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PM Notebook

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During my journey to PMP, I have gathered data and information in this document from various reliable sources, so NONE of this data/information is a property of mine. And NONE is intended for profit in any way. Please use this as your personal reference for ITTOs, terms, and formulas and feel free to manipulate it the way you like as long as it's for your personal usage.
Each chapter of this notebook covers a module of the PMP certificate. Additional eight sections summarize various tools and techniques.
Contents of this notebook are as follow:
* Chapter 1: Introduction
* Chapter 2: Organizations
* Chapter 3: The Process Framework
* Chapter 4: Integration Management
* Chapter 5: Scope Management
* Chapter 6: Schedule Management
* Chapter 7: Cost Management
* Chapter 8: Quality Management
* Chapter 9: Resources Management
* Chapter 10: Communication Management
* Chapter 11: Risk Management
* Chapter 12: Procurement Management
* Chapter 13: Stakeholder Management
* Chapter 14: Professional and Social Responsibility
* Appendix A: Data Analysis Techniques
* Appendix B: Data Gathering Techniques
* Appendix C: Data Representation Tools
* Appendix D: Decision-Making Techniques
* Appendix E: Estimating Techniques
* Appendix F: Forecasting Methods
* Appendix G: Interpersonal/Team/Soft Skills
* Appendix H: Formula Sheet

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PM Notebook

  1. 1. PM Notebook Summarizing Project Management Concepts for the PMP Exam Mohammad Elsheimy Road to PMP
  2. 2. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT MANAGEMENT DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 1 DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA/INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA/INFORMATION IS A PROPERTY OF THE AUTHOR. NONE IS INTENDED TO MAKE A PROFIT IN ANY WAY. THIS IS FOR PERSONAL USE ONLY.
  3. 3. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT MANAGEMENT DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 2 No great man ever complains of want of opportunity. Ralph Waldo Emerson
  4. 4. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT MANAGEMENT DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 3 Table of Contents Chapter 1 – Introduction ...................................................................................................................................... 13 Project Management........................................................................................................................................ 13 Portfolio, Program, Project and Operations.................................................................................................. 13 Project Initiation Context .................................................................................................................................. 13 Benefits Realization Management (BRM)...................................................................................................... 14 Identify Benefits............................................................................................................................................... 14 Execute Benefits.............................................................................................................................................. 14 Sustain Benefits................................................................................................................................................ 14 Business Documents........................................................................................................................................... 14 Business Case .................................................................................................................................................. 15 Benefit Management Plan ........................................................................................................................... 15 Project Selection Methods ............................................................................................................................... 15 Benefit Measurement Methods (Comparative Approach)................................................................... 16 Constrained Optimization Methods / Mathematical Model................................................................. 20 Non-Financial Considerations ...................................................................................................................... 20 Constraints ........................................................................................................................................................... 20 Theory of Constraints ..................................................................................................................................... 21 Project Lifecycle ................................................................................................................................................. 21 Project Management Methodology (PMM)................................................................................................. 22 Predictive Lifecycle / Plan-Driven / Waterfall ........................................................................................... 22 Iterative and Incremental Lifecycles / Iterations...................................................................................... 22 Adaptive Lifecycle / Change-Driven / Agile............................................................................................ 23 Hybrid Lifecycle / Structured Agile ............................................................................................................. 26 Gates Methodology ...................................................................................................................................... 26 Integrated Project Management (IPM) ..................................................................................................... 26 Projects integration Sustainable Methods (PRiSM)................................................................................... 26 Projects IN Controlled Environments (PRINCE2)........................................................................................ 27 Project Documents ............................................................................................................................................ 27 Additional Terms ................................................................................................................................................. 28 Chapter 2 – Organizations ................................................................................................................................... 30 Enterprise Environmental Factors (EEFs) ......................................................................................................... 30 Project Management Information System (PMIS).................................................................................... 30 Organizational Process Assets (OPAs)............................................................................................................ 31
  5. 5. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT MANAGEMENT DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 4 Organization System.......................................................................................................................................... 31 Organizational Structure................................................................................................................................... 32 Project-Based Organizations (PBO) ............................................................................................................ 34 Project Expediter vs. Project Coordinator ..................................................................................................... 34 Organizational Hierarchy.................................................................................................................................. 34 Project Management Office (PMO)............................................................................................................... 35 Organizational Project Management (OPM)............................................................................................... 35 Organizational Project Management Maturity Model (OPM3) ............................................................ 35 Capability Maturity Model Integration (CMMI)........................................................................................ 35 Project Environment........................................................................................................................................... 36 Project Complexity............................................................................................................................................. 36 Project Success Factors..................................................................................................................................... 36 Internal Factors ............................................................................................................................................... 36 External Factors............................................................................................................................................... 37 Additional Terms ................................................................................................................................................. 37 Chapter 3 – The Process Framework .................................................................................................................. 39 Phases................................................................................................................................................................... 39 Phase-to-Phase Relationship........................................................................................................................ 39 Process Groups ................................................................................................................................................... 39 Knowledge Areas............................................................................................................................................... 39 Project Management Plans ............................................................................................................................. 40 Work Performance ............................................................................................................................................. 40 Additional Terms ................................................................................................................................................. 41 Chapter 4 – Integration Management.............................................................................................................. 42 Key Terms ............................................................................................................................................................. 42 Integration Types ............................................................................................................................................ 42 Changes, Defects, and Corrections........................................................................................................... 42 Processes.............................................................................................................................................................. 42 1 – Develop Project Charter (Initiating) ..................................................................................................... 42 2 – Develop Project Management Plan (Planning)................................................................................. 43 3 – Direct and Manage Project Work (Executing)................................................................................... 44 4 – Manage Project Knowledge (Executing)............................................................................................ 45 5 – Monitoring and Controlling Project Work (Monitoring & Controlling) ............................................ 45 6 – Perform Integrated Change Control (Monitoring & Controlling) ................................................... 46 7 – Closing Project or Phase (Closing) ........................................................................................................ 47
  6. 6. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT MANAGEMENT DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 5 Statement of Work (SOW) / Scope of Services ............................................................................................ 49 Product Analysis.................................................................................................................................................. 49 Knowledge Types ............................................................................................................................................... 50 Knowledge Management Techniques.......................................................................................................... 50 Configuration Management ........................................................................................................................... 51 Program/Project Evaluation and Review Technique (PERT)...................................................................... 51 PERT Planning .................................................................................................................................................. 52 Additional Terms ................................................................................................................................................. 52 Chapter 5 – Scope Management...................................................................................................................... 53 Key Terms ............................................................................................................................................................. 53 Scope................................................................................................................................................................ 53 Requirements .................................................................................................................................................. 53 Processes.............................................................................................................................................................. 54 1 – Plan Scope Management (Planning) .................................................................................................. 54 2 – Collect Requirements (Planning) .......................................................................................................... 54 3 – Define Scope Statement (Planning)..................................................................................................... 55 4 – Create Work Breakdown Structure (WBS) (Planning)........................................................................ 56 5 – Validate Project Scope (Monitoring & Controlling)........................................................................... 58 6 – Control Project Scope (Monitoring & Controlling)............................................................................. 59 WBS Quality.......................................................................................................................................................... 59 Quality Principle 1........................................................................................................................................... 60 Quality Principle 2........................................................................................................................................... 60 Scope Creep vs. Gold Plating ......................................................................................................................... 60 Additional Terms ................................................................................................................................................. 60 Chapter 6 – Schedule Management................................................................................................................. 62 Key Terms ............................................................................................................................................................. 62 Project Work vs. Project Manager Work..................................................................................................... 62 Duration vs. Effort............................................................................................................................................ 62 Dependencies ................................................................................................................................................ 62 Processes.............................................................................................................................................................. 62 1 – Plan Schedule Management (Planning)............................................................................................. 62 2 – Define Activities (Planning)..................................................................................................................... 63 3 – Sequence Activities (Planning).............................................................................................................. 64 4 – Estimate Activity Durations (Planning).................................................................................................. 65 5 – Develop Schedule (Planning)................................................................................................................ 65
