Project Manager has maximum authority in a Projectized organization and least authority
in a Functional organization. In Functional organizations staff is organized based upon
their specialty, such as engineering or sales. In these organizations, functional managers
are responsible for specialized departments like marketing. In Functional organization,
the role of Project Manager is limited. In Projectized organization, PMs have more
authority and independence. All the persons in the project team report to the Project
Manager.
Real situations are a mixture of functional and projectized organizations. These mixed
situations are called matrix organizations. Strong matrix organizations have
characteristics of projectized organizations. Weak matrix organizations have
characteristics of functional organizations.
7. Leadership style varies from autocratic to democratic. Shared leadership involves team
members taking most of the decisions. It encourages team development.
8. Project Management consists of nine Knowledge Areas. These are
o Project Integration Management
o Project Scope Management
o Project Cost Management
o Project Time Management
o Project Risk Management
o Project Quality Management
o Project HR Management
o Project Communication Management
o Project Procurement Management
Each Knowledge area has further Processes. There are a total of 44 processes. Each
process has inputs, outputs and "tools and techniques" (ITTO). The PMBOK primarily
covers each of the processes and it's ITTO in detail. You need to understand the
concepts related to each of the input, output and "tools and techniques".
9. Further the discipline of Project Management has five process groups. These are -
o Initiation
o Planning
o Execution
o Control
o Closure
Each process is part of one of these five project phases. It is important to know the
process group for each of the 44 processes.
10. Project Sponsors are primarily involved in funding the project. Tasks performed by project
sponsor include
o Provides financial support
o Accepts the project during scope verification
o May provide key milestone and deliverables due dates
o Does not sign the Project Charter. This is done by Senior Management.
Stake-holders are all the individuals that are concerned with the project. Stakeholders
have vested interest in the outcome of the project. They include project team members,
customers, management, and other individuals who get impacted by the project. Stake
holders role includes -
2. A project charter
o Formally authorizes the project.
o Gives the objectives and business case
o Identifies the Project Manager.
o Generic enough not to change often.
o Written by a Manager higher in authority than Project Manager.
o Includes name, description, deliverables
o A project does not start unless it has a Project charter.
3. During project execution the project team focuses on completing the tasks assigned. The
Senior Management protects the project from changes and loss of resources. The Project
Manager integrates all the pieces into the project as a whole.
4. The Inputs, Tools and Techniques, and Outputs of the Project Plan Development process
are given in the table below.
5. At the end of each phase of a project, a lessons learned document must be prepared.
The lessons learned document defines what was done right, wrong etc. It is required to
be completed in order for the project to be completed.
6. Project Management Information System (PMIS) is a system that keeps track of status of
all the project tasks. It is used to track the status of the project. The exam does not focus
on any specific system (for example Microsoft Project ).
7. Project Plan is developed by Project Manager with inputs from the team, stake holders
and management. Project Plan development is iterative. A project plan is bought into,
approved, realistic and formal.
8. A Project Plan includes -
o Project Charter
o Budget
o Schedule
o Resources
o Scope Statement
o WBS
o Responsibility charts/assignments
o Management Plans
9. Project baseline refers to the original version of the project plan.
10. Progressive Elaboration involves the process of taking a project from concept to
detailed design.
11. Kick-off meeting happens after the planning phase and before the project execution. It is
typically used to communicate responsibilities of key stake holders.
12. Change Control Board is formed to review change requests. It is used to approve or
reject change requests. After the project scope has been baselined, each requested
change must go through a change control review process.
13. Project Manager needs to be proactive in looking for deviations from project plan and
then take timely corrective action. After that the Project Manager needs to evaluate the
effectiveness of corrective action, and measure performance of corrective action, and
then determine the need for further corrective action.
14. When a change request is received, the following steps must be taken (in this order) -
1. Evaluate (assess) the impact of change to the project
2. Create alternatives including cutting other tasks, crashing, fast-tracking etc.
3. Meet with management, sponsors etc.
4. Meet with the customer if necessary
Project Scope Management
This chapter covers key concepts related to Project Scope Management.
