PROJECT MANAGEMENT (PMP EXAM PREP COURSE)

Transcription

1 PROJECT MANAGEMENT (PMP EXAM PREP COURSE) TRAINING MANUAL TABLE OF CONTENTS Chapter 1: Introduction

2 Chapter 2: Organizational Influences and Project Life Cycle Chapter 3: Project Management Processes Chapter 4: Project Integration Management Chapter 5: Project Scope Management Chapter 6: Project Time Management Chapter 7: Project Cost Management Chapter 8: Project Quality Management Chapter 9: Project Human Resource Management Chapter 10: Project Communication Management Chapter 11: Project Risk Management Chapter 12:Project Procurement Management Chapter 13: Project Stakeholder Management Strategy Solutions Structures Page 1

3 ABOUT THIS COURSE Project Management is about creating an environment for the achievement of defined goals in a controlled manner by a team of people. In order to compete in a fast paced and highly technical workplace, you need to master the best practices in project management. The primary objective of this course is to teach project management knowledge and skills; and for the participants learn how to integrate and apply the PMBOK Guide 5 th Ed. into effective processes for managing projects. The course will also prepare the participants who want to write and to pass the PMP (Project Management Professional) certification examination. By careful study, you will be able to adapt the proven practical project management knowledge to your projects and increase your competitive edge. The materials in this course are based on the: Project Management Institute, A guide to the Project Management Body of Knowledge, (PMBOK (R) Guide)- Fifth Edition, Project Management Institute, Inc., 2013 PMBOK (R) is a registered mark of the Project Management Institute, Inc. Strategy Solutions Structures Page 2

4 THE NEED FOR PROJECT MANAGEMENT SKILL Since the beginning of the 21st century, there has been a new challenge to every current and potential employee in the job market of what do you have to offer. The only way for any employee, current or potential to meet this challenge and come on top is the possession of a marketable edge. Whether in health-care; finance, manufacturing, government, or any other type of service or product based industry, Project Management Professional (PMP) certification is ideal for anyone looking to get the most out of their career. Becoming a PMP indicates your willingness to invest in your professional development, a fact not lost on employers. This course will provide our students with a thorough knowledge of current project management philosophies and principles to equip them with an understanding of the industry s best practices. Strategy Solutions Structures Page 3

5 CHAPTER ONE INTRODUCTION Purpose of the PMBOG Guide The acceptance of project management as a profession indicates that the application of knowledge, processes, skills, tools, and techniques can have a significant impact on project success. The PMBOK Guide identifies that subset of the project management body of knowledge that is generally recognized as good practice. Generally recognized means the knowledge and practices described are applicable to most projects most of the time, and there is consensus about their value and usefulness. Good practice means there is general agreement that the application of the knowledge, skills, tools, and techniques can enhance the chances of success over many projects. Good practice does not mean that the knowledge described should always be applied uniformly to all projects; the organization and/or project management team is responsible for determining what is appropriate for any given project. The PMBOK Guide contains the globally recognized standard and guide for the project management profession. A standard is a formal document that describes established norms, methods, processes, and practices. As with other professions, the knowledge contained in this standard has evolved from the recognized good practices of project management practitioners who have contributed to the development of this standard. The PMBOK Guide also provides and promotes a common vocabulary within the project management profession for using and applying project management concepts. A common vocabulary is an essential element of a professional discipline. This standard is a guide rather than a specific methodology. One can use different methodologies and tools (e.g., agile, waterfall, PRINCE2) to implement the project management framework. What is a project A project is a temporary endeavor undertaken to create a unique deliverable (product, service or result).the temporary nature of a project is that a project has a definite beginning and the end. The end of a project is reached when the project objectives have been achieved or the project is terminated because its objective cannot be met, when the need for the project is no more in existence. A project may also be terminated if the client (customer, sponsor or champion) wishes to terminate the project. Strategy Solutions Structures Page 4

6 Salient points: Temporary: a definite beginning and end. Also it does not necessary mean that the duration of the project is short, rather it refers to the project engagement and it s longevity. Unique: No two projects have exactly the same factors associated with it, although they might have the same repetitive elements in their deliverables and activities but it does not change the fundamental unique characteristic of the project work. However an ongoing work is generally a repetitive process that follows an organization s existing procedures. In contrast, because of the unique nature of projects there may be uncertainties or differences in the products, services, or results that the project creates. Project activities can be new to a project team which might necessitate more dedicated planning than other routine work. In addition a project is undertaken at all organizational levels. A project may involve a single or multiple individuals, as well as single organizations or multiple organizations. A Project can be: A finished product or component of another item A capability to perform a service e.g., a business function A result e.g., an outcome of a research work An improvement in the existing product or service lines. Examples of projects include, but not limited to: Developing a new product, service, or result; Effecting a change in the structure, processes, staffing, or style of an organization; Developing or acquiring a new or modified information systems( hardware or software); Conducting a research effort whose outcome will be aptly recorded; Constructing a building, industrial plant, or infrastructure; Implementing, improving, or enhancing existing business processes and procedures. The relationships among portfolios, programs, and projects The relationship among portfolios, programs, and projects is such that a portfolio refers to a collection of projects, programs, sub-portfolios, and operations managed as a group to achieve strategic objectives. Programs are grouped within a portfolio and are comprised of subprograms, projects, or other work that are managed in a coordinated fashion in support of the portfolio. Individual projects that are either within or outside of a program are still considered part of a portfolio. Although the projects or programs within the portfolio may not necessarily be interdependent or directly related, they are linked to the organization s strategic plan by means of the organization s portfolio. What is project management? According to Project Management Body of Knowledge, PMBOK 5th Edition, Project Management is the application of knowledge, skills, tools and techniques to project activities to meet the project requirements. Project management is accomplished through the appropriate application and integration of the 47 logically grouped project management processes, which are categorized into five Process Groups. Strategy Solutions Structures Page 5

7 These five Process Groups are: Initiating, Planning, Executing, Monitoring and Controlling, and Closing. Managing a project typically includes, but is not limited to: Identifying requirements; Addressing the various needs, concerns, and expectations of the stakeholders in planning and executing the project; Setting up, maintaining, and carrying out communication among stakeholders that is active, effective, and collaborative in nature; Managing stakeholders towards meeting project requirements and creating project deliverables; Balancing the competing project constraints, which include, but are not limited to: o Scope, o Quality, o Schedule, o Budget, o Resources, and o Risks. The specific project characteristics and circumstances can influence the constraints on which the project management team needs to focus Strategy Solutions Structures Page 6

8 RELATIONSHIPS AMONG PORTFOLIO MANAGEMENT, PROGRAM MANAGEMENT, PROJECT MANAGEMENT AND ORGANIZATIONAL PROJECT MANAGEMENT Comparative Overview of Project,Program,and Portfolio Management Strategy Solutions Structures Page 7

9 Program Management A program is defined as a group of related projects, subprograms, and program activities managed in a coordinated way to obtain benefits and control not available from managing them individually. Program Management is the application of knowledge, skills, tools, and techniques to a program in order to meet the program requirements and to obtain benefits and control not available by managing projects individually. Program management focuses on the project interdependencies and helps to determine the optimum approach for managing them. Actions related to these interdependencies as follows Resolving resource constraints and/or conflicts that affect multiple projects within the program. Aligning organizational/strategic direction that affects project and program goals and objectives, and Resolving issues and change management within a shared governance structure. Portfolio management Portfolio refers to a collection of projects, programs, sub-portfolios and operations managed as a group to achieve strategic objective. Portfolio Management refers to centralized management of one or more portfolios to achieve specific strategic objectives. The projects or programs of the portfolio may not necessarily be interdependent or directly related. Projects and Strategic Planning Projects are often utilized as a means of directly or indirectly achieving objectives within an organization s strategic plan. Projects are authorized as a result of one or more of the following strategic considerations: Market demand Business need/strategic opportunity Social need Environmental consideration Customer request Technological advance Legal requirements Projects, within programs or portfolios, are a means of achieving organizational goals or objectives, often in the context of a strategic plan. Project office on the other hand is the place where the project team is managed and where the project manager and project team reside. Project Management Office Project Management Office (PMO) is an organizational body responsible for coordinated management of projects centralized under its domain. It could be a department that centralizes the management of projects. It is a management structure that standardizes the project-related governance processes and facilitates the sharing of resources, methodologies, tools, and techniques. Strategy Solutions Structures Page 8

10 Types of PMO structures in Organization Supportive. Supportive PMOs provide a consultative role to projects by supplying templates, best practices, training, access to information and lessons learned from other projects. This type of PMO serves as a project repository. The degree of control provided by the PMO is low. Controlling. Controlling PMOs provide support and require compliance through various means. Compliance may involve adopting project management frameworks or methodologies, using specific templates, forms and tools, or conformance to governance. The degree of control provided by the PMO is moderate. Directive. Directive PMOs take control of the projects by directly managing the projects. The degree of control provided by the PMO is high. The PMO integrates data and information from corporate strategic projects and evaluates how higher level strategic objectives are being fulfilled. The PMO is naturally the liaison between the organizations portfolio, programs, and the corporate measurement systems (e.g. balanced score card) A primary function of a PMO is to support project managers in a variety of ways which may include, but are not limited to: Managing shared resources across all projects administered by the PMO; Identifying and developing project management methodology, best practices, and standards; Coaching, mentoring, training, and oversight; Monitoring compliance with project management standards, policies, procedures, and templates by means of project audits; Developing and managing project policies, procedures, templates, and other shared documentation (organizational process assets); and Coordinating communication across projects. RELATIONSHIP BETWEEN PROJECT MANAGEMENT AND OPERATIONS MANAGEMENT AND ORGANIZATIONAL STRATEGY Operations and Project Management Operations management is responsible for overseeing, directing, and controlling business operations. Operations are permanent endeavors that produce repetitive outputs. Unlike the ongoing nature of operations, projects are temporary endeavors. Operations evolve to support the day-to-day business, and are necessary to achieve strategic and tactical goals of the business. Examples include: production operations, manufacturing operations, accounting operations, software support, and maintenance. Though temporary in nature, projects can help achieve the organizational goals when they are aligned with the organization s strategic objectives. Organizations sometimes change their operations, products, or systems by creating strategic business initiatives that are developed and implemented through projects. Projects require project management activities and skill sets, while operations require business process management, operations management activities, and skill sets. Strategy Solutions Structures Page 9

11 Operations management is a subject area that is outside the scope of formal project management as described in this standard. Operations management is an area of management concerned with ongoing production of goods and/or services. It involves ensuring that business operations continue efficiently by using the optimum resources needed and meeting customer demands. It is concerned with managing processes that transform inputs (e.g., materials, components, energy, and labor) into outputs (e.g., products, goods, and/or services). Operational Stakeholders in Project Management The needs of stakeholders who perform and conduct business operations are important considerations in projects that will affect their future work and endeavors. Project managers who consider and appropriately include operational stakeholders in all phases of projects, gain insight and avoid unnecessary issues that often arise when their input is overlooked. Operational stakeholders should be engaged and their needs identified as part of the Stakeholder register, and their influence (positive or negative) should be addressed as part of the risk management plan. E.g. of operational stakeholders are( Plant operators, Manufacturing line supervisors, Help desk staff, Production system support analysts, Customer service representative,salespersons,maintenance workers, Telephone sales personnel) Organizations and Project Management Organizations use governance to establish strategic direction and performance parameters. The strategic direction provides the purpose, expectations, goals, and actions necessary to guide business pursuit and is aligned with business objectives. Project management activities should be aligned with toplevel business direction, and if there is a change then project objectives need to be realigned. In a project environment, changes to project objectives affect project efficiency and success. When the business alignment for a project is constant, the chance for project success greatly Increases because the project remains aligned with the strategic direction of the organization. Should something change, projects should change accordingly. Project-Based Organization Project-based organizations (PBOs) refer to various organizational forms that create temporary systems for carrying out their work. PBOs can be created by different types of organizations (i.e., functional, matrix, or projectized. The use of PBOs may diminish the hierarchy and bureaucracy inside the organizations as the success of the work is measured by the final result rather than by position or politics. PBOs conduct the majority of their work as projects and/or provide project rather than functional approaches. PBOs can refer to either entire firms (as in telecommunications, oil and gas, construction, consultancy, and professional services) multi-firm consortia, or networks, it is also possible that some large project-based organizations have functional support areas or that the PBO is nested within subsidiaries or divisions of larger corporations. Strategy Solutions Structures Page 10

12 The Link between project Management and Organizational Governance Projects (and programs) are undertaken to achieve strategic business outcomes, for which many organizations now adopt formal organizational governance processes and procedures. Organizational governance criteria can impose constraints on projects particularly if the project delivers a service which will be subject to strict organizational governance. The Relationship between Project Management and Organizational Strategy Organizational strategy should provide guidance and direction to project management especially when one considers that projects exist to support organizational strategies. Often it is the project sponsor or the portfolio or program manager who identifies alignment or potential conflicts between organizational strategies and project goals and then communicates these to the project manager. If the goals of a project are in conflict with an established organizational strategy, it is incumbent upon the project manager to document and identify such conflicts as early as possible in the project. At times, the development of an organizational strategy could be the goal of a project rather than a guiding principle. In such a case, it is important for the project to specifically define what constitutes an appropriate organizational strategy that will sustain the organization Business Value Business value is a concept that is unique to each organization. Business value is defined as the entire value of the business; the total sum of tangible and intangible assets. Depending on the organization, business value scope can be short, medium or long-term. Value may be created through the effective use of portfolio, program, project management, organizations will possess the ability employ reliable, established processes to meet strategic objectives and obtain greater business value from their project investments. Project Manager The Project manager is the person assigned by the performing organization to achieve project objectives. A project manager must have people-managing and interpersonal skills and general management skills such as negotiation, leadership and mentoring. Effective project management requires that the project manager possess the following characteristics: Knowledge-what project manager knows about project management Performance-what the project manager is able to accomplish Personal-how project manager behaves when performing the project. Some of the skills that must be possessed by a Project Manager to deliver organization project include Communication Skills Organizational Skills Budgeting Skills Problem Solving Negotiation and Influencing Leadership Skills Team Building and Human Resources Strategy Solutions Structures Page 11

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14 Project objectives Project objectives are contained in the preliminary project scope statement and project scope statement. Management by objective This management concept believes that an organization should be managed according to its objectives. This is achieved by: Establishing unambiguous and realistic objectives Periodically evaluate if objectives are being met Implementing corrective action. Management by objectives works best when management supports it. Project Management Body of Knowledge The PMBOK Guide contains the standard for managing most projects most of the time across many types of industries. The standard describes the project management processes used to manage a project toward a successful outcome. Project management standards do not address all details of every topic. This standard is limited to individual projects and the project management processes that are generally recognized as good practice. Other standards may be consulted for additional information on the broader context I which projects are accomplished, such as The standard for program Management addresses the management of programs, The standard for portfolio Management addresses the management of portfolios, Organizational project Management Maturity Model (OPM3) examine an enterprise s project management process capabilities. Strategy Solutions Structures Page 13

15 CHAPTER TWO ORGANIZATIONAL INFLUENCES AND PROJECT LIFE CYCLE Projects and project management take place in an environment that is broader than that of the project itself. Understanding this broader context helps ensure that work is carried out in alignment with the organization's goals and managed in accordance with the organization s established practices. This section describes how organizational influences affect the methods used for staffing, managing, and executing the project. It discusses the influence of stakeholders on the project and its governance, the project team s structure and membership, and different approaches to the phasing and relationship of activities within the project s life cycle. The following major sections are addressed: Organizational Influences on Project Management An organization s culture, style, and structure influence how its projects are performed. The organization s level of project management maturity and its project management systems can also influence the project. Organizational culture and style Organizations are systematic arrangements of entities (persons and/or departments) aimed at accomplishing a purpose, which may involve undertaking projects. An organization's culture and style affect how it conducts projects. Cultures and styles are group phenomena known as cultural norms, which develop over time. The norms include established approaches to initiating and planning projects, the means considered acceptable for getting the work done, and recognized authorities who make or influence decisions. Organizational Communications Project management success in an organization is highly dependent on an effective organizational communication style, especially in the face of globalization of the project management profession. Organizational communications capabilities have great influence on how projects are conducted. As a consequence, project managers in distant locations are able to more effectively communicate with all relevant stakeholders within the organizational structure to facilitate decision making. Stakeholders and project team members can also use electronic communications (including , texting, instant messaging, social media, video and web conferencing, and other forms of electronic media) to communicate with the project manager formally or informally. Organizational structure Organizational structure is an enterprise environmental factor which can affect the availability of resources and influence how projects are conducted. Organization and Project Management. Organizations use governance to establish strategic direction and performance parameters. The strategic direction provides the purpose, expectations, goals, and actions necessary to guide business pursuit and Strategy Solutions Structures Page 14

16 is aligned with business objectives. Project management activities should be aligned with top level business direction and if there is any change project objective needs to be realigned. Types of Organizational Structure Functional The most common form found in most organizations. The organization is grouped by areas of specialization within different functional areas (e.g. Marketing, Admin, Accounting, HR, etc) Projectized The entire organization is grouped by projects. Team member has no home Matrix They are a combination of functional and projectized characteristics. The team member has Two bosses In a strong matrix, power rests with the project manager In a weak matrix, power rests with functional manager. The project manager s role in a weak matrix might be more of a: Project Expediter- i.e. a staff assistant and communication coordinator. The expediter cannot make or enforce decision. Project Coordinator similar to project expediter but has more power to make decisions, some authority, and report to a higher level manager. In a balanced matrix, the power is shared between functional manager and the project manager. Organizational Structure Influence on Projects Functional Weak Matrix Balanced Matrix Strong Matrix Projected PM authority Little or None Limited Low to Moderate Moderate High to Total to High Resource Little or None Limited Low to Moderate Moderate High to Total Availability to High Project Budget Functional Manager Functional Manager Mixed PM PM PM Role Part Time Part Time Full Time Full Time Full Time (Expeditor/co ordinator) Project Staff Part Time Part Time Part Time Full Time Full Time Grouped by Area of Mix Organized by specialization project Communication Request to Team member to Within departmental two bosses project head then to other dept and back Unique Silos Two bosses No home Strategy Solutions Structures Page 15

