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Pmi - Project Management Professional (Pmp) Certification Study Guide

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Pmi - Project Management Professional (Pmp) Certification Study Guide

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Pmi - Project Management Professional (Pmp) Certification Study Guide

  1. 1. Project Management Professional (PMP) Certification Study Guide
  2. 2. PMI Certification Materials <ul><li>To assist PMI candidates for completing the PMI certification exam administered by the Project Management Institute </li></ul><ul><li>Content is from “A Guide To The Project Management Body Of Knowledge” (PMBOK) </li></ul><ul><li>www.pmi.org </li></ul>
  3. 3. Recurring Themes <ul><li>Historical Records – need to collect and use for planning, estimating and risk </li></ul><ul><li>Kickoff meetings are important </li></ul><ul><li>Work Breakdown Structures </li></ul><ul><li>Do not introduce benefits that are not stated in requirements </li></ul><ul><li>Needs of all stakeholders should be taken into account during all projects </li></ul><ul><li>Team Members must be involved in project planning </li></ul><ul><li>Project Mangers must be pro-active </li></ul>
  4. 4. Chapter 1 – Introduction <ul><li>Project – temporary endeavor undertaken to create a unique product or service </li></ul><ul><li>Has a definite beginning and end and interrelated activities </li></ul><ul><li>Programs adopt new set of objectives and continue to work; projects cease when declared objectives have been attained </li></ul>
  5. 5. Chapter 1 – Introduction <ul><li>Projects are unique – characteristics are progressively elaborated </li></ul><ul><ul><li>Progressively: proceeding in steps </li></ul></ul><ul><ul><li>Elaborated: worked with care and detail </li></ul></ul><ul><li>Scope of project should remain constant even as characteristics are “progressively elaborated” </li></ul>
  6. 6. Chapter 1 - Introduction <ul><li>Project Management: the application of knowledge, skills, tools and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a defined project – balancing the following: </li></ul><ul><ul><li>Scope, time, cost, and quality </li></ul></ul><ul><ul><li>Stakeholders’ expectations </li></ul></ul><ul><ul><li>Requirements (needs) vs. unidentified requirements (expectations) </li></ul></ul>
  7. 7. Chapter 1 - Introduction <ul><li>Programs are groups of projects managed in a coordinated way to obtain benefits not available from managing the projects individually </li></ul><ul><li>Most programs have elements of ongoing operations </li></ul><ul><ul><li>Series of repetitive or cyclical undertakings </li></ul></ul><ul><li>Projects are often divided into “subprojects” for more manageability </li></ul><ul><ul><li>Often contracted out to external organizations </li></ul></ul>
  8. 8. Chapter 2 – Project Management Context <ul><li>Project Phases are marked by the completion of a deliverable </li></ul><ul><ul><li>Tangible, verifiable work product </li></ul></ul><ul><ul><li>Review of deliverables and approval/denial are “phase exits, stage gates, or kill points” </li></ul></ul><ul><li>Phases are collected into the Project Life Cycle </li></ul><ul><ul><li>Set of defined work procedures to establish management control </li></ul></ul>
  9. 9. Chapter 2 – Project Management Context <ul><li>Project Life Cycle defines: </li></ul><ul><ul><li>Technical work performed in each phase </li></ul></ul><ul><ul><li>Who is involved in each phase </li></ul></ul><ul><li>Project Phases can overlap – “Fast Tracking” </li></ul><ul><li>Common Characteristics of Project Life Cycles: </li></ul><ul><ul><li>Cost and Staffing levels are low at start and move higher towards the end </li></ul></ul><ul><ul><li>Probability of successfully completing project is low at beginning, higher towards the end as project continues </li></ul></ul><ul><ul><li>Stakeholder influence is high at the beginning and progressively lowers as project continues </li></ul></ul>
  10. 10. Chapter 2 – Project Management Context <ul><li>Stakeholders: individuals and organizations who are actively involved in the project </li></ul><ul><ul><li>Often have conflicting expectations and objectives </li></ul></ul><ul><ul><li>In general, differences should be resolved in favor of the customer – individual(s) or organization(s) that will use the outcome of the project </li></ul></ul><ul><ul><li>Stakeholder management is a proactive task </li></ul></ul><ul><ul><ul><li>Project Mangers must determine all stakeholders and incorporate their needs into the project </li></ul></ul></ul>
  11. 11. Chapter 2 – Project Management Context <ul><li>Stakeholders are: </li></ul><ul><ul><li>Project Managers </li></ul></ul><ul><ul><li>Customers </li></ul></ul><ul><ul><li>Performing Organizations, owners </li></ul></ul><ul><ul><li>Sponsor </li></ul></ul><ul><ul><li>Team </li></ul></ul><ul><ul><li>Internal/External </li></ul></ul><ul><ul><li>End User </li></ul></ul><ul><ul><li>Society, citizens </li></ul></ul><ul><ul><li>Others: owner, funders, supplier, contractor </li></ul></ul>
  12. 12. Chapter 2 – Project Management Context <ul><li>Organizational Systems: Project based vs. Non-Project Based </li></ul><ul><ul><li>Project Based – derive revenues from performing projects for others (consultants, contractors),”management by projects” </li></ul></ul><ul><ul><li>Non-Project Based – seldom have management systems designed to support project needs (manufacturing, financial services) </li></ul></ul>
  13. 13. Chapter 2 – Project Management Context <ul><li>Organizational Cultures and Styles: </li></ul><ul><ul><li>Entrepreneurial firms more likely to adopt highly participative Project Manager – accept higher risk/reward </li></ul></ul><ul><ul><li>Hierarchical firms less likely to adopt participative Project Manager – take fewer risks </li></ul></ul>
  14. 14. Chapter 2 – Project Management Context <ul><li>Organizational Structures </li></ul><ul><ul><li>Functional (classical) marked by identifiable superiors. Staff grouped by specialty . Perceived scope of project limited by function (Engineering, HR). Typically have part-time Project Manager </li></ul></ul><ul><ul><li>Projectized Organization –blend functional and projectized characteristics. Mix cross-department personnel with full-time Project Manger </li></ul></ul>
  15. 15. Chapter 2 – Project Management Context <ul><li>Project Management Skills </li></ul><ul><ul><li>General Business Management (consistently producing results expected by stakeholders) </li></ul></ul><ul><ul><li>Leading (establishing direction, aligning resources, motivating) </li></ul></ul><ul><ul><li>Communicating (clear, unambiguous, and complete) </li></ul></ul><ul><ul><li>Negotiating (conferring with others to reach an agreement) </li></ul></ul><ul><ul><li>Problem Solving (definition and decision making) </li></ul></ul><ul><ul><ul><li>Distinguish causes and symptoms </li></ul></ul></ul><ul><ul><ul><li>Identify viable solutions </li></ul></ul></ul><ul><ul><li>Influencing Organization (understanding power and politics) </li></ul></ul>
  16. 16. Chapter 2 – Project Management Context <ul><li>Socioeconomic Influences </li></ul><ul><ul><li>Standards – document approved that provides common, repeated use, rules and guidelines </li></ul></ul><ul><ul><ul><li>Compliance is not mandatory </li></ul></ul></ul><ul><ul><li>Regulations – document that identifies products, services or characteristics </li></ul></ul><ul><ul><ul><li>Compliance is mandatory </li></ul></ul></ul><ul><ul><li>Standards often become “ de facto ” regulations </li></ul></ul><ul><ul><li>Internationalization </li></ul></ul><ul><ul><li>Cultural Influences </li></ul></ul>
  17. 17. Chapter 2 – Project Management Context <ul><li>Organization Structure Pro’s and Con’s </li></ul><ul><ul><li>Projectized </li></ul></ul><ul><ul><ul><li>Efficient Organization – No “home” </li></ul></ul></ul><ul><ul><ul><li>Loyalty – Lack of Professionalism </li></ul></ul></ul><ul><ul><ul><li>Effective Communication – Duplication of functions, less efficient resource usage </li></ul></ul></ul><ul><ul><li>Matrix </li></ul></ul><ul><ul><ul><li>Visible Objectives – not cost effective </li></ul></ul></ul><ul><ul><ul><li>PM Control – More than 1 boss </li></ul></ul></ul><ul><ul><ul><li>More support – More complex to control </li></ul></ul></ul><ul><ul><ul><li>Utilize scarce resources – Tough resource allocation </li></ul></ul></ul><ul><ul><ul><li>Information distribution – Competition of priorities </li></ul></ul></ul><ul><ul><ul><li>Coordination – Policies & Procedures </li></ul></ul></ul><ul><ul><ul><li>Home based – Potential for conflict </li></ul></ul></ul>
  18. 18. Chapter 2 – Project Management Context <ul><li>Functional Organization </li></ul><ul><ul><li>Specialists – More emphasis on functions </li></ul></ul><ul><ul><li>1 supervisor – No career path in PM </li></ul></ul>
  19. 19. Chapter 3 – Project Management Processes <ul><li>Project Management requires active management of Project Processes </li></ul><ul><ul><li>Series of actions that achieve a result </li></ul></ul><ul><ul><li>Project Management Processes </li></ul></ul><ul><ul><ul><li>Describing and organizing the work </li></ul></ul></ul><ul><ul><li>Product-Oriented Processes </li></ul></ul><ul><ul><ul><li>Specifying and creating the product </li></ul></ul></ul>
  20. 20. Chapter 3 – Project Management Processes <ul><li>Process Groups: </li></ul><ul><ul><li>Initiating processes: recognizing a project or phase should begin </li></ul></ul><ul><ul><li>Planning processes: devising and maintaining a workable plan </li></ul></ul><ul><ul><li>Executing processes: coordinating resources to execute the plan </li></ul></ul><ul><ul><li>Controlling processes: ensuring project objectives are met; monitoring, correcting and measuring progress </li></ul></ul><ul><ul><li>Closing processes: formalized acceptance </li></ul></ul>
  21. 21. Chapter 3 – Project Management Processes <ul><li>Process Groups are linked by the results each produces </li></ul><ul><li>Process Groups are overlapping activities with various levels of intensity </li></ul><ul><li>Process Group interactions cross phases – “rolling wave planning” </li></ul><ul><ul><li>Provides details of work to complete current phase and provide preliminary description of work for subsequent phases </li></ul></ul><ul><li>Individual processes have inputs, tools and techniques, and outputs (deliverables) </li></ul>
  22. 22. Chapter 3 – Project Management Processes <ul><li>Initiating and Planning Processes </li></ul><ul><li>Committing the organization to begin </li></ul><ul><ul><li>Initiation, High-level planning, Charter </li></ul></ul><ul><li>Amount of planning proportional to the scope of the project – Core Planning </li></ul><ul><ul><li>Scope Planning – written statement </li></ul></ul><ul><ul><li>Scope Definition – subdividing major deliverables into more manageable units </li></ul></ul><ul><ul><li>Activity Definition – determine specific tasks needed to produce project deliverables </li></ul></ul><ul><ul><li>Activity Sequencing – plotting dependencies </li></ul></ul>
  23. 23. Chapter 3 – Project Management Processes <ul><li>Core Planning (continued) </li></ul><ul><ul><li>Activity Duration Estimating – determine amount of work needed to complete the activities </li></ul></ul><ul><ul><li>Schedule Development – analyze activity sequences, duration, and resource requirements </li></ul></ul><ul><ul><li>Resource Planning – identify what and how many resources are needed to perform the activities </li></ul></ul><ul><ul><li>Cost Estimating – develop resource and total project costs </li></ul></ul><ul><ul><li>Cost Budgeting – allocating project estimates to individual work items </li></ul></ul><ul><ul><li>Project Plan Development – taking results from other planning processes into a collective document </li></ul></ul>
  24. 24. Chapter 3 – Project Management Processes <ul><li>Planning/Facilitating Processes – manage the interaction among the planning processes </li></ul><ul><ul><li>Quality Planning – standards that are relevant to the project and determining how to meet standards </li></ul></ul><ul><ul><li>Organizational Planning – identify, document, and assigning project roles and responsibilities </li></ul></ul><ul><ul><li>Staff Acquisition – obtaining the human resources </li></ul></ul><ul><ul><li>Communications Planning – determining rules and reporting methods to stakeholders </li></ul></ul>