1. The knowledge area of Project Scope Management consists of the following processes -
2. The knowledge area of Scope Management includes the processes required to ensure
that the project includes all the work, and only all the work required to complete the
project successfully. It is primarily concerned with controlling what is and what is not in
the scope.
3. Project Portfolio Management is the process of project selection. It involves making a
decision about which project an organization should execute.
4. There are two types of project selection methods. These are
o Benefits Measurement
o Constrained Optimization
5. Benefits Measurement project selection methods involve comparing the values of one
project against another. There are the following type of Benefit Measurement project
selection techniques -
o Murder Boards - This involves a committee asking tough questions from each
project
o Scoring Models - Different projects are given scores based on certain defined
criteria. Project with higher score is selected.
o Benefits Cost Ratio - This technique involves computing benefits to cost ratio
(BCR) for a project. Project with higher BCR is selected.
o Payback period - This technique involves considering how long it takes back to
"pay back" the cost of the project. Inflation or interest earned in not considered in
this technique. A project with lower pay back period is better.
o Discounted Cash Flow - This technique takes into account the interest earned on
the money. The Future Value (FV) of projects is compared.
FV=PV(1+i)n
PV is the present value of the project. A project with higher present value is
better.
o Internal Rate of Return (IRR) - A project that has higher IRR is better, as it is
giving higher return on money.
6. Constrained Optimization Project selection methods are used for large projects. These
are techniques based on mathematical models. The Constrained Optimization techniques
are -
o Linear Programming
o Non-Linear Programming
o Integer Algorithm
o Dynamic Programming
o Multi-objective Programming
7. Expected monetary value of a project (or expected value) is equal to probability*impact.
So if probability of a project's success is 20% and revenue earned if successful is
$100000, then the net value of the project will be $20,000. A project with higher net value
should be selected when performing project selection.
8. Management by Objective (MBO) is a management philosophy with three objectives -
o Establish unambiguous and realistic objectives
o Periodically Evaluate if objectives are being met
o Take corrective actions.
9. The tools and techniques of the Scope planning process are - Expert Judgment and
"Templates, forms and standards". The process has only one output - Project Scope
Management Plan.
10. Work Breakdown Structure (WBS) is an important part of the exam. It is a graphical
representation of the hierarchy of the project. The WBS template can be reused across
projects. WBS forces the project team to think through all the levels of the project. If a
task is not in the WBS, then it is not part of the project.
11. 8/80 rule for WBS - No task should be less than 8 hours or more than 80 hours.
12. WBS dictionary explains all the WBS components. Also WBS is input to most of the
planning processes. Specifically WBS is input to the following processes -
o Cost Estimating
o Cost Budgeting
o Scope control
o Activity Definition
o Plan Purchases and Acquisitions
13. The Scope Verification is the process in which the project customer formally accepts the
project deliverables. Scope Verification happens at the end of each phase. It is the
customer feedback on a detailed basis. While Scope Verification focuses on customer
acceptance, Quality Control focuses on correctness of work.
14. The table below gives inputs, Tools & Techniques, and Outputs of the Scope Verification
process.
1. The knowledge area of Project Time Management consists of the following processes -
6. Bar charts (or Gantt charts) are used to display tasks and their dates in a graphical
fashion. They are used to display information of the type task 1 is scheduled from date A
to date B. Typically the date range is displayed in the X-axis and the tasks on the Y-axis.
Bar charts do not show task dependencies. They are generally used to track progress
and show to the team.
7. Milestone charts are similar to bar charts but display only major events. They display
major milestones (for example bridge design completed). They are used to report status
to Management.
8. Network diagrams are used to display activities and their dependencies. Network
diagrams can be used to perform critical path analysis. Network diagrams can also be
used to perform crashing and fast tracking of the project.