17 Functional Organization Functional Advantages Easier management of specialists Team members report to only one supervisor Clearly defined paths in areas of work specialization Disadvantages People place more emphasis on their functional specialty to the detriment of the project No career path in project management Project Manager has little or no authority Projectized Organization Advantages Efficient project organization Loyalty to the project More effective communications than functional Disadvantages No home when project is completed Lack of professionalism in disciplines Duplication of facilities and job functions Less efficient use of resources Matrix Organization Advantages Highly visible project objectives Improved project manager control over resources More support from functional organizations Maximum utilization of scarce resources Better coordination Team members maintain a home Disadvantages Extra administration required More than one boss for project teams More complex to monitor and control Tougher problems with resource allocation Need extensive policies and procedures Higher potential for conflict Strategy Solutions Structures Page 16

18 Functional Organization Projectized Organization Strategy Solutions Structures Page 17

19 Matrix Organization Organizational Process Assets Organizational process assets are the plans, processes, policies, procedures and knowledge bases, specific to and used by the performing organization. They include any artifact, practice, or knowledge from any or all of the organizations involved in the project that can be used to perform or govern the project. These process assets include formal and informal plans, processes, policies, procedures, and knowledge bases, specific to and used by the performing organization. The process assets also include the organization s knowledge bases such as lessons learned and historical information. Organizational process assets may include completed schedules, risk data, and earned value data. Organizational process assets are inputs to most planning processes. Throughout the project the project team members may update and add to the organizational process assets as necessary. Organizational process assets may be grouped into two categories: (1) processes and procedures, and (2) corporate knowledge base Strategy Solutions Structures Page 18

20 Enterprise Environmental Factors Enterprise environmental factors refer to conditions, not under the control of the project team, that influence, constrain, or direct the project. Enterprise environmental factors are considered inputs to most planning processes, may enhance or constrain project management options, and may have a positive or negative influence on the outcome. Enterprise environmental factors vary widely in type or nature. Enterprise environmental factors include, but are not limited to Organizational culture Government or industry standard Personnel Administration Market conditions Existing resources Company work authorization system. Existing Infrastructure PROJECT STAKEHOLDER AND GOVERNANCE A stakeholder is an individual, group, or organization who may affect, be affected by, or perceive itself to be affected by a decision, activity, or outcome of a project. Stakeholders may be actively involved in the project or have interests that may be positively or negatively affected by the performance or completion of the project. Different stakeholders may have competing expectations that might create conflicts within the project. Stakeholders may also exert influence over the project, its deliverables, and the project team in order to achieve a set of outcomes that satisfy strategic business objectives or other needs. Project governance the alignment of the project with stakeholders needs or objectives is critical to the successful management of stakeholder engagement and the achievement of organizational objectives. Project governance enables organizations to consistently manage projects and maximize the value of project outcomes and align the projects with business strategy. It provides a framework in which the project manager and sponsors can make decisions that satisfy both stakeholder needs and expectations and organizational strategic objectives or address circumstances where these may not be in alignment. Project stakeholders Stakeholders include all members of the project team as well as all interested entities that are internal or external to the organization. The project team identifies internal and external, positive and negative, and performing and advising stakeholders in order to determine the project requirements and the expectations of all parties involved. The project manager should manage the influences of these various stakeholders in relation to the project requirements to ensure a successful outcome. Strategy Solutions Structures Page 19

21 What to do with stakeholders Identify ALL of them Determine ALL of their requirements Determine ALL their expectations Communicate with ALL of them Manage ALL their influences Types of stakeholders Sponsor Customer Project Manager Project Management Team Project Team Members Functions Signs project charter Champions the project Provides financial resources User of service or product manages all aspects of the project Performs project management activities Carry out project activities Other examples include; Project management office, functional managers etc Strategy Solutions Structures Page 20

22 Project governance Project governance function is oversight functions that is aligned with the organization s governance model and that encompasses the project life circle, project governance involve stakeholders as well as documented policies, procedures, and standards, responsibilities and authorities. Project governance framework provides the project manager and team with structure, processes, decision-making models and tools for managing the project, while supporting and controlling the project for successful delivery. Examples of the elements of a project governance framework include: Project success and deliverable acceptance criteria. Process to identify, escalate, and resolve issues that arise during the project. Guidelines for aligning project governance and organizational strategy. Project life circle approach. Process for stage gate or phase reviews. Process for review and approval for changes to budget, scope, quality, and schedule which are beyond the authority of the project manager. Process to align internal stakeholders with project process with project process requirements. Project success Since projects are temporary in nature, the success of the project should be measured in terms of completing the project within the constraints of scope, time, cost, quality, resources, and risk as approved between the project managers and senior management. To ensure realization of benefits for the undertaken project, a test period (such as soft launch in services) can be part of the total project time before handing it over to the permanent operations. Project success should be referred to the last baselines approved by the authorized stakeholders. Project team The project team includes the project manager and the group of individuals who act together in performing the work of the project to achieve its objectives. The project team includes the project manager, project management staff, and other team members who carry out the work but who are not necessarily involved with management of the project. This team is comprised of individuals from different groups with specific subject matter knowledge or with a specific skill set to carry out the work of the project. Composition of project team The composition of project teams varies based on factors such as organizational culture, Scope, and location. However the relationship of the project manager and the team varies depending on the authority of the project manager. The following are the examples of basic project teams compositions: Strategy Solutions Structures Page 21

23 Dedicated. In a dedicated team, all or a majority of the project team members are assigned to work full-time on the project. The project team may be collocated or virtual and usually reports directly to the project manager. This is the simplest structure for a project manager, as the lines of authority are clear and team members can focus on the project s objectives. Part-Time. Some projects are established as temporary additional work, with the project manager and team members working on the project while remaining in their existing organizations and continuing to carry out their normal functions. The functional managers maintain control over the team members and the resources allocated to the project, and the project manager is likely to continue performing other management duties. Part-time team members may also be assigned to more than one project at a time. Project Life Cycle This is a progression through a series of different stages of development. Two methodologies are involved in completing a project: 1. What you need to do to do the work (project) 2. The project Management processes Project life cycle addresses the following: What work will be performed in each phase? What deliverables will be produced and when? Who is involved in each phase? How management will control and approve work produced in each phase? Characteristics of the project life cycle All projects irrespective of size and complexity can be mapped to the following cycle structure: Starting the project Organizing and preparing Carrying out the project work Closing the project. Product Life Cycle The Life Cycle of a Product lasts from conception of a new product to its withdrawal from the market The product life cycle may give rise to several projects, thus the Project Life Cycle can become a part of the product life cycle. The Product Life Cycle may include the following stages: Conception Growth Maturity Decline Withdrawal Strategy Solutions Structures Page 22

24 Project phases A project may be divided into any number of phases. A project phase is a collection of logically related project activities that culminates in the completion of one or more deliverables. A phase may emphasize processes from a particular Project Management Process Group, but it is likely that most or all processes will be executed in some form in each phase. Project phases typically are completed sequentially, but can overlap in some project situations. Different phases typically have a different duration or effort. The phase structure allows the project to be segmented into logical subsets for ease of management, planning, and control. The number of phases, the need for phases, and the degree of control applied depend on the size, complexity, and potential impact of the project. Regardless of the number of phases comprising a project, all phases have similar characteristics: The work has a distinct focus that differs from any other phase. This often involves different organizations, locations, and skill sets. Achieving the primary deliverable or objective of the phase requires controls or processes unique to the phase or its activities. The repetition of processes across all five Process Groups, as described in Section 3, provides an additional degree of control and defines the boundaries of the phase. The closure of a phase ends with some form of transfer or hand-off of the work product produced as the phase deliverable. This phase end represents a natural point to reassess the activities underway and to change or terminate the project if necessary. This point may be referred to as a stage gate, milestone, phase review, phase gate or kill point. In many cases, the closure of a phase is required to be approved in some form before it can be considered closed When projects have more than one phase, the phases are part of a generally sequential process designed to ensure proper control of the project and attain the desired product, service, or result. However, there are situations when a project might benefit from overlapping or concurrent phases. There are two basic types of phase-to-phase relationships: Sequential relationship. In a sequential relationship, a phase starts only when the previous phase is complete. The step-by-step nature of this approach reduces uncertainty, but may eliminate options for reducing the overall schedule. Overlapping relationship. In an overlapping relationship, a phase starts prior to completion of the previous one. This can sometimes be applied as an example of the schedule compression technique called fast tracking. Overlapping phases may require additional resources to allow work to be done in parallel, increase risk and can result in rework if a subsequent phase progresses before accurate information is available from the previous phase. Strategy Solutions Structures Page 23

25 CHAPTER 3 PROJECT MANAGEMENT PROCESSES The following sections identify and describe the five project management process Groups required for any project, the five process group have clear dependencies and are typically performed in each project and highly interactive with one another. The nature of this interaction varies from project to project and may or may not be performed in a particular order. Projects are time bound and most employ huge resources of men, materials and machines. They involve heavy investments, require a high level of technology and need an effective management of resources. Most of these projects occur most times within complex project environments can best be achieved by a competent project manager who thoroughly understands the project management process groups. PROCESS GROUPS INITIATING: PLANNING: EXECUTING: SUMMARY The processes that are performed that defines a new project or phase The processes that defines the scope and determine the course of action required to fulfill project objectives The processes that are performed to complete the planned work MONITORING AND CONTROLLING: The processes that measure the actual work against the work plan CLOSING: The processes that are performed to terminate all activities in the various process groups A process is a set of interrelated actions and activities performed to create a pre-specified product, service, or result. Each process is characterized by its inputs, the tools and techniques that can be applied, and the resulting outputs In order for a project to be successful, the project team should: Select appropriate processes required to meet the project objectives; Use a defined approach that can be adapted to meet requirements; Establish and maintain appropriate communication and engagement with stakeholders; Comply with requirements to meet stakeholder needs and expectations; and Balance the competing constraints of scope, schedule, budget, quality, resources, and risk to produce the specified product, service, or result. Strategy Solutions Structures Page 24

26 Performance Domain I: INITIATING Domain I Initiating the Project -13% Task 1 Task 2 Task 3 Task 4 Task 5 Task 6 Task 7 Task 8 Perform project assessment based upon available information, lessons learned from previous projects and meetings with relevant stakeholders in order to support the evaluation of the feasibility of new products or services within the given assumptions and/or constraints. Identify key deliverables based on the business requirements in order to manage customer expectations and direct the achievement of project goals. Perform stakeholder analysis using appropriate tools and techniques in order to align expectations and gain support for the project. Identify high level risks, assumptions, and constraints based on current environment, organizational factors, historical data, and expert judgment, in order to propose an implementation strategy. Participate in the development of the project charter by compiling and analyzing gathered information in order to ensure project stakeholders are in agreement on its elements. Obtain project charter approval from the sponsor, in order to formalize the authority assigned to the project manager and gain commitment and acceptance for the project. Conduct benefit analysis with relevant stakeholders to validate project alignment with organizational strategy and expected business value. Inform stakeholders of the approved project charter to ensure common understanding of the key deliverables, milestones, and their roles and responsibilities. Knowledge and Skills Analytical skills Business analysis techniques Elements of a project charter Estimation tools and techniques Strategic management Strategy Solutions Structures Page 25

27 Performance Doman II: PLANNING Domain II Planning -24% Task 1 Task 2 Task 3 Task 4 Task 5 Task 6 Task 7 Task 8 Task 9 Task 10 Review and assess detailed requirements, constraints, and assumptions with stakeholders based on the project charter, lessons learned, and by using requirements-gathering techniques in order to establish detailed project deliverables. Develop a scope management plan, based on the approved project scope and using scope management techniques, in order to define, maintain and manage the scope of the project. Develop the cost management plan based on the projects scope, schedule, resources, approved project charter and other information, using estimating techniques, in order to manage project costs. Develop a project schedule based on the approved project deliverables and milestones, scope, and resource management plan, in order to manage timely completion of the project. Develop the human resource management plan by defining the roles and responsibilities of the project team members in order to create a project organizational structure and provide guidance regarding how resources will be assigned and managed. Develop the communications management plan based on the project organization structure and stakeholder requirements, in order to define the flow of project information. Develop the procurement management plan based on the project scope, budget and schedule, in order to ensure that the required project resources will be available. Develop a quality management plan and define the quality standards for the project and its products, based on the project scope, risks and requirements, in order to prevent the occurrence of defects and reduce the cost of quality. Develop a change management plan by defining how changes will be addressed and controlled, in order to track and manage changes. Plan for risk management by developing a risk management plan; and identifying, analyzing, and prioritizing project risks; creating the risk register; and defining risk response strategies in order to manage uncertainty and opportunity throughout the project life cycle. Strategy Solutions Structures Page 26

28 Task 11 Present the project management plan to the relevant stakeholders according to applicable policies and procedures in order to obtain approval to proceed with the project execution. Task 12 Task 13 Conduct kick-off meeting, communicating the start of the project, key milestones, and other relevant information in order to inform and engage stakeholders and gain commitment. Develop the stakeholder management plan by analyzing needs, interests, and potential impact in order to effectively manage stakeholders expectations and engage them in project decisions. Knowledge and Skills Change management planning Cost management planning, including project budgeting tools and techniques. Communications planning Contract types and selection criteria Estimating tools and techniques Human resource planning Lean efficiency principles Procurement planning Quality management planning Requirements gathering techniques (e.g., planning sessions, brainstorming, and focus groups. Regulatory and environmental impacts assessments planning Risk management planning. Scope deconstruction ( e.g., WBS, scope backlog) tools and techniques Scope management planning Time management planning, including scheduling tools and techniques Workflow diagramming techniques. Strategy Solutions Structures Page 27

29 Performance Domain III: EXECUTING Domain III Executing -31% Task 1 Acquire and manage project resources by following the human resource and procurement management plans, in order to meet project requirements. Task 2 Task 3 Manage tasks execution based on the project management plan by leading and developing the project team in order to ensure that work is performed in accordance with required quality standards. Implement the quality management plan using the appropriate tools and techniques in order to ensure that work is being performed in accordance with required quality standards. Task 4 Task 5 Implement approved changes and corrective actions by following the change management plan in order to meet project requirements. Implement approved actions by following the risk management plan in order to minimize the impact of the risk and take advantage of opportunities on the project. Task 6 Manage the flow of information by following the communications plan in order to keep stakeholders engaged and informed. Task 7 Maintain stakeholder relationships by following the stakeholder management plan in order to receive continued support and manage expectations. Knowledge and Skills Continuous improvement processes Contract management techniques Element of a statement of work Interdependencies among project elements Project budgeting tools and techniques Quality standard tools Vendor management techniques Strategy Solutions Structures Page 28

30 PERFORMANNCE DOMAIN IV: MONITORING and CONTROLLING Domain IV Monitoring and Controlling -25% Task 1 Task 2 Task 3 Task 4 Task 5 Task 6 Task 7 Measure project performance using appropriate tools and techniques, in order to identify and quantify any variances and corrective actions. Manage changes to the project by following the change management plan in order to ensure that project goals remain aligned with business needs. Verify that project deliverables conform to the quality standards established in the quality management plan by using the appropriate tools and techniques to meet project requirements and business needs. Monitor and assess risk by determining whether exposure has changed and evaluating the effectiveness of response strategies in order to manage the impact of risks and opportunities on the project. Review the issue log, update if necessary, and determine corrective actions by using appropriate tools and techniques in order to minimize the impact on the project. Capture, analyze, and manage lessons learned, using lessons learned management techniques in order to enable continuous improvement. Monitor procurement activities according to the procurement plan in order to verify compliance with project objectives Knowledge and Skills Performance measurement and tracking techniques (for example, EV, CPM, PERT, Trend Analysis) Project analysis techniques(e.g., LEAN, Kanban, sis sigma) Project control limits (e.g., thresholds, tolerance) Project finance principles Project monitoring tools and techniques Project quality best practices and standards(e.g.,iso,bs,cmmi,ieee) Quality measurement tools (e.g., statistical sampling, control charts, flowcharting, inspection, assessment) Risk identification and analysis techniques Risk response techniques Risk identification and analysis techniques Risk response techniques Quality validation and verification techniques Strategy Solutions Structures Page 29

31 PERFORMANCE DOMAIN V: CLOSING Domain V Closing -7% Task 1 Task 2 Obtain final acceptance of the project deliverables from relevant stakeholders in order to confirm that project scope and deliverables were achieved. Transfer the ownership of the deliverables to the assigned stakeholders in accordance with the project plan, in order to facilitate project closure. Task 3 Obtain financial, legal and administrative closure using generally accepted practices and policies in order to communicate formal project closure and ensure transfer of liability. Task 4 Task 5 Prepare and share the final project report according to the communications management plan in order to document and convey project performance and assist in project evaluation. Collate lessons learned that were documented throughout the project and conduct a comprehensive project review, in order to update the organization s knowledge base. Task 6 Archive project documents and materials using generally accepted practices in order to comply with statutory requirements and for potential use in future projects and internal/external audits Task 7 Obtain feedback from relevant stakeholders using appropriate tools and techniques and based on the stakeholder management plan in order to evaluate their satisfaction. Knowledge and Skills Archiving practices and statutes Compliance(statute/organization) Contract closure requirements Feedback techniques Performance measurement techniques(kpi and key success factors) Project review techniques Transition planning technique Strategy Solutions Structures Page 30