  25. 25. Chapter 3 – Project Management Processes <ul><li>Planning/Facilitating Processes (continued) </li></ul><ul><ul><li>Risk Identification – determining what is likely to affect the project and documenting these risks </li></ul></ul><ul><ul><li>Risk Quantification – evaluating risks and interactions to access the possible project outcomes </li></ul></ul><ul><ul><li>Risk Response Development – defining enhancement steps and change control measures </li></ul></ul><ul><ul><li>Procurement Planning – determining what to buy and when </li></ul></ul><ul><ul><li>Solicitation Planning – documenting product requirements and identifying possible sources </li></ul></ul>
  26. 26. Chapter 3 – Project Management Processes <ul><li>Planning/Facilitating Processes (continued) </li></ul><ul><ul><li>Order of events: </li></ul></ul><ul><ul><ul><li>Scope Statement </li></ul></ul></ul><ul><ul><ul><li>Create Project Team </li></ul></ul></ul><ul><ul><ul><li>Work Breakdown Structure </li></ul></ul></ul><ul><ul><ul><li>WBS dictionary </li></ul></ul></ul><ul><ul><ul><li>Finalize the team </li></ul></ul></ul><ul><ul><ul><li>Network Diagram </li></ul></ul></ul><ul><ul><ul><li>Estimate Time and Cost </li></ul></ul></ul><ul><ul><ul><li>Critical Path </li></ul></ul></ul><ul><ul><ul><li>Schedule </li></ul></ul></ul><ul><ul><ul><li>Budget </li></ul></ul></ul><ul><ul><ul><li>Procurement Plan </li></ul></ul></ul><ul><ul><ul><li>Quality Plan </li></ul></ul></ul><ul><ul><ul><li>Risk Identification, quantification and response development </li></ul></ul></ul><ul><ul><ul><li>Change Control Plan </li></ul></ul></ul><ul><ul><ul><li>Communication Plan </li></ul></ul></ul><ul><ul><ul><li>Management Plan </li></ul></ul></ul><ul><ul><ul><li>Final Project Plan </li></ul></ul></ul><ul><ul><ul><li>Project Plan Approval </li></ul></ul></ul><ul><ul><ul><li>Kick off </li></ul></ul></ul>
  27. 27. Chapter 3 – Project Management Processes <ul><li>Executing Processes </li></ul><ul><ul><li>Project Plan Execution – performing the activities </li></ul></ul><ul><ul><li>Complete Tasks/Work Packages </li></ul></ul><ul><ul><li>Information Distribution </li></ul></ul><ul><ul><li>Scope Verification – acceptance of project scope </li></ul></ul><ul><ul><li>Quality Assurance – evaluating overall project performance on a regular basis; meeting standards </li></ul></ul><ul><ul><li>Team Development – developing team and individual skill sets to enhance the project </li></ul></ul><ul><ul><li>Progress Meetings </li></ul></ul>
  28. 28. Chapter 3 – Project Management Processes <ul><li>Executing Processes (continued) </li></ul><ul><ul><li>Information Distribution – making project information available in a timely manner </li></ul></ul><ul><ul><li>Solicitation – obtaining quotes, bids, proposals as appropriate </li></ul></ul><ul><ul><li>Source Selection – deciding on appropriate suppliers </li></ul></ul><ul><ul><li>Contract Administration – managing vendor relationships </li></ul></ul>
  29. 29. Chapter 3 – Project Management Processes <ul><li>Controlling Processes – needed to regularly measure project performance and to adjust project plan </li></ul><ul><li>Take preventive actions in anticipation of possible problems </li></ul><ul><ul><li>Change Control – coordinating changes across the entire project plan </li></ul></ul><ul><ul><li>Scope Change Control – controlling “scope creep” </li></ul></ul><ul><ul><li>Schedule Control – adjusting time and project schedule of activities </li></ul></ul>
  30. 30. Chapter 3 – Project Management Processes <ul><li>Controlling Processes (continued) </li></ul><ul><ul><li>Cost Control – managing project budget </li></ul></ul><ul><ul><li>Quality Control – monitoring standards and specific project results; eliminating causes of unsatisfactory performance </li></ul></ul><ul><ul><li>Performance Reporting – status, forecasting, and progress reporting schedule </li></ul></ul><ul><ul><li>Risk Response Control – responding to changes in risk during the duration of the project </li></ul></ul>
  31. 31. Chapter 3 – Project Management Processes <ul><li>Closing Processes </li></ul><ul><ul><li>Administrative Closure – generating necessary information to formally recognize phase or project completion </li></ul></ul><ul><ul><li>Contract Close-out – completion and delivery of project deliverables and resolving open issues </li></ul></ul><ul><ul><ul><li>Procurement Audits </li></ul></ul></ul><ul><ul><ul><li>Product Verification </li></ul></ul></ul><ul><ul><ul><li>Formal Acceptance </li></ul></ul></ul><ul><ul><ul><li>Lessons Learned </li></ul></ul></ul><ul><ul><ul><li>Update Records </li></ul></ul></ul><ul><ul><ul><li>Archive Records </li></ul></ul></ul><ul><ul><ul><li>Release Team </li></ul></ul></ul>
  32. 32. Chapter 3 – Project Management Processes <ul><li>Overall Processes </li></ul><ul><ul><li>Influencing the organization </li></ul></ul><ul><ul><li>Leading </li></ul></ul><ul><ul><li>Problem Solving </li></ul></ul><ul><ul><li>Negotiating </li></ul></ul><ul><ul><li>Communicating </li></ul></ul><ul><ul><li>Meetings </li></ul></ul>
  33. 33. Chapter 3 – Project Management Processes <ul><li>Project Selection Techniques </li></ul><ul><ul><li>Comparative Approach (similar projects) </li></ul></ul><ul><ul><ul><li>Benefit measurement method </li></ul></ul></ul><ul><ul><li>Constrained Optimization (mathematical approach) </li></ul></ul><ul><li>Key aspect of scope verification is customer acceptance </li></ul><ul><li>Only 26 % of projects succeed </li></ul>
  34. 34. Chapter 4 – Project Integration Management <ul><li>Project Integration Management </li></ul><ul><ul><li>Ensures that the project processes are properly coordinated </li></ul></ul><ul><ul><li>Tradeoffs between competing objectives and alternatives in order to meet stakeholder approval </li></ul></ul><ul><ul><ul><li>Project Plan Development </li></ul></ul></ul><ul><ul><ul><li>Project Plan Execution </li></ul></ul></ul><ul><ul><ul><li>Overall Change Control </li></ul></ul></ul><ul><ul><li>These processes may occur repeatedly over the project duration </li></ul></ul><ul><ul><li>Historical Records are needed to perform project management well, they are inputs to continuous improvement </li></ul></ul><ul><ul><ul><li>Files </li></ul></ul></ul><ul><ul><ul><li>Lessons Learned </li></ul></ul></ul><ul><ul><ul><li>Actual Costs </li></ul></ul></ul><ul><ul><ul><li>Time Estimates </li></ul></ul></ul><ul><ul><ul><li>WBS </li></ul></ul></ul><ul><ul><ul><li>Benchmarks </li></ul></ul></ul><ul><ul><ul><li>Risks </li></ul></ul></ul>
  35. 35. Chapter 4 – Project Integration Management <ul><li>Project Plan Development </li></ul><ul><ul><li>Uses outputs from other planning processes to create consistent document to guide project execution and control </li></ul></ul><ul><ul><li>Iterated several times </li></ul></ul><ul><ul><li>Documents planning assumptions </li></ul></ul><ul><ul><li>Documents planning decisions that are chosen </li></ul></ul><ul><ul><li>Facilitates communication </li></ul></ul><ul><ul><li>Defines key management reviews </li></ul></ul><ul><ul><li>Provides a baseline to track progress measurement and project control </li></ul></ul>
  36. 36. Chapter 4 – Project Integration Management <ul><li>Project Plan Development Inputs </li></ul><ul><ul><li>Other planning outputs: primarily the planning process outputs (WBS, base documents, application area inputs) </li></ul></ul><ul><ul><li>Historical information – verify assumptions, records of past project performance </li></ul></ul><ul><ul><li>Organizational policies – quality management, personnel administration, Financial controls </li></ul></ul><ul><ul><li>Constraints – factors that limit performance, contractual provisions, budget </li></ul></ul><ul><ul><li>Assumptions – risk factors </li></ul></ul>
  37. 37. Chapter 4 – Project Integration Management <ul><li>Tools & Techniques for Plan Development </li></ul><ul><ul><li>Project Planning Methodology – any structured approach (software, templates, forms, start-up meetings </li></ul></ul><ul><ul><li>Stakeholder Skills & Knowledge – tap into plan development; use expertise for reasonableness </li></ul></ul><ul><ul><li>PMIS – Out of the box approach to support all project aspects through closure </li></ul></ul>
  38. 38. Chapter 4 – Project Integration Management <ul><li>Project Plan Development Outputs </li></ul><ul><ul><li>Project Plan is a collection that changes over time as more information about the project becomes available </li></ul></ul><ul><ul><li>Baseline will change only in response to approved scope change </li></ul></ul><ul><ul><li>Project Plan includes some or all of the following: </li></ul></ul><ul><ul><ul><li>Project Charter </li></ul></ul></ul><ul><ul><ul><li>Project Management approach or strategy </li></ul></ul></ul><ul><ul><ul><li>Scope statement </li></ul></ul></ul><ul><ul><ul><li>Work Breakdown Structure (WBS) </li></ul></ul></ul><ul><ul><ul><li>Budget, schedule, risks </li></ul></ul></ul><ul><ul><ul><li>Key Staff, Major Milestones </li></ul></ul></ul><ul><ul><ul><li>Change Control Plan, Management and Communications Plan </li></ul></ul></ul>
  39. 39. Chapter 4 – Project Integration Management <ul><li>Project Plan Components (continued) </li></ul><ul><ul><ul><li>Cost Estimates, scheduled start dates and responsibility assignments </li></ul></ul></ul><ul><ul><ul><li>Performance measurement baselines </li></ul></ul></ul><ul><ul><ul><li>Major milestones and target dates </li></ul></ul></ul><ul><ul><ul><li>Required Staff </li></ul></ul></ul><ul><ul><ul><li>Risks, constraints and assumptions </li></ul></ul></ul><ul><ul><ul><li>Subsidiary management plans (scope, schedule) </li></ul></ul></ul><ul><ul><ul><li>Open Issues </li></ul></ul></ul><ul><ul><ul><li>Pending Decisions </li></ul></ul></ul>
  40. 40. Chapter 4 – Project Integration Management <ul><li>Supporting Details to the Project Plan </li></ul><ul><ul><li>Outputs from planning processes </li></ul></ul><ul><ul><li>Technical documentation </li></ul></ul><ul><ul><li>Business requirements, specifications, and designs </li></ul></ul><ul><ul><li>Relevant standards </li></ul></ul><ul><ul><li>Additional information not previously known </li></ul></ul>
  41. 41. Chapter 4 – Project Integration Management <ul><li>Project Plan Execution </li></ul><ul><ul><li>Primary process for carrying out the project plan </li></ul></ul><ul><ul><li>Most costly aspect of project management </li></ul></ul><ul><ul><li>Direction of organizational resources and interfaces </li></ul></ul>
  42. 42. Chapter 4 – Project Integration Management <ul><li>Project Plan Execution Inputs: </li></ul><ul><ul><li>Project Plan </li></ul></ul><ul><ul><li>Supporting Detail </li></ul></ul><ul><ul><li>Organizational Policies </li></ul></ul><ul><ul><li>Corrective Action – anything to bring expected performance in line with the project plan </li></ul></ul>
  43. 43. Chapter 4 – Project Integration Management <ul><li>Tools & Techniques for Plan Execution </li></ul><ul><ul><li>General Management Skills </li></ul></ul><ul><ul><li>Product Skills and Knowledge – defined as part of planning, provided by staffing </li></ul></ul><ul><ul><li>Work Authorization System – formal procedure for sanctioning work to ensure completion – written or verbal authorization </li></ul></ul><ul><ul><li>Status review meetings – regular exchanges of information </li></ul></ul><ul><ul><li>Project Management Information System </li></ul></ul><ul><ul><li>Organizational Procedures </li></ul></ul>
  44. 44. Chapter 4 – Project Integration Management <ul><li>Project Plan Execution Outputs </li></ul><ul><ul><li>Work results – the outcome of activities performed is fed into the performance reporting process </li></ul></ul><ul><ul><li>Change Requests – expand/shrink project scope, modify costs and schedule estimates </li></ul></ul>
  45. 45. Chapter 4 – Project Integration Management <ul><li>Overall Change Control </li></ul><ul><ul><li>Influencing factors that create change to ensure beneficial results; ensure that change is beneficial </li></ul></ul><ul><ul><li>Determining that change has occurred </li></ul></ul><ul><ul><li>Managing actual changes as they occur </li></ul></ul><ul><ul><ul><li>Evaluate impact of change </li></ul></ul></ul><ul><ul><ul><li>Meet with team to discuss alternatives </li></ul></ul></ul><ul><ul><ul><li>Meet with management to present decision </li></ul></ul></ul><ul><li>Change control requires </li></ul><ul><ul><li>Maintaining integrity of performance measurement baselines (project plan) </li></ul></ul><ul><ul><li>Ensuring changes to scope are accurately recorded </li></ul></ul><ul><ul><li>Coordinating changes across knowledge areas (scheduling, risk, cost, quality, etc.) </li></ul></ul><ul><ul><li>Determine all factors that control change and pro-actively preventing the occurrence; evaluate the impact of change </li></ul></ul>
