Understand the difference between Product Life Cycle and Project Life Cycle.
Functional Organization
Advantages Disadvantages
Easier Management of specialists People place more emphasis on their functional
speciality to the detriment of the project
Team members report to only one supervisor No career path in project management
Similar resources are centralized, the company is Project Manager has little or no authority
grouped by specialties
Clearly defined paths in areas of work
specialization
Projectized Organization
Advantages Disadvantages
Efficient Project Organization No “home” when project is completed
Loyalty to the project Lack of professionalism in disciplines
More effective communication than functional Duplication of facilities and job functions
Less Efficient use of resources
Matrix Organization
Advantages Disadvantages
Highly visible project processes Extra administration required
Improved project manager control over resources More than one boss for project teams
More support from functional organizations More complex to monitor and control
Maximum Utilization of scarce resources Tougher problems with resource allocation
Better coordination Need extensive policies and procedures
Better Horizontal and vertical dissemination of Functional Managers may have different
information than functional priorities than project managers
Team members maintain a “home” Higher potential for conflict
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You need 2 methodologies to complete a project: Project Life Cycle: What you need to do to do, Project Management
Methodology: Managing the project. The Product Life Cycle differs from the product life cycle in that the project life cycle
is different for each industry
Chapter 03: Project Management Processes
Project Management is the application of knowledge, skills, tools and techniques to project activities to meet project
requirements.
Project Management Processes: Initiation, Planning, Execution, Monitor and Control, Closing
Projects are chartered by someone external to the project (Sponsor)
Outputs:
Initiation: Project Charter, Preliminary Project Scope Statement
Planning Process Group: Project Management Plan
Executing: Deliverables, requested changes, implemented change requests,
Monitoring and Control Process: Approved change requests, rejected change requestes , pPMP
Closing:
Monitoring and
Initiating Planning Executing Closing
Controlling
Determine how you will Measure against
Select a Project Develop closure
do planning - part of Acquire Final Team performance measurment
Manager procedures
management plans baselines
Determine
Company Culture Create Project Scope Measure according to the Complete contract
Execute the PM plan
and Existing Statement(S) management plans closure
Systems
Collect processes, Determine variances and if
Confirm work is done to
procedures and Determine Team(T) Complete Product Scope they warrant corrective
requirements
historical info action or a change
Divide large
Create WBS and WBS Recommended Changes Gain formal acceptance
projects into Scope Verfication
dictionary (W) and corrective actions of the product
phases
Identify Send and receive Configuration Final performance
Stakeholders Create activity list (A) information Management reporting
Implement approved
Recommend changes,
Document Business Create network changes, defect repair, Index and Archive
defect repair, preventive
Need diagram (N) preventive and corrective records
and corrective actions
actions
Determine Product Estimate Resource Integrarted change Update lessons learned
Continuous Improvements
Objectives Requirements (R) control knowledge base
Document Aprrove Changes, defect
Estimate Time and Hand off completed
assumptions and Follow Processes repair , preventive and
Cost (T) product
constraints corrective actions
Develop Project Determine Critical Path
Team Building Risk audits Release resources
Charter (C)
Develop
Preliminary Give Recognition and
Develop Schedule (S) Manage Reserves
Project Scope and rewards
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Statement
Develop Budget (B) Hold Progress meetings Use issue logs
Determine Quality
Uses work authorization Facilitate conflict
Standards, Processes
system resolution
and Metrics (Q)
Determine Roles and Measure team member
Request Seller Responses
Resp performance
Determine
Communication Select Sellers Report on performance
requirements (C)
Risk Identification (R) Create Forecasts
Iterations-Go back (I) Administer Contracts
Determine what to
purchase
Prepare procurement
documents
Finalize "how to
execute and control"
Create process
improvement plan
Develop final PM plan
TWAN
Determine Team
WBS
Activity List
Network Diagram
RTC
Resources
Time and Cost
Critical Path
SBQCRI
Schedule
Budget
Quality
Communication Requirements
Risk Identifcation
• Formally recognizes the existence of the project, or establishes the project. This means that a project does not
exist without a project charter
• Gives the project manager authority to spend money and commit corporate resources .