32 CROSS-CUTTING KNOWLEDGE AND SKILLS All Domains Cross-cutting knowledge and Skills Active listening Applicable laws and regulations Benefits realization Brainstorming techniques Business acumen Change management techniques Coaching, mentoring, training, and motivational techniques Communication channels, tools, techniques, and methods Configuration management Conflict resolution Customer satisfaction metrics Data gathering techniques Diversity and cultural sensitivity Emotional intelligence Expert judgment technique Facilitation Generational sensitivity and diversity Information management tools, techniques, and methods Interpersonal skills Knowledge management Leadership tools and techniques and skills Lessons learned management techniques Meeting management techniques Negotiating and influencing techniques and skills Organizational and operational awareness Peer-review processes Presentation tools and techniques Project finance principles Quality assurance and control techniques Relationship management Risk assessment techniques Situational awareness Stakeholder management techniques Team-building techniques Virtual/remote team management Strategy Solutions Structures Page 31

33 INITIATING PROCESS GROUP During the initiating stage, the need for the project is identified; the project s importance is ranked relative to other projects and the funding requirements are analyzed. The decision to authorize the project is made at this stage. High level planning may be done during initiating process. Such planning may include creating high level-risk identification, a high level WBS, Rough order of magnitude estimating and preliminary project scope statement. Inputs in this process include: Business need Description of product/service Company strategic plan Templates from past projects Project Management Processes of Initiating Process group Select project manager Determine company culture and existing system Collect processes, procedures and historical information Divide large project into phases Understand the business case Uncover Initial requirements and risks Assess project and product feasibility within the given constraints Create measurable objectives Develop project charter Identify stakeholder & determine their expectations, influence and impact Outputs to this process are: Project Charter Stakeholder Register Stakeholder Management Strategy Some of the reasons for initiating projects include: Begin a new phase of project Business need Obsolesce(we have software that needs updating) Client requirement Strategy Solutions Structures Page 32

34 PLANNING PROCESS GROUP Project Planning is the heart of project management. It determines whether the project charter can or cannot be done. This process begins after project initiation. Planning aims at formulation of a time-based plan of action for coordinating various activities and resources to achieve specified objectives. This is the most important aspect of any project. When planning is faulty, the objective is not likely to be met easily and usually increase project risk. During planning: Scope is defined Changes are made to the project plan Approved changes require re-planning Other management plans are created Some of the processes of planning phase include: Determine how you will plan for each knowledge area Determine detailed requirements Create project scope statement Assess what to purchase and create procurement documents Determine planning team Create WBS and WBS dictionary Create activity list Create network diagram Estimate resource requirements Estimate time and cost Determine critical path Develop schedule Develop budget Determine quality standards, processes and metrics Create process improvement plan Determine all roles and responsibility Plan communications and stakeholder engagement Perform risk identification, qualitative and quantitative risk analysis and response planning Go back- iterations Finalise procurement documents Create change management plan Finalize the how to execute and control parts of all management plans Develop realistic and final PM plan and performance measurement baselines Gain formal approval of the plan Hold kickoff meeting. The output of the planning process group is: Project Management Plan. Strategy Solutions Structures Page 33

35 EXECUTING PROCESS GROUP In this process group, the actual work takes place. The activities performed are done to bring the work in line with the project management plan to meet project objectives. The bulk of the budget is spent executing the project activities. People and resources are coordinated in a timely manner while executing the project management plan. Some of the processes of Executing phase include: Execute the work according to the PM plan Produce product deliverables( product scope) Gather work performance data Request changes Implement only approved changes Continuously improve Follow processes Determine whether processes are correct and effective(quality assurance) Perform quality audits Acquire final team Manage people Evaluate team and individual performance Hold team-building activities Give recognition and rewards Use issue logs Facilitate conflict resolution Release resources as work is completed Send and receive information Report on project performance Manage stakeholder engagement and expectations Hold meetings Select sellers Strategy Solutions Structures Page 34

36 MONITORING AND CONTROLLING PROCESS GROUP The monitoring and controlling activities help track, review and regulate progress. activities are monitored to bring timely corrective actions where necessary. During this process, work is monitored, changes to project plan are managed via corrective or preventive actions and generally factors that could influence work are kept under check. The monitoring and controlling activities include: Take action to control the project Measure performance against the performance measurement baselines Measure performance against other metrics determined by the project manager. Analyze and evaluate performance Determine variances and if they warrant a corrective action or change request. Influence the factors that cause changes Request changes Perform integrated change control Approve or reject changes Update the PM plan and project documents Inform stakeholders of the results of change requests Monitor stakeholder engagement Manage configuration Create forecasts Gain acceptance of interim deliverables from the customer Perform quality control Perform risk assessments and audits Manage reserves Control procurements Outputs to this process include updates to the following Project documents updates Project Management Plan updates Organizational Process Asset updates Strategy Solutions Structures Page 35

37 CLOSING PROCESS GROUP The activities performed to formally closeout the project s contractual and administrative activities. Processes of project or phase closure are: Confirm work is done to requirements Complete procurement closure Gain final acceptance of the product Complete financial closure Hand off completed product Solicit feedback from customer about project Complete final performance reporting Index and archive records Gather final lessons learned and update knowledge base Closure Procedures Administrative closure procedure: focuses on closing the project or project phase Contract closure procedure: focuses on closing a contract that is part of a project. Strategy Solutions Structures Page 36

38 Project information Throughout the life circle of the project, a significant amount of data and information is collected, analyzed, transformed, and distributed in various formats to project team members and other stakeholders. Project data are collected as a result of various Executing processes and are shared within the project team. The collected data are analyzed in context, and aggregated and transformed to become project information during various controlling processes. The information may then be communicated verbally or stored and distributed as reports in various formats. The project data are continuously collected and analyzed during the dynamic context of the project execution. As a result, the terms data and information are often used interchangeably in practice and these can lead to confusion and misunderstandings by the various project stakeholders.thus the following guidelines help minimize miscommunication and help the project team use appropriate terminology: Work performance data. The raw observation and measurements identified during activities performed to carry out the project work. Examples include reported percent of work physically completed, quality and technical performance measures, start and finish date of schedule, number of defects, number of change request, actual cost and actual durations. Work performance information. The performance data collected from various controlling processes, analyzed in context and integrated based on relationships across areas. Example of performance information are status of deliverables, implementation status for change request, and forecasted estimates to complete. Work performance reports. The physical or electronic representation of work performance information compiled in project documents, intended to generate decisions or raise issues, actions or awareness. Examples include status reports, memos, justifications, information notes, electronic dashboards, recommendations, and updates. Strategy Solutions Structures Page 37

39 Knowledge areas They are identified areas of project management described in terms of its component processes and they are defined by their knowledge requirements. They will be discussed in detail later in this course. Knowledge Area 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 Project Procurement Management Project stakeholders Management Summary It ensures that all other knowledge areas are efficiently glued together. This deals with what is and what is not needed to complete the project. Reveals how the project will be completed within time limits Completing the project within approved budget. Meeting customer s requirement. Effective use of project team members. Ease of information flow. Identification, assessment and Prioritization of risk. Acquiring resources from outside the organization. Meeting stakeholders Expectation. Strategy Solutions Structures Page 38

40 Project Management Process Group and Knowledge Area Mapping Process Groups Knowledge Area Initiating Process Group Planning Process Group Executing Process Group Monitoring and Controlling Group Closing Process Group 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 Project Procurement Management Develop Charter Project Develop Project Management Plan -Plan Scope Management. -Collect Requirements -Define Scope -Create WBS -Plan Schedule Mgt -Define Activities -Sequence Activities -Estimate Activity Resources -Estimate Activity Durations -Develop Schedule -Plan Cost Management -Estimate Costs -Determine Budget -Plan Quality Management -Plan Human Resource Management -Plan Communications Management -Plan Risk Management -Identify Risks -Perform Qualitative Risk Analysis -Perform Quantitative Analysis -Plan Risk Responses -Plan Procurements Management Direct and Manage Project Execution -Perform Quality Assurance -Acquire Project Team -Develop Project Team -Manage Project Team Manage Communications -Conduct Procurements -Monitor and Control Project Work -Perform Integrated Change Control -Validate Scope -Control Scope -Control Schedule -Control Costs -Perform Quality Control Control Communications -Control Risks -Control Procurements Close Project Phase -Close Procurements or Project Stakeholder Management -Identify stakeholders. -Plan Stakeholder -Manage Management Stakeholder CHAPTER Engagement 4 -Control Stakeholder Engagement PROJECT INTEGRATION MANAGEMENT Strategy Solutions Structures Page 39

41 Integration is about making choices, about where to concentrate resources and effort. It also involves making tradeoffs among competing objectives and alternatives. Integration is primarily concerned with effectively integrating the processes among the project Management Process Groups. Integration could be said to cover the high level work a project manager needs to do. The other knowledge areas in this manual are detailed work. Project Integration Management includes the processes and activities needed for the Unification, Consolidation, articulation and iteration of actions that are crucial to project completion. The project management processes are usually presented as discrete processes with defined interfaces while, in practice, they overlap and interact in ways that cannot be completely detailed in the PMBOK Guide. The project manager acts as an integrator, putting all the pieces of the project into one cohesive whole that gets the project done faster, better and cheaper with fewer resources while meeting project objectives. The project sponsor(s) protect the project from unnecessary changes and possible loss of resources while the project team carry out and complete the work package. Processes involved in Project Integration management are: Develop Project Charter-Initiating Process Group Develop Project Management Plan-Planning Process Group Direct and Manage Project Execution-Executing Process Group Monitor and Control Project work-monitoring and Controlling Perform Integrated change control-monitoring and Controlling Close Project or Phase-Closing Process Group DEVELOP PROJECT CHARTER The project charter is the document that formally authorizes a project or phase. It establishes a clear objective for the execution in line with stakeholder s expectation needs and expectations. Inputs: Project Statement of work-created by customer/sponsor and describes their need, product scope, and how the projects fits into their strategic plan. Business case- this provides the necessary information from a business standpoint to determine whether or not the project is worth the required investment, i.ebussiness is a result of market demand, organizational need, customer request, social need, technological advance etc. Agreement- e.g. contracts, MOUs, letters of intent. Contract is used when project is being performed for an external customer. Enterprise Environment Factors. Organizational Process assets. Strategy Solutions Structures Page 40

42 Tools and Techniques: Expert Judgment Facilitation Techniques Facilitation techniques have broad application within project management processes and guide the development of the project charter. Brainstorming, conflict resolution, problem solving, and meeting management are examples of key techniques used by facilitators to help teams and individuals accomplish project activities. Project Selection methods Benefit Measurement Methods (Comparative approach): Murder board, peer review, scoring models, Economic models, Benefit compared to cost. Constrained Optimization methods (Mathematical approach): linear programming, integer programming, dynamic programming, multi-objective programming Outputs: Project Charter A document issued by the sponsor during project initiating that formally recognizes the existence of project. It gives the Project manager authority to formally apply the organization resources to project activities, documents the business needs, justification and product/service requirements for that project. A project charter should include: The project title and description Project Manager assigned and authority level Business needs (reasons for the existence of the project) Project justification Resources pre-assigned Stakeholders Stakeholders requirements as known Product description/deliverables Constraints and assumption Project sponsor and signature. Strategy Solutions Structures Page 41

43 DEVELOP PROJECT MANAGEMENT PLAN This is the road map on how the project will be managed, executed, monitored, controlled and closed through the phases of its life cycle. The project management plan is a living document and is updated as the project progresses. The project management plan must be bought into, approved, realistic and formal (BARF). Inputs: Project Charter Output from other processes Enterprise Environmental Factors Organization Process assets. Tools and Techniques: Output: Expert Judgment Project Management Plan The project management plan defines how the project is executed, monitored and controlled and closed. Other Terms Configuration Management System A plan to ensure that everyone knows what version of the scope, schedule, and other components of the plans are the latest version Change control system A system of formal procedure set up in advance defining how project deliverables and documentation are changed and approved Work Authorization systems A formal procedure for sanctioning that work is done at the right time and in proper sequence. Baseline They are a part of project management plans and are used to measure performance. There are scope, schedule, cost and quality baselines, projects should also include a resource baseline or technical performance baselines. Baselines are used during project executing to measure performance and to help control project. Strategy Solutions Structures Page 42

44 Kickoff meeting A meeting of all parties to the project (customers, sellers, project team, senior management, agencies, functional management, sponsor). It is held at the end of the planning process group just before beginning work on the project. DIRECT AND MANAGE PROJECT EXECUTION This is the performance of the work defined in the project management plan to achieve the project s scope. The key benefit of this process is that it provides overall management of the project work. Direct and Manage Project Work activities include, but are not limited to: Perform activities to accomplish project objectives; Create project deliverables to meet the planned project work; Provide, train, and manage the team members assigned to the project; Obtain, manage, and use resources including materials, tools, equipment, and facilities; Implement the planned methods and standards; Establish and manage project communication channels, both external and internal to the project team; Generate work performance data, such as cost, schedule, technical and quality progress, and status to facilitate forecasting; Issue change requests and implement approved changes into the project s scope, plans, and environment; Manage risks and implement risk response activities; Manage sellers and suppliers; Manage stakeholders and their engagement; and Collect and document lessons learned and implement approved process improvement activities. The project manager, along with the project management team, directs the performance of the planned project activities and manages the various technical and organizational interfaces that exist within the project. The project manager should also manage any unplanned activities and determine the appropriate course of action. Inputs: Project Management Plan Approved change requests Enterprise environmental factors Organization Process Assets Tools and Techniques: Expert judgment Project Management information system Meeting e.g. Information exchange, brainstorming or decision making. Strategy Solutions Structures Page 43

45 Outputs: Deliverables Work performance information Change requests Project management plan updates Project document updates Direct and Manage Project Execution also requires review of the impact of all project changes and the implementation of approved changes: Corrective action An intentional activity that realigns the performance of the Project work with the project management plan. Preventive action An intentional activity that ensures the future performance of the Project work is aligned with the project management plan, and/or Defect repair An intentional activity to modify a nonconforming product or Product component. MONITOR AND CONTROL PROJECT WORK This is the process of tracking, reviewing and reporting the progress of project work to meet the performance objectives defined in the project plan. An effective control system generates information that can improve the productivity of men and materials. Continuous monitoring gives the project management team insight into the health of the project and identifies any areas that may require special attention. Control includes determining corrective or preventive action or replanning and following up on action plans to determine whether the actions taken resolved the performance issue. The Monitor and Control Project Work process is concerned with: Comparing actual project performance against the project management plan; Assessing performance to determine whether any corrective or preventive actions are indicated, and then recommending those actions as necessary; Identifying new risks and analyzing, tracking, and monitoring existing project risks to make sure the risks are identified, their status is reported, and that appropriate risk response plans are being executed; Maintaining an accurate, timely information base concerning the project s product(s) and their associated documentation through project completion; Providing information to support status reporting, progress measurement, and forecasting; Providing forecasts to update current cost and current schedule information; Monitoring implementation of approved changes as they occur; and Providing appropriate reporting on project progress and status to program management when the project is part of an overall program. Strategy Solutions Structures Page 44

46 Inputs: Project management plan Performance reports Enterprise environmental factors Organizational process assets Schedule forecast Cost forecast Validated changes Tools and Techniques: Expert judgment Meetings Analytical Techniques: Analytical techniques are applied in project management to forecast potential outcomes based on possible variations of project or environmental variables and their relationships with other variables. Examples of analytical techniques used in projects are: o Regression analysis, o Grouping methods, o Causal analysis, o Root cause analysis, o Forecasting methods (e.g., time series, scenario building, simulation, etc.), o Failure mode and effect analysis (FMEA), o Fault tree analysis (FTA), o Reserve analysis, o Trend analysis, o Earned value management, o Variance analysis, and Project Management Information System. Outputs: Change requests Work performance reports Project Management plan updates Project document updates Other Terms Preventive Actions They are taken to deal with anticipated or possible deviation from the performance baselines. Corrective Actions Actions taken to bring expected future performance in line with the project management plan. Strategy Solutions Structures Page 45

47 Defect Repair This is another word for rework and is necessary when a component of the project does not meet its specifications. PERFORM INTEGRATED CHANGE CONTROL This is the process of reviewing all changes requests, approving change requests and managing changes to the deliverables, organizational process assets, project documents and the project management plan. This process is conducted throughout the life cycle of the project (inception to completion) Every documented change request must be either approved or rejected by some authority within the project management team or an external organization. On many projects, the project manager is given authority to approve certain types of change requests as defined in the project s roles and responsibilities documentation. Whenever required, perform Integrated change control process includes a change control board responsible for approving or rejecting change requests. Configuration control is focused on the specification of both the deliverables and the Processes, while change control is focused on identifying, documenting, and approving or rejecting changes to the project documents, deliverables, or baselines. Some of the configuration management activities included in the Perform integrated Change Control process are as follows: Configuration identification: Provide the basis for which the product configuration is defined and verified, products and documents are labeled, changes are managed, and accountability is maintained. Configuration status accounting: Information is recorded and reported as to when appropriate data about the configuration item should be provided. This information includes a listing of approved configuration identification, status of proposed changes to the configuration, and the implementation status of approved changes. Configuration verification and audit: Configuration verification and configuration audits ensure the composition of a project s configuration items is correct and that corresponding changes are registered, assessed, approved, tracked, and correctly implemented. This ensures the functional requirements defined in the configuration documentation have been met. Inputs: Project Management plan Work performance information Change requests Enterprise environmental factors Organizational process assets Strategy Solutions Structures Page 46