  46. 46. Chapter 4 – Project Integration Management <ul><li>Inputs to Change Control </li></ul><ul><ul><li>Project Plan – baseline performance </li></ul></ul><ul><ul><li>Performance Reports – issue tracking, risk management </li></ul></ul><ul><ul><li>Change Requests – orally or written, externally or internally initiates, legally mandated or optional </li></ul></ul>
  47. 47. Chapter 4 – Project Integration Management <ul><li>Change Control Tools & Techniques </li></ul><ul><ul><li>All Changes must be evaluated before a decision can be reached </li></ul></ul><ul><ul><li>Change Control System – collection of formal procedures, paperwork, tracking systems, approval levels </li></ul></ul><ul><ul><li>Change Control Board – decision making authority </li></ul></ul><ul><ul><li>Configuration Management – documented procedure to apply technical and administrative direction </li></ul></ul><ul><ul><ul><li>ID and document functional and physical characteristics </li></ul></ul></ul><ul><ul><ul><li>Control changes to these characteristics </li></ul></ul></ul><ul><ul><ul><li>Record and report change and implementation status </li></ul></ul></ul><ul><ul><ul><li>Audit items and system to verify requirements </li></ul></ul></ul>
  48. 48. Chapter 4 – Project Integration Management <ul><li>Change Control Tools & Techniques </li></ul><ul><ul><li>Performance Measurement – earned value, plan variance analysis </li></ul></ul><ul><ul><li>Additional Planning – revised cost estimates, modify activity sequences, plan adjustments </li></ul></ul><ul><ul><li>Project Management Information System </li></ul></ul><ul><ul><li>Change Control System may have </li></ul></ul><ul><ul><ul><li>Change Control Plan </li></ul></ul></ul><ul><ul><ul><li>Change Control Board </li></ul></ul></ul><ul><ul><ul><li>Change Control Procedures, Corrective Action plans </li></ul></ul></ul><ul><ul><ul><li>Performance Statistics, Reports, Change forms </li></ul></ul></ul><ul><ul><ul><li>Specification reviews, Demonstrations, Testing, Meetings </li></ul></ul></ul><ul><ul><li>Configuration Management </li></ul></ul>
  49. 49. Chapter 4 – Project Integration Management <ul><li>Change Control Outputs </li></ul><ul><ul><li>Project Plan Updates </li></ul></ul><ul><ul><li>Corrective Actions </li></ul></ul><ul><ul><li>Lessons Learned – variance causes and reasoning documented for historical purposes </li></ul></ul>
  50. 50. Chapter 4 – Project Integration Management <ul><li>Configuration Management </li></ul><ul><ul><li>Rigorous Change Management as it relates to scope </li></ul></ul><ul><ul><ul><li>Subset of the change control system </li></ul></ul></ul><ul><li>Work Authorization System </li></ul><ul><ul><li>Controls “gold plating”; defines what task is/is not </li></ul></ul><ul><li>Meetings </li></ul><ul><ul><li>Most are inefficient; keep minutes </li></ul></ul><ul><ul><li>Status can be determined without meeting </li></ul></ul>
  51. 51. Chapter 4 – Project Integration Management <ul><li>Lessons Learned </li></ul><ul><ul><li>Project is not complete until a Lessons Learned is completed </li></ul></ul><ul><ul><li>What have we done, how can we do it better </li></ul></ul><ul><ul><ul><li>Technical Aspects of the project </li></ul></ul></ul><ul><ul><ul><li>Project Management (WBS, plans, etc.) </li></ul></ul></ul><ul><ul><ul><li>Overall Management (communications, leadership) </li></ul></ul></ul><ul><ul><ul><li>Best to have whole team complete and made available </li></ul></ul></ul><ul><ul><ul><li>Also called “Post – Mortem” </li></ul></ul></ul>
  52. 52. Chapter 4 – Project Integration Management <ul><li>Integration is a result of need for communication within a project </li></ul><ul><li>Primary responsibility to decide what changes are necessary is Management </li></ul><ul><li>Project Managers must pro-actively define and solve problems before reporting to superiors </li></ul>
  53. 53. Chapter 5 – Project Scope Management <ul><li>Project Scope Management </li></ul><ul><ul><li>Processes required to ensure that the project includes all, and only, work required </li></ul></ul><ul><ul><li>Defining what “is/is not” included in the project </li></ul></ul><ul><ul><li>Project scope – work that must be done – measured against project plan </li></ul></ul><ul><ul><li>Product scope – features and functions included in the product or service – measured against requirements </li></ul></ul>
  54. 54. Chapter 5 – Project Scope Management <ul><li>Initiation – process of formally recognizing that a new project exists, or an existing project continue to next phase </li></ul><ul><li>Involves feasibility study, preliminary plan, or equivalent analysis </li></ul><ul><li>Authorized as a result of: </li></ul><ul><ul><li>Market Demand </li></ul></ul><ul><ul><li>Business Need </li></ul></ul><ul><ul><li>Customer Request </li></ul></ul><ul><ul><li>Technological Advance </li></ul></ul><ul><ul><li>Legal Requirement </li></ul></ul>
  55. 55. Chapter 5 – Project Scope Management <ul><li>Initiation Inputs: </li></ul><ul><ul><li>Product Description – characteristics of the product/service that the project was to create </li></ul></ul><ul><ul><ul><li>Less detail in early phases, more comprehensive in latter </li></ul></ul></ul><ul><ul><ul><li>Relationship between product/service and business need </li></ul></ul></ul><ul><ul><ul><li>Should support later project planning </li></ul></ul></ul><ul><ul><ul><li>Initial product description is usually provided by the buyer </li></ul></ul></ul><ul><ul><li>Strategic Plan – supportive of the organization's goals </li></ul></ul>
  56. 56. Chapter 5 – Project Scope Management <ul><li>Initiation Inputs (continued) </li></ul><ul><ul><li>Project Selection Criteria – defined in terms of the product and covers range of management concerns (finance, market) </li></ul></ul><ul><ul><li>Historical Information – results of previous project decisions and performance should be considered </li></ul></ul>
  57. 57. Chapter 5 – Project Scope Management <ul><li>Tools & Techniques for Initiation </li></ul><ul><ul><li>Project Selection Methods: </li></ul></ul><ul><ul><ul><li>Benefit measurement models – comparative approaches, scoring models, economic models </li></ul></ul></ul><ul><ul><ul><ul><li>Murder Boards </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Peer Review </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Scoring Models </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Economic Models </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Benefits compared to costs </li></ul></ul></ul></ul><ul><ul><ul><li>Constrained operation models – programming mathematical </li></ul></ul></ul><ul><ul><ul><ul><li>Linear Programming </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Integer Programming </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Dynamic Programming </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Multi-objective programming </li></ul></ul></ul></ul>
  58. 58. Chapter 5 – Project Scope Management <ul><li>Tools & Techniques for Initiation </li></ul><ul><ul><li>Project Selection Methods: </li></ul></ul><ul><ul><ul><li>Decision models – generalized and sophisticated techniques </li></ul></ul></ul><ul><ul><li>Expert judgment </li></ul></ul><ul><ul><ul><li>Business Units with specialized skills </li></ul></ul></ul><ul><ul><ul><li>Consultant </li></ul></ul></ul><ul><ul><ul><li>Professional and Technical Associations </li></ul></ul></ul><ul><ul><ul><li>Industry Groups </li></ul></ul></ul><ul><ul><ul><li>Delphi Technique – obtain expert opinions on technical issues, scope of work and risks </li></ul></ul></ul><ul><ul><ul><ul><li>Keep expert’s identities anonymous </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Build consensus </li></ul></ul></ul></ul>
  59. 59. Chapter 5 – Project Scope Management <ul><li>Outputs from Initiation: </li></ul><ul><ul><li>Project Charter – formally recognizes project, created by senior manager, includes: </li></ul></ul><ul><ul><ul><li>Business need/Business Case </li></ul></ul></ul><ul><ul><ul><li>Product description & title </li></ul></ul></ul><ul><ul><ul><li>Signed contract </li></ul></ul></ul><ul><ul><ul><li>Project Manager Identification & Authority level </li></ul></ul></ul><ul><ul><ul><li>Senior Management approval </li></ul></ul></ul><ul><ul><ul><li>Project’s Goals and Objectives - </li></ul></ul></ul><ul><ul><ul><li>Constraints – factors that limit project management team’s options </li></ul></ul></ul><ul><ul><ul><li>Assumptions – factors that are considered true for planning purposes. Involve a degree of risk </li></ul></ul></ul>
  60. 60. Chapter 5 – Project Scope Management <ul><li>Scope Planning – process of developing a written statement as basis for future decisions </li></ul><ul><ul><li>Criteria to determine if the project or phase is successful </li></ul></ul><ul><li>Scope Planning Inputs: </li></ul><ul><ul><li>Product description </li></ul></ul><ul><ul><li>Project Charter </li></ul></ul><ul><ul><li>Constraints </li></ul></ul><ul><ul><li>Assumptions </li></ul></ul>
  61. 61. Chapter 5 – Project Scope Management <ul><li>Scope Planning Tools & Techniques </li></ul><ul><ul><li>Product Analysis - - developing a better understanding of the product of the project </li></ul></ul><ul><ul><li>Cost/Benefit Analysis – estimating tangible/intangible costs and returns of various project alternatives and using financial measures (R.O.I.) to assess desirability </li></ul></ul><ul><ul><li>Alternatives Identification – generate different approaches to the project; “brainstorming” </li></ul></ul><ul><ul><li>Expert Judgment </li></ul></ul>
  62. 62. Chapter 5 – Project Scope Management <ul><li>Scope Planning Outputs </li></ul><ul><ul><li>Scope Statement – documented basis for making project decisions and confirming understanding among stakeholders. Includes: </li></ul></ul><ul><ul><ul><li>Project justification – business need, evaluating future trade-offs </li></ul></ul></ul><ul><ul><ul><li>Project Product – summary of project description </li></ul></ul></ul><ul><ul><ul><li>Project Deliverables – list of summary of delivery items marking completion of the project </li></ul></ul></ul><ul><ul><ul><li>Project Objectives – quantifiable criteria met for success. Addresses cost, schedule and metrics – unqualified objectives indicate high risk (customer satisfaction) </li></ul></ul></ul>
  63. 63. Chapter 5 – Project Scope Management <ul><li>Scope Planning Outputs (continued) </li></ul><ul><ul><li>Supporting detail – includes documentation of all assumptions and constraints </li></ul></ul><ul><ul><li>Scope Management Plan – how project scope is managed, change control procedure, expected stability, change identification and classification </li></ul></ul><ul><ul><ul><li>Control what is/is not in the project; prevents delivering “extra” benefits to the customer that were not specified/required </li></ul></ul></ul>
  64. 64. Chapter 5 – Project Scope Management <ul><li>Scope Definition – subdividing major deliverables into smaller, manageable components </li></ul><ul><ul><li>Improve accuracy of cost, time, and resource estimates </li></ul></ul><ul><ul><li>Define a baseline for performance measurement </li></ul></ul><ul><ul><li>Clear responsibility assignments </li></ul></ul><ul><ul><li>Critical to project success – reduces risk of higher cost, redundancy, time delays, and poor productivity </li></ul></ul><ul><ul><li>Defines “what” you are doing; WBS is the tool </li></ul></ul>
  65. 65. Chapter 5 – Project Scope Management <ul><li>Scope Definition Inputs: </li></ul><ul><ul><li>Scope Statement </li></ul></ul><ul><ul><li>Constraints – consider contractual provisions </li></ul></ul><ul><ul><li>Assumptions </li></ul></ul><ul><ul><li>Other Planning Outputs </li></ul></ul><ul><ul><li>Historical Information </li></ul></ul>
