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Project Integration
Management
PMP Preparation Course
March – April 2015
Session 3
by Andrey Mikityuk
Head of Project Management Team
Credit Suisse Moscow
Overview
Initiating Planning Executing Monitoring
and
Controlling
Closing
Develop
Project
Charter
Develop
Project
Management
Plan
Direct and
Manage
Project Work
Monitor and
Control
Project Work
Perform
Integrated
Change
Control
Close Project
or Phase
Integration Management – balancing all knowledge areas with each
other
Develop Project Charter
Develop
Project
Charter
Inputs
1. Project Statement
of Work
2. Business Case
3. Agreements
4. Enterprise
Environmental
Factors
5. Organizational
Process Assets
Outputs
1. Project Charter
Tools and
Techniques
1. Expert Judgment
2. Facilitation
Techniques
• Business need
• Product Scope
Description
• Strategic Plan
• Business
need
• Cost/Benefit
Analysis
Contracts,
memorandums,
letters of intent,
verbal, email, etc.
• Government
standards
• Organizational
culture
• Marketplace
conditions
• Standards, policies,
procedures
• Templates
• Historical
information and
lessons learned
• Brainstorming
• Conflict resolution
• Problem solving
• Meeting
management
Business Case
Fundamentals
 every project should have a business case
 project is selected only based on sound business case (no “management discretionary”
projects)
 project manger should be assigned as early as feasible (prior to start of planning), and
understands the business case and reason for project selection
Business case is important – it affects decision-making
Project can be initiated as a result of:
 Market demand
 Organizational need (e.g., reduce costs)
 Customer request
 Technological advance
 Legal requirement
 Ecological impacts
 Social need
Project Charter
 Project Name and Description
 Project Sponsor(s)
 Business Case, Objectives and Success Criteria
 Project manager and his authority
 Pre-assigned resources
 High-level requirements
 Summary milestone schedule
 High-level budget
 High-level risks
 Assumptions and constraints
 Known stakeholders
 Project approval requirements (who approves what)
Project charter
defines
project
boundaries
Project Selection
Benefit measurement models
(comparative approach)
• Murder board
• Peer review
• Scoring model
• Economic models
• Present Value (PV)
• Net Present Value (NPV)
• Internal Rate of Return
(IRR)
• Payback period
• Cost-Benefit ratio
• Economic Value Added
(EVA)
Constrained optimization
methods (mathematical approach)
• Linear programming
• Integer programming
• Dynamic programming
• Multi-objective programming
Methods
Image from John E. A. Bertram’s article “Constrained optimization in human walking: cost minimization and gait plasticity”
http://jeb.biologists.org/content/208/6/979.figures-only
IRR formal definition: rate at which
NPV = 0
Simple: rate which your project
returns if you treat it as investment
Economic Models
You may be asked to calculate PV and cost/benefit; for others just
understand the idea
Payback period – number of
periods (years / months) to
return invested money (also:
break-even point)
Cost-Benefit ratio =
Benefit (Revenue) / Cost
Remember: revenue, not profit
Economic Value Added (EVA)
= Net Operating Profit After
Taxes – Cost of Capital
Return of Investment =
(revenue – cost) / cost (simple)
Total Cost of Ownership (TCO) –
cost including non-project costs
(operational)
Few More Economic
Concepts
 Opportunity Cost
 Sunk Costs
 Law of Diminishing Returns
 Working Capital
 Depreciation
◦ Straight-line depreciation
◦ Accelerated depreciation
Develop Project Management
Plan
Develop
Project
Management
Plan
Inputs
1. Project Charter
2. Outputs from other
processes
3. Enterprise
Environmental
Factors
4. Organizational
Process Assets
Outputs
1. Project
Management Plan
Tools and
Techniques
1. Expert Judgment
2. Facilitation
Techniques
• Governmental or
industry
standards
• PM practices for
the industry (e.g.