48 Tools and Techniques: Expert judgment Change control tools Meeting. Outputs: Approved change request Project management plan updates Project document updates Change log Other Terms Change Control Board A group of people, usually involving the sponsor, that approve or reject changes. It is formed since the project manager alone may not have the knowledge or expertise to analyze a change request. The board may include the project manager, sponsors, subject matter experts, others Change Request Any formal request made by stakeholders to change parts of the projects. Project Management Information system (PMIS) This is automated tools (software) that can be used to help manage a project. It is also used to help submit and track changes, monitor and control project activities and other efforts from project initiating to project closing. CLOSE PROJECT OR PHASE This is the process of finalizing all activities across the entire project management process group to formally complete the project or phase. Closing a project requires both contractual and administrative activities. The key benefit of this process is that it provides lessons learned, the formal ending of project work, and the release of organization resources to pursue new endeavors. When closing the project, the project manager will review all prior information from previous phase closures to ensure that all project work is complete and that the project has met its objectives. Inputs: Project Management Plan Accepted Deliverables Organization process Assets Strategy Solutions Structures Page 47

49 Tools and Techniques: Expert judgment Analytical techniques Meetings Outputs: Final Product, Service, or result transition Organization Process Assets Updates Strategy Solutions Structures Page 48

50 CHAPTER 5 PROJECT SCOPE MANAGEMENT Project Scope Management includes the processes required to ensure that the project includes all the work required, and only the work required, to complete the project successfully. Managing the project scope is primarily concerned with defining and controlling what is and is not included in the project. Processes involved in Project Scope Management are: Plan scope Management Collect Requirements Define Scope Create WBS Verify Scope Control Scope Summarily, Scope Management means: Constantly checking to 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 what is not included in the project. Preventing extra work or gold plating. In the project context the term scope can refer to: Product Scope: The features and functions that characterize a product, service or result i.e. what do they want you to do? Project scope: The work you need to do to deliver the product of the project. PLAN SCOPE MANAGEMENT Plan Scope Management is the process of creating a scope management plan that documents how the project scope will be defined, validated, and controlled. The key benefit of this process is that it provides guidance and direction on how scope will be managed throughout the project. Inputs: Project Management Plan. Project Charter. Enterprise Environmental Factors Organization Process assets. Strategy Solutions Structures Page 49

51 Tools and Techniques: Expert Judgment Meetings Outputs Scope Management Plan: The scope management plan is a component of the project or program management plan that describes how the scope will be defined, developed, monitored, controlled, and verified. The scope management plan is a major input into the Develop Project Management Plan process, and the other scope management processes. The components of a scope management plan include: Process for preparing a detailed project scope statement Process that enables the creation of the WBS from the detailed project scope statement; Process that establishes how the WBS will be maintained and approved; Process that specifies how formal acceptance of the completed project deliverables will be obtained; and Process to control how requests for changes to the detailed project scope statement will be processed. This process is directly linked to the Perform Integrated Change Control process. The scope management plan can be formal or informal, broadly framed or highly detailed, based on the needs of the project. Requirements Management Plan: The requirements management plan is a component of the project management plan that describes how requirements will be analyzed, documented, and managed. Components of the requirements management plan can include, but are not limited to: How requirements activities will be planned, tracked, and reported; Configuration management activities such as: how changes to the product will be initiated, how impacts will be analyzed, how they will be traced, tracked, and reported, as well as the authorization levels required to approve these changes; Requirements prioritization process; Product metrics that will be used and the rationale for using them; and Traceability structure to reflect which requirement attributes will be captured on the traceability matrix. Strategy Solutions Structures Page 50

52 COLLECT REQUIREMENTS This is the process of defining and documenting stakeholder s needs and expectations to meet the project objectives. These requirements are recorded in enough detail before work begins. Collecting requirements is defining and managing customer expectations. The development of requirements begins with analysis of the information contained in the project charter and stakeholder register. Inputs: Project Charter Stakeholder register Used to identify stakeholders that can provide information on project and product requirements Requirement Management Plan Scope Management Plan Stakeholder Management Plan Tools and Techniques: Interviews A formal or informal approach to discover information from stakeholders by talking to them directly Focus groups Are the pre-qualified stakeholders and subject matter experts brought together to learn about their expectations and attitudes about the proposed project. Facilitated Workshops Are focused sessions which brings key cross-functional stakeholders together to define product requirements. Group creativity techniques Such as brainstorming, Nominal group technique, the Delphi technique, Idea mapping and affinity group Benchmarking Benchmarking involves comparing actual or planned practices, such as processes and operations, to those of comparable organizations to identify best practices, generate ideas for improvement, and provide a basis for measuring performance. The organizations compared during benchmarking can be internal or external. Document Analysis Document analysis is used to elicit requirements by analyzing existing documentation and identifying information relevant to the requirements. Examples of documents that may be analyzed include, but are not limited to: business plans, marketing literature, agreements, requests for proposal, current process flows, and logical data models. Strategy Solutions Structures Page 51

53 Context diagrams The context diagram is an example of a scope model. Context diagrams show input business system, the actor(s) providing the input, the outputs from the business system, and the actor(s) receiving the output. Group decision making technique Questionnaires and surveys Observations Prototypes Outputs: Requirements Documentation: describes how individual requirements meet the business need for the project Requirements Traceability Matrix: is a table that links requirement to their origin and traces them throughout the project life cycle. DEFINE SCOPE This is the process of finding out what your stakeholders really need and planning the work to meet these needs. This detailed description will help prevent unnecessary changes and avoid scope creep. It is most critical to project success, getting it wrong at this stage could lead to rework later. The result, or output, is the project scope statement which is used to manage and measure project performance. Inputs: Project Charter Scope Management Plan Requirements documentation Organization process assets Tools and Techniques: Expert Judgment Product analysis Analyzing the objectives stated by the customer or sponsor and turning them into tangible requirements Strategy Solutions Structures Page 52

54 Outputs: Alternative Generation Alternatives generation is a technique used to develop as many potential options as possible in order to identify different approaches to execute and perform the work of the project. A variety of general management techniques can be used, such as brainstorming, lateral thinking, analysis of alternatives, etc. Facilitated workshop Project scope statement Describes in detail, the project deliverables and the work required to create those deliverables. The project scope statement also provides a common understanding of the project scope among project stakeholders. The details of project scope statements include but not limited to 1. Product Scope description 2. Acceptance criteria 3. Deliverable 4. Project exclusion 5.Constraints and 6. Assumptions. Although the project charter and the project scope statement are sometimes perceived as containing a certain degree of redundancy, they are different in the level of detail contained in each. The project charter contains high-level information, while the project scope statement contains a detailed description of the scope elements. Elements of the Project Charter and Project Scope Statement Project document updates Strategy Solutions Structures Page 53

55 OTHER TERMS Project scope: The work you need to do to deliver the product of the project. Product scope: The features and functions that characterize a product, service or result i.e. what do they want you to do? Scope creep: Uncontrolled changes to the scope statement that causes a project team to do extra work CREATE WBS This is the process of subdividing project deliverables and project work into smaller, more manageable components. The Work Breakdown Structure (WBS) is the big picture of the project deliverables. The work breakdown structure (WBS) is a deliverable-oriented hierarchical decomposition of the work to be executed by the project team to accomplish the project objectives and create the required deliverables, with each descending level of WBS representing an increasingly detailed definition of the project work. The WBS organizes and defines the total scope of the project, and represents the work specified in the current approved project scope statement. Inputs: Project scope Statement Requirements documentation Organizational process assets Enterprise Environmental factor Scope Management Plan. Tools and Techniques: Decomposition The subdivision of project deliverables into smaller, more manageable components until the work and deliverables are defined to the work package level. Expert Judgudgement. Outputs: Scope baseline- approved version of: WBS WBS Dictionary- A document generated by the create WBS process that supports WBS. The WBS dictionary rovides more detailed descriptions of the components in the WBS, including work packages and control accounts Project Scope statement Project document updates Strategy Solutions Structures Page 54

56 Work Breakdown Structure VALIDATE SCOPE This is the process of confirming that the work has satisfactorily met the requirements as documented in the project scope statement. Validate Scope includes reviewing deliverables with the customer or sponsor to ensure that they are completed satisfactorily and obtaining formal acceptance of deliverables by the customer or sponsor Inputs: Project management plan Requirements documentation Requirements traceability Verified deliverables Deliverables that have been completed and checked for correctness by the perform quality control process. Tools and Techniques: Inspection Includes activities such as measuring, examining, and verifying to determine whether work deliverables meet requirements and product acceptance criteria. Group decision making techniques. Strategy Solutions Structures Page 55

57 Outputs: Accepted deliverables Change Requests Project document updates. Work Performance Information Difference between validate scope and quality control The primary focus of scope verification is customer acceptance of the deliverables while quality control involves meeting quality requirements specified for the deliverables and the analysis of the correctness of the work. CONTROL SCOPE Control Scope is the process of monitoring the status of the project and product scope and managing changes to the scope baseline. The key benefit of this process is that it allows the scope baseline to be maintained throughout the project. To control scope, one first needs to have a clear definition of what is the scope of the project; the project scope statement, WBS and WBS dictionary give this. One then has to measure scope performance against the scope baseline. Controlling the project scope ensures all requested changes and recommended corrective or preventive actions are processed through the Perform Integrated Change Control process. Inputs: Project Management Plan Work Performance Information Information about project progress, such as which deliverables have started, their progress and which deliverables have finished. Requirements documentation Requirements Traceability matrix Organizational Process Assets Tools and Techniques: Variance Analysis Determining the magnitude of variation from the original baseline, this include determining the cause and degree of variance relative to the scope baseline and deciding whether corrective or preventive action is required. Strategy Solutions Structures Page 56

58 Outputs: Work Performance Measurements Planned vs. technical performance Organizational Process Assets Updates such as causes of variances, corrective action chosen and the reasons, and other types of lessons learned from project scope control. Change requests Project Management Plan Updates e.g. scope baseline updates Project documents updates Strategy Solutions Structures Page 57

59 CHAPTER 6 PROJECT TIME MANAGEMENT This management process describes the methodology for breaking down project work into activities and their timely management. Projects are best organized by tasks, best managed by work packages and best planned and monitored by activities. Project Time Management includes the processes required to manage the timely completion of the project. Processes involved in Project Time Management are: Plan Schedule Management Define Activities Sequence Activities Estimate Activity Resources Estimate Activity Durations Develop Schedule Control Schedule PLAN SCHEDULE MANAGEMENT Plan Schedule Management is the process of establishing the policies, procedures, and documentation for planning, developing, managing, executing, and controlling the project schedule. The key benefit of this process is that it provides guidance and direction on how the project schedule will be managed throughout the project. Inputs: Project Management Plan Project Charter Enterprise Environmental factors Organizational Process Assets Tools and Techniques: Expert Judgment Analytical Techniques Meetings Outputs Schedule Management Plan Strategy Solutions Structures Page 58

60 DEFINE ACTIVITIES Define Activities is the process of identifying and documenting the specific actions to be performed to produce the project deliverables. Whoever is in charge must be able to visualize and list out the activities necessary for the execution of the project. This process involves taking the work packages created in the WBS and breaking them down further (decomposing) in order to reach the activity level; a level small enough to estimate, schedule, monitor and manage. When completed, activity definition will result in an activity list and the details of the activities (activity attributes) being completed. Activity definition can lead to a discovery that the WBS or some other part of the project management plan under development needs to be changed. This will result in requested changes to the developing project management plan. Inputs: Schedule Management Plan Scope Baseline Enterprise Environmental Factors Organizational Process Assets Tools and Techniques: Decomposition Rolling wave planning Templates Expert Judgment A form of progressive elaboration planning where the work to be accomplished in the near term is planned in detail and the future work is planned at a higher level of the WBS. Outputs: Activity List Activity attributes Milestone List A significant point or event in the project. Strategy Solutions Structures Page 59

61 SEQUENCE ACTIVITIES This is the process of identifying and documenting relationships among project activities. It involves taking the activities and logically sequencing them into how the work will be performed. The result is a network diagram. The key benefit of this process is that it defines the logical sequence of work to obtain the greatest efficiency given all project constraints Inputs: Schedule Management Plan Activity List Activity Attributes Milestone List Project Scope Statement Enterprise Environmental Processes Organizational Process Assets Tool and Techniques: Precedence Diagramming Method (PDM) A Critical Path Methodology (CPM) for constructing a project schedule network where nodes (boxes) are used to represent activities and arrows to show activity dependencies. This technique is also called activity-on-node (AON PDM includes four types of dependencies or logical relationships: Finish to Start(FS): An activity must finish before the successor activity can start(most common) Start to Start(SS): An activity must start before the successor activity can start Start to Finish(SF): An activity must finish before the successor activity can finish Finish to Finish(FF):An activity must finish before the successor activity can finish Dependency Determination: there are three types of dependencies used to define the sequence among the activities: Mandatory Dependencies (Hard Logic): are those that are contractually required or inherent in the nature of the work. (E.g. foundation must be built before superstructure.) Discretionary Dependencies (Preferred Logic or Preferential Logic, or Soft Logic): the way the project team prefer to set dependencies. External Dependencies: Based on the needs or desires of a party outside the project (e.g. government or suppliers) Internal dependencies. Internal dependencies involve a precedence relationship between project activities and are generally inside the project team s control. For example, if the team cannot test a machine until they assemble it; this is an internal mandatory dependency. Applying Leads and Lags Strategy Solutions Structures Page 60

62 Leads: allows acceleration of the successor activity (activity can begin before its predecessor is totally complete). Lags: inserted waiting time between activities. Schedule Network Templates Outputs: Project Document Updates Examples includes: activity list, activity attributes, risk register etc. Project Schedule Network Diagram Schematic displays of the project s schedules activities and the logical relationships among them. It is also referred to as dependencies. Advantages of Network Diagrams Show interdependencies of all activities Show workflow which helps the team to know the sequence of activities. Aids in effectively planning, organizing and controlling the project Help justify time estimate for the project Show project progress if used for schedule control and reporting. ESTIMATE ACTIVITY RESOURCES This process deals with the estimation of the people, materials or supplies and equipment needed for the project activities. The key benefit of this process is that it identifies the type, quantity, and characteristics of resources required to complete the activity which allows more accurate cost and duration estimates Inputs: Schedule Management Plan Activity List Activity attributes Cost Estimate Resource Calendars Specify when and how long identified project resources will be available during the project. Enterprise Environmental Factors Risk Register Organizational Process Assets Tools and Techniques: Expert Judgment Alternative Analysis Published Estimating Data Published Estimating Data Bottom-Up Estimating Project Management Software Strategy Solutions Structures Page 61

63 Outputs: Activity Resource Requirements Resource Breakdown Structure Hierarchical structure of the identified resource category and resource type. Project Document Updates ESTIMATE ACTIVITY DURATIONS This is the time taken to accomplish an activity. It involves the approximation of the number of work periods needed to complete individual project activities with estimated resources. The key benefit of this process is that it provides the amount of time each activity will take to complete, which is a major input into the Develop Schedule process. Inputs: Schedule Management Plan Activity List Activity Attributes Activity Resources Requirements Resource Calendars Resource Breakdown Structure Project Scope Statement Enterprise Environmental Factors Organizational Process Assets Tools and Techniques: Expert Judgment Analogous Estimating (Top-down) - Uses historical information and expert judgment e.g. the last five projects similar to this one each took five months, so this one should also. Parametric Estimating Uses a statistical relationship between historical data and other variables to calculate an estimate for activity parameters, such as cost, budget, and duration. Three-Point Estimates The accuracy of single-point activity duration estimates may be improved by considering estimation uncertainty and risk. This concept originated with the program evaluation and review technique (PERT). PERT uses three estimates to define an approximate range for an activity s duration. Uses a weighted average of optimistic(t 0), pessimistic (t p) and most likely (t m) estimates for each activity otherwise called PERT (Program Evaluation and Review Technique) which calculates Expected(t E) activity duration using the formula: t E = to + 4t M + T p 6 Strategy Solutions Structures Page 62

64 Group Decision Making Technique: Team-based approaches, such as brainstorming, the Delphi or nominal group techniques, are useful for engaging team members to improve estimate accuracy and commitment to the emerging estimates. By involving a structured group of people who are close to the technical execution of work in the estimation process, additional information is gained and more accurate Reserve Analysis Estimating to accommodate the time and cost risk in a project through the use of reserve analysis. Duration estimates may include contingency reserves, sometimes referred to as time reserves or buffers, into the project schedule to account for schedule uncertainty. Contingency reserves are the estimated duration within the schedule baseline, which is allocated for identified risks that are accepted and for which mitigation responses are developed. Outputs: Activity Duration Estimates Project Document Updates DEVELOP SCHEDULE Scheduling project work means having the plan on a calendar basis. A time schedule outlines the project work program, it is the time table of work. This process analyzes activity sequences, durations, resource requirements and schedule constraints to create the project schedule. Inputs: Schedule Management Plan Activity List Activity Attributes Project Schedule Network Diagrams Activity Resource Requirements Resource Calendars Activity Duration Estimates Project Scope statement Enterprise Environmental Factors Organizational Process Assets Risk Register Resource Breakdown Structure Project Staff Assignments Strategy Solutions Structures Page 63