  66. 66. Chapter 5 – Project Scope Management <ul><li>Scope Definition Tools & Techniques </li></ul><ul><ul><li>Work Breakdown Structure – templates from previous projects </li></ul></ul><ul><ul><li>Decomposition – subdividing major deliverables into manageable components: </li></ul></ul><ul><ul><ul><li>Major elements – project deliverables and project management approach </li></ul></ul></ul><ul><ul><ul><li>Decide cost and duration estimates are appropriate at level of detail </li></ul></ul></ul><ul><ul><ul><li>Constituent elements – tangible verifiable results to enable performance management, how the work will be accomplished </li></ul></ul></ul><ul><ul><ul><li>Verify correctness of decomposition </li></ul></ul></ul><ul><ul><ul><ul><li>All items necessary and sufficient? </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Clearly and completely defined? </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Appropriately scheduled, budgeted, assigned? </li></ul></ul></ul></ul>
  67. 67. Chapter 5 – Project Scope Management <ul><li>Scope Definition Outputs </li></ul><ul><ul><li>Work Breakdown Structure (WBS) – a deliverable-oriented grouping of project assignments that organizes and defines the scope of the project </li></ul></ul><ul><ul><ul><li>Each descending level represents further detail; smaller and more manageable pieces </li></ul></ul></ul><ul><ul><ul><li>Each item is assigned a unique identifier collectively known as “code of accounts” </li></ul></ul></ul><ul><ul><ul><li>Work element descriptions included in a WBS dictionary (work, schedule and planning information) </li></ul></ul></ul><ul><ul><ul><li>Other formats: </li></ul></ul></ul><ul><ul><ul><ul><li>Contractual WBS – seller provides the buyer </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Organizational (OBS) – work elements to specific org. units </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Resource (RBS) – work elements to individuals </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Bill of Materials (BOM) – hierarchical view of physical resources </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Project (PBS) – similar to WBS </li></ul></ul></ul></ul>
  68. 68. Chapter 5 – Project Scope Management <ul><li>Scope Definition Outputs </li></ul><ul><ul><li>Work Breakdown Structure (WBS) </li></ul></ul><ul><ul><ul><li>First Level is commonly the same at the Project Life Cycle (requirements, design, coding, testing, conversion and operation) </li></ul></ul></ul><ul><ul><ul><li>First level is completed before the project is broken down further </li></ul></ul></ul><ul><ul><ul><li>Each level of the WBS is a smaller segment of level above </li></ul></ul></ul><ul><ul><ul><li>Work toward the project deliverables </li></ul></ul></ul><ul><ul><ul><li>Break down project into tasks that </li></ul></ul></ul><ul><ul><ul><ul><li>Are realistically and confidently estimable </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Cannot be logically divided further </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Can be completed quickly (under 80 hours rule of thumb) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Have a meaningful conclusion and deliverable </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Can be completed without interruption </li></ul></ul></ul></ul><ul><ul><ul><li>Provides foundation for all project planning and control </li></ul></ul></ul>
  69. 69. Chapter 5 – Project Scope Management <ul><li>Scope Definition Outputs </li></ul><ul><ul><li>Work Breakdown Structure (WBS) - Benefits </li></ul></ul><ul><ul><ul><li>Prevent work slippage </li></ul></ul></ul><ul><ul><ul><li>Project team understands how their tasks fit into the overall project and their impact upon the project </li></ul></ul></ul><ul><ul><ul><li>Facilitates communication and cooperation between project team and stakeholders </li></ul></ul></ul><ul><ul><ul><li>Helps prevent changes </li></ul></ul></ul><ul><ul><ul><li>Focuses team experience into what needs to be done – results in higher quality </li></ul></ul></ul><ul><ul><ul><li>Basis and proof for estimating staff, cost and time </li></ul></ul></ul><ul><ul><ul><li>Gets team buy-in, role identification </li></ul></ul></ul><ul><ul><ul><li>Graphical picture of the project hierarchy </li></ul></ul></ul><ul><ul><ul><li>Identifies all tasks, project foundation </li></ul></ul></ul>
  70. 70. Chapter 5 – Project Scope Management <ul><li>WBS phrases </li></ul><ul><ul><li>Graphical hierarchy of the project </li></ul></ul><ul><ul><li>Identifies all tasks </li></ul></ul><ul><ul><li>Foundation of the project </li></ul></ul><ul><ul><li>Very important </li></ul></ul><ul><ul><li>Forces thought of all aspects of the project </li></ul></ul><ul><ul><li>Can be re-used for other projects </li></ul></ul>
  71. 71. Chapter 5 – Project Scope Management <ul><li>Scope Definition Outputs </li></ul><ul><ul><li>Work Breakdown Structure (WBS) – Dictionary </li></ul></ul><ul><ul><ul><li>Designed to control what work is done and when </li></ul></ul></ul><ul><ul><ul><li>Also known as a task description </li></ul></ul></ul><ul><ul><ul><li>Puts boundary on what is included in a task and what is not included </li></ul></ul></ul>
  72. 72. Chapter 5 – Project Scope Management <ul><li>Scope Verification Inputs </li></ul><ul><ul><li>Work results – partially/completed deliverables, costs to date </li></ul></ul><ul><ul><li>Product documentation – description available for review (requirements) </li></ul></ul><ul><li>Scope Verification Tools & Techniques </li></ul><ul><ul><li>Inspection – measuring, examining, testing to determine if results conform to requirements </li></ul></ul><ul><li>Scope Verification Outputs </li></ul><ul><ul><li>Formal acceptance – documentation identifying client and stakeholder approval, customer acceptance of efforts </li></ul></ul>
  73. 73. Chapter 5 – Project Scope Management <ul><li>Scope Change Control: </li></ul><ul><ul><li>Influencing factors to ensure that changes are beneficial </li></ul></ul><ul><ul><li>Determining scope change has occurred </li></ul></ul><ul><ul><li>Managing changes when they occur </li></ul></ul><ul><ul><li>Thoroughly integrated with other control processes </li></ul></ul>
  74. 74. Chapter 5 – Project Scope Management <ul><li>Scope Change Control Inputs: </li></ul><ul><ul><li>Work Breakdown Structure </li></ul></ul><ul><ul><li>Performance Reports- issues reported </li></ul></ul><ul><ul><li>Change Requests – expansion/shrink of scope derived from : </li></ul></ul><ul><ul><ul><li>External events (government regulations) </li></ul></ul></ul><ul><ul><ul><li>Scope definition errors of product or project </li></ul></ul></ul><ul><ul><ul><li>Value adding change – new technology </li></ul></ul></ul><ul><ul><li>Scope Management Plan </li></ul></ul>
  75. 75. Chapter 5 – Project Scope Management <ul><li>Scope Change Control Tools & Techniques </li></ul><ul><ul><li>Scope Change Control System – defines procedures how scope change can occur </li></ul></ul><ul><ul><ul><li>All paperwork, tracking systems, approval levels </li></ul></ul></ul><ul><ul><ul><li>Integrated with overall change control procedures </li></ul></ul></ul><ul><ul><li>Performance Measurement – determine what is causing variances and corrective actions </li></ul></ul><ul><ul><li>Additional Planning </li></ul></ul>
  76. 76. Chapter 5 – Project Scope Management <ul><li>Scope Change Control Outputs: </li></ul><ul><ul><li>Scope Changes – fed back through planning processes, revised WBS </li></ul></ul><ul><ul><li>Corrective Actions </li></ul></ul><ul><ul><li>Lessons Learned – cause and reasoning for variances documented for historical purposes </li></ul></ul>
  77. 77. Chapter 5 – Project Scope Management <ul><li>Management By Objectives (MBO) </li></ul><ul><ul><li>Philosophy that has 3 steps: </li></ul></ul><ul><ul><ul><li>Establish unambiguous and realistic objectives </li></ul></ul></ul><ul><ul><ul><li>Periodically evaluate if objectives are being met </li></ul></ul></ul><ul><ul><ul><li>Take corrective action </li></ul></ul></ul><ul><ul><ul><ul><li>Project Manager must know that if project is not aligned or support corporate objectives, the project is likely to lose resources, assistance and attention. </li></ul></ul></ul></ul><ul><ul><ul><ul><li>MBO only works if management supports it </li></ul></ul></ul></ul>
  78. 78. Chapter 6 – Project Time Management <ul><li>Project Time Management </li></ul><ul><ul><li>Processes required to ensure timely completion of the project </li></ul></ul><ul><ul><li>No consensus concerning differences between activities and tasks </li></ul></ul><ul><ul><li>Activities seen as composed of tasks –most common usage </li></ul></ul><ul><ul><li>Other disciplines have tasks composed of activities </li></ul></ul>
  79. 79. Chapter 6 – Project Time Management <ul><li>Activity Definition: identifying and documenting specific activities to produce project deliverables identified in the WBS </li></ul><ul><ul><li>Must be defined to meet the project objectives </li></ul></ul>
  80. 80. Chapter 6 – Project Time Management <ul><li>Activity Definition Inputs </li></ul><ul><ul><li>WBS – primary input </li></ul></ul><ul><ul><li>Scope Statement – project justification & project objectives </li></ul></ul><ul><ul><li>Historical Information </li></ul></ul><ul><ul><li>Constraints </li></ul></ul><ul><ul><li>Assumptions </li></ul></ul>
  81. 81. Chapter 6 – Project Time Management <ul><li>Activity Definition Tools & Techniques </li></ul><ul><ul><li>Decomposition – outputs are expressed as activities rather than deliverables </li></ul></ul><ul><ul><li>Templates – reuse from previous projects </li></ul></ul>
  82. 82. Chapter 6 – Project Time Management <ul><li>Activity Definition Outputs </li></ul><ul><ul><li>Activity List – all to be performed; extension to the WBS and includes description to ensure team members understand work to be performed </li></ul></ul><ul><ul><li>Supporting Detail – organized as needed and include all assumptions and constraints </li></ul></ul><ul><ul><li>WBS Updates – identify missing deliverables and clarify deliverable descriptions. WBS updates often called refinements; more likely using new technologies in project </li></ul></ul>
  83. 83. Chapter 6 – Project Time Management <ul><li>Activity Sequencing – identifying and documenting interactive dependencies among activities. Support later development of a realistic schedule </li></ul><ul><ul><li>Project Management software often used </li></ul></ul>
  84. 84. Chapter 6 – Project Time Management <ul><li>Activity Sequencing Inputs: </li></ul><ul><ul><li>Activity List </li></ul></ul><ul><ul><li>Product Description – product characteristics often affect activity sequencing </li></ul></ul><ul><ul><li>Mandatory Sequencing – physical limitations, hard logic, prototypes needed; inherent in nature of work being done </li></ul></ul><ul><ul><li>Discretionary Dependencies – defined by project management team; “best practices” or unusual aspects of project – soft logic, preferred logic, preferential logic </li></ul></ul><ul><ul><li>External Dependencies – relationship between project activities and non-project activities (company policies, procurement, etc.) </li></ul></ul><ul><ul><li>Constraints </li></ul></ul><ul><ul><li>Assumptions </li></ul></ul>
  85. 85. Chapter 6 – Project Time Management <ul><li>Network Diagrams </li></ul><ul><ul><li>Shows how the project tasks will flow from beginning to end </li></ul></ul><ul><ul><li>Proves how long the project will take to complete </li></ul></ul><ul><ul><li>Takes project tasks from low levels of WBS and placing them into their order of completion (beginning to end) </li></ul></ul>
  86. 86. Chapter 6 – Project Time Management <ul><li>Activity Sequencing Tools & Techniques </li></ul><ul><ul><li>Precedence Diagramming Method (PDM) – constructing network diagram using nodes to represent activities and arrows to indicate dependencies; also called Activity On Node (AON) </li></ul></ul><ul><ul><li>Most project management software uses </li></ul></ul><ul><ul><li>Includes 4 types of dependencies: </li></ul></ul><ul><ul><ul><li>Finish to Start – “from” activity must finish before “to” activity can begin; most commonly used </li></ul></ul></ul><ul><ul><ul><li>Finish to Finish – “from” activity must finish before the next may finish </li></ul></ul></ul><ul><ul><ul><li>Start to Start – “from” activity must start before next “to” activity can start </li></ul></ul></ul><ul><ul><ul><li>Start to Finish – task must start before next activity can finish </li></ul></ul></ul><ul><ul><li>Use caution with last 3 techniques - logical relationships often not consistently implemented with project management software </li></ul></ul>
