
achieving the project objectives

 Required competencies: Knowledge, performance, and personal skills

 Interpersonal skills of a project manager:

• Leadership
• Team building
• Motivation
• Communication
• Influencing
• Decision making
• Political and cultural awareness
• Negotiation
16 • Trust building
• Conflict management
• Coaching
Project Constraints

 Constraints are factors that limit options

 Change to one constraint affects other constraints


 Organizational influences

 Project stakeholders

 Project life cycle

 Process groups & Interactions

Organizational Structure

 The structure of the performing organization often

constraints the availability of resources






19 Composite
Functional organization

Functional Organization - Key Points

 The organization is grouped by specialty / functions

 Each employee has one clear supervisor

 Projects generally occur within a single department (silo)

 Each department does its project work independently,

coordination will be routed through departmental heads

 Team members complete project work in addition to

21 normal department work
Weak Matrix Organization

Balanced Matrix Organization

Introduction Strong Matrix Organization

Projectized Organization

Projectized Organization – Key Points

 The entire company is organized by projects.

 The project manager has control of projects.

 Employees are assigned and report to a project manager.

 Employees complete only project work and when its over

they don't have HOME.

 Communication generally occurs only within the project.

Matrix Organization - Key Points
 Two Bosses: Team members reports to Project Manager and
Functional Manager

 Employees do project work in addition to normal departmental work

 Weak matrix: Power rests with functional manager, and project

manager plays a role of expeditor or coordinator.

 Balanced matrix: Power is shared between project manager and

functional manager

 Strong matrix: Power rests with project manager

Project Expediter: Staff assistant and communication coordinator. No power,

27 cannot take decisions.
Project Coordinator: Similar to Project expediter but has some power to take
decisions, and reporting to higher-level manager
Composite Organization

Introduction Organization Structure

Organizational process assets

 The Assets that are specific to and used by the organization

 Inputs to most planning processes

 Project team updates and add to it through out the project

 It includes:

• Policies, procedures, processes, templates, forms, and guidelines.

• Databases, lessons learnt DB, Historical information from previous

Enterprise environmental factors

 The conditions that are not under control of project team that
influence, constraint or direct the project.
 Inputs to most planning processes
 Project team updates and add to it through out the project
 It includes:
• Organization culture and structure
• Existing staff and their skills, competencies, experience
• Work authorization system
• Government standards and regulations
• Geographic location
• Marketplace conditions
• Infrastructure
• Political climate
31 • PMIS: Project management information systems (software / tools)
Introduction Stakeholders
 People or organizations whom interest may be positively or negatively
impacted by the project.
They may also include those who may exert influence over the project
but would not otherwise be considered stakeholders.

Who could be a project stakeholder?

 Sponsor

 Customers & users

 Sellers

 Business partners

 Functional managers

 Project team
 Government

 Consultants
Introduction Product and project Life Cycles

 Product Life Cycle: Conception, growth, maturity, decline, and withdrawal

 Project Life Cycle (product oriented processes): (Phases), Examples are:
 Construction: Feasibility, planning, Engineering, procurement, construction,
 IT: Analysis, design, coding, testing, installation, conversion.
 Project Management processes: (life Cycle)

Product life cycle


Introduction Project life cycles (phases)

 Collection of project related activities cumulate to one or more

deliverable and different from other phases.

 Stage gates / kill points / phase review

 Most Project management processes are applied in each phase

 Phase to phase relationships:

• Sequential (step by step)

• Overlapping

Introduction Project life cycles (phases)

 Project life cycles are:

Predictive Iterative & Incremental Adaptive

When product and Scope are “Change driven or Agile”, for rapidly
Detailed scope is defined
clear and determined early changing environment (Iterative and
only at each iteration
(Fully plan-driven) incremental)
Nature of work is different For risky, large and complex Scope is decomposed into prioritized
from phase to phase projects requirements (product backlog)
After each iteration, deliverables are
When Product is required in When partial delivery (or one
reviewed and customer feedback
full to have value deliverable) provides value

Project Management Process groups

Initiation process group

Business need

Begin a new phase

of the project Initiation

Project has so
many problems
that you reevaluate
business need

Planning process group

Initiation process group

is completed
Approved changes that
require re-planning

Executing process group

Project planning is
Integrated change group
control results in a
changed project
management plan

Introduction Monitoring & controlling process group

Initiation: to review
project charter
Requested changes

Planning: to re-plan
Monitoring & parts of the project
Work performance controlling
information process
group Executing: to repair

Closing if the
project is completed
Closing process group

Project phase is

Project is complete process

Project is terminated




5-Quality 47 Processes


42 10-Stakeholder

Page 61 in PMBOK® Guide

ITTO’S For Process

Inputs Outputs


43 For each process, you have to know the

inputs ,tools , techniques and outputs.

 Develop project charter

 Develop project management plan
 Direct and manage project work
 Monitor and control project work
 Perform integrated change control
 Close project or phase

To be explained after all knowledge areas
Project Initiation

Project Charter

 Project purpose / justification

 Project objectives (SMART)
 High level requirements
 Constraints and Assumptions
 Product Description/Deliverables
 Summary Milestones & budget
 High level project risks
 Stakeholders (as known)
 Project approval requirements
 Project Manager Assigned and
Authority Level
 Project Sponsor Approval

Initiation & Feasibility Study
Project selection methods - Business case

Project selection methods: used to determine which project the

organization will select:

 Benefit measurement methods that are comparative


 Mathematical models that use programming algorithms.

Initiation & Feasibility Study

The amount that a future sum of money is worth today given a specified rate
of return which is Opposite to the Future Value.

FV n years
PV = i %, interest rate
( 1 + i )n PV

What is the present value of $300,000 received three years from now
if we expect 10% interest rate?
Initiation & Feasibility Study

 NPV is used in capital budgeting to analyze the profitability of

an investment or project

 To compare between options, you have to evaluate the

present value for the cash out and the present value for the
cash in:

NPV = (NPV) cash in – (NPV) cash out

Present value of the total benefits – the costs over many time

You have two projects to choose from. Project A will take 3 years and

48 has a NPV of $45,000. Project B will take 6 years and has a NPV of
$85,000. which one would you prefer?
Initiation & Feasibility Study

 It's the interest rate at which project revenue and costs are equal

You have two projects to choose from. Project A with an IRR of 21%
or project B with an IRR of 15%. which one would you prefer?


 The number of time periods it takes to recover your

investment. Calculated as:
PBP = Cost of Project / Annual Cash In

You have two projects to choose from. Project A with a payback

49 period of 6 months or project B with a payback period of 18 months.
which one would you prefer?
Initiation & Feasibility Study

 The total revenue of the project divided by the total cost

Calculated as:


If the BCR of Project A is 2.3 and the BCR of project B is 1.7, which
project would you select?
Initiation & Feasibility Study

Select the project with


Initiation & Feasibility Study
Opportunity Cost
The opportunity given up by selecting one project over another.

You have two projects to choose from: Project A with an NPV of $45,000 or
Project B with an NPV of $8,ooo. What is the opportunity cost of selecting
project B?

Answer: $45,000.

Sunk Costs
Expended costs.

You have a project with an initial budget of $1,000,000. You are halfway through
the project and have spent $2,000,000. Do you consider the $1,000,000 over
budget when determining whether to continue with the project?
Answer: No. The money spent is gone.
Initiation & Feasibility Study

Law of Diminishing Returns

After a certain point, adding more input will not produce a proportional
increase in productivity.

Working Capital
Current assets minus current liabilities, or the amount of money the
company has available to invest, including investment in projects

Large assets (Equipment) lose value over time
1. Straight line depreciation: (same amount every year)
2. Accelerated (faster than straight line)
Initiation & Feasibility Study
Example: Case Study
 A training company has the following expected cash in and Cash out results
for one training program, Calculate the NPV and IRR for this project at 10%
& 25% discount rate.
 Brief conclusion accordingly.
 Use Excel & Power point to present your results using charts.

Time, Cash out Cash in At 10%

End year $K $K

0 1000 0 At 25%
1 150 625
2 150 550
3 200 530
54 4 200 470
5 250 450
Project Scope Management

 What is Scope Management?

 Why Scope Management is important?
 What are the Scope processes?
Planning Stage Controlling Stage
1. Plan Scope management 5. Validate Scope
2. Collect Requirements 6. Control Scope
3. Define Scope
4. Create WBS

Project Scope Management
Project Scope Management

 Ensure that the project includes all the work required, and only the
work required, to complete the project successfully.