  7. 7. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT MANAGEMENT DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 6 6 – Control Schedule (Monitoring & Controlling) ..................................................................................... 67 Activities ............................................................................................................................................................... 68 Types ................................................................................................................................................................. 68 Relationships.................................................................................................................................................... 69 Critical Path Method (CPM) / Logic-Driven Scheduling............................................................................. 70 Float / Slack ..................................................................................................................................................... 70 Components ................................................................................................................................................... 70 Critical Chain Method (CCM) ......................................................................................................................... 71 Schedule Compression ..................................................................................................................................... 71 Resource Optimization Techniques ................................................................................................................ 72 Additional Terms ................................................................................................................................................. 72 Chapter 7 – Cost Management.......................................................................................................................... 74 Key Terms ............................................................................................................................................................. 74 Cost Baseline ................................................................................................................................................... 74 Processes.............................................................................................................................................................. 74 1 – Plan Cost Management (Planning)...................................................................................................... 74 2 – Estimate Costs (Planning) ....................................................................................................................... 75 3 – Determine Budget (Planning)................................................................................................................ 76 5 – Control Costs (Monitoring & Controlling)............................................................................................. 77 Cost Types............................................................................................................................................................ 78 Direct / Indirect............................................................................................................................................... 78 Fixed / Variable............................................................................................................................................... 78 Additional Cost Types.................................................................................................................................... 78 Earned Value Management (EVM)................................................................................................................ 79 Techniques....................................................................................................................................................... 79 Performance ................................................................................................................................................... 80 Formulas ........................................................................................................................................................... 80 Additional Terms ................................................................................................................................................. 83 Chapter 8 – Quality Management..................................................................................................................... 84 Key Terms ............................................................................................................................................................. 84 Responsibility ................................................................................................................................................... 84 Quality Control vs. Quality Assurance ........................................................................................................ 84 Quality Approaches....................................................................................................................................... 85 Precision vs. Accuracy .................................................................................................................................. 85 Quality vs. Grade............................................................................................................................................ 85
  8. 8. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT MANAGEMENT DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 7 Standards vs. Regulations ............................................................................................................................. 86 Auditing ............................................................................................................................................................ 86 Processes.............................................................................................................................................................. 86 1 – Plan Quality Management (Planning) ................................................................................................. 86 2 – Manage Quality / Quality Assurance (Executing)............................................................................. 87 3 – Control Quality (Monitoring & Controlling).......................................................................................... 88 Quality Theories................................................................................................................................................... 89 Deming’s 14 Points ......................................................................................................................................... 90 David Garvin’s Attributes of Quality ........................................................................................................... 90 Quality Improvement Techniques................................................................................................................... 91 Quality Costs ....................................................................................................................................................... 91 Inspection ............................................................................................................................................................ 92 Testing............................................................................................................................................................... 92 Statistical Sampling ........................................................................................................................................ 92 Design for X.......................................................................................................................................................... 93 Seven Basic Quality Tools (7QL)....................................................................................................................... 93 Variation Causes ................................................................................................................................................ 94 Causes .............................................................................................................................................................. 94 Variation........................................................................................................................................................... 94 Additional Terms ................................................................................................................................................. 95 Chapter 9 – Resources Management ............................................................................................................... 97 Key Terms ............................................................................................................................................................. 97 Processes.............................................................................................................................................................. 97 1 – Plan Resource Management (Planning) ............................................................................................. 97 2 – Estimate Activity Resources (Planning) ................................................................................................ 98 3 – Acquire Resources (Executing).............................................................................................................. 99 4 – Develop Project Team (Executing).....................................................................................................101 5 – Manage Project Team (Executing) ....................................................................................................101 6 – Control Resources (Monitoring & Controlling) ..................................................................................102 Roles and Responsibilities................................................................................................................................103 Responsibility Matrices.................................................................................................................................103 Organizational Charts..................................................................................................................................104 Roles of Project Sponsor/Initiator...............................................................................................................105 Roles of Project Team ..................................................................................................................................105 Roles of Stakeholders...................................................................................................................................106
  9. 9. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT MANAGEMENT DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 8 Roles of Financial Manager........................................................................................................................106 Roles of Project Manager ...........................................................................................................................106 Roles of Program Manager ........................................................................................................................107 Roles of Portfolio Manager .........................................................................................................................107 Competency Model........................................................................................................................................107 Basic Social Power ...........................................................................................................................................108 Human Resource Theories ..............................................................................................................................109 Leadership Theories......................................................................................................................................109 Management Systems.................................................................................................................................112 Motivation Theories ......................................................................................................................................113 Tuckman’s Group Development Stages .................................................................................................116 Other Theories ...............................................................................................................................................116 Delegation of Authority...................................................................................................................................117 Delegation Steps ..........................................................................................................................................117 What to Delegate ........................................................................................................................................117 What not to Delegate .................................................................................................................................118 Guidelines for Effective Delegation..........................................................................................................118 Obstacles to Delegation.............................................................................................................................118 Types of Teams..................................................................................................................................................118 Virtual/Distributed Teams ............................................................................................................................119 Team Building Activities...................................................................................................................................119 Rewards and Recognition..............................................................................................................................119 Team Performance Review............................................................................................................................120 Personnel Assessment Tools / Team Performance Assessment ...........................................................120 Project Performance Appraisals................................................................................................................120 Conflict Management ....................................................................................................................................120 Sources of Conflicts......................................................................................................................................121 Conflict Resolving.........................................................................................................................................121 Stress Factors .................................................................................................................................................122 Influence Factors..........................................................................................................................................122 Additional Terms ...............................................................................................................................................122 Chapter 10 – Communication Management................................................................................................123 Key Terms ...........................................................................................................................................................123 Communication Methods/Styles...............................................................................................................123 Communication Model...............................................................................................................................123
  10. 10. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT MANAGEMENT DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 9 Communication Direction ..........................................................................................................................124 Distribution Methods ....................................................................................................................................124 Communication Types ................................................................................................................................124 Communication Technology .....................................................................................................................124 Communication Flow ..................................................................................................................................124 Processes............................................................................................................................................................125 1 – Plan Communication Management..................................................................................................125 2 – Manage Communications (Executing) .............................................................................................126 3 – Monitor Communications (Monitoring & Controlling).....................................................................126 Aspects of Effective Communication ..........................................................................................................127 Listening..........................................................................................................................................................127 Message Impact...........................................................................................................................................128 5 Cs of Effective Communication .............................................................................................................128 Formulas .............................................................................................................................................................128 Additional Terms ...............................................................................................................................................128 Chapter 11 – Risk Management .......................................................................................................................130 Key Terms ...........................................................................................................................................................130 Risk Appetite vs. Risk Tolerance .................................................................................................................130 Risk Levels.......................................................................................................................................................131 Risk Sources....................................................................................................................................................131 Processes............................................................................................................................................................132 1 – Plan Risk Management (Planning)......................................................................................................132 2 – Identify Risks (Planning) .........................................................................................................................133 3 – Perform Qualitative Risk Analysis (Planning)......................................................................................134 4 – Perform Quantitative Risk Analysis (Planning)...................................................................................135 5 – Plan Risk Responses (Planning) ............................................................................................................136 6 – Implement Risk Responses (Executing) ..............................................................................................137 7 – Monitor Risks (Monitoring & Controlling) ............................................................................................138 Perspective Project Examination / Prompt Lists (Identification)..............................................................139 Risk Parameter Assessment (Qualitative).....................................................................................................139 Sensitivity Analysis (Quantitative) ..................................................................................................................140 Expected Monetary Value (Quantitative) ..................................................................................................140 Risk Types............................................................................................................................................................141 Event-Based Risks..........................................................................................................................................141 Nonevent-Based Risks..................................................................................................................................141