65 Tools and Techniques: Schedule Network Analysis This is technique that generates the project schedule. It employs various analytical techniques such as critical path method, PERT, critical chain method, what-if analysis, resource leveling Critical Path Method Determines the longest path in the network diagram and earliest and latest an activity can start and earliest and latest it can be completed. 5 6 START 3 ACTIVITY A ACTIVITY B ACTIVITY D END 2 4 ACTIVITY C ACTIVITY E Tools and Techniques continued Float(Slack) Total Float: The amount of time an activity can be delayed without delaying the project end date. Free Float: The amount of time an activity can be delayed without delaying the early start 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 stakeholder Strategy Solutions Structures Page 64

66 ES EF FORWARD PASS FLOAT= LS-ES or LF-EF FLOAT BACKWARD PASS LS LF Activities on the critical path has zero float, however it is possible to have negative float on critical path activities. Critical Chain Method The critical chain method (CCM) is a schedule method that allows the project team to place buffers on any project schedule path to account for limited resources and project uncertainties. Resource Leveling They can be used when shared or critically required resources are only available at certain times and in limited quantities, or to keep resource usage at a constant level Resource Smoothing. A technique that adjusts the activities of a schedule model such that the requirements for resources on the project do not exceed certain predefined resource limits What-if Scenario Analysis An analysis of the question What if a particular thing changed on the project, would that produce a longer or shorter schedule? Applying leads and Lags Scheduling Tool Strategy Solutions Structures Page 65

67 Schedule Compression Shortens the project schedule without changing the project scope, to meet schedule constraints, imposed dates or other schedule objective. Schedule Compression Techniques includes: Crashing: cost and schedule tradeoffs to determine how to obtain the greatest amount of schedule compression for the least incremental cost. This almost always leads to incremental costs. Fast Tracking: Doing critical path activities in parallel that were originally planned in series. Usually results in reworks, increases risks and require more attentions to communications Outputs: Project Schedule Milestone Charts Bar Charts Network Diagram Schedule Baseline Schedule Data Project Calendars Project Management Plan Updates Project Document Updates CONTROL SCHEDULE This is the process of monitoring the status of the project work to update project progress and time schedules and reviewing progress and manage changes to the project schedule baseline to achieve the plan Schedule control deals with: Determining the current status of the project Schedule Influencing the factors that create schedule changes Determining that the project schedule has changed, and Managing the actual changes as they occur. Inputs: Project Management Plan Project Schedule Work Performance Information Organizational process assets Strategy Solutions Structures Page 66

68 Tools and Techniques: Performance Reviews Variance Analysis Project Management Software Resource Optimization Techniques What-if Scenario Analysis Or Modeling Technique Adjusting Leads and lags Schedule Compression Scheduling Tool Outputs: Work Performance Measurements Organizational Process Assets Updates Change Requests Project Management Plan Updates Project Document Updates Organization Process Assets Update Schedule Forecast Strategy Solutions Structures Page 67

69 CHAPTER 7 PROJECT COST MANAGEMENT Project cost management describes the cost classification and nature of costs. It involves estimating, budgeting and controlling. Cost management involves planning judgment, costing techniques, accounting discipline and cost control measures with the ultimate goal of achieving project cost objectives. Processes of Project Cost Management are: Plan Cost Management Estimate Costs Determine Budget Control Cost Terms in Cost Management Life Cycle costing: This concept looks at the cost of the whole life of the product, not just the cost of the project. Value Analysis: This is also called value engineering i.e. finding a less costly way to do the same work. Types of Cost Direct cost: Costs that can be correlated to a specific activity attributable to the work e.g. costs of materials, labor etc. Indirect cost: Costs which can be attributable to a given project but cannot be identified with the performance of a specific activity or a work package.e.g. accommodation, project office costs etc. Fixed costs: Cost that remains constant irrespective of the level of production Variable costs: cost that change with the amount of production. PLAN COST MANAGEMENT Plan Cost Management is the process that establishes the policies, procedures, and documentation for planning, managing, expending, and controlling project costs. The key benefit of this process is that it provides guidance and direction on how the project costs will be managed throughout the project. The work involved in performing the processes of Project Cost Management is preceded by a planning effort of the project management team which produces Cost Management Plan. The plan sets out the format and establishes the criteria for planning, structuring, estimating, budgeting, and controlling project costs. Strategy Solutions Structures Page 68

70 The cost management plan will help make costing easier and faster by establishing the following Reporting formats Process descriptions Level of accuracy Units of measure Organizational procedures link Rules of performance measurement Inputs: Project Management Plan Project Charter Enterprise Environmental Factors Organizational Processes Tools and Techniques: Expert judgement Analytical techniques Meetings Outputs Cost Management Plan The cost management plan is a component of the project management plan and describes how the project costs will be planned, structured, and controlled. The cost management processes and their associated tools and techniques are documented in the cost management plan. For example, the cost management plan can establish the following: Units of measure. Each unit used in measurements (such as staff hours, staff days, weeks for time measures; or meters, liters, tons, kilometers, or cubic yards for quantity measures; or lump sum in currency form) is defined for each of the resources. Level of precision. The degree to which activity cost estimates will be rounded up or down (e.g., US$ to US$100, or US$ to US$1,000), based on the scope of the activities and magnitude of the project. Level of accuracy. The acceptable range (e.g., ±10%) used in determining realistic activity cost estimates is specified, and may include an amount for contingencies; Organizational procedures links. The work breakdown structure (WBS) provides the framework for the cost management plan, allowing for consistency with the estimates, budgets, and control of costs. The WBS component used for the project cost accounting is called the control account. Each control account is assigned a unique code or account number(s) that links directly to the performing organization s accounting system. Control thresholds. Variance thresholds for monitoring cost performance may be specified to indicate an agreed-upon amount of variation to be allowed before some action needs to be taken. Thresholds are typically expressed as percentage deviations from the baseline plan. Rules of performance measurement. Earned value management (EVM) rules of performance measurement are set. Strategy Solutions Structures Page 69

71 ESTIMATE COST This is the process of developing an approximation of the monetary resources needed for the project. Costs are estimated for all resources that will be charged to the project. This includes, but Is not limited to, labor, materials, equipment, services, and facilities, as well as special categories such as an inflation allowance, cost of financing, or contingency costs. A cost estimate is a quantitative assessment of the likely costs for resources required to complete the activity. Cost estimates may be presented at the activity level or in summary form. Inputs: Cost Management Plan Scope Baseline Project scope management. WBS Work breakdown dictionary Project Schedule Human resource Management Plan Risk Register Enterprise Environmental Factors Organizational Process Assets Tools and Techniques: Expert Judgment Analogous Estimating Parametric Estimating Bottom-up Estimating Three-Point Estimates Reserve Analysis: e.g. contingency reserve Cost of Quality The work added to the project to accommodate quality planning should be added to project estimate. Project Management Estimating Software e.g. computerized spreadsheets, simulation, and statistical tools. Vendor Bid Analysis Analysis of what the project should cost based on the responsive bids from qualified vendors. Outputs: Activity Cost Estimates Basis of Estimates Project Document Updates Strategy Solutions Structures Page 70

72 Accuracy of estimates Rough Order of Magnitude estimate (ROM): made during the initiating process, and is in the range of -50% to +100% from actual Budget Estimate: This type of estimate is usually made during project planning and is in the range of -10% to +25% from actual Definitive: As project progresses, the estimate becomes more refined. Some project managers use the range +/- 10% from actual while others use -5% to +10 percent from actual. DETERMINE BUDGET Determine Budget is the process of aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline. The key benefit of this process is that it determines the cost baseline against which project performance can be monitored and controlled. Inputs: 1) Activity Cost Estimates 2) Resource calendars 3) Basis of Estimates 4) Contracts 5) Project Schedule 6) Resource Calendars 7) Risk Registers 8) Agreement 9) Organizational process assets Tools and Techniques: Cost aggregation Cost estimates are aggregated by work packages in accordance with WBS. The work estimates are then aggregated for the higher component levels of the WBS (such as control account) and ultimately for the entire budget. Reserve Analysis Contingency reserve-risks remaining after risk response planning Management Reserve- Any extra amount of funds to be set aside to cover unforeseen risks or changes to the project. Expert Judgment Historical relationships Funding Limit Reconciliation The expenditure of funds should be reconciled with any funding limits on the commitment of fund for the project. Strategy Solutions Structures Page 71

73 Outputs: Cost Performance Baseline: time phased budget at Completion used to measure, monitor, and control overall cost performance on the project. Project Funding requirements e.g. total funding requirement and periodic funding requirements. Project Document Updates. CONTROL COSTS Without budgetary control, even the best formulated budget will serve no purpose. Controlling costs involves comparing the actual costs with budgeted costs to bring out the extent of variations while updating stakeholders of all approved changes and associated costs. Project Cost Control includes: Influencing the factors that create changes to the authorized cost baseline Ensuring that all change requests are acted on in a timely manner. Managing the actual changes when and as they occur. Ensuring that cost expenditures do not exceed the authorized funding. Monitoring cost performance to isolate and understand variances from approved cost baseline Monitoring work performance against funds expended. Acting to bring expected cost overruns within acceptable limits. Informing appropriate stakeholders of all approved changes and associated cost. Inputs: Project Management Plan Project Funding requirements Work performance information Organizational Process Assets Tools and Techniques: Earn Value Management (EVM) The earned value technique is a method to measure project performance against the project baseline. Results from an earned value analysis indicate potential deviation of the project from cost and schedule baselines. Forecasting Using the value of EAC which may differ from BAC based on project performance. To- complete Performance Index. Performance reviews Variance Analysis Project Management Software Strategy Solutions Structures Page 72

74 Outputs: Work Performance Measurements The calculated CV, SV, CPI, SPI values for WBS components. Budget Forecasts Calculated value of EAC communicated to stakeholders Organizational Process assets updates e.g. causes of variances, corrective action chosen and why. Change Request. Project Management Plan updates Project Document Updates Accounting Standards Present Value: the value today of future cash flows Net Present Value (NPV): present value of total benefits (income or revenue) less the costs over many time periods. Internal rate of Return (IRR): the rate at which project revenues and project costs are equal. Payback Period: the number of time periods it takes to recover your investment in the project before accumulating profit. Benefit Cost Ratio: the ratio of benefits of project to its costs. Opportunity Cost: the opportunity given up by selecting one project over another. Sunk cost: expended costs Law of Diminish Returns: the more input you use the less output you get. Working Capital: current assets less current liabilities Depreciation: Large assets purchased by a company lose value over time. Project selection Method Present Value: Project A with PV of N250,000 is better than project B with PV of N200,000. Net Present Value: Project A with NPV of N250,000 is better than project B with NPV of N200,000. Internal Rate of Return: Project A with IRR of 18% is better than B with IRR of 12% Payback Period: Project A with PBP of 2 years is better than project B with PBP of 5 years. Benefit Cost Ratio: Project A with BCR of 2.5 is better than project B with BCR of 1.8 Strategy Solutions Structures Page 73

75 Earned Value Terms Acronym Term Interpretation PV Planned value What is the estimated value of the worked planned to be done? EV Earned Value What is the estimated value of the work actually accomplished? AC Actual Cost What is the actual cost incurred for the work accomplished? BAC Budget at Completion How much work did we budget for the Total Project effort? EAC Estimate at Completion What do we currently expect the total project to cost? ETC Estimate to Complete From this point on, how much more do we expect it to cost to finish the project? VAC Variance at Completion How much over or under budget do we expect to be at the end of the project? TCPI To complete performance Index. The efficiency that must be maintained in order to complete on plan or The efficiency that must be maintained in order to complete the current EAC Strategy Solutions Structures Page 74

76 Earned Value Terms Name Formula Interpretation Cost Variance (CV) EV-AC -ve is over budget, +ve is under budget Schedule (SV) Variance EV-PV -ve is behind schedule, +ve is ahead Schedule Performance Index (SPI) EV/PV We are progressing at % of the rate originally planned Cost Performance Index (CPI) EV/AC We are getting N worth of work out of N 1 spent. Estimate at Completion (EAC) BAC/CPI As of now, how much do we expect the total project to cost? Estimate Complete (ETC) to EAC - AC How much more will the project cost? Variance at Completion (VAC) BAC - EAC How much over or under budget will we be at the end of the project? To Complete Performance Index (TCPI) (BAC-EV)/(BAC-AC) Or (BAC-EV)/(EAC-AC) Greater than 1.0= Harder to complete Exactly 1= Same to complete Less than 1 =Easier to complete Strategy Solutions Structures Page 75

77 CHAPTER 8 PROJECT QUALITY MANAGEMENT Project Quality Management addresses the management of the Project and the deliverables of the project. It applies to all projects, regardless of the nature of their deliverables. Quality measures and techniques are specific to the type of deliverables being produced by the project. For example, the project quality management of software deliverables may use different Approaches and measures from those used when building a nuclear power plant. In either case, failure to meet the quality requirements can have serious, negative consequences for any or all of the project s stakeholders. For example: Meeting customer requirements by overworking the project team may result in decreased profits and increased project risks, employee attrition, errors, or rework. Meeting project schedule objectives by rushing planned quality inspections may in undetected errors, decreased profits, and increased post-implementation risks. Quality and grade are not the same concepts. Quality as a delivered performance or result is the degree to which a set of inherent characteristics fulfil requirements. (ISO 9000) while, Grade as a design intent is a category assigned to deliverables having the same functional use but different technical characteristics. Processes of Project Quality Management are: Plan Quality Management Perform Quality Assurance Perform Quality Control Quality Management Process Interaction Strategy Solutions Structures Page 76

78 This knowledge area dwells on the importance of: Customer Satisfaction Prevention over inspection Continuous improvement Management Responsibility PLAN QUALITY This plan documents the quality requirements identified for the project and how to attain it. Inputs: Project Management Plan Requirement Documentation Stakeholder Register Cost performance baseline Schedule baseline Risk register Enterprise environmental factors Organizational process assets Tools and Techniques: Cost-benefit analysis Considering the benefits versus the costs of meeting quality requirements. Benchmarking Looking at past projects to determine ideas for improvement on the current project and to provide a basis to use in measurement of quality performance. Cost of Quality Cost of quality includes all costs incurred over the life of the product by investment in preventing nonconformance to requirements, appraising the product or service for conformance to requirements, and failing to meet requirements (rework). Design of Experiment (DOE) The use of experimentation to statistically determine what variables will improve quality. Control Charts: Are used to determine whether or not a process is stable or has predictable performance. Statistical Sampling Involves choosing part of a population of interest for inspection. Flowcharting A flowchart is a graphical representation of a process showing the relationships among Additional Strategy Solutions Structures Page 77

79 Additional Quality Planning and Metrics o Brainstorming. This technique is used to generate ideas. o Force field analysis. These are diagrams of the forces for and against change. o Nominal group technique. This technique is used to allow ideas to be brainstorm in small groups and then reviewed by a larger group. o Quality management and control tools. These tools are used to link and sequence the activities identified Meetings Project teams may hold planning meetings to develop the quality management plan. Outputs: Quality Management Plan The quality management Plan describes how the project management team will implement the performing organization s quality policy. Quality Metrics An operational definition that describes, in very specific terms, a project or product attribute and how the quality control process will measure it. Quality Checklists Is a structured tool used to verify that a set of required steps has been performed. Process Improvement plan Details the steps for analyzing processes to identify activities which enhance their value PERFORM QUALITY ASSURANCE This is the process of auditing the work as it is being carried out to ensure that appropriate quality standards are met. Inputs: Project Management Plan Process Improvement plan Quality Metrics Work Performance Information Technical performance measures, deliverables status, schedule progress and costs incurred. Quality Control Measurements The results of quality control activities used to analyze and evaluate the quality standards and processes of the performing organization Strategy Solutions Structures Page 78

80 Tools and Techniques: Plan Quality and Perform Quality Control Tools and Techniques. Quality Audits A structured and independent review to determine whether project activities comply with organizational and project policies, processes and procedures. Process Analysis Follows steps outlines in the process improvement plan to identify needed improvements. Process analysis includes root cause analysis-- a specific technique to identify a problem, discover the underlying causes that lead to it, and develop preventive actions. Outputs: Organizational Process Assets Updates Change Requests Project Management Plan Updates(scope management plan update, cost management plan update) Project Document Updates(quality audit report, training plans) Terms in Quality Management Quality: is defined as the degree to which the project fulfills requirements. Gold Plating: refers to giving the customer extra (e.g. extra functionality or better Performance or higher quality). This practice is not recommended. It is important to meet the stakeholders expectation, and also important not to exceed it. Marginal Analysis: Optimal quality is reached at the point where the incremental revenue from improvement equals the incremental cost to secure it. Cost of quality: refers to the total cost of all efforts related to quality throughout the product life cycle. This includes cost of conformance and cost of non-conformance Standard Deviation: Is a measure of a range. Also sometimes stated as a measure of how far you are from the mean. 3 or 6 Sigma: This is another name for standard deviation and it represents the level of quality that a company has decided to try to achieve. 6 Sigma represents a higher quality standard than sigma 3. Sigma 6 is used to calculate the upper and lower control limits in a control chart. +/-1 sigma=68.26% +/-2 sigma=95.46% +/-3 sigma=99.73% +/-6 sigma= % Strategy Solutions Structures Page 79

81 CONTROL QUALITY This process is performed throughout the work. To check whether project and its processes are in control.i.e. meeting predetermined standards. Should there be any variance; the relevant change is instituted following already agreed change control system. Inputs: Project Management Plan Quality Metrics Quality Checklists Work performance measurements Approved change requests Deliverables Project Documents Organizational process assets Tools and Techniques: Cause and Effect Diagrams Is also called Ishikawa or fishbone diagrams. It illustrates how various factors might be linked to potential problems or effects. Summarily, it can be used: As a creative way to look at causes or potential causes of a problem Helps stimulate thinking, organizes thoughts and generates discussion Can be used to explore the factors that will result in a desired future outcome (as in quality planning) Machine Method Material Major Defect Measurement Personnel Environment Ishikawa or Fishbone Diagram Strategy Solutions Structures Page 80