There are two type of network diagrams -
o Activities on Node (or Precedence)
o Activities on Arrow (or AOA)
Precedence is most commonly used. AON and AOA cannot have loops or conditional
relationships.
Activity name
Activity Number Estimate
10. As an example -
Documentation
2 5 days
11. In the above example Documentation is activity number 2 and is estimated to last 5 days.
12. Precedence (or Activity on Node) diagrams can be used to display four type of
relationship between activities. These are
o Finish-To-Start
o Start-To-Start
o Start-To-Finish
o Finish-To-Finish
Finish-to-start relationship means the dependent activity cannot start until the first activity
is finished. This is the most common way to represent relationships between activities.
13. Activity on Array (AOA) network diagrams have the following characteristics.
o AOA only uses Finish-To-Start relationship between tasks.
o PERT and CPM can only be used with AOA.
o Dummy events are shown with dotted lines. They do not take any time. They
show dependencies between tasks.
14. Longest path through the network diagram is called the critical path. The activities on the
critical paths are called critical activities.
15. Lags are inserted waiting times in between tasks. For example Task B cannot start until
three days after task A completes.
16. Slack or Float is the amount of time a task can be delayed without delaying the project.
Tasks on the critical path have zero float.
17. Critical Path Method (CPM) has the following characteristics.
o It uses one time estimate per activity
o It can be drawn only using AOA diagrams
o It can have dummy events
18. Program Evaluation and Review Technique (PERT) has the following characteristics.
o It uses three estimates per activity - optimistic, pessimistic and most likely
o It can be drawn only using AOA diagrams
o It can have dummy events
19. PERT utilizes more information than CPM as it considers the "Pessimistic" and
"Optimistic" values in addition to the "Most Likely" value in its calculations. The following
are formulae used by PERT -
Mean = (P + 4M + O)/6
Standard Deviation = (P-O)/6
Variance = ((P-O)/6)2
Here P is the pessimistic estimate, O is the optimistic estimate and M is the most likely
estimate.
20. GERT is another type of network diagram. It can support looping.
21. If a project has more than one critical paths then the risk to the project increases.
22. Resource levelling refers to keeping the resources same across the duration of the
project.
Project Cost Management
This chapter covers key concepts related to Project Cost Management.
1. The knowledge area of Project Cost Management consists of the following processes -
1. The knowledge area of Project Risk Management consists of the following processes -
2. A project risk is a potential source of deviation from the project plan. Project risks can
have a negative or positive impact on the project. Project risks that are negative are
called threats. Project risks that are positive are called opportunities.
3. Responses to threat include --
o Reducing the probability of risk
o Developing contingency plans
o Passively accepting consequences.
o Transferring risk
1. The knowledge area of Project Quality Management consists of the following processes -
2. Grade refers to category or rank given to entities having same functional use but different
technical characteristics. As an example, for different grades of hotels, the customers
expectations are different. Poor grade may be acceptable, but poor quality is not.
3. The aim of quality is to ensure "Conformance to requirements" and "fitness for use".
4. Quality Policy defines the company goals and how to adhere to them. This acts as an
input to Quality Planning for a project.
5. Deming suggested a process of Plan-Do-Check-Act to improve quality. According to
Deming, each process should go through these steps to improve the quality.
6. Kaizen Theory - Apply continuous small improvements to reduce costs and ensure
consistency.
7. Marginal Analysis - You compare the cost of incremental improvements against the
increase in revenue made from quality improvements. Optimal quality is reached when
cost of improvements equals the costs to achieve quality.
8. The value of sigma of Normal Distribution are given below. These are important for the
exam.
9. Based on the above table, we can see that in six sigma one out of 10,000 items can have
defects. In three sigma, twenty seven out of 10,000 items can have defects.