• Provides high level requirements for the project
• Links the project to the ongoing work of the organization
• Issued by a project sponsor, not the project manager
• Created in the Initiating process group
• Broad enough so it does not NEED to change as the project changes
• Any change to the project charter should call into question whether or not the project should continue
What is Project Statement of Work?
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• Created by customer/sponsor and describes their needs, product scope and how the project fits into their
strategic plan
Project Selection Methods are of two types:
Management Plans are your strategy for managing the project. Someone needs to put the whole thing together.
Management Plans when completed become part of the project management plan.
A Project Management Plan should be BARF
• Bought into
• Approved
• Realistic
• Formal
Work Authorization System: A system for authorizing work. ( 1 question in exam for sure)
Baselines: are used during project executing to measure performance and to help control the project. Forecasts of final
cost and schedule should be compared to the baselines.
Corrective Action: It is any action taken to bring expected future project performance in line with
the project management plan.
Preventive Action: Whereas corrective action involves implementing actions to deal with actual
deviations from the performance baselines, preventive action deals with anticipated or possible
deviations from the performance baselines
Scope Verification
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Scope Control
Project Scope: Work you need to do to deliver the product of the project. This includes the
meetings, reports, analysis and all the other parts of the project management that become part of
the project scope management plan
1. Scope Verification can be done at the end of each project phase in the project cycle ( to verify the phase deliverables
along the way) and during the monitoring and controlling process group in the project management process.
2.Scope verification relates to Quality Control. Although quality control is generally done first( to make sure that the work
meets the quality requirements before meeting with the customer), scope verification and quality control can overlap. The
difference is focus .Primary focus of scope verification is customer acceptance of the deliverables while quality control
involves meeting the quality requirements specified for the deliverables and analysis of the correctness of the work.
Chapter 08: Quality Management
What is Quality?
• Quality is defined as the degree to which the project fulfils the requirements
• Degree to which a set of inherent characteristics fulfill requirements
• International Organization for Standardization (ISO):The totality of characteristics of an entity that bear on its
ability to satisfy stated or implied needs.
• Conformance to requirements
• Project’s processes and products meet written specifications
• Fitness for Use
• Product can be used as it was intended
The Project Manager has the ultimate responsibility for the quality of the product of the project, but each team member
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must check his or her work – self inspection. Senior management has the ultimate responsibility for quality in the
organization as a whole.
Impact of Poor Quality
• Increased Costs
• Low Morale
• Low Customer Sat
• Increased Risk
• Rework
• Schedule Delays
Increase in quality can result in increased productivity and cost effectiveness and decreased cost risk
Quality Planning
Quality Planning Tools and Techniques:
• Cost-Benefit Analysis: Trade off between cost of rework and stakeholder satisfaction.
• Design of Experiments: Helps identify which variables have the most influence on the overall outcome of a
process. E.g., Which combination of materials and equipment produce the most reliable computer chips?
• Cost of Quality: Total costs incurred by investment in preventing non-conformance to requirements, appraising
the product, and failing to meet requirements (rework).
• Benchmarking: Comparison of actual or planned project practices to those of other projects to generate ideas for
improvement.
Outputs
• Quality Audits: Structured reviews of specific quality management activities to help identify lessons learned
• Process Analysis: Follows steps outlined in the process improvement plan to identify needed improvements.
Outputs
Quality Control
Sigma is taken on both sides of the mean. Half the curve is to the right of the mean, and half the curve is to the left of the
mean.
• +/-1 sigma is equal to 68.26% which is the percentage of occurrences to fall between the two control limits
• +/-2 sigma equals 95.46%
• +/-3 sigma equals to 99.73%
• +/-6 sigma equals 99.99985%
Seven Basic Tools of Quality
1 Cause and Effect Diagram(Fishbone/Ishikawa Diagram): How various factors might be linked to potential problems.
2 Control Charts: Graphic display of data that illustrates the results of a process over time. Allow you to determine
whether a process is in control or out of control. Six-sigma quality will identify process concerns.7-run rule – if seven data
points in a row are all below the mean or above and are all increasing or decreasing, then process needs to be
examined for non-random problems.