  87. 87. Chapter 6 – Project Time Management <ul><li>Activity Sequencing Tools & Techniques (continued) </li></ul><ul><ul><li>Arrow Diagramming Method (ADM) – uses arrows to represent activities and connecting at nodes to illustrate dependencies </li></ul></ul><ul><ul><ul><li>Also called Activity On Arrow (AOA) </li></ul></ul></ul><ul><ul><ul><li>Only uses finish to start dependencies </li></ul></ul></ul><ul><ul><ul><li>PERT and CPM only can be drawn using AOA </li></ul></ul></ul>
  88. 88. Chapter 6 – Project Time Management <ul><li>Activity Sequencing Tools & Techniques (continued) </li></ul><ul><ul><li>Conditional diagramming methods </li></ul></ul><ul><ul><ul><li>GERT (Graphical Evaluation and Review Technique) </li></ul></ul></ul><ul><ul><ul><li>System Dynamic Models </li></ul></ul></ul><ul><ul><ul><li>Allow for non-sequential activities (loops) or conditional branches – not provided by PDM or ADM methods </li></ul></ul></ul>
  89. 89. Chapter 6 – Project Time Management <ul><li>Activity Sequencing Tools & Techniques (continued) </li></ul><ul><ul><li>Network Templates – standardized networks can be used. Composed of subnets, or fragnets </li></ul></ul><ul><ul><ul><li>Subnets are several nearly identical portions of a network (floors on a building, clinical trials, program modules) </li></ul></ul></ul><ul><ul><ul><li>Useful for several identical processes (clinical trials, programming modules). </li></ul></ul></ul>
  90. 90. Chapter 6 – Project Time Management <ul><li>Activity Sequencing Outputs: </li></ul><ul><ul><li>Project Network Diagram – schematic display of project activities and relationships (dependencies). Should be accompanied by a summary narrative that describes the diagram approach </li></ul></ul><ul><ul><li>Activity List Updates </li></ul></ul>
  91. 91. Chapter 6 – Project Time Management <ul><li>Activity Duration Estimating </li></ul><ul><ul><li>Involves assessing number of work periods needed to complete identified activities </li></ul></ul><ul><ul><li>Requires consideration of elapsed time, calendars, weekends, and day of week work starts </li></ul></ul>
  92. 92. Chapter 6 – Project Time Management <ul><li>Activity Duration Estimating Inputs: </li></ul><ul><ul><li>Activity Lists </li></ul></ul><ul><ul><li>Constraints </li></ul></ul><ul><ul><li>Assumptions </li></ul></ul><ul><ul><li>Resource Requirements – amount of labor assigned to activity </li></ul></ul><ul><ul><li>Resource Capabilities – human and material resources, expertise </li></ul></ul><ul><ul><li>Historical Information </li></ul></ul><ul><ul><ul><li>Project Files, or records of previous project results </li></ul></ul></ul><ul><ul><ul><li>Commercial Duration Estimates – useful when durations are not driven by actual work (approval periods, material resources) </li></ul></ul></ul><ul><ul><ul><li>Project Team Knowledge </li></ul></ul></ul>
  93. 93. Chapter 6 – Project Time Management <ul><li>Activity Duration Estimating Tools & Techniques </li></ul><ul><ul><li>Expert Judgment – guided by historical information should be used whenever possible; high risk without expertise avail. </li></ul></ul><ul><ul><li>Simulation – using different sets of assumptions (Monte Carlo Analysis) to drive multiple durations </li></ul></ul><ul><ul><li>Analogous Estimating – “top down estimating” – use actual, similar, previous known durations as basis for future activity duration. Used when limited knowledge is available. Form of expert judgment </li></ul></ul>
  94. 94. Chapter 6 – Project Time Management <ul><li>Activity Duration Outputs: </li></ul><ul><ul><li>Activity Duration Estimates – quantitative assessments of work periods to complete an activity. Should indicate a range +/- of possible results </li></ul></ul><ul><ul><li>Basis of Estimates – all assumptions should be documented </li></ul></ul><ul><ul><li>Activity List Updates </li></ul></ul>
  95. 95. Chapter 6 – Project Time Management <ul><li>Schedule Development </li></ul><ul><ul><li>Determining start and finish dates for project activities </li></ul></ul><ul><ul><li>Without realistic dates, project unlikely to be finished as scheduled </li></ul></ul><ul><ul><li>Schedule development process often iterates as more information becomes available (process inputs) </li></ul></ul>
  96. 96. Chapter 6 – Project Time Management <ul><li>Schedule Development Inputs: </li></ul><ul><ul><li>Project Network Diagram </li></ul></ul><ul><ul><li>Activity Duration Estimates </li></ul></ul><ul><ul><li>Resource Requirements </li></ul></ul><ul><ul><li>Resource Pool Description – availability patterns; shared resources are highly variable </li></ul></ul><ul><ul><li>Calendars – define eligible work periods </li></ul></ul><ul><ul><ul><li>Project Calendars affect all resources </li></ul></ul></ul><ul><ul><ul><li>Resource Calendars – affect specific resource pools or individuals </li></ul></ul></ul>
  97. 97. Chapter 6 – Project Time Management <ul><li>Schedule Development Inputs (continued): </li></ul><ul><ul><li>Constraints </li></ul></ul><ul><ul><ul><li>Imposed Dates – may be required </li></ul></ul></ul><ul><ul><ul><li>Key events or milestones – are initially requested and become expected during project </li></ul></ul></ul><ul><ul><li>Assumptions </li></ul></ul><ul><ul><li>Lead and Lag Time – dependencies may specify time in order to satisfy relationship (example – 2 weeks to receive order) </li></ul></ul>
  98. 98. Chapter 6 – Project Time Management <ul><li>Schedule Development Tools & Techniques </li></ul><ul><ul><li>Mathematical Analysis – calculating theoretical early/late finish and start dates without regard for resource pool limitations; indicate time periods which activity should be scheduled given resource limits and other constraints: </li></ul></ul><ul><ul><ul><li>Critical Path Method (CPM) – single early/late start and finish date for all activities. Based on specified, sequential network and single duration estimate. Calculates float to determine flexibility </li></ul></ul></ul><ul><ul><ul><li>Graphical Evaluation and Review Technique (GERT) – probabilistic treatment of network and activity duration estimates </li></ul></ul></ul><ul><ul><ul><li>Program Evaluation and Review Technique (PERT)- sequential network and weighted average duration to calculate project duration – differs from CPM by using mean (expected value) instead of most-likely estimate in CPM </li></ul></ul></ul>
  99. 99. Chapter 6 – Project Time Management <ul><li>Schedule Development Tools & Techniques </li></ul><ul><ul><li>Critical Path Method: refers to estimating based on one time estimate per activity </li></ul></ul><ul><ul><ul><li>One time estimate per task (Most Likely) </li></ul></ul></ul><ul><ul><ul><li>Emphasis on controlling cost and leaving schedule flexible </li></ul></ul></ul><ul><ul><ul><li>Drawn using AOA diagrams </li></ul></ul></ul><ul><ul><ul><li>Can have dummy task </li></ul></ul></ul><ul><ul><li>PERT (Program Review and Estimating Technique) </li></ul></ul><ul><ul><ul><li>3 Time estimates per activity </li></ul></ul></ul><ul><ul><ul><ul><li>Optimistic </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Pessimistic </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Most Likely </li></ul></ul></ul></ul><ul><ul><ul><li>Emphasis on meeting schedule, flexibility with costs </li></ul></ul></ul><ul><ul><ul><li>Drawn on AOA diagrams </li></ul></ul></ul><ul><ul><ul><li>Can have dummy tasks </li></ul></ul></ul>
  100. 100. Chapter 6 – Project Time Management <ul><li>Schedule Development Tools & Techniques </li></ul><ul><ul><li>Monte Carlo Analysis </li></ul></ul><ul><ul><ul><li>Uses a computer with PERT values and network diagram </li></ul></ul></ul><ul><ul><ul><li>Tells </li></ul></ul></ul><ul><ul><ul><ul><li>Probability of completing a project on any specific day </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Probability of completing a project for any specific amount of cost </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Probability of any task actually being on the critical path </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Overall Project Risk </li></ul></ul></ul></ul><ul><ul><ul><li>Suggests that Monte Carlo simulation will create a project duration that is closer to reality than CPM or PERT </li></ul></ul></ul>
  101. 101. Chapter 6 – Project Time Management <ul><li>Schedule Development Tools & Techniques (continued) </li></ul><ul><ul><li>Duration Compression – look to shorten project schedule without affecting scope </li></ul></ul><ul><ul><ul><li>Crashing – cost and schedule trade-offs to determine greatest amount of compression for least incremental cost – often results in higher costs </li></ul></ul></ul><ul><ul><ul><li>Fast Tracking – performing activities in parallel that normally would be sequenced – often results in re-work and usually increases risk </li></ul></ul></ul><ul><ul><li>Simulation </li></ul></ul>
  102. 102. Chapter 6 – Project Time Management <ul><li>Schedule Development Tools & Techniques (continued) </li></ul><ul><ul><li>Resource Leveling Heuristics – leveling resources that apply to critical path activities a.k.a. “resource constrained scheduling” – when limitation on quantity of available resources; sometimes called “Resource Based Method” – often increases project duration </li></ul></ul><ul><ul><li>Project Management Software </li></ul></ul>
  103. 103. Chapter 6 – Project Time Management <ul><li>Schedule Development Tools & Techniques (continued) </li></ul><ul><ul><li>Project Manger’s role </li></ul></ul><ul><ul><ul><li>Provide the team with the necessary information to properly estimate the task </li></ul></ul></ul><ul><ul><ul><li>Complete a sanity check of the estimate </li></ul></ul></ul><ul><ul><ul><li>Formulate a reserve </li></ul></ul></ul><ul><ul><li>Project Team should be involved; determine task estimates </li></ul></ul><ul><ul><ul><li>Historical Records </li></ul></ul></ul><ul><ul><ul><li>Guesses </li></ul></ul></ul><ul><ul><ul><li>Actual Costs </li></ul></ul></ul><ul><ul><ul><li>Benchmarks </li></ul></ul></ul><ul><ul><ul><li>CPM and PERT </li></ul></ul></ul>
  104. 104. Chapter 6 – Project Time Management <ul><li>Schedule Development Tools & Techniques </li></ul><ul><ul><li>Critical Path Method: longest path through a network diagram and determines the earliest completion of the project </li></ul></ul><ul><ul><li>Proves how long the project will take </li></ul></ul><ul><ul><li>Indicates tasks that need most monitoring </li></ul></ul><ul><ul><li>Almost always have no slack </li></ul></ul>
  105. 105. Chapter 6 – Project Time Management <ul><li>Schedule Development Outputs: </li></ul><ul><ul><li>Project Schedule – includes planned start and finish dates for each activity; remains preliminary until resources assignments are approved. Usually in following formats: </li></ul></ul><ul><ul><ul><li>Project Network Diagrams (with date information added) – show logical and critical path activities </li></ul></ul></ul><ul><ul><ul><li>Bar or Gantt charts – activity start and end dates, expected durations </li></ul></ul></ul><ul><ul><ul><li>Milestone Charts – identifies key deliverables and interfaces </li></ul></ul></ul><ul><ul><ul><li>Time-scaled network diagrams – blend of project network and bar charts </li></ul></ul></ul>
  106. 106. Chapter 6 – Project Time Management <ul><li>Schedule Development Outputs (continued): </li></ul><ul><ul><li>Supporting Detail – all assumptions and constraints. May also include: </li></ul></ul><ul><ul><ul><li>Resource requirement by time period (resource histogram) </li></ul></ul></ul><ul><ul><ul><li>Alternative schedules (best/worst case) </li></ul></ul></ul><ul><ul><ul><li>Schedule reserve/risk assessments </li></ul></ul></ul><ul><ul><li>Schedule Management Plan – how updates are managed </li></ul></ul><ul><ul><li>Resource requirement updates – leveling and activity impact </li></ul></ul>
  107. 107. Chapter 6 – Project Time Management <ul><li>Schedule Control: </li></ul><ul><ul><li>Influencing factors which create schedule changes to ensure changes are beneficial </li></ul></ul><ul><ul><li>Determining that schedule has changed </li></ul></ul><ul><ul><li>Managing actual changes as they occur </li></ul></ul><ul><li>Inputs to Schedule Control </li></ul><ul><ul><li>Project Schedule – baseline approved, measure against project performance </li></ul></ul><ul><ul><li>Performance Reports – planned dates met, issues </li></ul></ul><ul><ul><li>Change Requests </li></ul></ul><ul><ul><li>Schedule Management Plan </li></ul></ul>