 Scope Management includes:

 Make sure you are completing all the work
 Not letting people randomly add to the scope of the project
without a structured change control system
 Making sure all changes fit within the project charter
 Defining and controlling what is and is not included in the project
 Preventing extra work or gold plating

 Encompasses both product scope and project scope

Project Scope Management
Product Scope

 Product scope
 The features and functions that are to be included in your
products or service or result of the project.
 Completion is measured against the requirements.

 Project Scope
 The work that must be done to deliver the specified product.
 Completion is measured against the project management plan
(scope baseline).

 Deliverable
 is a product produced as part of a project, such as hardware or
software, planning documents, report, or meeting minutes
Project Scope Management

Plan Scope Management
Project Scope Management
Collect Requirements

 Defining and documenting stakeholders’ needs and expectations:

project requirements and product requirements

 Requirements become the foundation of the WBS. Cost , Schedule,

and quality planning.

Project Scope Management

Collect Requirements
Project Scope Management
Collect Requirements - Tools & Techniques
 Interviews
 Formal or informal interview of stakeholders by asking prepared
 Focus groups
 Specific stakeholder of SMEs
 Conversation is directed by a trained moderator
 Facilitated workshops
 Cross-functional teams and stakeholders interact, discover and
resolve issues, and reach consensus
 Group creativity techniques
 Brainstorming, Nominal group technique (voting), mind mapping,
affinity diagram, and multi-criteria decision analysis
 Group Decision making techniques
 Unanimity (Delphi technique), Majority, plurality, Dictatorship
Project Scope Management

Define Scope

 Description of the project and product (progressively elaborated)

 What is and is not included in the project.
 Takes into account constraints and assumptions.

Project Scope Management
Define Scope

Value Engineering
Occure During desin focuses in maximizing value

Value Analysis B A
Occure after design often by contractor analysis and recomendation
Constructability Study
Occure During Construction focuses ion effecient and effective
construction techniques
Optimum Process

Project Scope Management
Define Scope - Output

Project Scope Statement

 Product Scope Description
 Acceptance Criteria
 Deliverables
 Project Exclusions
 Project Boundaries
 Constraints and assumptions
 Initial Project Organization
 Initial Defined Risks
 Schedule Milestones
 Fund Limitations
64  Cost Estimate
 Approval Requirements
Project Scope Management

Create WBS
 One of the most important project management tools.
 Visualizes the entire project.
 Foundation for accurate planning, estimating, and project control.
 Control mechanism to keep the project on track.
 Builds team consensus and buy-in to the project.
 Prevents scope creep or change.

Project Scope Management

Create WBS
Project Scope Management
Create WBS

Activity list
Project Network
control diagram

WBS Staffing

Quality Estimating

67 Budgeting Scheduling
Project Scope Management
WBS Dictionary

Work Package:
Code of Account: Work Package #: Department:
Work package description:

Deliverables: Constraints: Assumptions:

Cost: Due date: Duration:

Dependencies: Resources: Attachments:

68 Approval:
Project Scope Management
WBS Dictionary
 The WBS dictionary is where work component descriptions are

 WBS dictionary should include the following elements:

 Code of accounts identifier
 Statement of work, which describes the work of the component
 Organization responsible for completing the component
 List of Schedule Milestones
 Associated Schedule Activities
 Resources required
 Cost estimates
 Quality requirements
 Acceptance criteria
 Technical references
Project Scope Management
Validate Scope

 Working with the customer for accepting the project


Scope Validation is concerned with the acceptance of the work.

70 Quality Control, is concerned with the correctness of the work.
Project Scope Management

Control Scope
 Measuring project and product scope performance and
manage changes to scope baseline
 Prevent scope creep and unnecessary changes

Project Time Management

 includes the processes required to ensure timely

completion of the project

Planning Controlling
1. Plan schedule management 7. Control Schedule
2. Define Activities
3. Sequence Activities
4. Estimate Resources
5. Estimate Duration
72 6. Develop Project Schedule
Project Time Management
Plan schedule management

 Establishing procedures for schedule development and control

 Includes determining:
 Schedule model, Level of accuracy, Units of measure, and contingency
 Progress update, control threshold, and reporting formats

Project Time Management
Define activities
 Identifying the specific actions to be performed to produce the
project deliverables
 Breakdown work packages into activities

Project Time Management
Define activities
1- Define Activities 2- Estimate Resourses 3- Estimate Duration
Attributes Resources
Code Activity List Q P OD
Manpower Material Machine S/C

Activity attributes:
 activity identifier, codes, activity description
 Logical relationships, Predecessor, successor, leads and lags
 Imposed dates, and resource requirements
 Constraints, and assumptions
75  Person responsible, and work geographic area
 Activity type, and technical documentations
Project Time Management
Sequence Activities
 Identifying and documenting relationships among the project activities

Project Time Management
Sequence Activities: Tools & Techniques
1. Precedence Diagramming Method (PDM)


Start D E Finish

Precedence Diagramming Method (PDM):

 A method of constructing a project network diagram.
 Used in Critical Path Methodology (CPM)
 This technique is called activity-on-node (AON).
 It is the method used by most project management software packages.
Project Time Management

2. Arrow Diagramming Method (ADM)

 Arrow Diagramming Method B

(ADM): 4
3 2
 This technique is called
Activity-on-Arrow (AOA)
5 1
 Uses dummy activities to F
represent relationships
(Dummies have 0 effort)

 Accepts only FS relationship

Project Time Management


 AON technique (Activity on node)  AOA technique (Activity on Arrow)

 Enables the four Types of  Enables only (FS) Relationship

Relationships (FS, FF, SS, SF)

 No dummy Activities  Dummy Activities to represent

 Used by most of scheduling
software packages
Project Time Management
Other Network Diagramming methods
Conditional Diagramming Method (CDM)
Is  Like (GERT) Graphical
Condition Test
met? evaluation & review technique
Build Ship
 Decision points

 Allow Looping.


Network Template Method (NT)

 For Repeated group of tasks
80 Steel  Like (line of balance) technique
Types of Dependencies
Project Time Management

Mandatory Discretionary
Hard Logic preferred logic, preferential logic, or Soft logic
Contractually required or inherent in Should be documented and reviewed while
the nature of the work (Must) schedule compression (can be changed)
Established based on best practices

Internal External
Internal relationships between project Relationships between project activities and
activities non-project (external) activities
Within project team’s control Outside project team’s control
External activities being done by external
sources (supplier, government, …)

Internal Mandatory
External Discretionary
Relationship types
Project Time Management

Predecessor Successor
(A) Finish-To-Start

Activity Activity
(1) (2)

Activity (B) Start-To-Start


(C) Finish-To-Finish

(1) (D) Start-To-Finish
Project Time Management
3. Applying Leads and Lags

Lead (-) : Allows an acceleration of the successor activity

Lag (+) : Directs a Delay in the successor activity

1 2 3 4 5 6 7 8 9 10

A (DU=4)

FS 0

A (DU=4)


A (DU=4)
Project Time Management

Sequence Activities : Outputs

1. Project schedule network diagrams

2. Project Document Updates: include Activity list, Activity attributes, and risk
Project Time Management
Estimate Activities Resources

 Estimating the type, quantity, and characteristics of resources (3M)

and supplies (contracting) required to complete the activity
Material Manpower Machines
 Raw / Fabricated Material Direct Direct
(Sand, Wood, Steel, Pipes) Indirect Indirect


Slide No. 85
Project Time Management
Estimate Activity Resources: Tools & Techniques

1. Expert Judgment: PM, Team, expert, consultant, specialist, …

2. Alternatives analysis: Make or buy decision, resources capabilities &

skills, …

3. Published estimating data: Productivity rates, unit costs, …

4. Bottom-up Estimating: Decomposing the activity work into more

details, estimate required resources (Manpower, Material, and
Machines), then aggregate into total resource required for the activity

5. Project Management Software

Project Time Management
Estimate Activity Resources - Outputs

1. Activity Resource requirements: Types, quantities, and skills of the

resources required for each activity

2. Resource Breakdown Structure (RBS): Hierarchical structure of

identified resources and supplies by Category (3M) & Type (Skill level,
grade level, …)

Machines Material Manpower

Engineer Accountant Secretary

3. Project document updates: Activity list, Activity attributes, Resource

87 calendars, …
Project Time Management
Estimate Activity Durations
 Estimating the number of work periods required to complete each
activity with the estimated resources