3 Flowcharting: Helps to analyze how problems occur based on a graphical representation of a process .Can help
anticipate what and where quality problems might occur and thus, develop approaches to deal with them.
4. Histogram: Bar chart showing a distribution of variables. Each column represents an attribute or characteristic of a
problem/situation.
5.Pareto Diagram: Specific type of histogram that shows how many defects were generated by type or category of
identified case
6. Run Chart: Line graph shows trends in a process over time, variation over time, and declines or improvements over
time. Trend analysis is performed using run charts to monitor: Technical performance, Cost and schedule performance.
7. Scatter Diagram: Shows pattern of relationships between two variables – allows for study of possible relationship
changes.
What is Quality Policy?
The intended direction of the organization with regard to quality. Must be approved by top management. Project
stakeholders must be fully aware of
Sample Quality Policy
It is the policy of ABC company to manufacture and deliver products which conform to the specifications laid down in this
manual to our customers. This includes not only manufacture to specification, but price, delivery, reliability and all
interfaces between us and our customers from enquiry to delivered goods. To achieve this policy a quality assurance
system is in place of which management gives full support
Formal, Reward and Penalty are powers derived from the project manager's position in the company
Expert power is earned on you own.
Conflict Resolution
Confronting (Problem Solving): Win-Win
Compromising :Lose-Lose situation ( Second best)
Withdrawal: ( Avoidance)
Smoothing: Emphasizing agreement rather than differences of opinion.
Forcing: Pushing one view point at the expense of another.
HR Planning
Responsibility Management Matrix does not show when people will do their jobs (time)
Remember that acquiring team occurs during the executing process group
Halo Effect
Ground Rules
A project manager must exercise -Honesty, Integrity, Loyalty (HIL) with his/her team, counterparts and customers
Powers of Project Manager
Formal or legitimate: getting people to do things based on position of authority.
Withdrawal: ( Avoidance)
Smoothing: Emphasizing agreement rather than differences of opinion.
Forcing: Pushing one view point at the expense of another.
Performance Reporting
Status Report: Describing where the project now stands regarding performance measurement
baselines in cost, schedule, scope and quality
Trend Report: Examining project results over time to see if performance is improving or
deteriorating
Earned Value: Integrating scope, cost and schedule measures to asses project performance . This
report makes use of the terms described in the cost chapter
Lessons Learnt
Plan Contracting
Select Sellers
Contract administration
Contract Closure
• Completion and settlement of the contract, including resolution of any open items.
Identifies which project needs can be best met by purchasing or acquiring products, services, or results outside the
organization. The Plan Purchases & Acquisition process can significantly influence the project plan and schedule – should
be integrated with Schedule Development and estimating
Tools and Techniques
Exercises
Who has the highest risk in a cost reimbursable contract, buyer or seller? Buyer
Who has the cost risk in a fixed price contract ? Seller
Contract statement needs to be
• Clear
• Complete
• Concise as possible
• Describe all the work and activities the seller is required to complete
( All because the key is to prevent contract problems)
Plan Contracting
This process consists primarily of putting together the procurement documents that will be sent to prospective sellers
describing the buyer’s need , how to respond and the criteria by which the buyer will select a seller.
Procurement Documents
• Request for proposal (RFP): Requests a price , but also a detailed proposal on how the work will be accomplished
, who will do it, resumes, company, experiences etc
• Invitation for BID: Requests one price to do all the work
• Request for Quotation: Requests a price quote per item, hour or foot
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• Standard Contract
• Special Provisions
• Terms and Conditions
• Evaluation Criteria
Letter of Intent: You should understand this is normally NOT a contract but simply a letter, without legal binding, that says
the buyer intends to hire the seller
Privity: Means a contractual relationship. You should understand the following because it explains privity and shows you
how questions on this topic are asked.