  11. 11. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT MANAGEMENT DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 10 Risk Response Strategies .................................................................................................................................142 Negative Risks (Threats)...............................................................................................................................142 Positive Risks (Opportunities) ......................................................................................................................143 Contingent Response Strategy vs. Fallback Plan ......................................................................................143 Contingency Reserve vs. Management Reserve ......................................................................................143 Scales..................................................................................................................................................................144 Additional Terms ...............................................................................................................................................144 Chapter 12 – Procurement Management......................................................................................................145 Key Terms ...........................................................................................................................................................145 Contract Terms..............................................................................................................................................145 Processes............................................................................................................................................................146 1 – Plan Procurement Management (Planning) ....................................................................................146 2 – Conduct Procurements (Executing)...................................................................................................147 3 – Control Procurement (Monitoring & Controlling).............................................................................149 Make-or-Buy Analysis.......................................................................................................................................150 Factors ............................................................................................................................................................150 Formula...........................................................................................................................................................150 Negotiations......................................................................................................................................................151 Factors of Negotiations ...............................................................................................................................151 Agreement Types .............................................................................................................................................151 Procurement Documents ...............................................................................................................................152 Contract Types .................................................................................................................................................153 Fixed Price (FP) / Lump-Sum Contracts....................................................................................................153 Cost Plus (CP) / Cost-Reimbursable (CR) Contracts..............................................................................154 Time and Materials (T&M) / Unit Price Contracts ...................................................................................155 Incentives.......................................................................................................................................................155 Awards............................................................................................................................................................155 Risk...................................................................................................................................................................155 Point of Total Assumption (PTA) / Breakpoint..............................................................................................155 Formula...........................................................................................................................................................155 Example..........................................................................................................................................................156 Notes...............................................................................................................................................................156 Market Conditions............................................................................................................................................156 Handling Changes...........................................................................................................................................156 Centralized/Decentralized Contracting......................................................................................................157
  12. 12. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT MANAGEMENT DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 11 Breaches ............................................................................................................................................................157 Alternative Dispute Resolution (ADR) .......................................................................................................157 Damages .......................................................................................................................................................158 Termination........................................................................................................................................................158 Additional Terms ...............................................................................................................................................159 Chapter 13 – Stakeholder Management........................................................................................................162 Key Terms ...........................................................................................................................................................162 Processes............................................................................................................................................................162 1 – Identify Stakeholders (Initiating) ..........................................................................................................162 2 – Planning Stakeholder Engagement (Planning)................................................................................163 3 – Manage Stakeholder Engagement (Executing)..............................................................................164 4 – Monitor Stakeholder Engagement (Monitoring & Controlling) .....................................................165 Stakeholder Analysis ........................................................................................................................................166 Stakeholder Stakes.......................................................................................................................................166 Stakeholder Influence .................................................................................................................................166 Stakeholder Classifications .........................................................................................................................166 Stakeholder Engagement Grid..................................................................................................................166 Salience Model.............................................................................................................................................167 Stakeholder Cube ........................................................................................................................................169 Stakeholder Influence Mapping................................................................................................................169 Stakeholder Engagement/Assessment Matrix........................................................................................170 Requirements vs. Expectations......................................................................................................................170 Additional Terms ...............................................................................................................................................170 Chapter 14 – Professional and Social Responsibility .....................................................................................171 Responsibility .....................................................................................................................................................171 Respect ..............................................................................................................................................................171 Fairness ...............................................................................................................................................................171 Honesty...............................................................................................................................................................171 Additional Terms ...............................................................................................................................................171 Appendix A – Data Analysis Techniques .........................................................................................................173 Appendix B – Data Gathering Techniques .....................................................................................................175 Appendix C – Data Representation Tools.......................................................................................................177 Appendix D – Decision-Making Techniques ...................................................................................................185 Appendix E – Estimating Techniques................................................................................................................187 3-Point Estimates...............................................................................................................................................187
  13. 13. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT MANAGEMENT DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 12 Simple/Triangular Distribution .....................................................................................................................187 Beta Distribution / Weighted Average / PERT (Program/Project Evaluation Review Technique) 187 Other Estimating Techniques .........................................................................................................................188 Appendix F – Forecasting Methods..................................................................................................................190 Causal/Econometric Methods ......................................................................................................................190 Time Series Methods.........................................................................................................................................190 Judgmental Methods......................................................................................................................................191 Other methods..................................................................................................................................................192 Appendix G – Interpersonal/Team/Soft Skills..................................................................................................193 Reactive vs. Proactive.....................................................................................................................................195 Appendix H – Formula Sheet .............................................................................................................................196 Project Selection Methods .............................................................................................................................196 Depreciation .................................................................................................................................................196 Planned Value ..............................................................................................................................................196 Other Methods..............................................................................................................................................197 Schedule Management .................................................................................................................................197 Cost Management ..........................................................................................................................................197 Earned Value Management (EVM)..........................................................................................................197 Communication ...............................................................................................................................................200 Risk Management ............................................................................................................................................200 Procurements....................................................................................................................................................200 Estimates ............................................................................................................................................................201
  14. 14. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT MANAGEMENT DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 13 Project Management Project management is the application of knowledge, skills, tools, and techniques to manage activities to meet the project requirements. Portfolio, Program, Project and Operations Portfolio –  A group of projects, programs, and operations that are linked together by a business goal to facilitate effective management to meet strategic business objectives.  Usually the responsibility of senior management.  Success is measures in terms of aggregate performance of portfolio components. Program – A group of projects that are closely linked, to the point where managing them together provides some benefit. Programs usually include an element of ongoing activity. Project – a temporary endeavor that is progressively elaborated and produces a specific result.  Tactical – One operational goal. Probably does not entail contributions by most employees. e.g. Moving to a new building  Strategic – has a primary goal of gaining the competitive advantage by focusing on the organization's overall direction. Operations/Processes –  Ongoing work to support the business and systems of the organization.  Permanent endeavors.  Produce repetitive outputs. Projects intersect with operations in many cases including –  At each closeout phase.  While expanding outputs.  During the product development process.  Until the end of the product life cycle.  When improving operations or the product development lifecycle. Project Initiation Context Why projects are created – 1. Regulatory, legal, or social requirements. 2. Stakeholder requests. 3. Technological advances.
