PROJECT MANAGEMENT BODY OF KNOWLEDGE
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1 A Guide to the PROJECT MANAGEMENT BODY OF KNOWLEDGE Third Edition (PMBOK Guide) Project Management Institute
2 A Guide to the Project Management Body of Knowledge Third Edition (PMBOK Guide) an American National Standard ANSI/PMI
3 Library of Congress Cataloging-in-Publication Data A guide to the project management body of knowledge: PMBOK guide. 3 rd ed. p. cm Includes index. ISBN X 1. Project management. I. Title: PMBOK guide. II. Project Management Institute. HD69.P75G dc ISBN: X (paperback) ISBN: (CD-ROM) Published by: Project Management Institute, Inc. Four Campus Boulevard Newtown Square, Pennsylvania USA. Phone: Fax: pmihq@pmi.org Internet: Project Management Institute, Inc. All rights reserved. "PMI", the PMI logo, "PMP", the PMP logo, "PMBOK", "Project Management Journal", "PM Network", and the PMI Today logo are registered marks of Project Management Institute, Inc. For a comprehensive list of PMI marks, contact the PMI Legal Department. PMI Publications welcomes corrections and comments on its books. Please feel free to send comments on typographical, formatting, or other errors. Simply make a copy of the relevant page of the book, mark the error, and send it to: Book Editor, PMI Publications, Four Campus Boulevard, Newtown Square, PA USA, or booked@pmi.org. PMI books are available at special quantity discounts to use as premiums and sales promotions, or for use in corporate training programs, as well as other educational programs. For more information, please write to Bookstore Administrator, PMI Publications, Four Campus Boulevard, Newtown Square, PA USA, or booksonline@pmi.org. Or contact your local bookstore. Printed in the United States of America. No part of this work may be reproduced or transmitted in any form or by any means, electronic, manual, photocopying, recording, or by any information storage and retrieval system, without prior written permission of the publisher. The paper used in this book complies with the Permanent Paper Standard issued by the National Information Standards Organization (Z )
4 Preface to the Australian Edition Once called the accidental profession, Project Management is evolving into a profession of choice and is emerging as a management discipline distinct from operational management. Government agencies, business and other organisations are turning to project management approaches to solve unique problems, effectively manage scarce resources and implement improved efficiencies. The Project Management Institute (PMI ) Sydney Chapter and SAI Global are pleased to publish A Guide to the Project Management Body of Knowledge Third Edition (also known as the PMBOK Guide). The Third Edition in 2004 reflects the continued growth of knowledge and practices in the project management profession. One of the core objectives of this document is to provide standardisation within the profession of project management and to provide a basic reference for anyone interested in the profession in the Australia and New Zealand region. The PMBOK Guide is a result of the volunteer efforts of many dedicated and knowledgeable individuals, both members and non-members of the Project Management Institute, seeking to advance the profession. The project team for the Third Edition comprised of over 260 individuals representing 28 countries and 52 industries. Since the publication of PMBOK Guide 2000 Edition as CB by Standards Australia, the credibility of this publication has grown dramatically, and the PMBOK Guide continues to be the de facto global standard for project management by serving as an essential reference for anyone interested in project management. The guide is already approved as an American National Standard (ANS) by the American National Standards Institute (ANSI). Body of Knowledge The Project Management Body of Knowledge (PMBOK ) is an inclusive term that describes the sum of knowledge within the profession of project management. As with other professions, the body of knowledge concerning Project Management is that which resides with the practitioners and academics that apply and advance it. The full body of knowledge includes knowledge of proven, traditional practices, which are widely applied, as well as knowledge of innovative and advanced practices, which may have seen more limited use, and includes both published and unpublished material. CB , A Guide to the Project Management Body of Knowledge Third Edition The document identifies and describes that subset of the Project Management Body of Knowledge, which is generally recognised as good practice. Generally recognised means that the knowledge and practices described are applicable to most projects most of the time, and that there is widespread consensus about their value and usefulness. Good practice does not mean that the knowledge described should be applied uniformly on all projects; the project management team is always responsible for determining what is appropriate for any given project. As a basic reference, this document is neither comprehensive nor all-inclusive. In fact, no one document can encompass the entire PMBOK. The document maps forty-four Project Management processes against the five Project Management Process Groups and the nine Project Management knowledge areas. The five Project Management Process Groups consist of Initiating, Planning, Executing, Controlling and Closing processes. The nine Project Management knowledge areas are Project Integration Management, Project Scope Management, Project Time Management, Project Cost Management, Project Quality Management, Project Human Resource Management, Project Communications Management, Project Risk Management and Project Procurement Management. Failure of project managers to accurately report the performance of a project has resulted in dissatisfied stakeholders. The document covers Earned Value Management (EVM) which is one of the widely used