Request Seller Responses
This process consists of getting the procurement into the hands of sellers, answering the sellers questions and the sellers
preparing the proposals
Tools and Techniques
• Bidder Conferences: Buyer invites the sellers to attend a meeting where they can tour the buyer’s facilities and
ask questions about the procurement. The questions and answers are written down and sent to all prospective
bidders to make sure that all prospective sellers have the same information. This meeting is also an opportunity for
the buyer to discover anything that is missing
• Advertising
• Qualified Sellers List
Select Sellers
Tools and Techniques
• Weighting System
• Independent Estimate
• Screening System
• Contract Negotiation
• Seller Rating System
• Expert Judgment
• Proposal Evaluation Techniques
What is a Contract?
A contract is a legally binding document. Therefore, all terms and conditions in the contract must be met. One cannot
chose to not conform or to not do something required in the contract. Change to the contract are made formally in writing
What needs to be in the contract?
• An offer
• Acceptance
• Consideration ( Something of value, not necessarily money)
• Legal Parties
• Legal Purpose
A contract , offer of acceptance may be oral or written, though written is preferred.
Contract Administration ( Important)
Contract administration consists of assuring that the performance of both parties to the contract meets contractual
requirements. This is an important are on the exam.
• Contract Change Control System: Defines the process by which the contract can be modified.
• Buyer-Conducted Performance Reviews: Structured review of seller’s progress according to time, scope, cost,
and quality.
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• Inspections and Audits: Contractual agreement to identify weaknesses in the seller’s processes and deliverables.
• Performance Reporting: Seller-reported statement of achievement according to contractual objectives.
• Claims Administration: Contested changes (claims or disputes) that are documented and managed through
arbitration or litigation if necessary.
• Records Management System: Used by project manager to manage contract documentation and records (e.g., a
spreadsheet that states what each sponsor has contractual rights to for each football game).
Contract Closure
Contract Closure is done:
All contracts must be closed out no matter the circumstances under which they stop, are terminated or completed. Closure
provides value to the performing organization and the customer and should be eliminated under any circumstances.
Contract Closure occurs first. All contracts must be closed out before the project is closed out.
Therefore, at the end of the contract, the project manager performs a procurement audit for each
contract, administratively closes out the contract and then administratively closes the project and
the whole project is completed.
Administrative Closure may be done at the end of each project phase and at the end of the project
as a whole. Contract closure is done only once , at the end of each project.
Administrative Closure uses the word “Lessons learned” and contract closure uses the world
“procurement audit”
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plan. What part of the project management process is he in ? CLOSING
Company Culture is called the enterprise environmental factors
Work authorization system can be used to “manage what time and in what sequences work is done”
The Work Beakdown structure can be BEST be thought as an effective aid for stakeholder communications
The WBS Dictionary describes each element in the WBS. Therefore, descriptions of the work package are in the WBS
dictionary
Marginal Analysis: The concept of optimal quality level is reached at the point where the incremental revenue from product
improvement equals the incremental cost to secure it.
A Control chart shows seven data points in a row on one side of the mean. What should be done ? Find an assignable cause.
Even if the customer was happy, the project is unsuccessful if it has been gold plated.
The most common causes of conflict on a project are schedules, project priorities and resources
Resource histogram and Responsibility Matrix do not show time
The primary objective of contract negotiation is to protect the relationship.
Contract Closure is different from administrative closure in that contract closure occurs before administrative closure.
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Centralized Structure
Advantages Disadvantages
Increased expertise in contracting One contract person may work on many
projects.
A contracting department will provide is May be more difficult to obtain contracting help
employees with continuous improvement , when needed
training and lessons learned
Contracting professionals have a clearly defined
career path in the contracting profession
Decentralized
Advantages Disadvantages
Easier access to contracting expertise because No home department for the contracts person to
contract experts are on the team return to after the project is complete
More loyalty to the project Difficult to maintain a high level of contracting
resources across projects
More focussed contracting experience Little standardization of contracting practices
from one project to the next
Tendency to have a lack of defined career path
in the contracting profession
CHAPTER 13: Professional and Social Responsibility
o Do the right thing
o Follow the right process
o Act ethically, fairly and professionally towards team and resource owners
o Watch for conflicts of interest
o Report Violations
o Deal with problems
o Put the project’s needs before your own
o Share lessons learned
o Enhance your competence.