  15. 15. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | BENEFITS REALIZATION MANAGEMENT (BRM) DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 14 4. Create, improve, or fix products, processes, or services. Benefits Realization Management (BRM) Benefits Realization Management (BRM) – provides organizations with a way to measure how projects and programs add true value to the enterprise. Identify Benefits Position the intended business results as criteria for determining the best project and program investments by –  Utilizing the appropriate tools, such as a benefits register, benefits realization roadmap, and benefits breakdown structures.  Confirming that key stakeholders, sponsors, and customers have reviewed and approved the benefits realization roadmap.  Developing meaningful metrics and key performance (KPI) indicators to measure the actual delivery of benefits versus the planned benefits Execute Benefits Prepare to capture and realize both intended and unintended benefits to minimize risks to future benefits and maximize the opportunity to gain additional benefits by –  Ensuring the project or program remains aligned with the organization’s strategic objectives.  Evaluating risks and KPIs related to financials, compliance, quality, safety, and stakeholder satisfaction, as they might impact the delivery of benefits  Recording progress and reporting to key stakeholders as directed in the communication plan  Ensuring key stakeholders and beneficiaries have reviewed, understand, and act in accordance with identified benefit realization dependencies. Sustain Benefits Deliver continuous value from outputs and outcomes once they transition back to the business by –  Implementing the required change control based on defined level of tolerance, and taking corrective action.  Performing a benefits assessment, which includes formally verifying that the benefits have been delivered and are being realized.  Sharing crucial information about how the deliverables are contributing to business success.  Monitoring the continued suitability of the new capability or other change factors.  Monitoring actual benefit results against targets and managing for variances. Business Documents Contains, but not limited to –
  16. 16. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT SELECTION METHODS DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 15 Business Case A document studies why it is worth to spend money on the project (benefits/reasons/financial validity.) It is the result of Business Case Analysis (BCA), it could be at program level and it is the responsibility of project sponsor. It tells us the following –  Identify business needs (business problems, opportunities, stakeholders affected, etc.)  Project feasibility – o Market Demand – For example, building more fuel-efficient cars in response to gasoline shortages. o Social Need o Ecological/Environmental Impact o Organizational Need o Customer Requests  Project determination (organization strategies, goals, objectives, known risks, gap analysis, etc.)  Analysis of the situation.  Recommendations for the project.  Documents high-level strategic and operational assumptions.  Should be reviewed periodically on multi-phase projects to ensure the project is on track to deliver the business benefits.  Critical Success Factors – what constitutes success and the ways you know that you are project is successful.  Business value – the value/benefits that your project creates for the organization. It is generally described in Business Case document. o Tangible – Like monetary assets and market share. o Intangible – Like goodwill, reputation and brand recognition. Benefit Management Plan Describes how and when the benefits of the deliverables of the project will bring and describes how to measure the benefits (also including the alignment with organization strategies, assumptions and risks). Often created by business analyst.  Target Benefits – Such as expected tangible and intangible value.  Strategic Alignment – How project benefits align to the business strategies.  Timeframe – When will benefits be realized (by phase / short-term / long-term / ongoing / etc.)  Metrics – The measures to be used to show benefits realized, direct measures, and indirect measures.  Assumptions – The factors expected to be in place or to be in evidence.  Risks – The risks for realization of benefits. Project Selection Methods Project Selection is a process to assess each project idea and select the project with the highest priority.