construction or
software
development)
• PMIS
• Organizational
structure, culture,
management
practices
• Infrastructure
(existing facilities
and capital
equipment)
• Staff
management
practices
(hiring/firing,
performance
reviews, etc)
• Standardized guidelines
• Project Management plan template
• Guideline for tailoring
• Project closure guidelines (validation and
acceptance criteria)
• Change control procedures
• Project files from previous projects
• Historical information and lessons learned
• Configuration management knowledge base (versions
and baselines of all standards and policies)
• Tailor the process
• Develop technical details
• Determine resources and skills
needed
• Define level of configuration
management
• Determine which projects will be
subject for change control
• Set priorities
Project Management Plan
Management Plans
 Change MP
 Configuration MP
 Scope MP
 Requirements MP
 Schedule MP
 Cost MP
 Quality MP
 Process Improvement plan
 Human Resource MP
 Communications MP
 Risk MP
 Procurement MP
 Stakeholder MP
Baselines
 Scope
 Schedule
 Cost
Other
 Life Cycle of the project
 Details of tailoring decisions
 How integrity of project
baselines will be maintained
Knowledge Area
Integration
Scope
Schedule
Cost
Quality
Human Resource
Communications
Risk
Procurement
Stakeholder
performance
measurement
baseline
Good project plan is…
 Iterative and non-contradictory
 Consistent with PMO guidelines
 Validated with program/portfolio managers
 Impact from/to other projects incorporated
 Has inputs from all internal stakeholders, including:
◦ Team members
◦ Resource managers
◦ Sponsor
 Has buy-in (approved)
 Realistic (everybody believe it can be met)
Don’t forget kick-off meeting which finalizes planning process!
Direct and Manage Project
Work
Direct and
Manage
Project Work
Inputs
1. Project
Management Plan
2. Approved Change
Requests
3. Enterprise
Environmental
Factors
4. Organizational
Process Assets
Outputs
1. Deliverables
2. Work performance
data
3. Change requests
4. Project
management plan
updates
5. Project documents
updatesTools and
Techniques
1. Expert Judgment
2. Project
Management
Information
System (PMIS)
3. Meetings
• Organizational,
company or
customer culture
• Infrastructure
(existing
facilities and
capital
equipment)
• Staff
administration
• Stakeholder risk
tolerances
• PMIS
• Standardized guidelines and work
instructions
• Communication requirements (allowed
communication media, record retention and
security requirements)
• Issue and defect management procedures
• Process measurement database
• Project files from previous project
• Issue and defect management databases
• Corrective actions
• Preventive
actions
• Defect repairs
• Information exchange
• Brainstorming, options
evaluation or design
• Decision making
Examples: requirements,
project logs, risk register,
stakeholder register
Monitor and Control Project
Work
Monitor and
Control
Project Work
Inputs
1. Project Management
Plan
2. Schedule forecasts
3. Cost forecasts
4. Validated changes
5. Work performance
information
6. Enterprise
Environmental Factors
7. Organizational
Process Assets
Outputs
1. Change requests
2. Work performance
reports
3. Project
management plan
updates
4. Project documents
updates
Tools and
Techniques
1. Expert judgment
2. Analytical
techniques
3. Project
management
information system
4. Meetings
• SV (schedule
variance),
• SPI (schedule
performance
index)
• Regression analysis
• Grouping methods
• Causal analysis
• Root cause analysis
• Forecasting methods
• Failure mode and effect analysis
(FMEA)
• Fault tree analysis (FTA)
• Reserve analysis
• Trend analysis
• Earned value management
• Variance analysis
Status reports, memos,
justifications, information
notes, recommendations
and updates
• CV (cost
variance),
• CPI (cost
performance
index)
• Governmental
or industry
standards
• Work
authorization
system
• Stakeholder
risk tolerance
• PMIS • Organizational communication
requirements
• Financial control procedures (time
reporting, expenditure reviews, etc.)
• Issue and defect management
procedures
• Change control procedures
• Risk control procedures
• Process measurement database
• Lessons learned database
• Corrective actions
• Preventive
actions
• Defect repairs
Actions in Monitor and Control
project Work
 Compare actual performance against the project
management plan
 Assess performance to determine if any
corrective or preventive actions are needed
 Identify new risks and track existing
 Maintain an accurate, timely information base
concerning the project’s products
 Provide information to support status reporting
 Provide forecasts to update current
cost/schedule information
 Monitor implementation of approved changes
 Provide appropriate reporting of project status to
program management
Change requests
Preventive actions
(prevent anticipated
problem)
Corrective actions
(problem already
occurred)
Defect Repairs
(defect in deliverable)
All changes should pass change control process before implementation.