82 Control Charts Graphically helps to determine if process is within acceptable limit by defining an upper and lower limit. When a process is within acceptable limits it is in control and does not need to be adjusted. Conversely, when a process is outside acceptable limits, the process should be adjusted. Upper Specification Limit Upper Control Limit Median Lower Control Limit Specification Lower Limit Strategy Solutions Structures Page 81

83 Flowchart Shows how a process or system flows from beginning to end and how the elements interrelate. It is used during Perform Quality Control to determine a failing process steps and identify potential process improvement opportunities. Sign Up Fill in personal informat ion Submit the information Go to any Cybercafé Visit hool.ning.com New member? Enter address and Password; click Sign in Access the Network Flowchart is a good tool for defining what steps need to be completed and in what order to achieve a particular goal or output. Histogram This is a vertical bar chart showing how often a particular variable state occurred. Strategy Solutions Structures Page 82

84 Run Chart This shows the history and pattern of variation. It is a control chart that gives you a picture of the process output over time Percentage Of Defect Pareto Chart is a cumulative histogram (which means the data is displayed in the form of bars or columns). It is used to identify where the key problems lie. The higher the bar, the more frequent the problem. The Pareto chart: Helps focus attention on the most critical issues Prioritizes potential causes of the problems Separates the critical few from uncritical many. No of Defects Scatter Diagram Shows the relationship between two variables and track them to see if they are related. If, in the quality of cement used has changed and so has the strength of the bricks, a scatter diagram might be used to see if the two are related Cement Sand Bricks Strategy Solutions Structures Page 83

85 Approved Change requests review All approved change requests should be reviewed to verify that they were implemented as approved. Inspection An inspection is the examination of a work product to determine whether it conforms to documented standards. The results of an inspection generally include measurements and may be conducted at any level. Statistical Sampling Taking a statistically valid sample of a population would be best if studying the entire population would: Take too long Cost too much Be too destructive Outputs: Quality Control Measurements The documented results of quality control activities in the format specified during quality planning. Validated Changes Validated Deliverables Organizational Process Assets updates Change Requests Project Management Plan Updates Project Document Updates Strategy Solutions Structures Page 84

86 CHAPTER 9 PROJECT HUMAN RESOURCE MANAGEMENT This is the strategic and coherent management of the project s most valuable asset the project team, made up of people who collectively contribute to the achievement of objectives of the business. Project Human resource Management includes the processes that organize, manage, and lead the project team. The Project team is comprised of the people with assigned roles and responsibilities for completing the project. The project management team is a subset of the project team and is responsible for the project management and leadership activities such as initiating, planning, executing, monitoring, controlling, and closing the various project phases. This group can also be referred to as the core, executive, or leadership team. Managing and leading the project team includes, but is not limited to: Influencing the project team. The project manager needs to be aware of and influence, when possible, human resource factors that may impact the project. These factors includes team environment, geographical locations of team members, communications among stakeholders, internal and external politics, cultural issues, organizational uniqueness, and others factors that may alter project performance. Professional and ethical behavior. The project management team should be aware of, subscribe to, and ensure that all team members follow professional and ethical behaviour Processes of Human Resource Management are: Plan Human Resource Management Acquire Project Team Develop Project Team Manage Project Team PLAN HUMAN RESOURCE MANAGEMENT Plan Human Resource Management is the process of identifying and documenting project roles, responsibilities, required skills, reporting relationships, and creating a staffing management plan. The key benefit of this process is that it establishes project roles and responsibilities, project organization charts, and the staffing management plan including the timetable for staff acquisition and release. INPUTS: Project Management Plan Activity Resource Requirement Enterprise Environmental Factor Organizational process Assets Strategy Solutions Structures Page 85

87 Tools and Techniques: Organizational charts Position Description Organizational Description Networking Organizational theory Expert Judgment Meetings OUTPUTS: Human Resource Management plan. The human resource management plan includes, but is not limited to, the following: Roles and responsibilities. The following should be addressed when listing the roles and responsibilities needed to complete a project: o Role. The function assumed by or assigned to a person in the project. Examples of project roles are civil engineer, business analyst, and testing coordinator. Role clarity concerning authority, responsibilities, and boundaries should also be documented. o Authority. The right to apply project resources, make decisions, sign approvals, accept deliverables, and influence others to carry out the work of the project. Team members operate best when their individual levels of authority match their individual responsibilities. o Responsibility. The assigned duties and work that a project team member is expected to perform in order to complete the project s activities. o Competency. The skill and capacity required to complete assigned activities within the project constraints. Project organization charts. A project organization chart is a graphic display of project team members and their reporting relationships. It can be formal or informal, highly detailed or broadly framed, based on the needs of the project. Staffing management plan. The staffing management plan is a component of the human resource management plan that describes when and how project team members will be acquired and how long they will be needed. Information in the staffing management plan varies by application area and project size, but items to consider include: O Staff acquisition. A number of questions arise when planning the acquisition of project team members. For example, whether the human resources come from within the organization or from external, contracted sources; whether the team members need to work in a central location or may work from distant locations; costs associated with each level of expertise needed for the project; and level of assistance that the organization s human resource department and functional managers are able to provide to the project management team. o Resource calendars. Calendars that identify the working days and shifts on which each specific resource is available. o Staff release plan. Determining the method and timing of releasing team members benefits both the project and team members. When team members are released from a project, the costs associated with those resources are no longer charged to the project, thus reducing project costs. o o Training needs. If it is expected that the team members to be assigned will not have the required competencies, a training plan can be developed as part of the project. The plan can also include ways to help team members obtain certifications that would support their ability to benefit the project. Strategy Solutions Structures Page 86

88 o o o Recognition and rewards. Clear criteria for rewards and a planned system for their use help promote and reinforce desired behaviors. To be effective, recognition and rewards should be based on activities and performance under a person s control. For example, a team member who is to be rewarded for meeting cost objectives should have an appropriate level of control over decisions that affect expenses. Compliance. The staffing management plan can include strategies for complying with applicable government regulations, union contracts, and other established human resource policies. Safety. Policies and procedures that protect team members from safety hazards can be included in the staffing management plan as well as in the risk register. ACQUIRE PROJECT TEAM This process involves confirming and obtaining the specific human resources needed to accomplish the project activities. The key benefit of this process consists of outlining and guiding the team selection and responsibility assignment to obtain a successful team. It usually involves the following actions: Inputs: Know which resources are pre-assigned Negotiate for the best possible resources Hire new employees Hire resources through the contracting process from outside performing organization i.e. outsource Understand the possibilities and problems with using virtual teams- teams made up of people who never or rarely meet. Human Resources Management Plan Project Management Plan Enterprise Environmental Factors Organization Process Assets Tools and Techniques: Pre-Assignment When project team members are selected in advance they are said to be pre-assigned. Negotiation The project manager may negotiate with functional managers to ensure that project receives competent staff in the required time frame. Acquisition Acquiring needed staff from outside sources. Multircriteria Decision Analysis Selection criteria are often used as a part of acquiring the project team. The selection criteria are a follows: (Availability, cost, experience, ability, knowledge, skills, international factors and team attitude) Virtual Teams This describes a group of people with shared goals, who fulfill their roles with little or no time spent meeting face to face. Strategy Solutions Structures Page 87

89 Multi-Criteria Decision Analysis Selection criteria are often used as a part of acquiring the project team. By use of a multi-criteria decision analysis tool, criteria are developed and used to rate or score potential team members. The criteria are weighted according to the relative importance of the needs within the team. Some examples of selection criteria that can be used to score team members are Availability, Cost, Experience, Ability, Knowledge, Skills, attitude and international factors Outputs: Project Staff Assignments The project is staffed when appropriate people have been assigned through previously described methods. Resource Calendars These documents show the time periods that each project team member can work on the project. Project Management Plan updates e.g. updates to human resources plan. DEVELOP PROJECT TEAM This process involves improving the overall competencies and collaborations among team mates. This improvement will eventually enhance project performance. Teamwork is a critical factor for project success, and developing effective project teams is one of the primary responsibilities of the project manager. The key benefit of this process is that it results in improved teamwork, enhanced people skills and competencies, motivated employees, reduced staff turnover rates, and improved overall project performance Inputs: Project Resource Management Plan Project Staff Assignments Resource Calendars Tools and Techniques: Interpersonal skills Personnel Assessment Tools Personnel assessment tools give the project manager and the project team insight into areas of strength and weakness. These tools help project managers assess the team preferences, aspirations, how they process and organize information, how they tend to make decisions, and how they prefer to interact with people. Various tools are available such as attitudinal survey, assessments specific, structured interview, ability test, and focus group. These tools can provide improved understanding, trust, commitment, and communications among team members and facilitate more productive teams throughout the project. Training All activities designed to enhance the competencies of the project team members Ground Rules Strategy Solutions Structures Page 88

90 Clear expectations regarding acceptable behavior by project team members. Team commitment to ground rules decreases misunderstanding and increases productivity. Team-Building Activities Team-building activities can vary from a 5-minute agenda item in a status review meeting to an offsite, professionally facilitated experience designed to improve interpersonal relationships. The objective of team-building activities is to help individual team members work together effectively. Team-building strategies are particularly valuable when team members operate from remote locations without the benefit of face-to-face contact. Informal communication and activities can help in building trust and establishing good working relationships. One of the models used to describe team development is the Tuckman ladder which includes five stages of development that teams may go through. The stages are: Forming. This phase is where the team meets and learns about the project and their formal roles and responsibilities. Team members tend to be independent and not as open in this phase. Storming. During this phase, the team begins to address the project work, technical decisions, and the project management approach. If team members are not collaborative and open to differing ideas and perspectives, the environment can become counterproductive. Norming. In the norming phase, team members begin to work together and adjust their work habits and behaviors to support the team. The team learns to trust each other. Performing. Teams that reach the performing stage function as a well-organized unit. They are interdependent and work through issues smoothly and effectively. Adjourning. In the adjourning phase, the team completes the work and moves on from the project. This typically occurs when staff is released from the project as deliverables are completed or as part of carrying out the Close Project or Phase process. The duration of a particular stage depends upon team dynamics, team size, and team leadership. Project managers should have a good understanding of team dynamics in order to move their team members through all stages in an effective manner. Co-location This involves placing many or all of the most active project team members in the same physical location to enhance their ability to perform as a team. Recognition and Rewards Improving project work by recognizing and rewarding desired behaviors. Outputs: Team Performance Assessments Team performance assessment is done by the project manager to evaluate and enhance the effectiveness of the team as a whole. It also highlights any difficulties so that they can be addressed. Enterprise Environmental Factors Updates Updates to this may include personnel administration such as updates for employee training records and skill assessments. Strategy Solutions Structures Page 89

91 MANAGE PROJECT TEAM Manage Project Team is the process of tracking team member performance, providing feedback, resolving issues, and managing team changes to optimize project performance. The key benefit of this process is that it influences team behavior, manages conflict, resolves issues, and appraises team member performance. In managing projects, just like in any project, a project manager needs to possess excellent analytical and organizational skills. Team management involves a combination of skills with special emphasis on communication, conflict management, negotiation, and leadership. Inputs:. Human Resource Management Plan Project Staff Assignments Project Management Plan Team Performance Assessments Organizational Process Assets such as certificates of appreciation, Newsletters, Websites, Bonus structures, corporate apparel Performance reports These reports provide documentation about the current project status compared to project forecasts. Tools and Techniques: Observation and Conversation The project manager watches what is going on and also specifically talks to people to understand how things are going. Project Performance Appraisals The evaluation of the performance of project teamwork on project by project manager. Conflict Management The sources of conflict in order of frequency are: Schedules Project priorities Resources Technical opinions Administrative procedures Cost Personality Conflict Resolution Techniques include: Withdraw/Avoid: This is retreating from an actual or potential conflict situation Smooth/Accommodate: The Emphasis is on areas of agreement rather than areas of difference. Compromise/Reconcile: Solutions that bring some degree of satisfaction to all parties is sought and implemented. Force/Direct: Pushing one s viewpoint at the expense of others; offers only win-lose solutions. Collaborate/Problem Solve: Incorporating multiple viewpoints and insights from differing perspectives; leads to consensus and commitment. Strategy Solutions Structures Page 90

92 A point to note is that these techniques are not given in any particular order and each one has a situation unique to its application. Issue Log This document contains a written record of issues that arise in the course of managing the project team. It helps to monitor who is responsible for resolving specific issues by a target date. Interpersonal Skills Leadership: Leadership is important throughout all the phases of the project. Some leadership styles include- Directing: telling others what to do Facilitating: Coordinating the input of others Coaching: instructing others Supporting: providing assistance along the way Autocratic: Making decisions without input Consultative: Inviting ideas from others Consensus: Problem solving in a group with decision-making based on group agreement Influencing: Ability to be persuasive and clearly articulate points and positions. Effective Decision Making: This is the ability to negotiate and influence the organization and the project management team. Outputs: Enterprise Environmental factors Updates Organizational Process Assets Updates Change Request Project Document Update Project Management Plan Updates Other Terms Problem Solving: The processes for dealing with problems as they arise are listed as: Define the cause of the problem, not just the symptoms of the problem. Analyze the problem Identify Solutions Implement a decision Review the decision and confirm that the decision solved the problem. Strategy Solutions Structures Page 91

93 Motivation Theories These theories show how to motivate team members in order to gain their cooperation which can lead to higher work effectiveness. Four theories are discussed below Expectancy Theory: Employees who believe their efforts will lead to effective performance and who expect to be rewarded for their accomplishment remain productive as rewards meet their expectations. McGregor Theory X and Y: McGregor believed that all workers fit into one of two groups, X and Y. Theory X: Managers who accept this theory believe that people need to be watched every minute and they are incapable of working without supervision, avoid responsibility, and avoid work whenever possible. Theory Y: Managers who accept this theory believe that people are willing to work without supervision, want to achieve and can be self directed to meet their own work objectives. Hertzberg Theory: This theory splits motivating factors into 2 group; Motivating agents and hygiene factors. Hygiene Factors: Poor hygiene factors may destroy motivation, but improving them, under most circumstances, will not improve motivation. Hygiene factors are not sufficient to motivate people. Examples of these are Working Conditions, salary, Personal life relationship at work, security and status Motivating Agents: What motivates people is work itself, including such thing as Responsibility, Selfactualization, professional growth and recognition. Maslow s Hierarchy: Maslow s message is that people do not work for security or money. They work to contribute and to use their skills. Maslow calls this self actualization. Strategy Solutions Structures Page 92

94 Self Actualization: Self fulfillment, Growth and Learning Esteem: Accomplishment, Respect, Attention Social: Love, Affection, Approval Friends Safety: Security, Stability, Freedom Physiological: Need for food, shelter, Clothing Strategy Solutions Structures Page 93

95 CHAPTER 10 PROJECT COMMUNICATION MANAGEMENT This knowledge area provides a critical link between the project manager, the project team and other stakeholders at all stages of the work. Project managers spend about 90% of his time communicating. Project Communications Management includes the processes that are required to ensure timely and appropriate planning, collection, creation, distribution, storage, retrieval, management, control, monitoring, and the ultimate disposition of project information. All communication should be effective, accurate and considerate of project requirements. Project communication management processes provides a methodology for the successful implementation of the project communication plan. Effective communication creates a bridge between diverse stakeholders who may have different cultural and organizational backgrounds, different levels of expertise, and different perspectives and interests, which impact or have an influence upon the project execution or outcome. Processes of Project Communication Management are: Plan Communications Management Manage Communications Control Communications Communication can be: Internal (within the project) and external (Customer, other projects, the media, the public) Formal (reports, memos, briefings) and informal ( s, ad-hoc discussion). Vertical (up and down the organization) and horizontal (with peers). Official (newsletters, annual report) and unofficial (off the record communication). Written and oral Verbal and non-verbal (voice inflections, body language) Most communication skills are common for both general management and project management, such as, but not limited to: Listening actively and effectively; Questioning and probing ideas and situations to ensure better understanding; Educating to increase team s knowledge so that they can be more effective; Fact-finding to identify or confirm information; Setting and managing expectations; Persuading a person, a team, or an organization to perform an action; Motivating to provide encouragement or reassurance; Coaching to improve performance and achieve desired results; Negotiating to achieve mutually acceptable agreements between parties; Resolving conflict to prevent disruptive impacts; and Summarizing, recapping, and identifying the next steps. Communication is effective when there is a feedback, which is used to determine if the message sent was properly understood. Strategy Solutions Structures Page 94

96 Nonverbal: about 55% of all communication are nonverbal Para lingual: Pitch and tone of voice. Feedback: e.g. saying things like, Do you understand what I have explained? Listening is effective when the receiver properly decodes the message and confirms that message was understood. Feedback e.g. saying things like I am not sure I understand, can you repeat what you have said? Active Listening: The receiver confirms he is listening, confirms agreement or asks for clarification. Para lingual PLAN COMMUNICATIONS MANAGEMENT Plan Communications Management is the process of developing an appropriate approach and plan for project communications based on stakeholder s information needs and requirements, and available organizational assets. The key benefit of this process is that it identifies and documents the approach to communicate most effectively and efficiently with stakeholders. The process responds to the information and communications needs of project stakeholders; for example what information will be needed, by whom, when it will be needed, how it will be given to them and by whom. Inputs: Project Management Plan Stakeholder Register Enterprise Environmental Factors Organizational Process Assets Tools and Techniques: Communication Requirements Analysis The analysis of the communication requirements determines the information needs of the project stakeholders. These requirements are defined by combining the type and format of information needed with an analysis of the value of that information. The project Manager should also consider the number of potential communication channels or paths as an indicator of the complexity of a project s communication. The total number of communication channels is n (n-1)/2, where n represents the number of stakeholders. Communication Technology Addresses what method should be used to communicate each item to be communicated. E.g. face-to-face, telephone, fax, or meetings. Factors that can affect the choice of communication technology include: Urgency of the need for information. There is a need to consider the urgency, frequency, and format of the information to be communicated as they may vary from project to project and also within different stages of a project. Strategy Solutions Structures Page 95