Project Time Management
Estimate Activity Durations: Tools & Techniques

Analogous estimating Parametric Estimating Three-Point estimates

Top-down estimate, Rough Uses regression analysis (scatter (PERT) Program Evaluation
order of magnitude diagram) or learning curve and Review Technique
Used when there is a Higher level of accuracy, when Provide more accuracy and
limited amount of detailed more information is available consider uncertainty (Risk)
Uses Parameters such as Uses Statistical relationship Calculates expected activity
duration, budget, size and between historical data and other duration using a weighted
complexity from previous, variables (m2, line of code, …) to average of three estimates
similar project as the basis calculate an estimate for activity (Optimistic, pessimistic, and
for estimating current parameters (duration, budget, …) most likely)
Less costly, less time D = Q/(P*N) D = (P+4M+O)/6 ± SD
consuming but less SD = (P-O)/6
accurate Var. = SD2

Project Time Management
Estimate Activity Durations: Tools & Techniques

6- Reserve Analysis

1. Contingency Reserve: (Reserve or Buffer)

 To accommodate the risks remain in the project after plan risk response process (Risk
 To account for “known unknowns” (or simply knowns)
 Reflected in the project schedule baseline

2. Management Reserve:

 Any extra amount of funds or duration to be set aside to cover unforeseen risk
(unknown unknowns)

Develop Schedule
Project Time Management

 Analyzing activity sequences, durations, resources, and constraints to

create the project schedule
 Project schedule is calendar based estimates
 Creating the schedule is an iterative process

Project Time Management
Develop Schedule: Tools & Techniques

1. Schedule network analysis

It is a technique that generates the project schedule, it employs one or more of

the following techniques:

 Critical Path Method (CPM)

 Critical chain method (CCM)

 Resource optimization (Leveling, Smoothing)

 What-If Scenario analysis

 Schedule compression
Project Time Management
Develop Schedule: Tools & Techniques
2. Critical Path Method (CPM)

 Determining the early and late start and finish dates for each activity
(without regard for any resource limitations)

The Critical Path:

- Is the longest duration path through a network diagram
- Is the shortest duration to complete the project

Near-Critical Path

Float (Slack)
 Float (Total Float): The amount of time an activity can be delayed without
delaying the project or milestone

Free float: The amount of time an activity can be delayed without delaying the early start date of its successor(s)
Project Time Management
2. Critical Path Method (CPM)

1. Calculate The Following:

ES, EF,LS,LF and TF for each activity

Project Duration

2. Define Critical Path activities


ES=1 For First Activity


LF=EF For Last Activity

94 LS=LF-OD+1

Project Time Management
Early Start, Early Finish
4 10 Forward Pass
1 3 D 7
21 37
A 3
I 17

12 20

E 9

1 11 38 40

B 11
K 3
12 16

F 5
17 21

J 5

10 14

G 5

1 9

C 9
95 10

H 19

ES = Next Day of Highest date value from its immediate predecessor EF = ES+D-1
Project Time Management
Late Start, Late Finish
Backward Pass
D 7

A 3 14 20
I 17
11 13
21 37

E 9

B 11
K 3 40
1 11 38
F 5

28 32
J 5

33 37
G 5

28 32

C 9

10 18
96 H 19

19 37

LF = Previous Day of lowest date value from its immediate successor LS = LF-D+1
Project Time Management
Total Float Calculation

4 10

1 3 D 7
21 37
A 3 14 10 20
I 17
11 13
10 12 20
21 0 37
E 9
1 11

B 11
12 0 20 38 40
K 3
12 16
1 0 11
F 5
0 40

17 21
28 16 32
J 5
10 14

G 5
33 16 37

1 9 28 18 32
C 9
10 28
97 10 9 18
TF = LS-ES (or)
H 19

19 9 37
Project Time Management
Critical Path of the Project

4 10

1 3 D 7
21 37
A 3 14 20
I 17
11 13
12 20
21 37
E 9
1 11
12 20 38 40
B 11
K 3
12 16
1 11 38 40
F 5
17 21
28 32
J 5
10 14
33 37
G 5

1 9 28 32
C 9
10 28
98 10 18
H 19

19 37
Project Time Management
Preceding Diagramming Method

• Exercise


4 E G
5 5
5 3

4 3 5
Project Time Management

 Calculate Project duration



Most Activity Deviation Variance
Likely Pessimistic Duration (SD) (SD)2
Activity Optimistic
4 6 4 0.67 0.4489
A 2
3 5 3.33 0.5 0.25
B 2
7 10 7 1 1
C 4
5 6 5 0.33 0.1089
D 4

Expected Project Duration: 12:33 days ± 1.34

Project Time Management
Develop Schedule: Tools & Techniques

3. Critical Chain Method (CCM)

 It modifies the project schedule to account for limited resources

 Adding duration buffers (reserves) that are non-work schedule activities to

each chain (feeding buffer) and at the end of critical chain (project buffer)
to manage uncertainty

 Schedule the activities to latest possible start and finish dates

 Focuses on managing remaining buffer durations against remaining durations

of task chains

Project Time Management
Develop Schedule: Tools & Techniques

4. Resource Optimization

 Used when shared or critical resources are only available at certain times or
limited quantities (over allocated) or to keep resource usage at a constant
 It often causes the original critical path to change

 Adjust activities so that resources don’t exceed predefined limit
 Don’t delay the project or change the critical path, hence may not be
applicable for all resources

Project Time Management
Example: Resource smoothing

Project Time Management
Develop Schedule: Tools & Techniques

5. Modeling techniques

 What if scenario analysis:

 It uses software compute different scenarios (What if delivery delayed or
engineering duration extended, …) using Three-Point Estimates
 Result is a range of time or budget that project can finish within.

 Monte Carlo Analysis (Simulation): It takes into account probability

(Risk), the result of simulation can tell you:
 The probability of completing the project on any specific day
 The probability of completing the project for any specific cost

Project Time Management
Develop Schedule: Tools & Techniques
7. Schedule Compression :
Shortening the schedule without changing the project scope

Crashing Fast Tracking

 Obtain the greatest amount of  Critical path activities normally

compression for the least incremental performed in sequence are performed in
cost parallel

 By adding additional resources to  Changing FS relationship to SS with a

activities on critical path proper lag

 Increases project cost  May result in rework and increased risk

 Consider Low of Diminishing of return

 Choose the option which has the least negative impact on the project
Project Time Management

Example: Crashing
How much does it cost to reduce the project’s overall duration to 13 days ?



Time, Days Costs, $

Activity Normal Max. Crash Normal cost/day

A 6 4 6000 1000

B 4 3 5000 750

C 8 7 8000 500

D 6 5 6000 2000

Answer : $ 3,250 more than the original plan.

Project Time Management
Develop Schedule: Outputs
1- Project Schedule

 Milestone Charts: Shows only start or

completion of major deliverables / events.
Used for management presentation

 Summary Schedule: Bars representing

summary activities showing activity start and
finish dates and durations. Used for
management presentation

 Time-scaled network diagram / detailed

schedule / Bar Chart: Bars representing
activities showing activity start and finish
dates and durations. Suitable for presenting
The project progress status and to report to
the team

107  Network diagram: Shows interdependencies

between activities
Project Time Management
Develop Schedule: Outputs

2. Schedule Baseline: Is the version of project schedule that is

accepted and approved by project management team. It is a
component of project management plan

3. Schedule data: Milestones, activities, activity attributes, constraints

& assumptions, resource histogram, alternative schedules, …etc.

4. Project Calendars: Working and Non-working days / times

5. Project Management plan updates: Schedule baseline, schedule

management plan

6. Project document updates: includes Activity resource requirements

(from resource leveling), risk register (crashing/fast tracking)
Project Time Management
Control Schedule
Monitoring the status of the project to update progress and manage changes to
the schedule baseline (measure against the plan):
 Determining the current status of the project schedule
 Influencing the factors that create schedule changes (preventive action)
 Determining that the project schedule has changed
 Managing the actual changes as they occur (corrective action)

Project Time Management
Control Schedule: Tools & Techniques

 Measuring Work Progress:

1. Unit Completed
• #Done / # Total Units
2. Duration
• Actual duration / Total duration
3. Start/Finish
• %= 0 or 100
4. Incremental Milestone
• %=% of Milestones Achieved.
5. Supervisor Opinion
• Expert Judgment
6. Cost Ratio
• Actual Cost or Work hours/EAC
110 7. Weighted or Equivalent Units
• Weighted average Matrix
Project Time Management
Control Schedule: Outputs
1. Work Performance information: the Calculated SV & SPI

2. Schedule forecasts: the Calculated EAC & ETC

3. Change requests: to the Schedule baseline and/or to other components of

the project management plan (input to integrated change control process)

4. Project management Plan Updates: including Schedule baseline,

Schedule management plan, and Cost baseline

5. Project document Updates: Updated project schedule and schedule data

(activities list , activity attributes, constraints & assumptions, resource
histogram, alternative schedules, …etc), and risk register

6. Organizational process assets Updates: Cause of variance, Corrective

action, and other lessons learned
Changes to the approved schedule start and end date are called REVISIONS.
Project Cost Management

 What is Project Cost Management?