10. The following are inputs to Quality Planning Process -
o Enterprise environmental factors
o Organizational process assets
o Project Scope statement
o Project management plan
11. Giving extras i.e. doing more than the project scope is called gold-plating. PMI does not
recommend gold-plating.
12. Quality must be planned in and not inspected in. Prevention is more important than
inspection.
13. The following are tools and techniques for Quality Planning process -
o Benefit/Cost Analysis
o Benchmarking
o Additional quality planning tools
o Design of experiments
o Cost of quality
14. Quality Assurance is done during execution of the project. It includes
o Process of evaluating overall performance on a regular basis
o Re-evaluating quality standards
o Quality audits - structured review of quality activities that identify lessons learned.
These lessons learned are used for process improvement.
15. Perform Quality Control focuses on correctness of work. It includes inspections. The tools
and techniques used for Quality Control are -
o Cause and effect diagram
o Control charts
o Flowcharting
o Histogram
o Pareto chart
o Run chart
o Scatter diagram
o Statistical Sampling
o Inspection
o Defect repair review
16. In Just-In-Time (JIT) Quality, the amount of inventory is zero. The inputs are made
available, just when they are required. This reduces the storage cost.
17. Rule of seven : In control charts, if there are seven points on one side of mean, then an
assignable cause must be found.
18. The process of Analogous Estimation involves looking at the history of past projects,
and use them to make estimates.
Project HR Management
This chapter covers key concepts related to Project HR Management.
HR Management Processes
Process Project Phase Key Deliverables
Organization Chart,
Human Resource Planning Planning Roles and responsibilities,
Staffing Management Plan
Acquire Project Team Execution Project Staff assignments
Develop Project Team Execution Team performance assessment
Manage Project Team Control Requested changes
2. The table below gives the inputs, and tools and techniques for the Human Resource
Planning process -
3. Responsibility Assignment Matrix (RAM) defines who does what. The Staffing
Management Plan defines when will people get added and removed from the project.
4. A Project Manager may yield authority over the project team in one of the following ways
-
o Referent - project team knows the PM
o Formal Power - Power due to Project Managers position
o Technical Power - Project Manager has strong technical skills in the projects
domain.
o Coercive Power - The project team is afraid of the power the Project Manager
holds.
5. Conflicts in the team are caused due to the following reasons in decreasing order of
occurrences.
o Schedules
o Project Priorities
o Resources
o Technical Opinions
So the most common cause of conflicts in projects are issues related to schedules.
2. Communication Management Plan defines how and when the various stakeholders
receive information, and communicate with each other.
3. Memos, emails are examples of non-formal communication.
4. The total number of communication channels between n stakeholders is n(n-1)/2. So if
there are ten stakeholders in a project, there are 45 channels of communication.
Project Procurement Management
This chapter covers key concepts related to Project Procurement Management.
1. Procurement Management involves getting work done by people outside the project
team. The knowledge area of Project Procurement Management consists of the following
processes -
1. Culture Shock refers to the initial disorientation that a person first experiences when
visiting a country other than his own.
2. Ethnocentrism is a typical belief that one's culture is superior to the foreigner's culture.
3. PMP's Code of Professional Conduct is a document provided by PMI. It is a guide to
Project Managers on how to conduct as a professional.
4. PMP aspirants need to provide accurate and truthful information through out the
application process. Any violations can lead to disciplinary action.
5. If a project team member or the project manager has a conflict of interest, then it must be
brought into notice of all the stake-holders, to prevent any appearance of impropriety. As
an example of this consider a case where a Project Manager is evaluating some vendors.
Lets assume the Project Manager has friendship with one of the vendors. In such a
situation, the Project Manager should let all the stakeholders know, and offer herself to
be excluded out of the evaluation process.
6. The confidentiality of any intellectual property information that a PMP professional works
with, must be maintained.
7. Any information that a PMP provides to general public must be accurate and truthful.
8. A PMP must not accept any form of inappropriate gifts. Similarly a PMP must not offer
inappropriate compensation for personal gains.