  108. 108. Chapter 6 – Project Time Management <ul><li>Schedule Control Tools & Techniques </li></ul><ul><ul><li>Schedule Change Control System – defines procedures for schedule changes, paperwork, approval, tracking systems </li></ul></ul><ul><ul><li>Performance Measurement – assess magnitude of variations to baseline; determine if corrective action is needed </li></ul></ul><ul><ul><li>Additional Planning </li></ul></ul><ul><ul><li>Project Management Software </li></ul></ul>
  109. 109. Chapter 6 – Project Time Management <ul><li>Schedule Control Outputs: </li></ul><ul><ul><li>Schedule Updates – any modifications, stakeholder notification </li></ul></ul><ul><ul><ul><li>Revisions change scheduled start and finish dates – generally in response to scope changes. “Re-baselining” may be needed in drastic situations </li></ul></ul></ul><ul><ul><li>Corrective Action – re-align performance with project plan </li></ul></ul><ul><ul><li>Lessons Learned </li></ul></ul>
  110. 110. Chapter 6 – Project Time Management <ul><li>Key knowledge points not in PMBOK </li></ul><ul><ul><li>Need to know manual calculations of network diagrams </li></ul></ul><ul><ul><ul><li>Created after project charter and WBS (task estimates and dependencies are determined) </li></ul></ul></ul><ul><ul><ul><ul><li>Mandatory dependencies (Hard Logic) – inherent in nature of work </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Discretionary dependencies (Soft Logic) – based on experience, desire or results </li></ul></ul></ul></ul><ul><ul><ul><ul><li>External dependencies – based on needs and desires of organizations outside the project </li></ul></ul></ul></ul>
  111. 111. Chapter 6 – Project Time Management <ul><li>Methods to draw network diagrams </li></ul><ul><ul><li>Activity on Node (AON) or Precedence Diagramming Method (PDM) </li></ul></ul><ul><ul><ul><li>Boxes represent tasks </li></ul></ul></ul><ul><ul><ul><li>Arrows show task dependencies </li></ul></ul></ul><ul><ul><ul><li>4 types of task relationships </li></ul></ul></ul><ul><ul><ul><ul><li>Finish to Start (task must finish before next can start) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Finish to Finish (task must finish before next can finish) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Start to Start (task must start before next can start) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Start to Finish (task must start before the next can finish) </li></ul></ul></ul></ul><ul><ul><ul><li>No dummy tasks used </li></ul></ul></ul>
  112. 112. Chapter 6 – Project Time Management <ul><li>Methods to draw network diagrams </li></ul><ul><ul><li>Activity on Arrow (AOA or Arrow Diagramming Method (ADM) </li></ul></ul><ul><ul><ul><li>Arrows used to represent tasks </li></ul></ul></ul><ul><ul><ul><li>Only Finish to Start relationships are used </li></ul></ul></ul><ul><ul><ul><li>May use dummy tasks (show dependencies) </li></ul></ul></ul><ul><ul><ul><li>PERT and CPM estimating techniques can only be drawn using AOA </li></ul></ul></ul><ul><ul><ul><ul><li>CPM (Critical Path Method) – estimating based on one time estimate per activity (the most likely time estimate) </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Emphasizes controlling cost and allowing schedule flexibility </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Can have dummy tasks </li></ul></ul></ul></ul></ul>
  113. 113. Chapter 6 – Project Time Management <ul><li>Methods to draw network diagrams </li></ul><ul><ul><li>Activity on Arrow (AOA or Arrow Diagramming Method (ADM) continued: </li></ul></ul><ul><ul><ul><li>PERT (Program Evaluation and Review technique) </li></ul></ul></ul><ul><ul><ul><ul><li>3 time estimates per activity: Optimistic (O), Most Likely (M), Pessimistic (P) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Emphasizes meeting schedule, flexibility with cost </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Can have dummy tasks </li></ul></ul></ul></ul>
  114. 114. Chapter 6 – Project Time Management <ul><li>Methods to draw network diagrams </li></ul><ul><ul><li>PERT (Program Evaluation and Review technique) </li></ul></ul><ul><ul><li>Estimating based on 3 formulas: </li></ul></ul><ul><ul><ul><li>PERT Duration: (P + 4M + O)/6 </li></ul></ul></ul><ul><ul><ul><li>Standard Task Deviation: (P – O)/6 </li></ul></ul></ul><ul><ul><ul><li>Task Variance: </li></ul></ul></ul><ul><ul><ul><li>Total project estimate: </li></ul></ul></ul><ul><ul><ul><ul><li>Add up all Optimistic, Most Likely and Pessimistic values of the critical path tasks and apply P + 4M + O/6 </li></ul></ul></ul></ul><ul><ul><ul><li>Total project variance (+/-): </li></ul></ul></ul><ul><ul><ul><ul><li>Add up the individual task variances and take the square root of the value. Use the value as a +/- figure to compute the Optimistic and Pessimistic values. The total project estimate will serve as the basis. </li></ul></ul></ul></ul>[ P – O ] 2 6
  115. 115. Chapter 6 – Project Time Management <ul><li>Monte Carlo Simulation: </li></ul><ul><ul><li>Uses a computer with PERT values (P, M, O) and a network diagram but does not use the PERT formula </li></ul></ul><ul><ul><li>Indicates </li></ul></ul><ul><ul><ul><li>Probability of completing project on a specific day </li></ul></ul></ul><ul><ul><ul><li>Probability of completing project for any specific amount of cost </li></ul></ul></ul><ul><ul><ul><li>Probability of any task actually being on critical path </li></ul></ul></ul><ul><ul><ul><li>Overall project risk </li></ul></ul></ul>
  116. 116. Chapter 6 – Project Time Management <ul><li>Estimating techniques in general: </li></ul><ul><ul><li>Should be performed by entire project team </li></ul></ul><ul><ul><ul><li>Project manager needs to provide information to allow team to create estimates; sanity check; formulate reserve </li></ul></ul></ul><ul><ul><li>Estimates are: </li></ul></ul><ul><ul><ul><li>Guesses, Historical Records, Actual Costs, Benchmarks, CPM, PERT </li></ul></ul></ul><ul><ul><ul><ul><li>Critical paths determines the earliest completion date and identifies tasks that need monitoring </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Can be obtained by CPM, PERT and Monte Carlo estimating techniques </li></ul></ul></ul></ul>
  117. 117. Chapter 6 – Project Time Management <ul><li>Key Definitions: </li></ul><ul><ul><li>Slack (Float): the amount of time a task can be delayed without delaying the entire project. Tasks on critical path have no slack. </li></ul></ul><ul><ul><ul><li>Slack is calculated by the difference between Early Start and Late Start of a task </li></ul></ul></ul><ul><ul><ul><ul><li>Free Slack (Float): the amount of time a task can be delayed without delaying the early start date of its successor </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Total Slack (Float): the amount of time a task can be delayed without delaying the project completion date </li></ul></ul></ul></ul><ul><ul><li>Lag: inserted waiting time between tasks </li></ul></ul>
  118. 118. Chapter 6 – Project Time Management <ul><li>General Comments: </li></ul><ul><ul><li>Projects can have more than 1 critical path (increases risk) and can involve dummy tasks </li></ul></ul><ul><ul><li>Negative float indicates that you are behind </li></ul></ul><ul><ul><li>Resource Leveling involves possibly letting schedule and cost slip </li></ul></ul><ul><ul><li>Heuristics – just means “rule of thumb” e.g. 80/20 rule </li></ul></ul><ul><ul><li>Schedules are calendar based – makes this different than a time estimate </li></ul></ul><ul><ul><ul><li>Bar Chart a.k.a. Gantt chart (track progress, report to entire team including stakeholders, control tool) </li></ul></ul></ul><ul><ul><ul><li>Network Diagram (to show task inter-dependencies, show project organization, basis for project control) </li></ul></ul></ul><ul><ul><ul><li>Milestone chart (report to Senior management, shows major events) </li></ul></ul></ul>
  119. 119. Chapter 6 – Project Time Management <ul><li>General Comments: </li></ul><ul><ul><li>To shorten project schedule examine the critical path </li></ul></ul><ul><ul><ul><li>Crashing – add more resources to the critical path tasks </li></ul></ul></ul><ul><ul><ul><ul><li>Usually results in increased cost </li></ul></ul></ul></ul><ul><ul><ul><li>Fast Tracking – performing tasks in parallel </li></ul></ul></ul><ul><ul><ul><ul><li>Can result in re-work and increased risk </li></ul></ul></ul></ul><ul><ul><li>Best to select method that has least impact on the project (is the importance on cost, risk or schedule?) </li></ul></ul>
  120. 120. Chapter 6 – Project Time Management <ul><li>General Comments: </li></ul><ul><ul><li>Bar (Gantt) Charts </li></ul></ul><ul><ul><ul><li>Weak Planning Tool, effective progress and reporting tool </li></ul></ul></ul><ul><ul><ul><li>Does not show interdependencies of tasks </li></ul></ul></ul><ul><ul><ul><li>Does not help organize the project more effectively </li></ul></ul></ul><ul><ul><li>Network Diagrams (PERT, CPM, PDM) </li></ul></ul><ul><ul><ul><li>Shows task interdependencies </li></ul></ul></ul><ul><ul><ul><li>Aids in effectively planning and organizing work </li></ul></ul></ul><ul><ul><ul><li>Provides a basis for project control </li></ul></ul></ul><ul><ul><li>Milestone Charts </li></ul></ul><ul><ul><ul><li>Only shows major events </li></ul></ul></ul><ul><ul><ul><li>Good for reporting to management and customer </li></ul></ul></ul><ul><ul><li>Flow Charts </li></ul></ul><ul><ul><ul><li>Depicts workflow and not commonly used for project management </li></ul></ul></ul>
  121. 121. Chapter 6 – Project Time Management <ul><li>General Comments: </li></ul><ul><ul><li>Free Slack (Float) – amount of time a task can be delayed without delaying the early start date of its successor </li></ul></ul><ul><ul><li>Total Slack (Float) – amount of time a task can be delayed without delaying the project completion date </li></ul></ul><ul><li>Lag – inserted waiting time between tasks </li></ul><ul><li>Resource Leveling – level peaks of resource usage; stable number of resources – allows schedule and cost slip in favor of leveling resources </li></ul><ul><li>Heuristic – rule of thumb (80/20 rule) </li></ul>
  122. 122. Chapter 7 – Project Cost Management <ul><li>Project Cost Management </li></ul><ul><ul><li>Ensure that the project is completed within budget </li></ul></ul><ul><ul><li>Concerned with cost of resources needed to complete activities; consider effect of project decisions on cost of using product “life-cycle costing” </li></ul></ul><ul><ul><li>Most prospective financial impact of using the product is outside the project scope </li></ul></ul><ul><ul><li>Consider information needs of stakeholders, controllable and uncontrollable costs (budget separately for reward and recognition systems) </li></ul></ul>
  123. 123. Chapter 7 – Project Cost Management <ul><li>Project Cost Management </li></ul><ul><ul><li>Estimating should be based on WBS to improve accuracy </li></ul></ul><ul><ul><li>Estimating should be done by the person performing the work </li></ul></ul><ul><ul><li>Having historical records is key to improving estimates </li></ul></ul><ul><ul><li>Costs (schedule, scope, resources) should be managed to estimates </li></ul></ul><ul><ul><li>A cost (schedule, scope, baseline) should be kept and not changed </li></ul></ul><ul><ul><li>Plans should be revised as necessary during completion of work </li></ul></ul><ul><ul><li>Corrective action should be taken when cost problems (schedule, scope and resources) occur. </li></ul></ul>
  124. 124. Chapter 7 – Project Cost Management <ul><li>Resource Planning: </li></ul><ul><ul><li>Determining what physical resources and quantities are needed to perform work </li></ul></ul><ul><li>Inputs to Resource Planning: </li></ul><ul><ul><li>Work Breakdown Structure </li></ul></ul><ul><ul><li>Historical Information </li></ul></ul><ul><ul><li>Scope Statement – justification & objectives </li></ul></ul><ul><ul><li>Resource Pool Description – what resources are potentially available for resource planning </li></ul></ul><ul><ul><li>Organizational Policies – staffing, procurement </li></ul></ul>
  125. 125. Chapter 7 – Project Cost Management <ul><li>Inputs to Resource Planning: </li></ul><ul><ul><li>Work Breakdown Structure </li></ul></ul><ul><ul><li>Network Diagram </li></ul></ul><ul><ul><li>Schedule </li></ul></ul><ul><ul><li>Risks </li></ul></ul><ul><ul><li>Historical Information </li></ul></ul><ul><ul><li>Scope Statement – justification & objectives </li></ul></ul><ul><ul><li>Resource Pool Description – what resources are potentially available for resource planning </li></ul></ul><ul><ul><li>Organizational Policies – staffing, procurement </li></ul></ul>