 Why project Cost Management is important?
 What are the Project Cost Management processes?

Planning Controlling
Plan Cost Management Control Costs
Estimate Costs
Determine Budget

Project Cost Management
Project Cost Management
 The processes required to ensure that the project is completed
within the approved budget
 Most stakeholders better understand and are more interested in
financial terms, so project managers must speak their language

Profits are revenues minus expenditures

Profit margin is the ratio of profits / revenues

Life cycle costing considers the total cost of ownership, or

development plus support costs, for a project

Cash flow analysis determines the estimated annual costs and

benefits for a project and the resulting annual cash flow

Project Cost Management
Plan Cost Management

Cost Management plan includes determining: Units of measure, currency, level

of accuracy, control thresholds, and EVM rules
Project Cost Management
Cost Estimating
Developing an approximation of the costs of the resources needed
to complete project activities

Difference between Estimate Cost and pricing:

 Cost estimating: Assessing how much it will cost the organization to
provide the product or service.
 Pricing: Assessing how much the organization will charge for the
product or service.
 Estimate Cost also includes identifying and considering cost alternatives.

Cost Estimation Objectives:

 Determining the feasibility of a project (Go/No Go)
 Evaluating between Projects
 Providing a basis for project cost control
Project Cost Management

Estimate Costs
Estimate Costs - Tools and Techniques
Project Cost Management

Analogous estimating Parametric Estimating Three-Point estimates

Top-down estimate, Rough Uses regression analysis (scatter (PERT) Program Evaluation
order of magnitude diagram) or learning curve and Review Technique
Used when there is a When there is a parameter Used for what if scenarios and
limited amount of detailed simulation to obtain range of
information estimate
Uses Parameters such as Uses Statistical relationship Calculates expected activity
duration, budget, size and between historical data and other duration using a weighted
complexity from previous, variables (m2, line of code, …) to average of three estimates
similar project as the basis calculate an estimate for activity (Optimistic, pessimistic, and
for estimating current parameters (duration, budget, …) most likely)
Less costly, less time Higher level of accuracy, when Provide more accuracy and
consuming but less more information is available consider uncertainty (Risk)

Project Cost Management

Variable or Fixed:

• VARIABLE COST_ Any cost that changes with the amount of production or
the amount of work. Examples include the cost of material, Supplier and
• FIXED COST_ Cost that do not change as production changes. Examples
include set up, rental, etc.

Direct or Indirect:
• DIRECT COST _ Cost that are directly attributable to the work on the
project. Examples are team travel, team wages, recognition and costs of
material used on the project.

• INDIRECT COSTS_ Overhead items or costs incurred for the benefit

Of more than one project. Examples include taxes, fringe benefits and
janitorial services.
Project Cost Management
Organization Cost Breakdown Structure (CBS)

Project Cost Management
Estimation Classification
• Rough Order of magnitude(ROM): Early stages (-50% to +50%)
• Budget estimate: during planning (-10% to +25%)
• Definitive estimate: Late Stages (-10% / -5% to +10%)

Project Cost Management
Determine Budget

• Aggregating the estimated costs of individual schedule activities or

work packages to establish a total cost baseline

Project Cost Management
Determine Budget - Tools and Techniques

Cost aggregation & Reserve analysis

Cost Estimation
Project Cost Management
Project Manager Control

Clear Not Clear

DRY Cost
Direct and Indirect Assumption

Uncertain Unknown
Reserve Cost Risk Mgmt. %

Scope Baseline Out of Project Manager Control

Market rates
Historical Data
123 BOQ
Contingency Reserve Management Reserve MH=Dx8XN
Project Cost Management
Determine Budget - Tools and Techniques

Funding limit reconciliation

Project Cost Management
Control Cost
Monitoring cost performance to detect, analyze, and response to
variances from the cost baseline

Earned Value Measurement (EVM)
Project Cost Management

Cost Schedule
Planned B.C W.S P.V = B.C.W.S
Actual A.C W.P A.C = A.C.W.P

(Earned Value) E.V = B.C.W.P

Earned Value=Planed cost multiplied by actual time.

= BAC x % Complete
Earned Value Measurement (EVM)
Project Cost Management

You have a project to build a new fence. The fence is four sided as
shown. Each side is to take one day to build and is budgeted for
$1,000 per side. The sides are planned to be completed one after
the other. Today Is the end of day three.
Using the project status chart, calculate EV and all other parameters
as listed here in after. When completed, please interpret what each
answer means?
Do the calculations to three decimal place accuracy on the

127 A C

Project Cost Management
Planned Schedule
Actual Progress

Activity Day1 Day2 Day3 Day4 Status end of


Side no. 1 100%,


Side no. 2 100%,


Side no. 3 50%, $600

Side no. 4 0%

Calculate: PV, AC, EV, BAC, SV, CV, SPI, CPI, ETC, EAC, VAC
Project Cost Management EV EXAMPLE SOLUTION

Item Formula Calculation Answer Interpretation

Complete, complete, half
We should have done $3,000
PV done or 1,000 plus 1,000 2,500
worth of work
plus 500
AC 1,000 plus 1,200 plus 6,00 2,800 We have actually spent $2,800
Complete, complete, half
We should have done $3,000
EV done or 1,000 plus 1,000 2,500
worth of work
plus 500
1,000 plus 1,000 plus
BAC Σ(PV) 4,000 Our project budget is $4,000
1,000plus 1,000

SV EV-PV 2,500 minus 3,000 -500 We are behind schedule

CV EV-AC 2,500 minus 2,800 -300 We are over budget by $300

We are only progressing at 83%

SPI EV/PV 2,500 divided by 3,000 0.833
of the rate planned
We are only getting 89 cents
129 CPI EV/AC 2,500 divided by 2,800 0.893
out of every dollar we spent
Project Cost Management
Case 1
PV = $ 1,860 Time Cost

EV = $ 1,860
AC = $ 1,860
This is the ideal situation, where everything goes according to plan.

Case 2
PV = $ 1,900
Time Cost
AC = $ 1,700

130 In this Case, without Earned Value measurements, it appears we’re in good shape.
Expenditures are less than planned.
Project Cost Management
Case 3
PV = $ 1,900 Time Cost
EV = $ 1,500
AC = $ 1,700
With EVM, we see $400 worth of work is behind schedule and $200 overspent

Case 4
PV = $ 2,200 Time Cost
EV = $ 2,400
AC = $ 2,600
The bad news is that our work efficiency is a bit low; we have spent $200 more in
131 order to finish ahead of schedule.
Project Cost Management
Case 5
PV = $ 1,700 Time Cost
EV = $ 1,500
AC = $ 1,500
In this case, the work execution was late but still on budget

Case 6
PV = $ 1,400
EV = $ 1,600 Time Cost
AC = $ 1,400

132 A positive scenario; right? But is it because we are performing better than our
learning-curve standards or because we planned too pessimistically?
Project Cost Management
Case 7
PV = $ 2,000 Time Cost
EV = $ 2,000
AC = $ 2,200
We’re on schedule. But in order to be on schedule, there is a $200 overrun as a result.

Case 8
PV = $ 1,000
EV = $ 0.00 Time Cost
AC = $ 800

A tough one!!!
133 Out of $1,000 worth of scheduled work, no measurable milestone has yet been
accomplished. However, $800 has been spent just getting started.
Project Cost Management
Case 9
PV = $ 0.00 Time Cost
EV = $ 700
AC = $ 900
Work was begun before it was scheduled to start. But while $700 worth of work was
completed ahead of schedule, it cost $900 to do it. (A 22% overrun.)

Case 10
PV =
EV =
Time Cost
AC =

Forecasting & TCPI
Project Cost Management

Item Formula Details

Re-estimate Performing “Bottom up estimate” for the remaining work
(BAC-EV) Remaining work will be performed at budgeted rate
(BAC-EV)/CPI Remaining work will be performed at the present CPI
(BAC-EV)/(CPI*SPI) Remaining work performance considers both SPI & CPI
EAC AC+ETC Actual cost + Estimated cost of remaining work
VAC BAC-EAC Estimated variance at completion of the project
Performance of remaining work that is required to meet
the original budget
Performance of remaining work that is required to meet
the new estimated budget

Forecasting & TCPI
Project Cost Management


Forecasting & TCPI
Project Cost Management


Project Quality Management

Includes the processes of determining quality policies

so that the project will satisfy its needs

Planning Execution Controlling

Plan Quality Management Quality Assurance Control Quality

Project Quality Management
Quality Management
Grade Vs. Quality
Quality: “The degree to which a set of inherent characteristics fulfill requirements”
Grade: “A category assigned to deliverables having the same functional use but
different technical characteristics”

Precision Vs. Accuracy

Precision: is a measure of exactness
Accuracy: is an assessment of correctness

Standard Vs. Regulation

Standard: “document established by consensus and approved by a recognized
body , that provides , for common and repeated use, rules , guidelines, or
characteristics for activities or their results, aimed at the achievement of the
optimum degree of order in a given context”. Example: size of computer diskettes.