97 Availability of technology. There is a need to ensure that the technology that is required to facilitate communication is compatible, available, and accessible for all stakeholders throughout the life of the project. Ease of Use. There is a need to ensure that the choice of communication technologies is suitable for project participants and that appropriate training events are planned for, where appropriate. Project environment. There is a need to determine if the team will meet and operate on a face-to-face basis or in a virtual environment; whether they will be located in one or multiple time zones; whether they will use multiple languages for communication; and finally, whether there are any other project environmental factors, such as culture, which may affect communications. Sensitivity and confidentiality of the information. There is a need to determine if the information to be communicated is sensitive or confidential and whether or not additional security measures need to be taken. Also, the most appropriate way to communicate the information should be considered. Tools and Techniques continued Communication Models Encode: to translate thoughts or ideas into a language that is understood by others. Message and feedback-message: The output of encoding. Medium: The method used to convey the message. Noise: Anything that interferes with the transmission and understanding of the message. Decode: To translate the message back into meaningful thoughts or ideas Strategy Solutions Structures Page 96

98 Communication Methods There are several communication methods to share information among project stakeholders. These methods can be broadly classified into: Interactive communication: multidirectional exchange of information Push Communication: sent to specific recipients who need to know the information Pull Communication: recipients access the information at their own discretion e.g. internet sites. Used for very large audiences or for very large volume of information. Meetings The Plan Communications Management process requires discussion and dialogue with the project team to determine the most appropriate way to update and communicate project information, and to respond to requests from various stakeholders for that information. These discussions and dialogue are commonly facilitated through meetings, which may be conducted face to face or online and in different locations, such as the project site or the customer s site. Outputs: Communication Management Plan The communications management plan is a component of the project management plan that describes how project communications will be planned, structured, monitored, and controlled. The plan contains the following information: Stakeholder communication requirements; Information to be communicated, including language, format, content, and level of detail; Reason for the distribution of that information; Time frame and frequency for the distribution of required information and receipt of acknowledgment or response, if applicable; Person responsible for communicating the information; Person responsible for authorizing release of confidential information; Person or groups who will receive the information; Methods or technologies used to convey the information, such as memos, , and/or press releases; Resources allocated for communication activities, including time and budget; Escalation process identifying time frames and the management chain (names) for escalation of issues that cannot be resolved at a lower staff level; Method for updating and refining the communications management plan as the project progresses and develops; Glossary of common terminology; Flow charts of the information flow in the project, workflows with possible sequence of authorization, list of reports, and meeting plans, etc.; and Communication constraints usually derived from a specific legislation or regulation, technology, and organizational policies, etc. The communications management plan can also include guidelines and templates for project status meetings, project team meetings, e-meetings, and messages. The use of a project website and project management software can also be included if these are to be used in the project. Project Documents Updates Strategy Solutions Structures Page 97

99 MANAGE COMMUNICATION Manage Communications is the process of creating, collecting, distributing, storing, retrieving, and the ultimate disposition of project information in accordance to the communications management plan. The key benefit of this process is that it enables an efficient and effective communications flow between project stakeholders.this process occurs throughout the executing process group. The project manager ensures that the project stakeholders have the needed information and it is delivered in a timely manner. This process goes beyond the distribution of relevant information and seeks to ensure that the information being communicated to project stakeholders has been appropriately generated, as well as received and understood. It also provides opportunities for stakeholders to make requests for further information, clarification, and discussion. Techniques and considerations for effective communications management include, but are not limited to, the following: Sender-receiver models Choice of media: face-to face or Writing style: active versus passive voice, sentence structure. Meeting management techniques: preparing an agenda and dealing with conflicts Presentation techniques: Body language and design of visual aids Facilitation techniques: Building consensus and overcoming obstacles. Inputs: Communication Management Plan This will contain the communication management plan Work Performance Reports They are used to distribute project performance and status information Enterprise Organizational Factors Organizational Process assets. Tools and Techniques: Communication Technology Communication Models The focus here is to ensure that the choice communication model is appropriate for the project that is undertaken and that any barriers (noise) are identified and managed. Communication Methods The choice of communication methods is an important consideration in this process. As there can be many potential barriers and challenges during this process, the focus is to ensure that the information that has been created and distributed has been received and understood to enable response and feedback. Information Managements Systems Hard- copy document distribution, manual filing systems, s, fax Performance Reporting Strategy Solutions Structures Page 98

100 Outputs: Project Communication Performance reports Deliverables status Schedule progress Cost incurred. Project Management Plan Updates Project baselines Communications management Stakeholder management Project Document Updates Issue log Project schedule Project funding requirements. Organization Process assets Updates The organizational process assets updates which may be updated include Stakeholder notifications, Project reports, project presentations, project records, feedback from stakeholders, lessons learned documentation. CONTROL COMMUNICATION Control Communications is the process of monitoring and controlling communications throughout the entire project life cycle to ensure the information needs of the project stakeholders are met. The key benefit of this process is that it ensures an optimal information flow among all communication participants, at any moment in time. Inputs: Project Management Plan The project management plan describes how the project will be executed, monitored, controlled, and closed. Project Communications The Control Communications process involve activities that are required for information and communications to be monitored, acted upon, and released to stakeholders. Issue log An issue log is used to document and monitor the resolution of issues. Work Performance Data Work performance data organizes and summarizes the information gathered, and presents the results of comparative analysis to the performance measurement baseline. Organizational Process Assets Report templates. Policies, standards, and procedures that define communications. Specific communication technologies available. Strategy Solutions Structures Page 99

101 TOOLS and TECHNIQUES: Information Management Systems Information management system provides a set of standard tools for the project manager to capture, store, and distribute information to stakeholders about the project s costs, schedule progress, and performance. Expert judgment Meeting OUTPUT: Work Performance Information Work performance information organizes and summarizes the performance data gathered, which provides status and progress information on the project at the level of detail required by the various stakeholders. Change Requests Project Management Plan Update Project Management Updates Organization process assets Updates Strategy Solutions Structures Page 100

102 CHAPTER 11 PROJECT RISK MANAGEMENT This objective of risk management is to deal with risks in a structured manner because projects are subject to fast changing environments. The knowledge area covers how to conduct risk management planning, identification, analysis, response planning, and monitoring and control on a project. When looking at risks, you should determine: The probability that it will occur. The range of possible outcomes (impact or amount at stake). Expected timing (when) in the project life cycle. Anticipated frequency of risk events from that source (how often). Project risk is an uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives such as scope, schedule, cost, and quality. A risk may have one or more causes and, if it occurs, it may have one or more impacts. A cause may be a given or potential requirement, assumption, constraint, or condition that creates the possibility of negative or positive outcomes. Organizations perceive risk as the effect of uncertainty on projects and organizational objectives. Organizations and stakeholders are willing to accept varying degrees of risk depending on their risk attitude. The risk attitudes of both the organization and the stakeholders will be influenced by a number of factors, which are broadly classified into three themes: Risk appetite: which is the degree of uncertainty an entity, is willing to take on in anticipation of a reward. Risk tolerance: which is the degree, amount, or volume of risk that an organization or Individual will withstand. Risk threshold: which refers to measures along the level of uncertainty or the level of Impact at which a stakeholder may have a specific interest. Below that risk threshold, the organization will accept the risk. Above that risk threshold, the organization will not tolerate the risk. PLAN RISK MANAGEMENT Plan Risk Management is the process of defining how to conduct risk management activities for a project. The key benefit of this process is it ensures that the degree, type, and visibility of risk management are commensurate with both the risks and the importance of the project to the organization. The risk management plan is vital to communicate with and obtain agreement and support from all stakeholders to ensure the risk management process is supported and performed effectively over the project life cycle. Strategy Solutions Structures Page 101

103 Inputs: Project Management Plan In planning risk management, all approved subsidiary management plans and baselines are taken into consideration in order to make the risk management plan consistent with them. Project Charter provides inputs such as: High level risks High-level project descriptions High-level requirements. Stakeholder Register Project Scope Statement Cost Management Plan Schedule Management Plan Communications Management Plan Enterprise Environmental Factors Organizational Process Assets that can influence the Plan Risk Management process include, but not limited to: Risk categories Risk statement formats Standard templates Roles and responsibilities Authority levels for decision making Lessons learned. Tools and Techniques: Analytical Techniques Expert Judgment Meetings: The project team holds planning meetings to develop the risk management plan. Attendees at these meetings includes; the project manager, selected project team members and stakeholders, anyone in the organization with responsibility to manage the risk planning and execution activities OUTPUTS: Risk Management Plan: describes how risk management will be structured and performed on the project. The risk management plan includes the following: Methodology: approaches, tools and data sources Roles and responsibilities Budgeting Timing Risk categories Definition of risk probability and impact Probability and impact matrix Revised stakeholder tolerances Reporting formats: content and format of risk register. Tracking Strategy Solutions Structures Page 102

104 IDENTIFY RISKS It is an iterative process that, involves all the project stakeholders. Identify Risks is the process of determining which risks may affect the project and documenting their characteristics. The key benefit of this process is the documentation of existing risks and the knowledge and ability it provides to the project team to anticipate events. Inputs Risk Management Plan Activity Cost estimates Activity Duration Estimates Scope Baselines Stakeholder Register Cost Management Plan Schedule Management Plan Quality Management Plan Procurement Document Human Resource Management Plan Project Documents Enterprise Environmental Factors Organization Process assets Tools and Techniques Documentation reviews A structured review may be performed of project documentation, including plans, assumptions, previous project files, contracts, and other information. Information Gathering Techniques Brainstorming: to obtain a comprehensive list of project risks. Delphi Techniques: This is way to reach a consensus of experts. Project risk experts participate in this technique anonymously. Interviewing Root cause analysis: This is a specific technique to identify a problem, discover the underlying causes that led to it, and develop preventive action. Checklist Analysis Assumptions Analysis is based on a set of hypothesis, scenarios, or assumptions. Diagramming Techniques Cause and effect diagrams also known as fish bones or Ishikawa diagrams System or process flowcharts Influence diagrams: graphical representations of situations showing causal influences, time ordering of events, and other relationships among variables and outcomes. SWOT Analysis: to increase the breadth of identified risks by including internally generated risks. Expert Judgment Strategy Solutions Structures Page 103

105 Output: Risk Register: This is the place where most of the risk information is kept. This register contains: List of identified risks: The identified risks are described in as much detail as is reasonable. List of Potential responses. PERFORM QUALITATIVE RISK ANALYSIS This process deals with the prioritization of risks for further analysis by assessing and combining their probability of occurrence and impact. It is a subjective analysis of the risks previously identified. Perform Qualitative Risk Analysis assesses the priority of identified risks using their relative probability or likelihood of occurrence, the corresponding impact on project objectives if the risks occur, as well as other factors such as the time frame for response and the organization s risk tolerance associated with the project constraints of cost, schedule, scope, and quality. Perform Qualitative Risk Analysis is usually a rapid and cost-effective means of establishing priorities for Plan Risk Responses and lays the foundation for Perform Quantitative Risk Analysis, if required. The Perform Qualitative Risk Analysis process is performed regularly throughout the project life cycle, as defined in the project s risk management plan. The probability of each risk occurring (e.g. Low, Medium, High or 1 to 10) The impact (amount at stake, or consequences, positive or negative) of each risk occurring (e.g. Low, Medium, High or 1 to 10. Inputs: Risk Management Plan Scope Baseline Projects using state-of-the-art or first-of-its-kind technology, and highly Complex projects, tend to have more uncertainty. This can be evaluated by examining the scope Risk Register Organizational Process Assets Enterprise Environmental Factors Industry studies of similar projects by risk specialists Risk databases that may be available from industry or proprietary sources. Tools and Techniques: Risk Probability and Impact Assessment This reveals the likelihood that each specific risk will occur. Probability and Impact Matrix This shows that risks can be prioritized for further quantitative analysis and response based on their risk rating. Risk Data Quality Assessment The analysis of the quality of risk data is a technique to evaluate the degree to which the data about risks are useful for risk management. Strategy Solutions Structures Page 104

106 Risk Categorization Risk can be categorized by the sources of risks and the area of the project affected. Risk Urgency Assessment This is noting risks that should move more quickly through the process. Expert Judgment This helps to assess the probability and impact of each risk to determine its location in the matrix Outputs: Risk Register Updates: the updates include Relative ranking or priority list of project risk Risks grouped by categories Causes of risk or project areas requiring particular attention List of risks requiring response in the near-term List of risks for additional analysis and response Watch lists of low-priority risks. Trends in qualitative risk analysis results Assumptions log updates. As new information becomes available through the qualitative risk assessment, assumptions could change. The assumptions log needs to be revisited to accommodate this new information. Assumptions may be incorporated into the project scope statement or in a separate assumptions log. PERFORM QUANTITATIVE RISK ANALYSIS The effect of the risks identified is numerically analyzed to determine the degree to which they affect project objectives. It is carried out to determine; Which risk events warrant a response Overall project risk (risk exposure) The quantified probability of meeting project objectives Cost and schedule reserves Identify risks requiring the most attention Create realistic and achievable cost, schedule or scope targets. Inputs: Risk Register Risk Management Plan Cost Management Plan Schedule Management Plan Enterprise Environmental Factors Organizational Process Assets Strategy Solutions Structures Page 105

107 Tools and Techniques: Data Gathering and Representative Techniques Interviewing This technique draws on experience and historical data to quantify the probability and impact of risks on project objectives. Probability distribution This represents the uncertainty in values such as durations of schedule activities and costs of project component Quantitative Risk Analysis and Modeling Techniques Sensitivity analysis This helps to determine which risks have the most potential impact on the project. Expected monetary value analysis (EMV) This is given simply as mean probability times impact e.g. A risk that has 25% probability of occurrence and that will impact the project by N60,000 will have EMV of N15, Expert Judgment It is needed to identify potential cost and schedule impacts, to evaluate probability. Outputs Risk Register Update This is further updated to include quantitative approaches, outputs and recommendations. Updates include the following main components: Probabilistic analysis of the project Probability of achieving cost and time objectives Prioritized list of quantified risks Trend in quantitative risk analysis results PLAN RISK RESPONSES Once risks have been identified and quantified, actions and options to enhance the positive risks (opportunities) and reduce or completely eliminate negative risks (threats) must be developed. For residual risks, there has to be a contingency plan (implemented if risk occurs) or fallback plan (if contingency plan fails to take care of the risk. Inputs: Risk Register Risk Management Plan Tools and Techniques: Strategies for Negative Risks or Threats Avoid: Eliminate the threat by eliminating the cause (e.g., Remove the work package or person.) Strategy Solutions Structures Page 106

108 Transfer: Shifting some or all of the negative impact of a threat, along with ownership of the response, to a third party. An example is purchasing of insurance, performance bonds, guarantees, and warrantees. Mitigate: This implies a reduction in the probability and/or impact of an adverse risk event to be within acceptable threshold limits. Accept: Do nothing and say, if it happens, it happens. Active acceptance may involve establishing a contingency reserve, including amounts of time, money, or resources to handle the risks. Passive acceptance requires no action except to document the risks. Strategies for Positive Risks or Threats Exploit: add work or change the project to make sure the opportunity occurs Enhance: Increase the likelihood, probability and positive impacts. Share: Allocate ownership e.g. joint venture Contingent Response Strategies They are designed for use only if certain events occur. Expert Judgment Outputs: Risk Register Updates Risk-Related Contract decisions Project Management Plan Updates Project Document updates CONTROL RISKS In projects, both the clients and the contractor face risky situations. Both aim to minimize their risks. The process of controlling risks involves; implementing risk response plans, tracking identified risks, monitoring residual risks, identifying new risks and evaluating risk process effectiveness throughout the project. Inputs: Risk Register Project Management Plans Work Performance information such as Deliverable status, Schedule progress, and Costs incurred. Performance Reports e.g. variance analysis, earned value data, and forecasting data. Tool and Techniques: Risk Reassessment This is the periodical review of risk management plan and adjustment as necessary. Risk Audits This examines and documents the effectiveness of risk responses in dealing with identified risks and their root causes, as well the effectiveness of the risk management process. Variance and Trend Analysis This compares the planned results to the actual results Strategy Solutions Structures Page 107

109 Technical Performance Measurement It compares technical accomplishments during project execution to the project management plan s schedule of technical achievement. Reserve Analysis It compares amount of the contingency reserves remaining to the amount of risks remaining at any time in the project in order to determine if the remaining reserve is adequate. Meetings Project risk management should be an agenda item at periodic status meetings. Risk Register Project Management Plans Work Performance information such as Deliverable status, Schedule progress, and Costs incurred. Performance Reports Outputs: Risk Register Updates Organizational Process Assets Updates Change Requests Recommended Corrective actions These includes contingency plans and workarounds Recommended Preventive actions They are implemented to bring the project into compliance with the project management plan. Project Management plan updates Project Documents Updates Strategy Solutions Structures Page 108