Good project manager:
• Has realistic and up-to-date plans and baselines
• Creates metrics which cover all aspects of the project
• Continuously tracks project performance against baselines
• Systematic, not randomly focused on different areas
• Proactively looks out for problems
• Looks for a root cause of a problem before proposing action
• Evaluates effectiveness of proposed actions
Perform Integrated Change
Control
Perform
Integrated
Change
Control
Inputs
1. Project
Management Plan
2. Work performance
Reports
3. Change requests
4. Enterprise
Environmental
Factors
5. Organizational
Process Assets
Outputs
1. Approved change
requests
2. Change log
3. Project
management plan
updates
4. Project documents
updates
Tools and
Techniques
1. Expert Judgment
2. Meetings
3. Change control
tools
• PMIS
• Change control procedures
• Process measurement documents
• Project documents
• Configuration management knowledge base
• Change
management plan
• Baselines (scope,
schedule, cost)
Change control meetings
• Resource
availability
• Schedule and
cost data
• EVM reports
• Burnup or
burndown
charts
Change life cycle
Direct and
Manage
Project
Work
Monitor and
Control
Project Work
Perform
Integrated
Change
Control
New
Status of the
change
Created
Create formal
change
request
Approved
Rejected
Update the
change log
Update the
change log
Update PM plan
and project
documents
1. Assess the change
• against Project Charter (is it part of the project at
all?)
• against Risk log (check if it change is a result of
materialized risk, and has reserves for it already)
2. Assess impact
• within knowledge area
• on all other project constraints
3. Identify options
4. Approve/Reject the change (as defined in
Change MP)
• Project manager
• Change Control Board (CCB)
• Customer (if needed)
As part of Integrated Change Control you also should:
• Prevent the root cause of changes
• Manage stakeholders’ expectations by communicating statuses of changes
Configuration management
Configuration Management (CM) is another part of Perform
Integrated Change Control process
What is that all about?
• Problem occurred
because “wrong
version of something”
have been used
• Team members don’t
know where to look
for actual versions of
documents
• Lack of control for
changes
Step 1. Configuration identification
Which deliverables needs to be versioned /
controlled?
Step 2. Configuration status accounting
What are the current versions of all
deliverables?
What are the open change requests?
Step 3. Configuration verification and
audit
Independent review to establish compliance
Close Project or Phase
Close
Project or
Phase
Inputs
1. Project
Management Plan
2. Accepted
deliverables
3. Organizational
Process Assets
Outputs
1. Final product,
service or result
transition
2. Organizational
process assets
updates
Tools and
Techniques
1. Expert Judgment
2. Analytical
techniques
3. Meetings
• Closure
guidelines or
requirements
• Historical
information and
lessons learned
• Regression analysis
• Trend analysis
Can include partial
or interim
deliverables for
phased or
cancelled projects
• Project files
• Project or phase
closure documents
• Historical information
Actions during project closure
Confirm work is done to requirements
Complete procurements closure (another knowledge area!)
Gain final acceptance of the product
Complete financial closure
Hand off completed product
Solicit feedback from the customer about the project
Complete final performance reporting
Index and archive records
Gather final lessons learned and update knowledge base

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PMP Prep 3 - Project Integration Management

  • 1. Project Integration Management PMP Preparation Course March – April 2015 Session 3 by Andrey Mikityuk Head of Project Management Team Credit Suisse Moscow
  • 2. Overview Initiating Planning Executing Monitoring and Controlling Closing Develop Project Charter Develop Project Management Plan Direct and Manage Project Work Monitor and Control Project Work Perform Integrated Change Control Close Project or Phase Integration Management – balancing all knowledge areas with each other
  • 3. Develop Project Charter Develop Project Charter Inputs 1. Project Statement of Work 2. Business Case 3. Agreements 4. Enterprise Environmental Factors 5. Organizational Process Assets Outputs 1. Project Charter Tools and Techniques 1. Expert Judgment 2. Facilitation Techniques • Business need • Product Scope Description • Strategic Plan • Business need • Cost/Benefit Analysis Contracts, memorandums, letters of intent, verbal, email, etc. • Government standards • Organizational culture • Marketplace conditions • Standards, policies, procedures • Templates • Historical information and lessons learned • Brainstorming • Conflict resolution • Problem solving • Meeting management