139 Regulation: is a government –imposed requirement which specifies product,

process or service characteristics, including the applicable administrative
provisions, with which compliance is mandatory. Example is Building codes.
Project Quality Management
International Organization for Standardization (ISO).

ISO 9000
Concerned with "quality management". This means what
the organization does to enhance customer satisfaction by
meeting customer and applicable regulatory requirements
and continually to improve its performance in this regard.

ISO 14000
Concerned with "environmental management". This
means what the organization does to minimize harmful
140 effects on the environment caused by its activities, and
continually to improve its environmental performance.
Project Quality Management
Modern Quality Management

PMI applies modern Quality management approach in order to be compatible with

ISO quality standard.

Modern quality management approach focuses on:

• Customer satisfaction: meet customer expectations

• Conformance to requirement: produce what it was created for
• Fitness for use: satisfy the real needs

• Prevention over inspection

• Continuous improvement: PDCA, Lean Six Sigma, TQM, …

• Management responsibility: provide support, budget & resources

141 • Cost of quality (COQ): cost of conformance & cost of non-conformance
Project Quality Management
Quality Gurus (1)

Edwards Deming

 Developed 14 steps to total quality management (TQM)

 Advocated the Plan-Do-Check-Act “PDCA” cycle as the basis
for quality improvement

Project Quality Management
Quality Gurus (2)

Philip Crosby

 Popularized the concept of the cost of poor quality

 Advocated Prevention over inspection and “Zero defect”
 Cost of quality is measured by cost of non-conformance
 Believed that Quality is “Conformance to requirements”

Project Quality Management
Quality Gurus (3)

Joseph Juran

 Developed the 80/20 principle

 Top management involvement
 Defined quality as “Fitness for use”.

Project Quality Management
Plan Quality Management

• Identifying the quality standards, how to satisfy them

• Project processes improvement plan (SIPOC, Process map,
metrics, and targets)

Project Quality Management
Quality: Cost Benefit analysis

Benefits of meeting quality requirements:

 Less rework
 Higher productivity
 Lower costs
 Increased stakeholder satisfaction
 Increased profitability

Impact of poor quality:

 Increased costs
 Low morale
 Low customer satisfaction
 Increased risk
146  Rework
 Schedule delays
Project Quality Management

Cost of Quality (COQ)
Project Quality Management
7 Basic Quality tools
1. Cause & effect diagram: (Fishbone /
Ishikawa): Ask Why? until you reach the root

2. Flowcharts: (process map): Displays

sequence of steps, branches, and decision

3. Check sheets: (tally sheets): used for

collecting data like frequency of defects.

4. Pareto diagram: special Bar chart used for

80/20 rule.
Project Quality Management
7 Basic Quality tools

5. Histograms: special bar chart with

central tendency and statistical
distribution (Normal distribution curve),
doesn’t consider time

6. Control charts: used to determine

process stability. Control limit, specification
limit. Process is out of control when:
exceeding control limit or 7 consecutive
readings in one side

7. Scatter diagram: (correlation charts) try to

find correlation between two variables X,Y. if
found, regression line or curve can be calculated to
estimate the relation
Project Quality Management
Perform Quality Assurance

Auditing the quality requirements to ensure standards are

used “Are we using the standards?”

Quality Management and control tools
Project Quality Management

1. Affinity diagram: similar to mind mapping, link and

organize, and group ideas.
2. Process Decision Program Chart: understand a goal
in relation to the steps
3. Interrelationships digraphs: provide a process for
problem solving in complex scenarios
4. Tree diagrams: (systematic diagrams) for parent to
child decomposition like WBS, RBS, OBS

5. Prioritization matrices: to prioritize and weight

alternatives, and provide a score to rank them

6. Network diagrams: AON, AOA diagrams

151 7. Matrix diagrams: to show strength of relationship
between factors
Project Quality Management
Control Quality

Monitoring and recording results of quality checks to assess

performance and recommend changes “Are we meeting the

Project Quality Management
Control Quality

Prevention Vs. Inspection

Prevention: “Keeping errors out of the process”
Inspection: “Keeping errors out of the customer hands”

Attribute Vs. Variable Sampling

Attribute Sampling: The result is either conforms or does not conform
Variables Sampling: The result is rated on a continuous scale to measure
degree of conformity

Tolerance Vs. Control limits

Tolerance: Specified range of accepted results
Control limits: Identifies the boundaries of process variation

Project Quality Management

What is quality? Are we following the Are we meeting the

How we will ensure it standard? standards?

Determine what work Audit the project

Validate deliverables
you will do to meet activities against
against standards
the standards procedures

Find best practices and

Determine how you Identify product
Perform continuous
will measure quality quality improvements

Mostly done during Mostly done during Done throughout the

planning execution project
Project Quality Management
Test your Knowledge
A specific type of histogram, ordered by frequency of
occurrence, which shows how many defects were generated by
type or category of identified cause.
A. Pareto chart
B. Bar chart
C. Network diagram
D. Critical path
Quality costs include all of the following EXCEPT:
A. Appraisal.
B. Prevention.
C. External failure.
D. Computer operations.
‘‘Design of experiments’’ is a statistical method that helps:
A. Determine how various elements of a system interrelate.
B. Identify which factors may influence specific variables of a product or
C. Establish a standard by which to measure performance.
155 D. Compare actual or planned project practices to those of other projects.
Project Quality Management
Test your Knowledge
Quality and grade are not the same. A fundamental distinction is that:
A. Grade is a category assigned to products or services having the same functional use,
but different technical characteristics.
B. Low quality may not be a problem; low grade is always a problem.
C. Determining and delivering the required levels of quality are not included in the
responsibilities of the project manager and the project team.
D. Determining and delivering the required levels of grade are not included in the
responsibilities of the project manager and the project team.

A control chart has all of the following characteristics EXCEPT:

A. It illustrates how a process behaves over time.
B. It is used to determine whether or not a process is stable or has predictable
C. It illustrates how various factors might be linked to potential problems or effects.
D. It can be used to monitor any type of output variable

Which of the following is not a tool or technique of the Perform Quality

Control process?
A. Inspection
156 B. Quality audits
C. Pareto charts
D. Statistical sampling
Project HR Management

 What is Project HR Management?

 Why project HR Management is important?
 What are the Project HR Management processes?

Planning Stage Execution Stage

Plan HR Management Acquire Project Team
Develop Project Team
Manage Project Team

• Project Human Resource Management includes the

157 processes that organize and manage the project team.
Project HR Management
Plan HR Management

Determines project roles, responsibilities, and reporting

Relationships, and creates the staffing Management plan.

Project HR Management
Human Resource Plan

Roles and Responsibility Formats

Project HR Management
Human Resource Plan

160 Responsibility Assignment Matrix (RAM) Using a RACI Format

Project HR Management
Human Resource Plan: Outputs

 Roles & Responsibilities: Role, Authority, Responsibility,


 Project organization charts: team members and reporting


 Staffing management plan:

• Staff acquisition: Who?, within organization or external, location?
• Resource calendars: (resource histogram) working times, when, how
• Staff release plan: when?, where?
• Training needs: competencies
• Recognition & rewards: performance related, meeting objectives
• Compliance: company policies, Government regulations
• Safety: Safety procedures

Acquire Project Team
Project HR Management

Obtaining the human resources needs to complete the project.

Project HR Management
Acquire Project Team - Tools & Techniques

1. Pre-Assignment: Selected in advance or in project charter

2. Negotiation: with Functional managers, Other projects managers, or


3. Acquisition: External (consultant, contractor,…)

4. Virtual teams: Due to Location or Shifts: Video conferences, Share point, E-

Mails, Phone calls,…

5. Multi-Criteria decision analysis: Rating candidates against multiple

criteria (Availability, Cost, Experience, knowledge, skills, Attitude, location…)
“Halo Effect”
Develop Project Team
Project HR Management

Improving the team competencies and interaction to enhance

project performance

Project HR Management
Develop Project Team – Tools & Techniques

 Interpersonal skills: (soft skills / behavioral competencies) communication,

conflict resolution, negotiation, influence, emotional intelligence, …

 Training: external, online, on-the-job, mentoring, coaching, …

 Team-Building Activities: face to face informal meetings help build

relationships and trust.
 Tuckman’s ladder: Forming, Storming, Norming, Performing, Adjourning

 Ground Rules: Acceptable behavior, clear expectations, code of conduct,…

 Colocation: (tight matrix) gathering the team in same physical location “war
room” to enhance communication

 Recognition & Rewards: Motivation by Money, opportunity to grow,…

 Personnel Assessment tools: surveys, interviews, objectives,…
Project HR Management
Tuckman’s Stages of Develop Project Team

 Forming: People are brought together as a team

 Storming: Disagreements a people learn to work together

 Norming: Team members begin to build good working relationships.