  17. 17. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT SELECTION METHODS DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 16  Projects are still just suggestions at this stage, so the selection is often made based on only brief descriptions of the project.  Any selection technique must be evaluated based on the degree to which it will meet the organization’s objective for the project.  The most important criterion for building project selection method is realism. Benefit Measurement Methods (Comparative Approach) Depreciation  Depreciation – A reduction in the value of an asset over time.  Salvage Value – The estimate resale value of an asset at the end of its useful life.  Book Value – The asset's cost minus the asset's accumulated depreciation Straight Line Depreciation – The same amount of depreciation is taken each year. E.g. A $1000 item with a 10-year useful life and no salvage value would be depreciated at $100 per year. Accelerated Depreciation – Faster than straight line.  Double Declining Balance  Sum of Years Digits (SYD) Double Declining Balance – Percentage is double the straight line depreciation. Sum of Years Digits (SYD) – 𝑺𝒀𝑫 = 𝒏 (𝒏 + 𝟏) 𝟐 = 𝟓𝒚𝒆𝒂𝒓𝒔 = 𝟓(𝟓 + 𝟏) 𝟐 = 𝟏𝟓 𝑫𝒆𝒑𝒓𝒆𝒄𝒊𝒂𝒕𝒊𝒐𝒏 𝑬𝒙𝒑𝒆𝒏𝒔𝒆 = 𝑹𝒆𝒎𝒂𝒊𝒏𝒊𝒏𝒈 𝒖𝒔𝒆𝒇𝒖𝒍 𝒍𝒊𝒇𝒆 𝒔𝒖𝒎 𝒐𝒇 𝒚𝒆𝒂𝒓𝒔 𝒅𝒊𝒈𝒊𝒕 ∗ 𝑫𝒆𝒑𝒓𝒆𝒄𝒊𝒂𝒃𝒍𝒆 𝑪𝒐𝒔𝒕
  18. 18. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT SELECTION METHODS DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 17 Return on Investment (ROI) Return on Investment (ROI) –  Measures the gain or loss generated on an investment relative to the amount of money invested.  It defines the cumulated net income from an investment at a given point in time or during a defined period.  It includes investment, direct and indirect costs and may include allowances for capital cost, depreciation, risk of loss, and/or inflation.  It is most commonly stated as a percentage of the investment or as a dimensionless index figure.  It is typically used for personal financial decisions, to compare a company's profitability or to compare the efficiency of different investments. 𝑹𝑶𝑰 = 𝑵𝒆𝒕 𝑷𝒓𝒐𝒇𝒊𝒕 (𝑹𝒆𝒕𝒖𝒓𝒏) 𝑰𝒏𝒗𝒆𝒔𝒕𝒎𝒆𝒏𝒕 (𝑪𝒐𝒔𝒕) Future Value (FV) Future Value (FV) – To determine the future value of present money. 𝑭𝑽 = 𝑷𝑽 (𝟏 + 𝒊) 𝒏 PV = Present value i = interest rate n = number of periods Present Value (PV) Present Value (PV) – The current worth of a future sum of money given a specific rate of return. 𝑷𝑽 = 𝑭𝑽 (𝟏 + 𝒊) 𝒏 FV = Future value i = interest rate n = number of periods E.g. Receiving $100 at the end of two years with interest rate of 8% = $58 now.
  19. 19. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT SELECTION METHODS DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 18 𝟏𝟎𝟎 (𝟏 + 𝟎. 𝟎𝟖) 𝟐 = 𝟖𝟓. 𝟕 Net Present Value (NPV) Net Present Value (NPV) / Net Present Worth (NPW) – The difference between the project’s current value of cash inflow and the current value of cash outflow over many time periods. The NPV must always be positive. When picking a project, one with a higher NPV is preferred. To calculate NPV, you need to calculate the PV of both income and cost figures. You then sum the income PVs and subtract the sum of cost PVs to get the value of NPV. 𝑵𝑷𝑽 = −𝑪 𝟎 + ∑ 𝑪𝒕 (𝟏 + 𝒓)𝒕 𝑻 𝒕=𝟏 Simplified – 𝑵𝑷𝑽 = −𝑪 𝟎 + 𝑪 𝟏 𝟏 + 𝒓 + 𝑪 𝟐 (𝟏 + 𝒓) 𝟐 + ⋯ + 𝑪 𝑻 (𝟏 + 𝒓) 𝑻 -C0 = Initial investment C = Future cash flow r = Interest rate T = Time period Internal Rate of Return (IRR) Internal Rate of Return (IRR) – is a method of calculating rate of return. It is a discount rate that makes the Net Present Value (NPV) of all cash flows from a particular project equal to zero. In other words, if we computed the present value of future cash flows from a potential project using the internal rate as the discount rate and subtracted out the original investment, our net present value of the project would be zero.  IRR is considered the minimum discount rate that management uses to identify what capital investments or future projects will yield an acceptable return and be worth pursuing.  You can think of the internal rate of return as the interest percentage that company has to achieve in order to break even on its investment in new capital.  The term “internal” refers to the fact that its calculation does not involve external factors, such as inflation or the cost of capital.  The higher the IRR number, the better. 𝑰𝑹𝑹 = 𝟎 = −𝑪 𝟎 + 𝑪 𝟏 𝟏 + 𝒓 + 𝑪 𝟐 (𝟏 + 𝒓) 𝟐 + ⋯ + 𝑪 𝑻 (𝟏 + 𝒓) 𝑻 -C0 = Initial investment C = Future cash flow r = Interest rate T = Time period
  20. 20. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT SELECTION METHODS DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 19 Example – Tom is considering purchasing a new machine, but he is unsure if it’s the best use of company funds at this point in time. With the new $100,000 machine, Tom will be able to take on a new order that will pay $20,000, $30,000, $40,000, and $40,000 in revenue. Since it’s difficult to isolate the discount rate unless you use an excel IRR calculator. You can start with an approximate rate and adjust from there. Let’s start with 8 percent. As you can see, our ending NPV is not equal to zero. Since it’s a positive number, we need to increase the estimated internal rate. Let’s increase it to 10 percent and recalculate. As you can see, Tom’s internal return rate on this project is 10 percent. He can compare this to other investing opportunities to see if it makes sense to spend $100,000 on this piece of equipment or investment the money in another venture. Other Methods Discounted Cash Flow – future cash flows are estimated and discounted by using cost of capital to give their present values. Economic Value Added (EVA) –  An estimate of economic profit, or the value created in excess of the required return of the shareholders.  It is also defined as the net profit after the deduction of taxes, capital expenditure, and opportunity cost.  Indicates whether a company s creating or destroying value to its shareholders.  Example – for a project cost of $100, the estimated return for 1st year is $5, assuming the same money can be invested to gain 8% per year, then the EVA is $5 – $100 * 8% = -$3. Murder Board / Scrub-Down – a committee of questioners set up to critically review the project and to identify as many possible threats to the project. Opportunity Cost – is the cost that is given up when selecting another project. It is the cost of the project not selected. Payback Period / Management Horizon –  The time necessary for the organization to recover the cost invested before it starts accumulating profit.  The project with the shorter period is better.
  21. 21. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | CONSTRAINTS DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 20  The initial investment in the project will not impact the selection criteria when payback period is used for project selection. Peer Reviews – you present the project proposal to the peers in the organization. These peers review the project and then recommend some best practices adopted in other projects. The peers also check for the viability of the project. Scoring Model – the project selection committee lists relevant criteria, weighs them according to their importance and their priorities, and then adds the weighted values. Benefit/Cost Ratio (BCR) – the ratio between the Present Value of Inflow (the cost invested in a project) and the Present Value of Outflow, which is the value of return from the project. Projects that have a higher Benefit Cost Ratio or lower Cost Benefit Ratio are generally chosen over others. Constrained Optimization Methods / Mathematical Model Used for larger projects that require complex and comprehensive mathematical calculations.  Linear Programming  Non Linear Programming  Integer Programming  Dynamic Programming  Multiple Objective Programing Non-Financial Considerations Other organizational factors. May include political issues, change of management, speculative purposes, shareholders’ requests, etc. Constraints Constraints are factors that limit the team’s options.