110 CHAPTER 12 PROJECT PROCUREMENT MANAGEMENT Project procurement management involves the processes needed to acquire appropriate products, services or results from outside to meet the needs of the project. Project Procurement Management includes the contract management and change control processes required to develop and administer contracts or purchase orders issued by authorized project team members. Processes in Procurement Management are: Plan Procurements Conduct Procurements Control Procurements Close Procurements PLAN PROCUREMENT It is critical for the project manager to get the most out of supplier relationships. This process involves documenting purchasing decisions, identifying potential sellers and the best approach to acquiring equipments or services from external sources. A procurement plan helps ensure that only the best equipments or service are bought and at the right price. Inputs: Project Management Plan Scope baseline This describes the need, justification, requirements, and current boundaries for the project. It consists of Scope statement, WBS and WBS dictionary. Requirements Documentation This contains important information about project requirements that is considered during planning for procurements. Requirements with contractual and legal implications that may include health, safety, security, performance, environmental, insurance, intellectual property rights, equal employment opportunity, licenses, and permits all of which are considered when planning for procurement. Teaming Agreements They are legal contractual requirements between two or more entities to form a partnership or joint venture or some other arrangement as defined by the parties. Risk Register Risk-Related Contract Decisions They are agreements such as insurance, bonds prepared to specify each party s responsibility for specific risks. Stakeholder Register Strategy Solutions Structures Page 109

111 Activity Resource Requirements Project Schedule Activity Cost Estimates Cost Performance Baselines Enterprise Environmental Factors: Organizational Process Assets: The various types of contractual agreements used by the organization also influence decisions for the Plan Procurement Management process. The organizational process assets that influence the Plan Procurement Management process include,but are not limited to: Formal procurement policies, procedures, and guidelines. Most organizations have formal procurement policies and buying organizations. Management systems that are considered in developing the procurement management plan and selecting the contractual relationships to be used. An established multi-tier supplier system of pre-qualified sellers based on prior experience. All legal contractual relationships generally fall into one of two broad families: either fixed-price or cost reimbursable. Also, there is a third hybrid-type commonly in use called the time and materials contract. Fixed Price Contracts: Here the seller has the cost risk. A fixed price is set and determined for the contract by the buyer. Types of Fixed price contracts are: Firm Fixed Price Contracts (FFP): This is most commonly used, the set price is not subject to change unless the scope of work changes. Fixed Price Incentive Fee Contracts (FPIF): The buyer and seller has some flexibility in that it allows for deviation from performance, with financial incentives tied to achieving agreed to metrics Fixed Price with Economic Adjustment Contracts( FP-EPA): e.g. for a contract with multiple years Cost-reimbursable contracts: The seller s costs are reimbursed, plus an additional amount representing seller s profit. The buyer has the most cost risk because the total costs are unknown. Cost Plus Fixed Fee Contracts (CPFF): This is the allowable cost plus fixed fee payment calculated as a percentage of the initial estimated project cost. Cost plus Incentive Fee Contracts (CPIF): This is the allowable cost plus predetermined incentive fee based upon achieving certain performance objectives set forth in the contract. Cost Plus Award Fee Contracts (CPAF): allowable costs plus an apportionment of a bonus based on performance. Time and Material Contracts (T&M): This is a hybrid of Fixed Price (in fixed price per hour) and cost-reimbursable (in the material costs). Tools and Techniques: Make-or-Buy Analysis Strategy Solutions Structures Page 110

112 This is a general management technique used to determine whether a particular work can best be accomplished by the project team or must be purchased from outside sources. One of the main reasons to buy is to decrease risk to any component of the triple constraint. It is better to make if: You have an idle plant or workforce You want to retain control The work involves proprietary information or procedures Tools and Techniques Continued Expert Judgment Marketing Research Market research includes examination of industry and specific vendor capabilities. Procurement teams may leverage information gained at conferences, online reviews and a variety of sources to identify market capabilities. The team may also refine particular procurement objectives to leverage maturing technologies while balancing risks associated with the breadth of vendors who can provide the materials or services desired. Meetings Research alone may not provide specific information to formulate a procurement strategy without additional information interchange meetings with potential bidders. Outputs: Procurement Management Plan This describes how the procurement processes will be managed from developing procurement documents through contract closure. Procurement Statements of Work This is developed from the project scope baseline and defines only that portion of the project scope that is to be included within the related contract. Make-or-Buy Decisions Procurement Documents They are used to solicit proposals from prospective sellers. Source Selection Criteria These criteria are developed and used to rate or score seller proposals, can be objective or subjective. Other selection criteria can be identified and documented to support an assessment for More complex products, services, or results. Some possible source selection criteria are: Understanding of need. How well does the seller s proposal address the Procurement statement of work? Overall or life-cycle cost. Will the selected seller produce the lowest total cost of ownership (purchase cost plus operating cost)? Technical capability. Does the seller have, or can the seller be reasonably expected to acquire, the technical skills and knowledge needed? Risk. How much risk is embedded in the statement of work, how much risk will be assigned to the selected seller and how does the seller mitigate risk? Management approach. Does the seller have, or can the seller be reasonably expected to develop, management processes and procedures to ensure a successful Project? Technical approach. Do the seller s proposed technical methodologies, techniques, solution meet the procurement requirement? Change Request Strategy Solutions Structures Page 111

113 CONDUCT PROCUREMENT The conduct procurement process involves finding and selecting a suitable vendor and finalizing a contract for the delivery of the procured items within acceptable time frame and quality. In this process, the team will receive bids or proposals and will apply previously defined selection criteria to select one or more sellers who are qualified to perform the work and acceptable as a seller. Inputs: Project Management Plan Procurement Documents Source Selection Criteria Qualified Seller List The list of sellers who have been pre-screened for their qualifications and past experience. Procurement Statement of Work Seller Proposals A basic set of information prepared in response to a procurement document, used by an evaluation body to select one or more successful bidders (sellers). Project Documents Examples includes; Risk register and Risk-related contract decisions Make-or-buy decisions Teaming Agreements Organizational Process Assets Tools and Techniques Bidder Conferences (Contractor Conferences, Vendor Conferences, and Pre-Bid Conferences) These are meetings of all prospective sellers and buyers prior to submittal of a bid or proposal. They are used to ensure that all prospective sellers have a clear and common understanding of the procurement (both technical and contractual), and that no bidders receive preferential treatment. Proposal Evaluation Techniques The source selection by evaluation committee bases seller s responses to previously defined weighted criteria. Independent Estimates The estimates of costs prepared by procuring organization or outside professional estimator to serve as a benchmark on proposed responses. Expert Judgment may be used in evaluating seller proposals Advertising This is done to expand existing lists of potential sellers. Analytical Techniques Internet Search The prices of many commodities, components, and off-the-shelf- items may be gotten from the internet. Strategy Solutions Structures Page 112

114 Tools and Techniques Continued Procurement Negotiations These negotiations are necessary to clarify the structure, requirements and other terms of the purchases so that mutual agreement can be reached prior to signing the contract. The project manager may be involved during contract negotiations to clarify project requirements, and if for no other reason than to protect the relationship with the other side. Many projects go bad because of how negotiations were handled. The main items to address while negotiating a contract are: Responsibilities Authority Applicable law- Under whose law will the contract fall Technical and business management approaches Contract Financing Schedule Payments and Price Outputs: Selected Sellers These are the sellers who have been judged to be in a competitive range based upon the outcome of the proposal or bid evaluation, and who have negotiated a draft contract that will become the actual contract when an award is made. Agreement This is a mutually binding legal agreement that obligates the seller to provide the specified products, services, or results, and obligates the buyer to compensate the seller. A contract is a legal relationship subject to remedy in the courts. Resource Calendars The quantity and availability of contracted resources and those dates on which each specific resource can be active or idle are documented using resource calendars. Change Requests Project Management Plan Updates The elements of the Project Management plan that may be updated include Cost baseline, Scope baseline, Schedule baseline, Procurement management plan. Project Document Updates. CONTROL PROCUREMENTS These are the activities performed after contract award, to manage procurement relationships, monitor and control contract performance. Both the buyer and the seller will be involved in this process to ensure that the opposite party meets contractual obligations and protect their legal rights. Inputs: Procurement Documents Project Management Plan Agreements Performance Reports Approved Change Requests Strategy Solutions Structures Page 113

115 Work Performance Report Work Performance Data Tools and Techniques: Contract Change Control System This defines the process by which the procurement can be modified. Procurement Performance Reviews This is structured review of the seller s progress to deliver project scope and quality, within cost and schedule, as compared to the contract. Inspections and Audits They are conducted during the execution of the project to verify compliance in the seller s work processes and deliverables Performance Reporting This provides management with information about how effectively the seller is achieving the contractual objectives Claims Administration A claim is an assertion that the buyer did something that has hurt the seller and the seller is asking for compensation. Another way of looking at claims is that they are a form of seller's change requests. Record Management System This is used by the project manager to manage contract and procurement documentation and records. Payment Systems Payments to the seller are typically processed by the accounts payable system of the buyer after certification of satisfactory work by an authorized person on the project team. All payments should be made and documented in strict accordance with the terms of the contract. Outputs: Work Performance Information Procurement Documentation This includes, but is not limited to, the procurement contract with all supporting schedules, requested unapproved contract changes, and approved change requests. Organizational Process Assets Updates This updates to organizational process assets may include; correspondence, payment schedules and requests, and seller performance evaluation documentation. Change Requests Project Management Plan Updates This updates to project management plan may include procurement management plan, baseline schedule etc. CLOSE PROCUREMENTS Close Procurements is the process of completing each procurement. The Close Procurements process also involves administrative activities such as finalizing open claims, updating records to reflect final results and archiving such information for future use. The key benefit of this process is that it documents agreements and related documentation for future reference Strategy Solutions Structures Page 114

116 Inputs: Project Management Plan Procurement Documentation During closure, all procurement documentation is collected, indexed and filed. Information on contract schedule, scope, quality, and cost performance along with all contract change documentation, payment records, and inspection results are cataloged. Tools and Techniques: Procurement Audits This is a structured review of the procurement process originating from plan procurements process through Administer Procurements. The Objective is to identify successes and failures that warrant recognition in the preparation or administration of other procurement contracts on the project, or on other projects within the performing organization. Procurement Negotiation This is the final equitable settlement of all outstanding issues, claims and disputes by negotiation. Record Management System Outputs: Closed Procurements The buyer, usually, through its authorized procurement administrator, provides the seller with formal written notice that the contract has been completed. Requirements for formal procurement closure are usually defined in the terms and conditions of the contract and are included in the procurement management plan. Organizational Process assets Updates Elements of the organizational process assets that may be updated are Procurement File, Deliverable acceptance, and Lesson learned documentation. Strategy Solutions Structures Page 115

117 CHAPTER 13 PROJECT STAKEHOLDER MANAGEMENT In every goal oriented organization, there is need for proper management of stakeholders in other to achieve and implement set objectives. Thus, Project Stakeholder Management includes the processes required to identify the people, groups, or organizations that could impact or be impacted by the project, to analyze stakeholder expectations and their impact on the project, and to develop appropriate management strategies for effectively engaging stakeholders in project decisions and execution. However stakeholder management is not limited to the above stated, but it also focuses on Communication with stakeholders, Addressing issues as they occur, Managing Conflicting interest and also fostering appropriate stakeholder engagement. Processes in stakeholder Management: Identify Stakeholders. Plan Stakeholder Management. Manage Stakeholder Engagement. Control Stakeholder Engagement. IDENTIFY STAKEHOLDERS This is the process of identifying the people, groups, and organizations that could impact or be impacted by a decision, activity, or outcome of a project either positively or negatively, analyzing and documenting relevant information regarding their interests, involvement, interdependencies, influence, and potential impact on project success. The key benefit of this process is that it allows the project manager to identify the appropriate focus for each stakeholder or group of stakeholders. Project stakeholders are individuals, groups, or organizations who may affect, be affected by, or perceive themselves to be affected by a decision, activity, or outcome of a project. They are comprised of persons and organizations such as customers, sponsors, the performing organization, and the public who are actively involved in the project, or whose interests may be positively or negatively affected by the execution or completion of the project. They may also exert influence over the project and its deliverables. Stakeholders may be at different levels within the organization and may possess different authority levels, or may be external to the performing organization for the project. It is critical for project success to identify the stakeholders early in the project or phase and to analyze their levels of interest, their individual expectations, as well as their importance and influence. This initial assessment should be reviewed and updated regularly. Most projects will have a diverse number of stakeholders depending on their size, type, and complexity. While the project manager s time is limited and should be used as efficiently as possible, these stakeholders should be classified according to their interest, influence, and involvement in the project, taking into consideration the fact that the affect or influence of a stakeholder may not occur or become evident until later stages in the project or phase. This enables the project manager to focus on the relationships necessary to ensure the success of the project. Strategy Solutions Structures Page 116

118 Inputs Project charter The project charter provide information about internal and external parties related with the project such as Project sponsor(s) Customers Team members Groups and departments Procurement Document When a project is as a result of a procurement activity based on an established contract, the parties in that contract are key project stakeholders. Enterprise Environmental Factors Organizational Process Assets Tools and Techniques: Stakeholder Analysis A stakeholder analysis technique is used to identify the interests, expectations, and influence of the stakeholders and relates them to the purpose of the project. Stakeholder analysis generally follows the steps described below: Identify all potential project stakeholders and relevant information about their roles and importance. Analyze the potential impact or support each stakeholder could generate. Assess how key stakeholders are likely to react or respond in various situations. Multiple Classification Models used for Stakeholders Analysis are as Follows: Power/interest grid: Grouping the stakeholders based on their level of authority ( power ) and their level or concern ( interest ) regarding the project outcomes. Power/influence grid: Grouping the stakeholders based on their level of authority ( power ) and their active involvement ( influence ) in the project; Influence/impact grid: Grouping the stakeholders based on their active involvement ( influence ) in the project and their ability to effect changes to the project s planning or execution ( impact ). Salience model: describing classes of stakeholders based on their power (ability to Impose their will), urgency (need for immediate attention), and legitimacy (their Involvement is appropriate. Strategy Solutions Structures Page 117

119 Expert Judgment Example: Power/Interest Grid with Stakeholders To ensure comprehensive identification and listing of stakeholders, judgment and expertise should be sought from groups or individuals with specialized training or subject matter expertise, such as: Senior management; Other units within the organization; Identified key stakeholders; Project managers who have worked on projects in the same area (directly or through lessons learned); Subject matter experts (SMEs) in the business or project area; Industry groups and consultants; and Professional and technical associations, regulatory bodies, and nongovernmental organizations (NGOs). Expert judgment can be obtained through individual consultations (one-on-one meetings, interviews, etc.) or through a panel format (focus groups, surveys, etc.). Strategy Solutions Structures Page 118

120 Meetings Profile analysis meetings are project meetings designed to develop an understanding of major project stakeholders, and they can be used to exchange and analyze information about roles, interests, knowledge, and the overall position of each stakeholder facing the project. Outputs: Stakeholder Register Identification information-name, organizational position, location, role in the Project, contact information. Assessment information- Major requirements, main expectations, potential influence In the project, phase in the life cycle with the most interest. Stakeholder classification- Internal/external, supporter/neutral/resistor. The stakeholder register should be consulted and updated on a regular basis, as stakeholders may change or new ones identified throughout the life cycle of the project. PLAN STAKEHOLDER MANAGEMENT Plan Stakeholder Management is the process of developing appropriate management Strategies to effectively engage stakeholders throughout the project life cycle based on the analysis of their needs, interests, and potential impact on project success. The key benefit of this process is that it provides a clear, actionable plan to interact with project stakeholders to support the project s interests. Input: Project Management Plan Stakeholder Register Enterprise Environmental Factors Organizational Process Assets Tools and Techniques: Expert Judgment Meetings Meetings should be held with experts and the project team to define the required engagement levels of all stakeholders. This information can be used to prepare the stakeholder management plan. Analytical Techniques Stakeholder engagement throughout the life cycle of the project is critical to project success. The current engagement level of all stakeholders needs to be compared to the planned engagement levels required for successful project completion. Stakeholder engagement throughout the life cycle of the project is critical to project success. The engagement level of the stakeholders can be classified as follows: Unaware. Unaware of project and potential impacts. Resistant. Aware of project and potential impacts and resistant to change. Neutral. Aware of project yet neither supportive nor resistant. Supportive. Aware of project and potential impacts and supportive to change. Leading. Aware of project and potential impacts and actively engaged in ensuring the project is a success. Strategy Solutions Structures Page 119

121 The current engagement can be documented using Stakeholders Engagement Assessment Matrix, as shown below where C indicates the current engagement, and D indicates the desired engagement. The project team needs to identify the desired engagement level for the current phase of the project, based on available information. Stakeholders Engagement Assessment Matrix The example in the table shows that stakeholder 3 is at the desired engagement level, while stakeholders 1 and 2 require further communications and additional actions to move them to the desired level of engagement. Through this analytical process, gaps between the current and desired engagement levels can be identified. Actions and communications required to close these gaps can be identified by the project team using expert judgment. Outputs: Stakeholder Management Plan The stakeholder management plan is a component of the project management plan and identifies the management strategies required to effectively engage stakeholders. The stakeholder management plan can be formal or informal, highly detailed or broadly framed, based on the needs of the project. In addition to the data gathered in the stakeholder register, the stakeholder management plan often provides: Desired and current engagement levels of key stakeholders; Scope and impact of change to stakeholders; Identified interrelationships and potential overlap between stakeholders; Stakeholder communication requirements for the current project phase; Information to be distributed to stakeholders, including language, format, content, and level of detail; Reason for the distribution of that information and the expected impact to stakeholder engagement; Time frame and frequency for the distribution of required information to stakeholders; and Method for updating and refining the stakeholder management plan as the project progresses and develops. Project managers should be aware of the sensitive nature of the stakeholder management plan and take appropriate precautions. For example, information on stakeholders who are resistant to the project can be Strategy Solutions Structures Page 120