 Performing: team becomes effective & efficient.

 Adjourning: the project ends, and team is disbanded.

Manage Project Team
Project HR Management

Tracking team members performance, providing feedback,

resolving issues, and managing team changes

Project HR Management
Manage Project Team – Tools & Techniques

 Observation & conversation

 Project Performance Appraisals: clarify R&R, resolve issues, development


 Interpersonal skills: Leadership, Influencing (matrix org), Effective

decision making processes

Project HR Management
Is Conflict bad?
Conflict Management
Opportunity for improvements. Conflict Management

Sources of Conflict?
 Schedules.
 Project priorities.
 Resources.
 Technical opinions.
 Administrative Procedures.
 Cost.
 Personality.

Who is responsible to resolve conflict?

169  Team members.
 If escalated, the project manager (early and usually in private).
Project HR Management
Conflict Resolution techniques

 Withdraw/Avoid:
Re-treat, postpone decision (better prepared, resolved by others)

 Smooth/Accommodate:
Emphasizing areas of agreements rather than differences, need of each others

 Compromise/Reconcile:
(Lose-Lose), Solution that partially satisfy all parties

 Force/Direct:
(Win-Lose) push one view point at the expense of another, emergency

 Collaborate/Confront/Problem solve:

(Win-Win) Cooperative, open dialogue, multiple viewpoints, leads to

170 consensus and commitment
Project HR Management
Problem solving steps

1. Identify the root problem

2. Analyze the problem

3. Identify solutions

4. Select the best solution

5. Implement the solution

6. Review the solution, and confirm that the solution solved the problem

Project HR Management
Conflict Management

Description Resolution technique

“We have talked about new PCs enough. I don’t
Forcing / Directing
want to buy the PCs, and that is it!”

“Let’s deal with this issue next week.” Withdrawal / Avoidance

“Let’s see what everyone thinks, and try to reach Collaborating /

a consensus.” problem solving

“Sandy, what if we get new PCs for the design Compromising

and use the existing PCs for monitoring?”

“Let’s calm down, we are one team and we all Smoothing

want to get the job done!”
Project HR Management
Develop Project Team
Power Of The Project Manager

Project manager almost always have difficulty getting

people to cooperate and perform, especially if they are
working in a matrix organization. Therefore, it is
important for project managers to understand what
they can do to get people to perform.

Project HR Management
Develop Project Team
Types Of Project Manager Power

 Formal (legitimate) – Power based on your position.

 Example “Do The Work Because I have been put it in charge”

 Reward
 Example “ I understand that you have been wanting to participate in
the acceptance testing of this project because of your performance, I
will assigned you as part of that team! “

Project HR Management
Develop Project Team
Types Of Project Manager’s Power (continue)

 Penalty (coercive) – Being able to penalize team

 Example “If this does not get done on time, I will remove you from
the group going to Hawaii for the customer meeting! “

 Expert – Being the technical or expert.

 Example “We should listen to what the project manager suggest.
She is the world authority on this technology! “

 Referent – another person liking you, respecting

175 you, or wanting to be like you.
 Example “The most respected project manager in the company says,
“We should review and change our standard procedures”
Project HR Management
Develop Project Team
Types Of Project Manager’s Power (continue)

Which form of power is the best ?  Formal

Which form of power is the worse ?  Reward
 Penalty
Which form of power is from position?
 Expert
Which form of power is from your own?  Referent

 NOTE: PMI® say that the best forms of power are

EXPERT and REWARD. Penalty is the worst choice.
PMI® also says that FORMAL, REWARD, and PENALTY
are from the project manager’s position in the
176 company. EXPERT power is earned on your own.
Project HR Management
Develop Project Team
Leadership Skills
 Get things done through others.
 Focus group effort (team work) towards a common goal.
 Respect & trust rather than fear & submission.

The project manager must have the following skills and understand
when to use them in the project:
 Directing

 Facilitating

 Coaching
177  Supportive
Project HR Management
Motivation theories
McGregor’s theory of X and Y
Avoid responsibilities and work whenever possible Willing to work without supervision
Need to be watched every minute Can direct their own effort
Incapable Want to achieve

Maslow’s Hierarchy of Needs

Project Communication Management

 What is Project Communication Management?

 Why project Communication Management is
 What are the Project Communication Management

Planning Execution Controlling

Plan Manage Control
Communications Communications Communications
Project Communication Management
Communications Dimensions

Communication should be efficient (need) & effective (right)

Communication activity has many potential dimensions including:

 Internal and external

 Formal and informal

 Vertical and horizontal

 Official and unofficial

 Written and oral

180  Verbal and non verbal

Project Communication Management
Communications Dimensions

Exercise: Formal / Informal , Written / Oral

Situation Comm. Method

Updating project management plans Formal Written
Presentations to management Formal Oral
Making notes regarding a telephone conversation Informal Written
Making changes to a contract Formal Written
Informing a team member of poor performance (1st notice) Informal Oral
Informing a team member of poor performance (2nd notice) Formal Written
Discussions to discover the root cause of a problem Informal Oral
Holding a milestone party Informal Oral
Conducting a bidder conference Formal Oral

Project Communication Management
Plan Communication Management

Who will receive what? And when? What frequency? And in

which format? Where information is stored? And how to be

Plan Communication : Tools & Techniques
Project Communication Management

1. Communication Requirement Analysis

n = number of stakeholders
183 If n=10, what is the no. of possible comm. channels?
Complexity of comm. increases when no of channels increase.
Plan Communication : Tools & Techniques
Project Communication Management

2. Communication Technology

Factors affect choosing the technology:

 Urgency & frequency of information need.
 Availability of technology.
 Ease of use.
184  Project environment: language, Virtual, Shift.
 Sensitivity / Security of information.
Plan Communication : Tools & Techniques
Project Communication Management

3. Communication Model

Sender responsibility:
 Transmission of the message.
 Ensure Information is clear and complete.
 Confirm that the message is correctly

Receiver responsibility:
 Ensuring that the entire information received.
 Information is understood correctly
185  Message is acknowledged or responded appropriately.
Project Communication Management
Miscommunication- Example

Memo from CEO to Group Manager:

Today at 11 o’ clock there will be a total eclipse of the

sun. This is when the sun disappears behind the moon for
two minutes. As this is something that cannot be seen
everyday, time will be allowed for employees to view the
eclipse in the parking lot.
Staff should meet in the lot at ten to eleven, when I
deliver a short speech introducing the eclipse, and giving
some background information. Safety goggles will be
made available at a small cost.

Project Communication Management
Miscommunication- Example

Memo from Group Manager to Department Manager:

Today at ten to Eleven, all staff should meet in the car

park. This will be followed by a total eclipse of the sun,
which will appear for two minutes. For a moderate cost,
this will be made safe with goggles.
The CEO will deliver a short speech beforehand to give us
all some information. This is not something that can be
seen every day.

Project Communication Management
Miscommunication- Example

Memo from Department Manager to Section Head:

The CEO will today deliver a short speech to make the sun
disappear for two minutes in the form of an eclipse. This is
something that cannot be seen everyday, so staff will meet
in the car park at ten or eleven. This will be safe, if you pay
a moderate cost.

Project Communication Management
Miscommunication- Example

Memo from Section Head to Supervisor:

Ten or Eleven staff are to go to the car park, where the

CEO will eclipse the sun for two minutes. This doesn’t
happen everyday. It will be safe, and as usual it will cost

Project Communication Management
Miscommunication- Example

Memo from Supervisor to Staff:

Some staff will go to the car park today to see the CEO will
disappear. This is a pity this doesn’t happen everyday.

Project Communication Management
Plan Communication: Tools & Techniques

4. Communication Methods:

there are several communication methods used to share information

among project stakeholders . These methods can be broadly classified
into :

 Interactive communication (Multidirectional)

 Push communication (Distribute, reached? Understood?)

 Pull communication (Large information / Audience)

Plan Communication: Tools & Techniques
Project Communication Management

5. Meetings:

Why ?