  22. 22. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT LIFECYCLE DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 21 1. Time 2. Cost 3. Scope – What should be included in the project and what should not. 4. Resources – People or material you need for your project. 5. Quality 6. Risk – Whenever you make assumptions about a project, you are introducing risk. Triple Constraint / Iron Triangle – Time, cost and scope Theory of Constraints  Identifying the most important limiting factors, eliminate them, then looking at the next most important limiting factors.  Systematically improving that constraint until it is no longer the limiting factors.  Constraints are often referred to as bottlenecks.  The Goal by Dr. Eliyahu M. Goldratt Project Lifecycle Project Management Lifecycle – Refer to Initiation, Planning, Executing, Monitoring & Controlling, and Closing (IPECC). Project Lifecycle –  Unique to each type of project.  Refers to methodology and phases of a project within an organization.  Each phase can consist of any activities from the process groups.  Have a definite end.  Phases may repeat.  Phases are generally sequential but can overlap. Product Lifecycle / Project Lifecycle Management (PLM) –  The process of managing the entire lifecycle of a product from its conception, through design and manufacture, to service and disposal.  PLM integrates people, data, processes, and business systems to provide a product information backbone for companies.  A product can spawn or require many projects over its life and each project has its own project lifecycle.  Does not have a definite end.  Phases occur only once.  Phases are sequential. The five stages of a product's life are – 1. Development / Conception – generating ideas and creating the product. 2. Introduction – marketing the product and selling it. 3. Growth – sales increase
  23. 23. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT MANAGEMENT METHODOLOGY (PMM) DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 22 4. Maturity – product is accepted widely and sales are at their peak. 5. Decline / Withdrawal / Retirement – selling out all of your inventory and move on to the next product. Project Management Methodology (PMM) A project management methodology is essentially a set of guiding principles and processes for managing a project. Your choice of methodology defines how you work and communicate. Predictive Lifecycle / Plan-Driven / Waterfall Predictive life cycles are ones in which the project scope, and the time and cost required to deliver that scope, are determined as early in the project life cycle as practically possible.  Fixed in scope. Variable in time and cost.  Divided into discrete stages.  Sequential, heavily requirements-focused.  Easy-to-use.  Implies high risk.  Best for – o Short, simple projects. o Projects with clear and fixed requirements. Iterative and Incremental Lifecycles / Iterations  Iterative and incremental life cycles are ones in which project phases intentionally repeat one or more project activities as the project team’s understanding of the product increases.  Iterations develop the product through a series of repeated cycles.  Increments successively add to the functionality of the product.  For each iteration, you have to collect requirements, define scope, and define the WBS.  Risk is analyzed before the start of each iteration.  Work items are documented into a backlog where an accumulation of work waiting to be done or orders to be fulfilled is available.
  24. 24. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT MANAGEMENT METHODOLOGY (PMM) DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 23 Adaptive Lifecycle / Change-Driven / Agile Adaptive life cycles are intended to respond to high levels of change and ongoing stakeholder involvement. Characteristics  Adaptive methods are also iterative and incremental, but differ in that iterations are very rapid (usually with duration of 1 to 4 weeks).  Fixed in time and cost. Variable in scope.  Documentation is not considered an added value in agile projects.  Face-to-face and informal communication.  Usually fist-to-five (or fist-of-five) voting methods is used in agile projects.  Team and Management – o Self-organizing teams. o PM has a servant leadership approach. o Team functions with an absence of centralized control. o Team members are generalists (instead of SMEs), they are local domain experts, and they determine how plans and components should integrate. o Collaboration to boost productivity.  Scope (or Backlog) – o No new work during the iteration. o Emerging requirements (also called progressive elaboration). o Scope is not fully defined at start. o The team estimate their capacity regarding the items on the backlog.  Risk – o More risky. o Risk is considered when selecting the contents for each iteration. Agile Release Planning
  25. 25. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT MANAGEMENT METHODOLOGY (PMM) DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 24  High-level summary of when we expect the product to be released.  Product roadmap.  The number of iterations/sprints. Iteration Burndown Chart A chart that shows how quickly (rate/velocity) you and your team are burning through your customer's user stories. It tracks the work remaining, and help analyzing the variance. Terms Backlog (Product Scope) – a prioritized list of requirements. Owned by product owner. Grooming the Backlog / Backlog Refinement / Scrum Artifact – The owner of the product prioritizes the backlog before each iteration/sprint of the project.
  26. 26. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT MANAGEMENT METHODOLOGY (PMM) DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 25 Timebox – a previously agreed period of time during which a person or a team works steadily towards completion of some goal. Story Points – an abstract measure of effort required to implement a user story. The team work together to agree on estimates in a group setting. Scrum  Scrum is a specialized agile method.  Focuses on project team.  Involves daily 15-minutes stand-up meeting.  Can easily lead to scope creep because there’s no fixed end-date. Sprint – Refers to an iteration or development cycle in Scrum. Sprint Review – To look back at what worked in that sprint. Retrospective – the last meeting done in a sprint. The entire team, including both the Scrum Master and the product owner should participate to determine what could be changed that might make the next sprint more productive. Planning Poker / Scrum Poker – a consensus-based, mostly used to estimate effort or relative size of development goals in software development. In planning poker, members of the group make estimates by playing numbered cards face-down to the table, instead of speaking them aloud. The cards are revealed, and the estimates are then discussed. By hiding the figures in this way, the group can avoid the cognitive bias of anchoring, where the first number spoken aloud sets a precedent for subsequent estimates. Extreme Programming (XP) Extreme programming (XP) is a software development methodology which is intended to improve software quality and responsiveness to changing customer requirements.  A type of agile software development.
  27. 27. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT MANAGEMENT METHODOLOGY (PMM) DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 26  Advocates frequent "releases" in short development cycles, which is intended to improve productivity and introduce checkpoints at which new customer requirements can be adopted.  Analysis, design, coding, and testing phases are done everyday. Hybrid Lifecycle / Structured Agile A combination of predictive, iterative, incremental, and/or agile approaches is a hybrid approach. Gates Methodology Gates methodology is a project management technique in which an initiative or project (e.g., new product development, process improvement, and business change) is divided into distinct stages or phases, separated by decision points (known as gates.) Gate / Tollgate / Phase Gate / Stage Gate / Water Gate / Kill Point / Exit Gate / Phase Exit Review – a standardized control point where the projects phase is reviewed and/or audited and approved (or not) to continue with the next phase. The gates allow to verify if the project reaches the expected performance.  Called a Kill Point because it is an opportunity to kill the project.  Funding might occur at phase gates.  Not necessary to have a phase gate at project closure. Integrated Project Management (IPM)  Sometimes called Integrated Project Delivery.  Emphasizes sharing and standardization of processes across the organization.  Requires extensive upfront planning to ensure that all processes are well-integrated. Projects integration Sustainable Methods (PRiSM)  Developed by Green Project Management (GPM) Global.  Focuses on accounting for and minimizing adverse environmental impacts of the project.  Extends beyond the end of the project to maximize sustainability.