  126. 126. Chapter 7 – Project Cost Management <ul><li>Resource Planning Tools & Techniques </li></ul><ul><ul><li>Expert Judgment </li></ul></ul><ul><ul><li>Alternatives Identification </li></ul></ul><ul><li>Resource Planning Outputs: </li></ul><ul><ul><li>Resource Requirements – what type & how many resources are needed for each activity in the Work Breakdown Structure </li></ul></ul>
  127. 127. Chapter 7 – Project Cost Management <ul><li>Cost Estimating: </li></ul><ul><ul><li>Develop approximate costs of resources </li></ul></ul><ul><ul><li>Distinguish estimating from pricing </li></ul></ul><ul><ul><ul><li>Estimating – likely amount </li></ul></ul></ul><ul><ul><ul><li>Pricing – business decision </li></ul></ul></ul><ul><ul><li>Identify alternatives and consider realigning costs in phases to their expected savings </li></ul></ul>
  128. 128. Chapter 7 – Project Cost Management <ul><li>Cost Estimating Inputs: </li></ul><ul><ul><li>Work Breakdown Structure </li></ul></ul><ul><ul><li>Resource Requirements </li></ul></ul><ul><ul><li>Resource Rates (if known) </li></ul></ul><ul><ul><li>Activity Duration Estimates </li></ul></ul><ul><ul><li>Historical Information – (project files, commercial cost databases, team knowledge </li></ul></ul><ul><ul><li>Chart Of Accounts – coding structure for accounting; general ledger reporting </li></ul></ul>
  129. 129. Chapter 7 – Project Cost Management <ul><li>Cost Estimating Tools & Techniques </li></ul><ul><ul><li>Analogous Estimating – “top down”; using actual costs from previous project as basis for estimate </li></ul></ul><ul><ul><ul><li>Reliable when previous projects are similar and individuals have expertise – form of expert judgment </li></ul></ul></ul><ul><ul><li>Parametric Modeling – uses project characteristics in mathematical models to predict costs (e.g.building houses) </li></ul></ul><ul><ul><ul><li>Reliable when historical information is accurate, parameters are quantifiable, and model is scalable </li></ul></ul></ul><ul><ul><ul><ul><li>2 types: Regression analysis, Learning Curve </li></ul></ul></ul></ul><ul><ul><li>Bottom Up Estimating – rolling up individual activities into project total – smaller work activities have more accuracy - </li></ul></ul><ul><ul><li>Computerized tools – spreadsheets, software </li></ul></ul>
  130. 130. Chapter 7 – Project Cost Management <ul><li>Cost Estimating Tools & Techniques </li></ul><ul><ul><li>Pro’s and Con’s </li></ul></ul><ul><ul><li>Analogous Estimating </li></ul></ul><ul><ul><ul><li>Quick - Less Accurate </li></ul></ul></ul><ul><ul><ul><li>Tasks don’t need to be identified – Estimates prepared with little detail and understanding of project </li></ul></ul></ul><ul><ul><ul><li>Less costly – Requires considerable experience to do well </li></ul></ul></ul><ul><ul><ul><li>Gives PM idea of management expectations – Infighting at high levels of organization </li></ul></ul></ul><ul><ul><ul><li>Overall project costs are capped – Difficult for projects with uncertainty </li></ul></ul></ul>
  131. 131. Chapter 7 – Project Cost Management <ul><li>Cost Estimating Tools & Techniques </li></ul><ul><ul><li>Pro’s and Con’s </li></ul></ul><ul><ul><li>Bottom Up Estimating </li></ul></ul><ul><ul><ul><li>More Accurate – Takes time and expense </li></ul></ul></ul><ul><ul><ul><li>Gains buy-in from the team – Tendency for team to pad estimates </li></ul></ul></ul><ul><ul><ul><li>Based on detailed analysis of project – Requires that project be defined and understood </li></ul></ul></ul><ul><ul><ul><li>Provides a basis for monitoring and control – Team infighting to get biggest piece of pie </li></ul></ul></ul>
  132. 132. Chapter 7 – Project Cost Management <ul><li>Outputs from Cost Estimating </li></ul><ul><ul><li>Cost estimates – quantitative assessments of likely costs of resources required to complete tasks </li></ul></ul><ul><ul><ul><li>For all resources of the project (labor, materials, supplies, inflation allowance, reserve) </li></ul></ul></ul><ul><ul><ul><li>Expressed in units of currency </li></ul></ul></ul><ul><ul><li>Supporting Detail </li></ul></ul><ul><ul><ul><li>Description of scope (reference to the WBS) </li></ul></ul></ul><ul><ul><ul><li>Documentation how estimate was developed </li></ul></ul></ul><ul><ul><ul><li>Indication of range of possible results </li></ul></ul></ul><ul><ul><ul><li>Assumptions </li></ul></ul></ul><ul><ul><li>Cost Management Plan – how cost variances will be managed </li></ul></ul><ul><ul><li>Cost Risk: associated to seller for Fixed Price; associated to buyer for Time and Materials budget </li></ul></ul>
  133. 133. Chapter 7 – Project Cost Management <ul><li>Cost Budgeting </li></ul><ul><ul><li>Involves allocation of total estimate to individual work to establish a cost baseline to measure performance </li></ul></ul><ul><li>Cost Budgeting Inputs </li></ul><ul><ul><li>Cost Estimate </li></ul></ul><ul><ul><li>Work Breakdown Structure </li></ul></ul><ul><ul><li>Project Schedule – includes planned start and finish dates for items costs are allocated to </li></ul></ul><ul><ul><ul><li>Needed to assign costs during the time period when the actual cost will be incurred </li></ul></ul></ul>
  134. 134. Chapter 7 – Project Cost Management <ul><li>Cost Budgeting Tools & Techniques </li></ul><ul><ul><li>same as Cost Estimating Tools and Techniques </li></ul></ul><ul><li>Outputs from Cost Budgeting </li></ul><ul><ul><li>Cost Baseline – time phased budget to measure and monitor cost performance </li></ul></ul><ul><ul><ul><li>Developed by summing estimated costs by period (S curve of values vs. time) </li></ul></ul></ul><ul><ul><ul><li>Larger projects have multiple baselines to measure different aspects of cost performance </li></ul></ul></ul>
  135. 135. Chapter 7 – Project Cost Management <ul><li>Cost Control </li></ul><ul><ul><li>Concerned with influencing factors that create changes to the cost baseline that are beneficial </li></ul></ul><ul><ul><li>Determining that the cost baseline has changed </li></ul></ul><ul><ul><li>Managing actual changes as they occur </li></ul></ul><ul><ul><ul><li>Monitor cost performance to detect variances </li></ul></ul></ul><ul><ul><ul><li>Record all appropriate changes accurately in the cost baseline </li></ul></ul></ul><ul><ul><ul><li>Preventing incorrect, unauthorized changes being included in the cost baseline </li></ul></ul></ul><ul><ul><ul><li>Informing stakeholders of authorized changes </li></ul></ul></ul><ul><ul><ul><ul><li>Determine the “why’s” of positive and negative variances </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Integrated will all other control processes (scope, change, schedule, quality) </li></ul></ul></ul></ul>
  136. 136. Chapter 7 – Project Cost Management <ul><li>Inputs to Cost Control </li></ul><ul><ul><li>Cost Baseline </li></ul></ul><ul><ul><li>Performance Reports – meet, exceed budget </li></ul></ul><ul><ul><ul><li>50/50 Rule – task is considered 50% complete when it begins and gets credit for remainder 50% only when completed </li></ul></ul></ul><ul><ul><ul><li>20/80 Rule - task is considered 20% complete when it begins and gets credit for remainder 80% only when completed </li></ul></ul></ul><ul><ul><ul><li>0/100 Rule – task only credited when fully completed </li></ul></ul></ul><ul><ul><li>Change Requests </li></ul></ul><ul><ul><li>Cost Management Plan </li></ul></ul><ul><li>Tools & Techniques of Cost Control </li></ul><ul><ul><li>Cost Change Control System – defines the procedures by which the cost baseline may be changed </li></ul></ul><ul><ul><li>Performance Measurement – assess magnitude of cost variations (Earned Value Analysis) and what is causing the variance </li></ul></ul><ul><ul><li>Additional Planning – examine alternatives </li></ul></ul><ul><ul><li>Computerized Tools – forecast planned costs, track actual costs, forecast effect of cost changes </li></ul></ul>
  137. 137. Chapter 7 – Project Cost Management <ul><li>Cost Control Outputs </li></ul><ul><ul><li>Revised Cost Estimate </li></ul></ul><ul><ul><ul><li>Modifications to cost information; require stakeholder approval and adjustments to other project areas </li></ul></ul></ul><ul><ul><li>Budget Updates – changes to approved cost baseline; revised in response to scope changes </li></ul></ul><ul><ul><li>Corrective Action </li></ul></ul><ul><ul><li>Estimate at completion – (EAC) – forecast of total expenditures </li></ul></ul><ul><ul><ul><li>Actual to date plus remaining budget modified by a factor (cost performance index) </li></ul></ul></ul><ul><ul><ul><ul><li>Current variances are seen to apply to future variances </li></ul></ul></ul></ul><ul><ul><ul><li>Actual to date plus new estimate for remaining work </li></ul></ul></ul><ul><ul><ul><ul><li>Original estimates are flawed, or no longer relevant </li></ul></ul></ul></ul><ul><ul><ul><li>Actual to date plus remaining budget </li></ul></ul></ul><ul><ul><ul><ul><li>Current variances are typical and similar variances will not occur in the future </li></ul></ul></ul></ul><ul><ul><li>Lessons Learned </li></ul></ul>
  138. 138. Chapter 7 – Project Cost Management <ul><li>Earned Value Analysis </li></ul><ul><ul><li>Integrates cost, schedule and scope </li></ul></ul><ul><ul><li>Better that comparing projected vs. actual because time and cost are analyzed separately </li></ul></ul><ul><ul><li>Terms: </li></ul></ul><ul><ul><ul><li>BCWS – Budgeted Cost of Work Scheduled (how much work should be done) </li></ul></ul></ul><ul><ul><ul><li>BCWP – Budgeted Cost of Work Performed a.k.a. Earned Value (how much work is budgeted, how much did we budget) </li></ul></ul></ul><ul><ul><ul><li>ACWP – Actual Cost of Work Performed (how much did the completed work cost) </li></ul></ul></ul>
  139. 139. Chapter 7 – Project Cost Management <ul><li>Earned Value Analysis </li></ul><ul><ul><li>Terms: </li></ul></ul><ul><ul><ul><li>BAC – Budget at Completion (how much did you budget for the total job) </li></ul></ul></ul><ul><ul><ul><li>EAC – Estimate at Completion (what do we expect the total project to cost) </li></ul></ul></ul><ul><ul><ul><li>ETC – Estimate to Completion (how much more do we expect to spend to finish the job) </li></ul></ul></ul><ul><ul><ul><li>VAC – Variance at Completion (how much over/under budget do we expect to be) </li></ul></ul></ul>
  140. 140. Chapter 7 – Project Cost Management <ul><li>Earned Value Analysis </li></ul><ul><ul><li>Formulas </li></ul></ul><ul><ul><ul><li>Variance (Plan – Actual) </li></ul></ul></ul><ul><ul><ul><li>Cost Variance (CV): BCWP – ACWP; negative is over budget </li></ul></ul></ul><ul><ul><ul><li>Schedule Variance (SV): BCWP – BCWS; negative is behind schedule </li></ul></ul></ul><ul><ul><ul><li>Cost Performance Index (CPI): BCWP </li></ul></ul></ul><ul><ul><ul><ul><ul><li>ACWP </li></ul></ul></ul></ul></ul><ul><ul><ul><li>I am only getting x¢ out of every $ </li></ul></ul></ul>BCWP ACWP
  141. 141. Chapter 7 – Project Cost Management <ul><li>Earned Value Analysis </li></ul><ul><ul><li>Formulas </li></ul></ul><ul><ul><ul><li>Schedule Performance Index (SPI): BCWP </li></ul></ul></ul><ul><ul><ul><ul><ul><li> BCWS </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><li>I am only progressing x % of the planned rate </li></ul></ul></ul></ul><ul><ul><ul><li>Estimate at Completion (EAC): BAC </li></ul></ul></ul><ul><ul><ul><ul><ul><li> CPI </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><li>As of now we expect the total project to cost x$ </li></ul></ul></ul></ul><ul><ul><ul><li>Estimate to Complete (ETC): EAC – ACWP; how much will it cost from now to completion </li></ul></ul></ul><ul><ul><ul><li>Variance at Completion: BAC – EAC; when the project is over how much more or less did we spend (most common way of calculating EVA </li></ul></ul></ul>BCWP BCWS BAC CPI
  142. 142. Chapter 7 – Project Cost Management <ul><li>Earned Value Analysis </li></ul><ul><ul><li>BCWP comes first in most formulas </li></ul></ul><ul><ul><li>If it is a variance, BCWP comes first </li></ul></ul><ul><ul><li>If it is an index, BCWP is divided by </li></ul></ul><ul><ul><li>If the formula relates to cost, use AWCP </li></ul></ul><ul><ul><li>If the formula related to schedule, use BWCP </li></ul></ul><ul><ul><li>Negative is bad; positive results are good </li></ul></ul><ul><ul><li>ETC refers to “this point on”; EAC refers to when job is completed </li></ul></ul>