 Exchange Information

 Brainstorming

 Decision making

Plan Communication: Tools & Techniques
Project Communication Management

5. Meetings:

Rules for effective meetings:

 Meet with the team regularly, but not too often.

 Schedule recurring meetings in advance.
 Set a time limit
 Have a purpose for each meeting.
 Create an agenda with team input.
 Distribute the agenda beforehand.
 Let people know their responsibilities in advance.
 Stick to the agenda and time limit.
 Bring the right people together.
 Chair and lead the meeting with a set of rules.
 Assign deliverables, time limits, and actionee for
193 all work that results from meetings.
 Document and publish meeting minutes.
Project Communication Management
Sample Stakeholder Analysis for Project Communications

Project Communication Management
Manage Communications

Collecting & distributing, storing & retrieving project information

according to the communication management plan.

Project Communication Management
Performance reporting

Examples of reports contents:

 Analysis of past performance

 Analysis of project forecast

 Current status of risk and issues.

 Work completed during the period

 Work to be completed in the next period

 Summary of changes approved in the period

Project Communication Management
Control Communications

Ensure optimal information flow (Efficient & Effective) in order to

meet stakeholders needs.

Project Stakeholder Management

13 – Project Stakeholder Management

Initiation Planning Execution Controlling

Identify Plan Stakeholders Manager Control
Stakeholders Management Stakeholders Stakeholders
Engagement Engagement

Identify Stakeholders
Project Communication Management

Identifying stakeholders and their Expectations, Power, Influence,

Impact, Interest, Involvement, and relationships.

 Identification
 Assessment
199  Classification
Identify Stakeholders
Project Communication Management

 Power / Interest
200  Power / Influence
 Influence / Impact
 Salience model: Grouping by Power, Urgency, and Legitimacy
Plan Stakeholder Management
Project Communication Management

Developing strategies to effectively engage stakeholders throughout the

project life cycle.

 Current & Desired engagement

 Communication requirements & Reasons
 Information distribution & frequency
Plan Stakeholder Management
Project Communication Management

C: Current engagement
D: Desired engagement
Manage Stakeholder Management
Project Communication Management

Communicating stakeholders to meet their expectations and address

issues in order to increase support & minimize resistance.

Interpersonal skills: Build trust, Resolve conflicts, …
Management skills: Negotiation, Influence, …
Control Stakeholder Management
Project Communication Management

Monitoring stakeholders relationships and adjusting strategies in order to

maintain or increase their effective engagement.

Project Risk Management

 What is Project Risk Management?

 Why project Risk Management is important?
 What are the Project Risk Management processes?

Planning Stage Controlling

Plan Risk Management Control Risks
Identify Risks
Qualitative Risk Analysis
Quantitative Risk Analysis
Plan Risk Responses
Project Risk Management
Project Risk Management

Maximizing the likelihood and impact of Positive events

Minimizing the likelihood and impact of negative events

 Risk appetite: the degree of uncertainty an entity is willing to take on in

anticipation of a reward.

 Risk tolerances: The areas of risk that are acceptable or not acceptable.
“a risk that affects our reputation will not be tolerated”

 Risk threshold: The point at which a risk becomes unacceptable.

“If there is a delay, it can be no longer than two weeks”
Project Communication Management
Plan Risk Management
How to conduct risk management activities for the project.

Risk Management plan:

 Methodology
 R&R
 Timing & frequency
 Budgeting
 Risk categories (RBS / WBS)
 Probability & Impact Matrix
207  Revised stakeholders’ tolerances
 Reporting formats
 Tracking
Probability & Impact matrix
Project HR Management

Risk Breakdown Structure

Project Communication Management
Identify Risks

Determining which risk will affect the project and documenting

their characteristics.

Project Risk Management
Risk Register

Root Potential
No Risk +/- Category Objective Triggers
cause responses

Project Risk Management
Information gathering Techniques

 Brainstorming

 Delphi Technique

 Interviewing

 Root cause analysis

Project Risk Management
Diagramming Techniques

 Cause and effect diagrams

 System or process flow charts

 Influence diagrams
Project Communication Management
SWOT Analysis

• SO strategies: (Max-Max strategy) Growth: Use strengths to capitalize and take advantages of opportunities

• ST strategies: (Max-Min strategy) Stability: Use strengths to avoid or mitigate threats

• WO strategies: (Min-Max strategy) Cooperate: Utilize the identified opportunities to overcome weaknesses

213 • WT strategies: (Min-Min strategy) Mitigate: Minimize weaknesses and avoid threats
Project Risk Management
Some Examples of risks in construction

Risk Risk Strategies

Major Risk  Resources not yet part of project inventory  Greatest damage
Factors  Possibility of changes in project  Longest delay
 Highest cost increase
 Potential alteration of fixed project dates
 Largest detraction of
 Unexpected losses of critical personnel project goals
 Reduction of funding  Greatest disruption
of project organization
 Technological achievements not realized
Improper budgets or scheduling factors
Site Condition/Resource
214 availability/Industrial problem/Safety
Project Risk Management
Some Examples of risks in construction

Risk Category Risk Strategies

Schedule Risk Not enough people  Reduce scope of work
 Too much parallelism - dependencies  Extend schedule
 Equipment delays  Do more work in parallel
 Jump start project by
 Information delays purchasing technology
 Permission delays - export license
 Management pushes too much
Financial Risk  Additional and unforeseen expenses  Find ways to cut corners
 Inflation issues due to schedule issues  Less expensive hardware
 Contract penalties - late on delivery  Reduce overheads
 Reduction of funding  Negotiate additional
funds  Change labor mix
Availability of necessary equipment
Project Risk Management
Some Examples of risks in construction

Risk Category Risk Strategies

Technical Risk Incomplete design  Invest in Research

and Development
Inadequate site investigation (dewatering)
 Hire experts
Uncertainty over the source and
availability of material  Change approach
Appropriation of specifications  Don’t do it!
Value engineering results.

Customer Risk  Sophistication of customer  Formal reviews

 Too high  Specific agreements
in writing
216  Too low
Project Communication Management
Perform Qualitative Risk Analysis

Prioritizing risks by combining probability and Impact

in order to focus on high priority risks.

 Risk register
 Watch list
217  Assumptions log
Project Risk Management
Qualitative Risk analysis
Updated risk register
Risk Score
S Risk Category Objective +/- % Probability Impact Basis Priority

Total project Risk = ∑ P X I

Watch list
Risk Score
S Risk Category Objective +/- % Probability Impact Basis Priority

Project Communication Management
Perform Quantitative Risk Analysis

Numerically analyze risks to support decision making

 Probabilistic analysis of
the project

 Probability of achieving
cost & time objectives
 Prioritized list of risks
Project Communication Management
Data gathering & representation techniques

Project Communication Management
Risk Modeling techniques

Sensitivity analysis

Tornado diagram
Project Communication Management
Risk Modeling techniques

Expected monetary value analysis

Decision tree diagram
Project Risk Management
Risk Modeling techniques

Modeling & Simulation (Monte Carlo technique)


Simulations typically use Monte Carlo technique (Pertmaster®)

Project Risk Management
Plan Risk Responses

Develop strategies to enhance opportunities and reduce threats

 Assumptions log

 Change requests: Resources,

activities, costs,…
 Deliverables
Project Risk Management
Plan Risk Responses

Threats Strategies Opportunities Strategies

(Corrective action)
Acceptance Share
(Accept consequences) (Partnership)
(Shift Responsibility)
(Deflect / Allocate) Exploit
PXI (shift impact): Insurance, warranty
Work To be a fact PXI
Project Risk Management
Plan Risk Responses

 Secondary risk: A new risk that is created by implementing the selected risk


 Residual risk: A risk that remains after implementing risk responses.

 Contingency plans: The planned actions to be taken if the risk occurs.

 Fallback plans: The planned actions to be taken if the contingency plan is

not effective.

 Workaround: A response to a negative risk that has occurred but was not

Plan Risk Responses
Project Risk Management

Exercise: Strategies

Risk Response Strategy

Prototype a risky piece of equipment Mitigate
Sub-contracting a work to a company to gain an incentive fee Share
Sub-contracting a difficult piece of work to an expert company Transfer
Training team members who have limited experience Mitigate
Reduce scope or remove a risky work package or activity Avoid
Redundant system or data Backup Mitigate
Assigning the most experienced resource to ensure activity
finishes ahead of target
Adding more resources to an activity in order to finish early Enhance
Visiting seller’s manufacturing facilities frequently to detect any
potential delivery delay as early as possible
Notify Management that there could be a cost increase if a risk
227 occurs because no action is planned to prevent it
Perform design review before manufacturing Mitigate
Project Risk Management
Control Risks
 Monitor identified risks
 Implement risk response plans
 Identify new risks
 Evaluate risk plans effectiveness

Change requests:
228  Corrective actions: Contingency plans & workarounds
 Preventive actions: Activities to ensure that future
performance is aligned with the plan.
Procurement Management

Planning Stage Execution Stage Controlling Closeout

Plan Procurement Conduct Control Close
management Procurements Procurements Procurements

 Buyer?