  • 4. Business Case Fundamentals  every project should have a business case  project is selected only based on sound business case (no “management discretionary” projects)  project manger should be assigned as early as feasible (prior to start of planning), and understands the business case and reason for project selection Business case is important – it affects decision-making Project can be initiated as a result of:  Market demand  Organizational need (e.g., reduce costs)  Customer request  Technological advance  Legal requirement  Ecological impacts  Social need
  • 5. Project Charter  Project Name and Description  Project Sponsor(s)  Business Case, Objectives and Success Criteria  Project manager and his authority  Pre-assigned resources  High-level requirements  Summary milestone schedule  High-level budget  High-level risks  Assumptions and constraints  Known stakeholders  Project approval requirements (who approves what) Project charter defines project boundaries
  • 6. Project Selection Benefit measurement models (comparative approach) • Murder board • Peer review • Scoring model • Economic models • Present Value (PV) • Net Present Value (NPV) • Internal Rate of Return (IRR) • Payback period • Cost-Benefit ratio • Economic Value Added (EVA) Constrained optimization methods (mathematical approach) • Linear programming • Integer programming • Dynamic programming • Multi-objective programming Methods Image from John E. A. Bertram’s article “Constrained optimization in human walking: cost minimization and gait plasticity” http://jeb.biologists.org/content/208/6/979.figures-only
  • 7. IRR formal definition: rate at which NPV = 0 Simple: rate which your project returns if you treat it as investment Economic Models You may be asked to calculate PV and cost/benefit; for others just understand the idea Payback period – number of periods (years / months) to return invested money (also: break-even point) Cost-Benefit ratio = Benefit (Revenue) / Cost Remember: revenue, not profit Economic Value Added (EVA) = Net Operating Profit After Taxes – Cost of Capital Return of Investment = (revenue – cost) / cost (simple) Total Cost of Ownership (TCO) – cost including non-project costs (operational)
  • 8. Few More Economic Concepts  Opportunity Cost  Sunk Costs  Law of Diminishing Returns  Working Capital  Depreciation ◦ Straight-line depreciation ◦ Accelerated depreciation
  • 9. Develop Project Management Plan Develop Project Management Plan Inputs 1. Project Charter 2. Outputs from other processes 3. Enterprise Environmental Factors 4. Organizational Process Assets Outputs 1. Project Management Plan Tools and Techniques 1. Expert Judgment 2. Facilitation Techniques • Governmental or industry standards • PM practices for the industry (e.g. construction or software development) • PMIS • Organizational structure, culture, management practices • Infrastructure (existing facilities and capital equipment) • Staff management practices (hiring/firing, performance reviews, etc) • Standardized guidelines • Project Management plan template • Guideline for tailoring • Project closure guidelines (validation and acceptance criteria) • Change control procedures • Project files from previous projects • Historical information and lessons learned • Configuration management knowledge base (versions and baselines of all standards and policies) • Tailor the process • Develop technical details • Determine resources and skills needed • Define level of configuration management • Determine which projects will be subject for change control • Set priorities
  • 10. Project Management Plan Management Plans  Change MP  Configuration MP  Scope MP  Requirements MP  Schedule MP  Cost MP  Quality MP  Process Improvement plan  Human Resource MP  Communications MP  Risk MP  Procurement MP  Stakeholder MP Baselines  Scope  Schedule  Cost Other  Life Cycle of the project  Details of tailoring decisions  How integrity of project baselines will be maintained Knowledge Area Integration Scope Schedule Cost Quality Human Resource Communications Risk Procurement Stakeholder performance measurement baseline
  • 11. Good project plan is…  Iterative and non-contradictory  Consistent with PMO guidelines  Validated with program/portfolio managers  Impact from/to other projects incorporated  Has inputs from all internal stakeholders, including: ◦ Team members ◦ Resource managers ◦ Sponsor  Has buy-in (approved)  Realistic (everybody believe it can be met) Don’t forget kick-off meeting which finalizes planning process!