  28. 28. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | PROJECT DOCUMENTS DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 27 Projects IN Controlled Environments (PRINCE2)  Official project management methodology of the UK government.  Requires extensive documentation.  Based on 7 principles, 7 themes and 7 processes. The 7 PRINCE2 principles, for instance, are – o Continued business justification o Learn from experience o Defined roles and responsibilities o Manage by stages o Manage by Exception o Focus on products o Tailor to suit the project environment Project Documents Refer to any project-related documents that are not part of the project management plan. Activity Attributes Lessons Learned Register Quality Control Measurements Risk Report Activity List Milestone List Quality Metrics Schedule Data Assumptions Log Physical Resource Assignments Quality Reports Schedule Forecasts Basis of Estimates Project Calendars Requirements Documentation Stakeholder Register Change Log Project Communications Requirements Traceability Matrix Team Charter
  29. 29. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | ADDITIONAL TERMS DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 28 Cost Estimates Project Schedule Resource Breakdown Structure Test and Evaluation Documents Cost Forecasts Project Schedule Network Diagram Resource Calendars Duration Estimates Project Scope Statement Resource Requirements Issue Log Project Team Assignments Risk Register Additional Terms Application Areas – The areas of expertise, industry, or function where a project is centered. E.g. IT, healthcare, etc. Cultural and Social Environment – How a project affects people and how these people may affect the project. Includes economics, religions, demographics, etc. MACD – Move, Add, Change, and Delete Line of Business (LOB) – is a general term which refers to a product or a set of related products that serve a particular customer transaction or business need. Management by Exception (Financial) – The practice of examining the financial and operational results of a business, and only bringing issues to the attention of management if results represent substantial differences from the budgeted or expected amount. PMI Talent Triangle – 1. Technical Project Management – enable the PM to effectively apply project management knowledge. Examples are resource management, tailoring, risk management, rolling-wave planning, integrated change control, etc. 2. Leadership / Interpersonal – allows PM to guide, motivate, and direct the team. Includes influencing the organization, sharing power, creating an environment to meet project objectives, and helping a group of people to bond. 3. Strategic and Business Management – ensure that the PM can see the high-level overview of the organization and effectively negotiate and implement decisions and actions that support strategic alignment and innovation. Progressive Elaboration – Refers to the technique of which the plan for the particular project is being continuously and constantly modified, detailed, and improved as newer and more improved sets of information becomes available to the project management team.
  30. 30. PM NOTEBOOK CHAPTER 1 – INTRODUCTION | ADDITIONAL TERMS DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 29
  31. 31. PM NOTEBOOK CHAPTER 2 – ORGANIZATIONS | ENTERPRISE ENVIRONMENTAL FACTORS (EEFS) DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 30 If you want something done right… better hope you are in the right kind of organization. Enterprise Environmental Factors (EEFs) Conditions, not under the control of the project team, that influence, constrain, or direct the project. It is the way your company is set up, the way people are managed, the processes your team needs to follow to do their jobs... they all can have a big impact on how you manage your project. Internal –  People – Skills and culture.  Databases  Standards  Risk Tolerance  Resource Availability  Authorization System – How work is assigned to people. Ensures that every work package is done at the right time and in the proper sequence.  Organizational Governance Framework – a structured way to provide control, direction, and coordination through people, policies, and processes to meet organizational strategic and operational goals. o Alignment with organizational mission o Performance on time, cost, and scope o Communication with stakeholders External –  Weather  Marketplace Conditions  Laws and Regulations  Politics  Government and Industry Standards Project Management Information System (PMIS) Part of EEFs. A computer-driven system to aid in the development of the project. It can calculate schedules, costs, expectations, and likely results. An example of a PMIS is Microsoft Project. Features of a PMIS – Scheduling Tools
  32. 32. PM NOTEBOOK CHAPTER 2 – ORGANIZATIONS | ORGANIZATIONAL PROCESS ASSETS (OPAS) DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 31 Work Authorization System – For authorizing the start of work packages or activities. Configuration Management System – It is a tool for establishing and monitoring consistency of a project performance, functional, and physical attributes. It manages items that require formal change control. It can store project management plan, risk register, calendars, and other project documents. Change Control System (CCS) – Includes standardized forms, reports, processes, procedures, and software to track and control changes.  Configuration/Change Control Board (CCB) – A committee that evaluates the worthiness of proposed changes. Information Collecting/Distribution System Organizational Process Assets (OPAs) Templates, forms, and previous work of the company, stored in corporate knowledge base (KB).  Templates  Contracts  Registers  Assessment Tools  Historical Data  Databases  Project files  Lessons Learned  Corporate/Organizational Knowledge Repository/Base – Where historical data, databases, and other data are stored.  Project Governance Framework – The organization’s established criteria, procedures, and guidelines intended to make sure projects meet organization’s strategic goals.  Personnel Administration – Includes employee development and training records and competency frameworks that refer to knowledge sharing behaviors.  Industry Project Management Body of Knowledge – sets forth guidelines and criteria to tailor the organization’s processes to satisfy specific needs of the project.  Change Control Procedures  Configuration Management Knowledge Base  Versions  Baselines Organization System  Structure and governance  Permissions  Work authorization  Employee discipline
  33. 33. PM NOTEBOOK CHAPTER 2 – ORGANIZATIONS | ORGANIZATIONAL STRUCTURE DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 32  System dynamics o Relationship between components o Policies o Bureaucracy Organizational Structure An organizational structure defines how activities such as task allocation, coordination, and supervision are directed toward the achievement of organizational aims. During project formation, there is always an element of confusion or lack of clarity regarding the balance of power between the project manager and the functional manager. If not resolved, such confusion manifests itself in conflicts regarding technical decisions, resource allocations, and scheduling later in the project. Organic/Simple –  Loosely organized business or organization.  The project manager likely has little control over the project resources and may not be called a project manager. Pre-Bureaucratic –  Totally centralized.  Strategic leader makes all key decisions and most communications are done by one on one conversations. Functional/Centralized/Bureaucratic/Traditional –  People who do similar tasks are grouped together based on specialty. Functional organizations are organized around the functions the organization need to be performed.  Functions include – HR, IT, Sales, Marketing, Administration, etc.  The Project Management role will be performed by a team member of a functional area under the management of a functional manager.  Resources are controlled and authorized by functional managers.  The Project Management role would act more like a Project Coordinator or Project Expediter who do not usually carry the title of Project Manager.  Project Management is considered a part-time responsibility.  Authority of the Project Manager is very limited.  Major difficulties arise when multiple projects need to be managed because of conflicts over the relative priorities of different projects in competition for limited resources. Divisional –  People are grouped into teams based on the products or projects that meet the needs of a certain customer.