5 techniques to both integrate the Project Management processes and to measure the performance of the project as it moves from initiation through to completion. About the Project Management Institute (PMI) The Project Management Institute (PMI ) is the world s leading not-for-profit project management professional association, with over 100,000 members in 125 countries worldwide. PMI members are individuals practicing and studying project management in many different industry areas, including, but not limited to aerospace, automotive, business management, construction, engineering, financial services, information technology, pharmaceuticals, healthcare and telecommunications. The PMI is a world leader in setting standards for the project management profession and has been confirmed by ANSI as an accredited standards developer. The accreditation constitutes the assurance that PMI conforms to accepted industry practice in standards development for the project management profession. Since 1969, the PMI has been supporting the development of all aspects of the project management community, through establishing industry standards, strengthening the PMI s system of professional certification and education, through meetings and conferences, research and publications. PMI s Project Management Professional (PMP ) certification is the world s most recognized professional credential for individuals associated with project management. In 1999, PMI became the first organization in the world to have its Certification Program attain International Organization for Standardization (ISO) 9001 recognition. More details about PMI can be found at About PMI in Australia PMI has been operative in Australia since 1996 with Chapters in Sydney, Melbourne, Queensland, Perth, Adelaide and Canberra and over 2000 members. In order to represent PMI as a single national body within Australia and gain national recognition for excellence as a representative of the Project Management profession, Australian PMI Council (APC) was formed in More details about APC and individual Chapters can be found at About SAI Global (SAIG) SAI Global is a business improvement organization, specializing in the distribution of technical standards and associated publications, and providing related training, assurance and conformity assessment services. It operates internationally, with offices in offices in Australia, New Zealand, the United States, Indonesia, and India. SAI Global=_usiness Publishing is a world leader in the innovative use of digital technologies and in particular web-based publishing for the development, distribution and sale of high-value intellectual property. Business Publishing holds exclusive rights to distribute Australian Standards and other publications of Standards Australia, and non-exclusive rights to distribute standards developed by international standardization bodies such as International Organization for Standardization (ISO), the International Electrotechnical Commission (IEC), Deutsche Institute for Normalization (DIN) and the Japanese Institute for Standardization (JISC).== More details about SAIG can be found at Sandeep Mathur PMP, MACS Vice President PMI Sydney Chapter
6 NOTICE The Project Management Institute, Inc. (PMI) standards and guideline publications, of which the document contained herein is one, are developed through a voluntary consensus standards development process. This process brings together volunteers and/or seeks out the views of persons who have an interest in the topic covered by this publication. While PMI administers the process and establishes rules to promote fairness in the development of consensus, it does not write the document and it does not independently test, evaluate, or verify the accuracy or completeness of any information or the soundness of any judgments contained in its standards and guideline publications. PMI disclaims liability for any personal injury, property or other damages of any nature whatsoever, whether special, indirect, consequential or compensatory, directly or indirectly resulting from the publication, use of application, or reliance on this document. PMI disclaims and makes no guaranty or warranty, expressed or implied, as to the accuracy or completeness of any information published herein, and disclaims and makes no warranty that the information in this document will fulfill any of your particular purposes or needs. PMI does not undertake to guarantee the performance of any individual manufacturer or seller s products or services by virtue of this standard or guide. In publishing and making this document available, PMI is not undertaking to render professional or other services for or on behalf of any person or entity, nor is PMI undertaking to perform any duty owed by any person or entity to someone else. Anyone using this document should rely on his or her own independent judgment or, as appropriate, seek the advice of a competent professional in determining the exercise of reasonable care in any given circumstances. Information and other standards on the topic covered by this publication may be available from other sources, which the user may wish to consult for additional views or information not covered by this publication. PMI has no power, nor does it undertake to police or enforce compliance with the contents of this document. PMI does not certify, tests, or inspect products, designs, or installations for safety or health purposes. Any certification or other statement of compliance with any health or safety-related information in this document shall not be attributable to PMI and is solely the responsibility of the certifier or maker of the statement.