  • 12. Direct and Manage Project Work Direct and Manage Project Work Inputs 1. Project Management Plan 2. Approved Change Requests 3. Enterprise Environmental Factors 4. Organizational Process Assets Outputs 1. Deliverables 2. Work performance data 3. Change requests 4. Project management plan updates 5. Project documents updatesTools and Techniques 1. Expert Judgment 2. Project Management Information System (PMIS) 3. Meetings • Organizational, company or customer culture • Infrastructure (existing facilities and capital equipment) • Staff administration • Stakeholder risk tolerances • PMIS • Standardized guidelines and work instructions • Communication requirements (allowed communication media, record retention and security requirements) • Issue and defect management procedures • Process measurement database • Project files from previous project • Issue and defect management databases • Corrective actions • Preventive actions • Defect repairs • Information exchange • Brainstorming, options evaluation or design • Decision making Examples: requirements, project logs, risk register, stakeholder register
  • 13. Monitor and Control Project Work Monitor and Control Project Work Inputs 1. Project Management Plan 2. Schedule forecasts 3. Cost forecasts 4. Validated changes 5. Work performance information 6. Enterprise Environmental Factors 7. Organizational Process Assets Outputs 1. Change requests 2. Work performance reports 3. Project management plan updates 4. Project documents updates Tools and Techniques 1. Expert judgment 2. Analytical techniques 3. Project management information system 4. Meetings • SV (schedule variance), • SPI (schedule performance index) • Regression analysis • Grouping methods • Causal analysis • Root cause analysis • Forecasting methods • Failure mode and effect analysis (FMEA) • Fault tree analysis (FTA) • Reserve analysis • Trend analysis • Earned value management • Variance analysis Status reports, memos, justifications, information notes, recommendations and updates • CV (cost variance), • CPI (cost performance index) • Governmental or industry standards • Work authorization system • Stakeholder risk tolerance • PMIS • Organizational communication requirements • Financial control procedures (time reporting, expenditure reviews, etc.) • Issue and defect management procedures • Change control procedures • Risk control procedures • Process measurement database • Lessons learned database • Corrective actions • Preventive actions • Defect repairs
  • 14. Actions in Monitor and Control project Work  Compare actual performance against the project management plan  Assess performance to determine if any corrective or preventive actions are needed  Identify new risks and track existing  Maintain an accurate, timely information base concerning the project’s products  Provide information to support status reporting  Provide forecasts to update current cost/schedule information  Monitor implementation of approved changes  Provide appropriate reporting of project status to program management
  • 15. Change requests Preventive actions (prevent anticipated problem) Corrective actions (problem already occurred) Defect Repairs (defect in deliverable) All changes should pass change control process before implementation. Good project manager: • Has realistic and up-to-date plans and baselines • Creates metrics which cover all aspects of the project • Continuously tracks project performance against baselines • Systematic, not randomly focused on different areas • Proactively looks out for problems • Looks for a root cause of a problem before proposing action • Evaluates effectiveness of proposed actions
  • 16. Perform Integrated Change Control Perform Integrated Change Control Inputs 1. Project Management Plan 2. Work performance Reports 3. Change requests 4. Enterprise Environmental Factors 5. Organizational Process Assets Outputs 1. Approved change requests 2. Change log 3. Project management plan updates 4. Project documents updates Tools and Techniques 1. Expert Judgment 2. Meetings 3. Change control tools • PMIS • Change control procedures • Process measurement documents • Project documents • Configuration management knowledge base • Change management plan • Baselines (scope, schedule, cost) Change control meetings • Resource availability • Schedule and cost data • EVM reports • Burnup or burndown charts
  • 17. Change life cycle Direct and Manage Project Work Monitor and Control Project Work Perform Integrated Change Control New Status of the change Created Create formal change request Approved Rejected Update the change log Update the change log Update PM plan and project documents 1. Assess the change • against Project Charter (is it part of the project at all?) • against Risk log (check if it change is a result of materialized risk, and has reserves for it already) 2. Assess impact • within knowledge area • on all other project constraints 3. Identify options 4. Approve/Reject the change (as defined in Change MP) • Project manager • Change Control Board (CCB) • Customer (if needed) As part of Integrated Change Control you also should: • Prevent the root cause of changes • Manage stakeholders’ expectations by communicating statuses of changes
  • 18. Configuration management Configuration Management (CM) is another part of Perform Integrated Change Control process What is that all about? • Problem occurred because “wrong version of something” have been used • Team members don’t know where to look for actual versions of documents • Lack of control for changes Step 1. Configuration identification Which deliverables needs to be versioned / controlled? Step 2. Configuration status accounting What are the current versions of all deliverables? What are the open change requests? Step 3. Configuration verification and audit Independent review to establish compliance
  • 19. Close Project or Phase Close Project or Phase Inputs 1. Project Management Plan 2. Accepted deliverables 3. Organizational Process Assets Outputs 1. Final product, service or result transition 2. Organizational process assets updates Tools and Techniques 1. Expert Judgment 2. Analytical techniques 3. Meetings • Closure guidelines or requirements • Historical information and lessons learned • Regression analysis • Trend analysis Can include partial or interim deliverables for phased or cancelled projects • Project files • Project or phase closure documents • Historical information
  • 20. Actions during project closure Confirm work is done to requirements Complete procurements closure (another knowledge area!) Gain final acceptance of the product Complete financial closure Hand off completed product Solicit feedback from the customer about the project Complete final performance reporting Index and archive records Gather final lessons learned and update knowledge base