  34. 34. PM NOTEBOOK CHAPTER 2 – ORGANIZATIONS | ORGANIZATIONAL STRUCTURE DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 33  An example is a company that runs many brands that each brand acts as an individual company. Multidivisional –  Same characteristics as functional, however, it has duplication of efforts within the organization, but not within each department or division of the organization.  Project manager has little authority in this structure and the functional manager controls the project budget.  An example, having an IT group within financial and manufacturing departments. Matrix Organization –  Groups people into functional departments of specialization, then further separates them into divisional projects and products.  They are organizations with structures that carries a blend of the characteristics of functional and projectized organizations.  Best for complex projects because of the mix of functional expertise and project management.  Matrix organizations can be classified as weak, balanced or strong based on the relative authority of the Functional Manager and Project Manager.  Weak Matrix – o Team has a blend of departmental and project duties. o The Project Manager is given a role of more like Project Coordinator or Project Expediter. Team members report to functional manager.  Strong Matrix – o The Project Manager is given much more authority on resources and budget spending.  The differentiations between Functional Organization vs. Weak Matrix and also Projectized Organization vs. Strong Matrix are not very clear cut.  The primary condition leading to conflict in matrix structure is ambiguous jurisdictions that’s when two or more parties have related responsibilities, but their work boundaries and role definitions are unclear.  The dual reporting relationship should be fixed by the project manager. Project-Oriented/Composite/Hybrid/Projectized – Projectized Organizations are organized around projects for maximal project management effectiveness.  The Project Manager is given more authority and resources control.  The Project Manager is responsible to the Sponsor and/or Senior Management.  The Project Manager is usually a full-time role.  Project managers may compete for stockpile resources.  Team members are usually co-located within the same office / virtually co-located to maximize communication effectiveness.  There can be some functional units within organization, however, those units are having a supportive function only without authority over the project manager
  35. 35. PM NOTEBOOK CHAPTER 2 – ORGANIZATIONS | PROJECT EXPEDITER VS. PROJECT COORDINATOR DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 34  Team members are from several departments and are selected to create a task force to implement the project. Virtual –  An organization involving detached and disseminated entities (from employees to entire enterprises) and requiring information technology to support their work and communication.  Project manager has low authority.  Single point of contact for each group.  Communications can be challenging. Hybrid – A blend of the functional, projectized and matrix organization styles. Project manager’s power is unique to the structure. PMO Structure –  Provides uniform approach to all projects. Can be supportive, controlling, or directive (highest control).  Can feel disconnected from project managers, stakeholders, or team. Flat/Flatarchy Structure – Management is decentralized. Each employee is the boss of themselves. Project-Based Organizations (PBO) Project-Based Organizations (PBO) – temporary structures created to facilitate the execution of projects. PBOs can exist within all forms of organizations. The project staff could be full time or part time, and they report to the project manager. The project managers report to the manager of project managers. PBO facilitates project execution by speeding up project based decision making. Project Expediter vs. Project Coordinator Project Expediter – A project expediter works as staff assistant and communications coordinator. The expediter cannot personally make or enforce decisions. He usually collects or reports data to the project manager. Project Coordinator – Project coordinators have the power to make some decisions, have some authority, and report to a higher-level manager. Organizational Hierarchy 1. Top / Strategic Management – Managers at the highest level. Their job –  Long-term objectives  Policies  Organizing
  36. 36. PM NOTEBOOK CHAPTER 2 – ORGANIZATIONS | PROJECT MANAGEMENT OFFICE (PMO) DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 35 2. Middle Management – Implement and control plans of top management. Examples are factory managers and division heads.  Departmental objectives  Assignment of duties  Coordination 3. Supervisory / Operational / Lower Management – Operate the schedule of actions desired from the staff. Examples are supervisors, foremen, and inspectors.  Discipline  Supervision  Training Project Management Office (PMO) Also called project office and project headquarters. A PMO is the center of excellence for project management in an organization. It is a central office that oversees all projects within an organization or within a functional department. A PMO supports the project manager through software, training, templates, policies, communication, dispute resolution, and other services (audits, resource management, etc.).  Supportive – Consultative role, templates, training, etc.  Controlling Compliance through a framework, governance, templates, etc.  Directive (highest) – o Directly manages the project. o Can set dates for beginning and terminating projects. o Can select, manage, and deploy resources. o Can manage shared resources. o PM is part of PMO. Organizational Project Management (OPM) OPM is the systematic coordination and management of projects, programs, and portfolios in alignment with the achievement of strategic goals. You can think of OPM as a framework for keeping the organization as a whole focused on the overall strategy. It provides direction for how portfolios, programs, projects and other organizational work should be prioritized, managed, executed, and measured to achieve strategic goals. Organizational Project Management Maturity Model (OPM3) OPM3 is PMI’s organizational project management maturity model. It is designed to help organizations determine their level of maturity (process capability) in project management. Capability Maturity Model Integration (CMMI) CMMI is a process improvement approach that helps organizations improve their performance. It can be used to guide process improvement across a project, a division, or an entire organization. Currently, it addresses three areas of interest –
  37. 37. PM NOTEBOOK CHAPTER 2 – ORGANIZATIONS | PROJECT ENVIRONMENT DISCLAIMER: THE MATERIAL INCLUDED IN THIS DOCUMENT IS BASED ON DATA / INFORMATION GATHERED FROM VARIOUS RELIABLE SOURCES. NONE OF THIS DATA / INFORMATION IS A PROPERTY OF THE AUTHOR. 36  Product and Service Development – CMMI for Development (CMMI-DEV)  Service Establishment, Management, and Delivery – CMMI for Services (CMMI-SVC)  Product and Service Acquisition – CMMI for Acquisition (CMMI-ACQ) Project Environment  Physical Elements – o Location of project work o Working conditions o Weather o Constraints o External EEFs  Social and Cultural Influences – o Political climate o Codes of conduct o Ethics o External EEFs  Organizational Culture and Structure – o Vision and mission o Values and beliefs o Cultural norms o Hierarchy and authority o Internal EEFs  Infrastructure Environmental Factors o Facilities o Equipment o Telecommunication Channels o Internal EEFs Project Complexity Complexity is a characteristic of a program or project or its environment that is difficult to manage due to (dimensions of complexity) –  Human Behavior  System Behavior  Ambiguity Project Success Factors Internal Factors Those 10 characteristics found to be critical to project implementation success – 1. Project mission – Initial clarity of goals and general directions. 2. Top management support – Willingness of top management to provide the necessary resources and authority/power for project success.

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