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8 CONTENTS The Project Management Framework... 1 Introduction Purpose of the PMBOK GUIDE What is a Project? What is Project Management? The PMBOK GUIDE Structure Areas of Expertise Project Management Context...16 Project Life Cycle and Organization The Project Life Cycle Project Stakeholders Organizational Influences...27 The Standard for Project Management of a Project Project Management Processes for a Project Project Management Processes Project management Process Groups Process Interactions Project Management Process Mapping...69 The Project Management Knowledge Areas Introduction Process Flow Diagrams...73 Major Project Documents...76 Project Integration Management Develop Project Charter Develop Preliminary Project Scope Statement Develop Project Management Plan Direct and Manage Project Execution Monitor and Control Project Work Integrated Change Control Close Project Project Scope Management Scope Planning Scope Definition Create WBS Scope Verification Scope Control Project Time Management Activity Definition Activity Sequencing A Guide to the Project Management Body of Knowledge (PMBOK Guide) Third Edition 2004 Project Management Institute, Four Campus Boulevard, Newtown Square, PA USA i
9 Contents 6.3 Activity Resource Estimating Activity Duration Estimating Schedule Development Schedule Control Project Cost Management Cost Estimating Cost Budgeting Cost Control Project Quality Management Quality Planning Perform Quality Assurance Perform Quality Control Project Human Resource Management Human Resource Planning Acquire Project Team Develop Project Team Manage Project Team Project Communications Management Communications Planning Information Distribution Performance Reporting Manage Stakeholders Project Risk Management Risk Management Planning Risk Identification Qualitative Risk Analysis Quantitative Risk Analysis Risk Response Planning Risk Monitoring and Control Project Procurement Management Plan Purchases and Acquisitions Plan Contracting Request Seller Responses Select Sellers Contract Administration Contract Closure Appendices Third Edition Changes Evolution of PMI s A Guide to the Project Management Body of Knowledge Contributors and Reviewers of PMBOK Guide Third Edition Application Area Extensions Additional Sources of Information on Project Management Summary of Project Management Knowledge Areas Glossary and Index References Glossary Index ii A Guide to the Project Management Body of Knowledge (PMBOK Guide) Third Edition 2004 Project Management Institute, Four Campus Boulevard, Newtown Square, PA USA
10 LIST OF TABLES AND FIGURES Figure 1-1. Overview of Project Management Knowledge Areas and Project Management Processes...11 Figure 1-2. Areas of Expertise Needed by the Project Management Team...13 Figure 2-1. Typical Project Cost and Staffing Level Across the Project Life Cycle...21 Figure 2-2. Stakeholders Influence Over Time...21 Figure 2-3. Typical Sequence of Phases in a Project Life Cycle...23 Figure 2-4. Relationship Between the Product and the Project Life Cycles...24 Figure 2-5. The Relationship Between Stakeholders and the Project...25 Figure 2-6. Organizational Structure Influences on Projects...28 Figure 2-7. Functional Organization...29 Figure 2-8. Projectized Organization...29 Figure 2-9. Weak Matrix Organization...30 Figure Balanced Matrix Organization...30 Figure Strong Matrix Organization...31 Figure Composite Organization...31 Figure 3-1. The Plan-Do-Check-Act Cycle...39 Figure 3-2. Project Management Process Groups Mapped to the Plan-Do-Check-Act Cycle...40 Figure 3-3. Flow Chart Legend...41 Figure 3-4. High Level Summary of Process Groups Interactions...42 Figure 3-5. Project Boundaries...43 Figure 3-6. Initiating Process Group...44 Table 3-1. Develop Project Charter: Inputs and Outputs...45 Table 3-2. Develop Preliminary Project Scope: Inputs and Outputs...45 Figure 3-7. Planning Process Group...47 Table 3-3. Develop Project Management Plan: Inputs and Outputs...48 Table 3-4. Scope Planning: Inputs and Outputs...48 Table 3-5. Scope Definition: Inputs and Outputs...49 Table 3-6. Create WBS: Inputs and Outputs...49 Table 3-7. Activity Definition: Inputs and Outputs...49 Table 3-8. Activity Sequencing: Inputs and Outputs...50 Table 3-9. Activity Resource Estimating: Inputs and Outputs...50 Table Activity Duration Estimating: Inputs and Outputs...50 Table Schedule Development: Inputs and Outputs...51 Table Cost Estimating: Inputs and Outputs...51 Table Cost Budgeting: Inputs and Outputs...51 Table Quality Planning: Inputs and Outputs...52 Table Human Resource Planning: Inputs and Outputs...52 Table Communications Planning: Inputs and Outputs...52 Table Risk Management Planning: Inputs and Outputs...53 Table Risk Identification: Inputs and Outputs...53 Table Qualitative Risk Analysis: Inputs and Outputs...53 Table Quantitative Risk Analysis: Inputs and Outputs...54 A Guide to the Project Management Body of Knowledge (PMBOK Guide) Third Edition 2004 Project Management Institute, Four Campus Boulevard, Newtown Square, PA USA iii
11 Contents Table Risk Response Planning: Inputs and Outputs...54 Table Plan Purchases and Acquisitions: Inputs and Outputs...54 Table Plan Contracting: Inputs and Outputs...55 Figure 3-8. Executing Process Group...55 Table Direct and Manage Project Execution: Inputs and Outputs...56 Table Perform Quality Assurance: Inputs and Outputs...56 Table Acquire Project Team: Inputs and Outputs...57 Table Develop Project Team: Inputs and Outputs...57 Table Information Distribution: Inputs and Outputs...57 Table Request Seller Responses: Inputs and Outputs...58 Table Select Sellers: Inputs and Outputs...58 Figure 3-9. Monitoring and Controlling Process Group...60 Table Monitor and Control Project Work: Inputs and Outputs...61 Table Integrated Change Control: Inputs and Outputs...61 Table Scope Verification: Inputs and Outputs...62 Table Scope Control: Inputs and Outputs...62 Table Schedule Control: Inputs and Outputs...62 Table Cost Control: Inputs and Outputs...63 Table Perform Quality Control: Inputs and Outputs...63 Table Manage Project Team: Inputs and Outputs...63 Table Performance Reporting: Inputs and Outputs...64 Table Manage Stakeholders: Inputs and Outputs...64 Table Risk Monitoring and Control: Inputs and Outputs...65 Table Contract Administration: Inputs and Outputs...65 Figure Closing Process Group...66 Table Close Project: Inputs and Outputs...67 Table Contract Closure: Inputs and Outputs...67 Figure Process Groups Interact in a Project...68 Figure Project Management Process Group Triangle...69 Table Mapping of the Project Management Processes to the Project Management Process Groups and the Knowledge Areas...70 Figure III-1. Process Flow Diagram Legend...73 Figure III-2. Three Major Project Documents and their Relationship to their Components...75 Figure 4-1. Project Integration Management Overview...79 Figure 4-2. Project Integration Management Processes Flow Diagram...80 Figure 4-3. Develop Project Charter: Inputs, Tools & Techniques, and Outputs...82 Figure 4-4. Develop Preliminary Project Scope Statement: Inputs, Tools & Techniques, and Outputs...87 Figure 4-5. Develop Project Management Plan: Inputs, Tools & Techniques, and Outputs...89 Figure 4-6. Direct and Manage Project Execution: Inputs, Tools & Techniques, and Outputs...92 Figure 4-7. Monitor and Control Project Work: Inputs, Tools & Techniques, and Outputs...95 Figure 4-8. Integrated Change Control: Inputs, Tools & Techniques, and Outputs...98 Figure 4-9. Close Project: Inputs, Tools & Techniques, and Outputs Figure 5-1. Project Scope Management Overview Figure 5-2. Project Scope Management Process Flow Diagram Figure 5-3. Scope Planning: Inputs, Tools & Techniques, and Outputs Figure 5-4. Scope Definition: Inputs, Tools & Techniques, and Outputs Figure 5-5. Create WBS: Inputs, Tools & Techniques, and Outputs Figure 5-6. Sample Work Breakdown Structure with Some Branches Decomposed Down Through Work Packages iv A Guide to the Project Management Body of Knowledge (PMBOK Guide) Third Edition 2004 Project Management Institute, Four Campus Boulevard, Newtown Square, PA USA