229  Seller?
Procurement Management
Plan Procurements
 Determining what to buy (if any), when, and how

 Statement of work (SOW)

 Procurement documents (RFP,

230 RFQ, IFB)

 Source Selection criteria
 Contract type
Make or Buy Analysis
Procurement Management

 Make or Buy decision: Availability, Skills, Cost, Risk, Control,

Intellectual property.

 Buy or lease decision: Direct & indirect cost, life cycle cost.

 You are trying to decide whether to buy or lease an

item for your project. The daily lease cost is $120. To
purchase the item, the investment cost is $1000 and
the daily cost is $20. How long will it take for the lease
231 cost to be the same as the purchase cost "break even
Procurement Management
Source selection criteria
 Understanding of need
 Overall or life-cycle cost
 Technical capability
 Risk
 Management approach
 Technical approach
 Warranty
 Financial capacity
 Production capacity
 Business size and type
 Past performance
 References
 Intellectual property rights
 Proprietary rights
Basic Types of Contracts
Procurement Management

 Fixed price contracts:

 Firm fixed price (FFP)

 Fixed price incentive fee (FPIF)

 Fixed fee with economic price adjustment (FP-EPA)

 Cost reimbursable contracts:

 Cost plus fixed fee (CPFF)

 Cost plus incentive fee (CPIF)

 Cost plus award fee (CPAF)

 Time & Material (T&M) contracts:

Basis Types of Contracts
Procurement Management

Fixed price contracts - (Lump sum)

 Well-defined scope, seller carries the risk

 Firm fixed price (FFP): Contract = $1,000,000.

 Fixed price incentive fee (FPIF): Contract = $1,000,000. For every

month the project finishes early, an additional $20,000 is paid to the
seller. Ceiling price is $1,100,000 (OR Maximum incentive $100,000).

 Fixed price with economic price adjustment (FP-EPA):

 Contract = $1,000,000, but a price increase will be allowed in year 3
based on the U.S. price index report for year 2.
 Contract = $1,000,000, but a price increase will be allowed in year 2
to account for increases in specific material costs.
 Purchase order: Contract to purchase 30 linear meter of wood at $9 per
Basis Types of Contracts
Procurement Management

Cost reimbursable (Cost +)

 Scope and cost are uncertain, buyer carries the risk

 Cost plus fixed fee (CPFF):

 Contract = Cost plus a fee of $100,000
 Contract = Cost plus a fee of 10% of costs.

 Cost plus incentive fee (CPIF): Contract = Cost plus a fee of $100,000
in addition to ± 20% of Cost Savings/overruns.

 Cost plus award fee (CPAF):

 Contract = Cost plus $100,000. For every month performance
exceeds 10% of plan, $5,000 will be paid as a bonus. Maximum
award is $40,000
235  Contract = Cost plus $100,000. For every deliverable finished at least
7 days early, $5,000 will be paid as an award. Maximum award is
Basis Types of Contracts
Procurement Management

Time & Material (Unit price)

 Short periods, smaller dollar value, staff augmentation

 ”Not to exceed values or time limits / ceiling price”

 Contract = $100 per hour plus $5 per linear meter of wood

Basis Types of Contracts
Procurement Management

Cost reimbursable Time & Material Fixed price

(Cost+) (T & M) (Lump sum)
Cost Risk Buyer Shared Seller
Scope Flexible Not defined Well-defined
Procurement docs. RFP RFQ IFB
Budget of buyer Unknown Unknown Known
Profit of seller Known unknown unknown

Procurement Management
Conduct Procurements

 Advertising, obtain responses, select a seller, and award contract.

Procurement Management
Conduct Procurements – Tools & Techniques

 Negotiation Objectives:
 Obtain a fair and reasonable price
 Develop a good relationship with the seller / buyer

 Main Items to negotiate:

 Scope
 Schedule
 Price

Procurement Management
Conduct Procurements – Tools & Techniques

 Screening System:
 Eliminating sellers that are not meeting minimum
requirements of source selection criteria

 Weighting System:

Sellers A B C
Criteria Weight Rating Score Rating Score Rating Score
No. of years in Business 5% 7 0.35 5 0.25 5 0.25
Understanding of scope 20% 8 1.6 6 1.2 8 1.6
Performance in previous projects 20% 6 1.2 3 0.6 4 0.8
meeting scheduled time 10% 4 0.4 9 0.9 4 0.4
Project management ability 10% 6 0.6 6 0.6 7 0.7
Technical ability 25% 6 1.5 3 0.75 9 2.25
240 Life cycle Cost 10% 5 0.5 6 0.6 6 0.6
Total Score 100% 88% 70% 94%
Procurement Management
Control Procurements

 Monitor & control seller / buyer performance according to the contract

terms and conditions (Contract Administration).

Close Procurements
Procurement Management

 Product verification and administrative close out of each

 Finalizing open issues, claims
 Updating & archiving records
 Contract audit
 Termination

 Outstanding issues settlement:

1) Negotiation
242 2) Alternative dispute resolution (ADR): mediation / arbitration
3) Litigation in the courts
Project Integration Management

Initiation Planning Execution Controlling Closing

1. Develop 2. Develop 3. Direct & 4. Monitor & Control 6. Close project
project project Manage project work or phase
charter management project work 5. Perform Integrated
plan change control

Coordinate all project management processes

Project Integration Management

Develop project charter
Project Integration Management

 Formally authorize the existence of a project

 Provide Project manager with authority to apply resources to the

SOW: Project, product, strategic objectives
Business case: Business need + Cost benefit analysis
Project Integration Management
Project Charter

Project Charter

 Project purpose / justification

 Project objectives (SMART)
 High level requirements
 Constraints and Assumptions
 Product Description/Deliverables
 Summary Milestones & budget
 High level project risks
 Stakeholders (as known)
 Project approval requirements
 Project Manager Assigned and
Authority Level
 Project Sponsor Approval

Develop project Management plan
Project Integration Management

Preparing all subsidiary plans, centralize & integrate them

Develop project Management plan
Project Integration Management

Direct & Manage project work
Project Integration Management

 Leading, managing & performing the work to create the deliverables

 Implementing approved changes
 Resolve issues and request changes

249 Scheduling tool, Work authorization System, Information collection & distribution
system, Automated Reporting tool, Configuration management system (versions of
deliverables & Docs
Monitor & Control project work
Project Integration Management

 Track, review, and report the progress

Monitor & Control project work
Project Integration Management

Perform Integrated Change Control
Project Integration Management

 Review and approve (or reject) changes.

 Update project plans and documents

Perform Integrated Change Control
Project Integration Management

 Process for making changes:

1) Prevent the root cause of changes

2) Identify changes

3) Create change request

4) Perform Integrated Change control

a. Assess the change: charter?, needed?

b. Look for options: S cope, Time, Cost, Quality, Risk, …

c. Change is approved / rejected (CCB)

d. Update change control system (change log)

5) Adjust plans, baselines, and documents

253 6) Communicate the change to respective stakeholders

7) Manage the project to the revised plan

Close Project or Phase
Project Integration Management

 Finalize all activities to formally complete (or terminate) the project

or phase

Close Project or Phase
Project Integration Management

 Project closing activities:

 Confirm work is done to requirements (acceptance / exit criteria)

 Hand off / transfer completed product (Operation)

 Complete procurement closure (Payments/bonds)

 Gain formal acceptance of the product

 Complete final performance reporting

 Audit project success or failure

 Benchmarking and update the OPA

 Gather & update LLDB

 Index & archive records

255  Commercial and functional close out

 Release resources
Professional Responsibility

Professional &
Professional Responsibility

 Make decisions based on the best interest of the company, rather

than your own best interest.

 Only accept assignments you are qualified to complete.

 Protect proprietary information.

 Report unethical behavior and violations.

Professional Responsibility
 Maintain an attitude of mutual cooperation.

 Respect cultural differences.

 Engage in good faith negotiations.

 Be direct in dealing with conflict.

 Do not use your power or position to influence others for your

own benefit.

Professional Responsibility

 Try to understand the truth.

 Be truthful in all communications, and create an environment

where others tell the truth.

Professional Responsibility

Thank You