CHAPTER 07: Cost Management
A large project might be where costs might be more practical to estimate and control at a higher level. This is called a control
account and is one of the level higher than the work package in the WBS.
Estimating should be done by the person doing the work whenever possible.
Padding is not an acceptable project management practice
The Steps
o Cost Management Plan
o Cost Estimating
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o Cost Budgeting
o Cost Control
COST Management Plan:
Life Cycle Costing: Look at the concept of the whole life of the product and not just the cost of the project.
Value analysis: Finding a less costly way to do the same work.
Variable Costs Fixed Costs
Eg: Supplies, Cost of material, Wages Set up, rental
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Net Present Value Project
$95000A Project B
$75000 Which do you go for?
A
IRR 13% 17% B
Payback Period 16 months 21 months B
Benefit Cost Ratio 2.79 1.3 A
Present Value = FV/( 1+R)**n
The number of years is not relevant as it would have taken into account in the calculation of your NPV.
Understand the following
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Sunk Costs
Law of Diminishing Returns
Working Capital
Depreciation: Straight Line OR Accelerated Depreciation ( Double declining balance and sum of the years digits)
Analogous Estimating uses TOP-DOWN approach
Main focus of life costing is to consider operations and maintenance costs in making project decisions.
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Start to Start: You must start design and wait for two weeks lag before you can start coding
Finish to Finsh: You must finish testing before you can finish documentation
Start to Finish: Rarely used
- Arrow diagramming method ( ADM)
Types of dependencies:
Mandatory:
Discre
Types Of Estimate
- One Time Estimate:
- Analogous Estimate:
Analogous Estimating is a one time – top down estimate. Form of expert judgement
Parametric Estimating: Mathematical Model
Heuristics is a rule of thumb
P= Pessimistic, O= Optimistic, M= Most Likely
Formula Standard Deviation of an activity Variance of an activity
(P+4M+O)/6 (P-O)/6 SD **2
CRITICAL PATH:
The longest duration path through a network diagram and determines the shortest time to complete the project
- Helps prove how long he project will take
- Helps the project manager determine where best focus her project management efforts
- Helps determine if an issue needs immediate attention
- Provides a vehicle to compress the schedule during project panning and whoever there are changes.
- Provides a vehicle to determine which activities have float and therefore can be delayed without delaying the project.
More critical paths increase risk
Would you leave the project with a negative schedule? No, you would compress the schedule
Activities on the critical path always have zero float. Critical path activities that are delayed or have dictated dates can result in
negative float.
ES
EF
Float (Slack)
Total Float: The amount of time an activity can be delayed without delaying the project ed date or an intermediary milestone. This is
the key type of float, but there are others.
Free Float: The amount of an activity that can be delayed without delaying the early start date of its successor
Project Float: The amount of time a project can be delayed without delaying the externally imposed project completion date required
by the customer, management or previously committed to by the project manager
Schedule Compression
Fast Tracking: Doing critical path activities in parallel that were originally planned in series. Fast Tracking often results in rework,
usually increases risk and requires more attention t communication
Crashing: Making cost and schedule tradeoffs to determine how to obtain the greatest amount of schedule compression for the
latest incremental cost wile maintaining the project scope. Crashing, by definition, almost always results in increased costs.
Option General Impacts of the Project
Fast Track Adds Risk
May add management time for the project manager
Crash Almost always adds cost
May add management time for the project manager
Reduce Scope Could save cost and time
May negatively impact customer satisfaction
Cut Quality Could save cost and resources
May increase risk
Requires good metrics
Monte Carlo Analysis: relates to “What if Analysis”
This method of estimating uses a computer to stimulate the outcome of a project making use of the three time estimates ( optimistic,
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pessimistic, most likely) for each activity and the network diagram. The simulation can tell you
- The probability of completing the project on any specific day
- The probability of completing the project for any specific amount of cost
- The probability of any activity actually being on the critical path
- The over all project tisk
Under what circumstances would you use a network diagram instead To show
of a bar chart interdependencies
between activities
Under what circumstances would you use a milestone chart instead of To report to senior
a bar chart management
Under what circumstances would you use a bar chart instead of a To track progress an d
network diagram report to the team
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