12 Figure 5-7. Sample Work Breakdown Structure Organized by Phase Figure 5-8. Sample Work Breakdown for Defense Materiel Items Figure 5-9. Scope Verification: Inputs, Tools & Techniques, and Outputs Figure Scope Control: Inputs, Tools & Techniques, and Outputs Figure 6-1. Project Time Management Overview Figure 6-2. Project Time Management Process Flow Diagram Figure 6-3. Activity Definition: Inputs, Tools & Techniques, and Outputs Figure 6-4. Activity Sequencing: Inputs, Tools & Techniques, and Outputs Figure 6-5. Precedence Diagram Method Figure 6-6. Arrow Diagram Method Figure 6-7. Activity Resource Estimating: Inputs, Tools & Techniques, and Outputs Figure 6-8. Activity Duration Estimating: Inputs, Tools & Techniques, and Outputs Figure 6-9. Schedule Development Overview: Inputs, Tools & Techniques, and Outputs Figure Project Schedule Graphic Examples Figure Schedule Control Overview: Inputs, Tools & Techniques, and Outputs Figure 7-1. Project Cost Management Overview Figure 7-2. Project Cost Management Process Flow Diagram Figure 7-3. Cost Estimating: Inputs, Tools & Techniques, and Outputs Figure 7-4. Cost Budgeting: Inputs, Tools & Techniques, and Outputs Figure 7-5. Cash Flow, Cost Baseline and Funding Display Figure 7-6. Cost Control: Inputs, Tools & Techniques, and Outputs Figure 7-7. Illustrative Graphic Performance Report Figure 8-1. Project Quality Management Overview Figure 8-2. Project Quality Management Process Flow Diagram Figure 8-3. Quality Planning: Inputs, Tools & Techniques, and Outputs Figure 8-4. Perform Quality Assurance: Inputs, Tools & Techniques, and Outputs Figure 8-5. Perform Quality Control: Inputs, Tools & Techniques, and Outputs Figure 8-6. Cause and Effect Diagram Figure 8-7. Example of a Control Chart of Project Schedule Performance Figure 8-8. Sample Process Flowchart Figure 8-9. Pareto Diagram (Chart) Figure 9-1. Project Human Resource Management Overview Figure 9-2. Project Human Resource Management Process Flow Diagram Figure 9-3. Human Resource Planning: Inputs, Tools & Techniques, and Outputs Figure 9-4. Roles and Responsibility Definition Formats Figure 9-5. Responsibility Assignment Matrix (RAM) Using a RACI Format Figure 9-6. Illustrative Resource Histogram Figure 9-7. Acquire Project Team: Inputs, Tools & Techniques, and Outputs Figure 9-8. Develop Project Team: Inputs, Tools & Techniques, and Outputs Figure 9-9. Manage Project Team: Inputs, Tools & Techniques, and Outputs Figure Project Communications Management Overview Figure Project Communications Management Process Flow Diagram Figure Communication Basic Model Figure Communications Planning: Inputs, Tools & Techniques, and Outputs Figure Information Distribution: Inputs, Tools & Techniques, and Outputs Figure Performance Reporting: Inputs, Tools & Techniques, and Outputs Figure 10-7 Tabular Performance Report Sample Figure Manage Stakeholders: Inputs, Tools & Techniques, and Outputs A Guide to the Project Management Body of Knowledge (PMBOK Guide) Third Edition 2004 Project Management Institute, Four Campus Boulevard, Newtown Square, PA USA v
13 Contents Figure Project Risk Management Overview Figure Project Risk Management Process Flow Diagram Figure Risk Management Planning: Inputs, Tools & Techniques, and Outputs Figure Example of a Risk Breakdown Structure (RBS) Figure Definition of Impact Scales for Four Project Objectives Figure Risk Identification: Inputs, Tools & Techniques, and Outputs Figure Qualitative Risk Analysis: Inputs, Tools & Techniques, and Outputs Figure Probability and Impact Matrix Figure Quantitative Risk Analysis: Inputs, Tools & Techniques, and Outputs Figure Range of Project Cost Estimates Collected During the Risk Interview Figure Examples of Commonly Used Probability Distributions Figure Decision Tree Diagram Figure Cost Risk Simulation Results Figure Risk Response Planning: Inputs, Tools & Techniques, and Outputs Figure Risk Monitoring and Control: Inputs, Tools & Techniques, and Outputs Figure Project Procurement Management Overview Figure Project Procurement Management Process Flow Diagram Figure Plan Purchases and Acquisitions: Inputs, Tools & Techniques, and Outputs Figure Plan Contracting: Inputs, Tools & Techniques, and Outputs Figure Request Seller Responses: Inputs, Tools & Techniques, and Outputs Figure Select Sellers: Inputs, Tools & Techniques, and Outputs Figure Contract Administration: Inputs, Tools & Techniques, and Outputs Figure Contract Closure: Inputs, Tools & Techniques, and Outputs Table 1 Structural Changes Table 2 Chapter 4 Changes Table 3 Chapter 5 Changes Table 4 Chapter 6 Changes Table 5 Chapter 7 Changes Table 6 Chapter 8 Changes Table 7 Chapter 9 Changes Table 8 Chapter 10 Changes Table 9 Chapter 11 Changes Table 10 Chapter 12 Changes vi A Guide to the Project Management Body of Knowledge (PMBOK Guide) Third Edition 2004 Project Management Institute, Four Campus Boulevard, Newtown Square, PA USA
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