  143. 143. Chapter 7 – Project Cost Management <ul><li>Accuracy of Estimates </li></ul><ul><ul><li>Order of Magnitude Estimate: -25% - 75%; usually made during Initiation Phase </li></ul></ul><ul><ul><li>Budget Estimate: -10% - 25%; usually made during the Planning phase </li></ul></ul><ul><ul><li>Definitive Estimate: -5% - 10%; usually made during the Planning phase </li></ul></ul>
  144. 144. Chapter 7 – Project Cost Management <ul><li>Accounting Standards </li></ul><ul><ul><li>Not usually part of the exam </li></ul></ul><ul><ul><li>Present Value (value today of future cash flows): </li></ul></ul><ul><ul><ul><li>PV = FV </li></ul></ul></ul><ul><ul><ul><ul><li>(1 + r) N </li></ul></ul></ul></ul><ul><ul><ul><ul><li>FV = Future Value </li></ul></ul></ul></ul><ul><ul><ul><ul><li>R = Interest Rate </li></ul></ul></ul></ul><ul><ul><ul><ul><li>N = Number of time periods </li></ul></ul></ul></ul>
  145. 145. Chapter 7 – Project Cost Management <ul><li>Accounting Standards </li></ul><ul><ul><li>Net Present Value: total benefits (income or revenue) less the costs. NPV is the sum of each present value of each income/revenue item </li></ul></ul><ul><ul><li>Internal Rate of Return (IRR): company may select project based on highest IRR </li></ul></ul><ul><ul><li>Payback Period: number of time periods it takes to recover the investment in the project before generating revenues </li></ul></ul><ul><ul><li>Benefit Cost Ratio (BCR): compares costs to the benefits of different projects </li></ul></ul><ul><ul><ul><li>Greater than 1 means benefits are greater than costs </li></ul></ul></ul><ul><ul><ul><li>Less than 1 means costs are greater than benefits </li></ul></ul></ul><ul><ul><li>Opportunity Cost: opportunity given up by selecting one project over another </li></ul></ul>
  146. 146. Chapter 7 – Project Cost Management <ul><li>Accounting Standards </li></ul><ul><ul><li>Sunk Costs: expended costs. Sunk costs should not be considered when determining to continue with a troubled project </li></ul></ul><ul><ul><li>Law of Diminishing Returns: the more that is put in the less of an outcome is received </li></ul></ul><ul><ul><li>Working Capital: current assets – current liabilities </li></ul></ul><ul><ul><li>Variable Cost: costs that change with the amount of production or the amount of work (materials, wages) </li></ul></ul><ul><ul><li>Fixed Cost: non-recurring costs that do not change </li></ul></ul><ul><ul><li>Direct Cost: directly attributable to project work (travel, wages, materials) </li></ul></ul><ul><ul><li>Indirect Cost: overhead items or costs for the benefit of more than one project (taxes, fringe benefits) </li></ul></ul>
  147. 147. Chapter 7 – Project Cost Management <ul><li>Accounting Standards </li></ul><ul><ul><li>Depreciation: assets lose value over time </li></ul></ul><ul><ul><ul><li>Straight Line depreciation: same amount is taken each year </li></ul></ul></ul><ul><ul><ul><li>Accelerated Depreciation: 2 forms </li></ul></ul></ul><ul><ul><ul><ul><li>Double Declining Balance </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Sum of the Years Digits </li></ul></ul></ul></ul><ul><ul><li>Life Cycle Costing: includes operations and maintenance phases </li></ul></ul><ul><ul><li>Value Analysis: find a less costly way to do same work </li></ul></ul>
  148. 148. Chapter 7 – Project Cost Management <ul><li>Accounting Standards </li></ul><ul><ul><li>Make or Buy decisions –at Development (Planning) phase, not conceptual phase </li></ul></ul><ul><ul><li>Project Objectives – are not necessarily needed to fund project </li></ul></ul><ul><ul><li>Project Definition – focus on end product initially; costs and benefits will be evaluated later </li></ul></ul><ul><ul><li>25% of project lifecycle expended at end of planning </li></ul></ul><ul><ul><li>No guarantees; only most likely results </li></ul></ul>
  149. 149. Chapter 7 – Project Cost Management <ul><li>Accounting Standards </li></ul><ul><ul><li>Line of Balance charts are used for manufacturing </li></ul></ul><ul><ul><li>Negative Float – the late start date is earlier than the early start date </li></ul></ul><ul><ul><li>Value Engineering/analysis – does not trade performance for cost </li></ul></ul><ul><ul><li>Prospectus – profitability and technical feasibility used to solicit funding </li></ul></ul>
  150. 150. Chapter 7 – Project Cost Management <ul><li>Accounting Standards </li></ul><ul><ul><li>Definitive Estimate –most precise/accurate estimate for determining project costs </li></ul></ul><ul><ul><li>Management Reserve – over time PM wants no change to reserve; customers wants $ back </li></ul></ul><ul><ul><li>Cost and Schedule Data – predicts future performance </li></ul></ul><ul><ul><li>ROI, Nest Present Value and Discounted Cash Flow – all can be used to measure total income vs. total $ expended </li></ul></ul><ul><ul><li>Undistributed budget – budget that contains approved scope changes but are not planned yet </li></ul></ul><ul><ul><li>Depreciation is not a measurement of profitability </li></ul></ul><ul><ul><li>Pay Back Period - # of periods required to recover the initial investment </li></ul></ul>
  151. 151. Chapter 8 – Project Quality Management <ul><li>Project Quality Management </li></ul><ul><ul><li>Processes required to ensure that the project will satisfy the needs for which it was designed </li></ul></ul><ul><ul><li>Includes all activities of the overall management function that determine the quality policy, objectives, and responsibilities. These are implemented by quality planning, quality control, quality assurance, and quality improvement </li></ul></ul>
  152. 152. Chapter 8 – Project Quality Management <ul><li>3 major processes: </li></ul><ul><ul><li>Quality Planning – identifying quality standards that are relevant to the project (Plan); Project Manager, Project Owner </li></ul></ul><ul><ul><li>Quality Assurance – evaluating overall project performance to provide confidence that project will satisfy relevant quality standards (Implement or Execution); Project Team </li></ul></ul><ul><ul><li>Quality Control – monitoring specific results to comply with quality standards and eliminating unsatisfactory performance causes (Check or Control); Project Manager, Project Team </li></ul></ul><ul><ul><ul><li>Compatible with ISO 9000 and 10000 series </li></ul></ul></ul><ul><ul><ul><li>Proprietary and non-proprietary approaches (total quality management </li></ul></ul></ul><ul><ul><ul><li>Must address the management of the project and the product of the project </li></ul></ul></ul>
  153. 153. Chapter 8 – Project Quality Management <ul><li>Quality – the totality of characteristics of an entity that bear on its ability to satisfy stated or implied needs </li></ul><ul><ul><li>Critical aspect is to turn implied needs into stated needs through project scope management </li></ul></ul><ul><ul><li>Do not confuse with grade – category or rank given to entities having the same functional use but different requirements for quality </li></ul></ul><ul><ul><li>Customer satisfaction – conformance to specifications (must produce what is stated) and fitness for use (must satisfy real needs) </li></ul></ul><ul><ul><li>Prevention – avoid mistakes vs. cost of correction </li></ul></ul><ul><ul><li>Management responsibility – requires participation of team; responsibility of management to provide resources </li></ul></ul><ul><ul><li>Processes within phases – plan-do-check-act cycle </li></ul></ul><ul><ul><ul><li>Recognize that the investment in product quality improvements may be borne by the performing organization since the project may not last long enough to reap reward </li></ul></ul></ul>
  154. 154. Chapter 8 – Project Quality Management <ul><li>Quality Planning </li></ul><ul><ul><li>Identify quality standards are relevant and how to satisfy </li></ul></ul><ul><li>Inputs to Quality Planning </li></ul><ul><ul><li>Quality Policy – the overall intentions and direction of an organization with regard to quality as expressed by management </li></ul></ul><ul><ul><li>Scope Statement </li></ul></ul><ul><ul><li>Product Description </li></ul></ul><ul><ul><li>Standards and Regulations </li></ul></ul><ul><ul><li>Other Process Outputs – processes from other knowledge areas (procurement planning) </li></ul></ul>
  155. 155. Chapter 8 – Project Quality Management <ul><li>Tools &Techniques for Quality Planning </li></ul><ul><ul><li>Benefit/Cost Analysis – consider trade-offs, benefit is less rework; cost is expense of project management activities </li></ul></ul><ul><ul><li>Benchmarking – comparing actual or planned practices to those of other projects </li></ul></ul><ul><ul><li>Flowcharting </li></ul></ul><ul><ul><ul><li>Cause and effect diagramming (Ishikawa or fishbone diagrams) illustrate how causes relate to potential problems or effects </li></ul></ul></ul><ul><ul><ul><li>System or Process flowcharts – show how various elements of the system interrelate </li></ul></ul></ul><ul><ul><ul><ul><li>Helps anticipation of what and where quality problems may occur </li></ul></ul></ul></ul><ul><ul><li>Design of Experiments – analytical technique which defines what variables have most influence of the overall outcome </li></ul></ul><ul><ul><ul><li>Cost and schedule tradeoffs </li></ul></ul></ul>
  156. 156. Chapter 8 – Project Quality Management <ul><li>Outputs from Quality Planning </li></ul><ul><ul><li>Quality Management Plan – describes how team will implement its quality policy; describes the project quality system – organizational structures, responsibilities, procedures, processes and resources needed to implement quality management </li></ul></ul><ul><ul><li>Operational Definitions – defines how an item is measured by the quality control process. Also known as Metrics. </li></ul></ul><ul><ul><li>Checklists – structured tool used to verify that a set of required steps has been performed </li></ul></ul><ul><ul><li>Inputs to other processes – may identify a need for further activity in another area </li></ul></ul>
  157. 157. Chapter 8 – Project Quality Management <ul><li>Quality Assurance </li></ul><ul><ul><li>All planned and systematic activities implemented within the quality system to provide confidence that the project will satisfy quality standards </li></ul></ul><ul><li>Inputs to Quality Assurance </li></ul><ul><ul><li>Quality Management Plan </li></ul></ul><ul><ul><li>Results of quality control measurements (testing) </li></ul></ul><ul><ul><li>Operational definitions </li></ul></ul>
  158. 158. Chapter 8 – Project Quality Management <ul><li>Tools & Techniques for Quality Assurance </li></ul><ul><ul><li>Quality planning tools & techniques </li></ul></ul><ul><ul><li>Quality Audits – structured review of quality management activities to identify lessons learned </li></ul></ul><ul><li>Outputs from Quality Assurance </li></ul><ul><ul><li>Quality improvements – taking action to increase the effectiveness and efficiency of the project to provide added benefits to the stakeholders </li></ul></ul><ul><ul><ul><li>Most likely will involve change control </li></ul></ul></ul>
  159. 159. Chapter 8 – Project Quality Management <ul><li>Quality Control – monitoring specific results to determine if they comply with quality standards and identifying ways to eliminate causes of unsatisfactory results </li></ul><ul><ul><li>Includes project (deliverables) and management (cost and schedule performance) results </li></ul></ul><ul><ul><li>Awareness of statistical quality control </li></ul></ul><ul><ul><ul><li>Prevention (keep errors out of process) and inspection (keep errors from customers) </li></ul></ul></ul><ul><ul><ul><li>Attribute sampling (result conforms) and variable sampling </li></ul></ul></ul><ul><ul><ul><li>Special Causes (unusual events) and random causes </li></ul></ul></ul><ul><ul><ul><li>Tolerances (acceptable range) and control limits (result falls within range) </li></ul></ul></ul>
  160. 160. Chapter 8 – Project Quality Management <ul><li>Inputs to Quality Control </li></ul><ul><ul><li>Work results – include process and product results </li></ul></ul><ul><ul><li>Quality Management Plan </li></ul></ul><ul><ul><li>Operational Definitions </li></ul></ul><ul><ul><li>Checklists </li></ul></ul>
  161. 161. Chapter 8 – Project Quality Management <ul><li>Tools & Techniques for Quality Control </li></ul><ul><ul><li>Inspection – activities such as testing to determine if results comply with requirements </li></ul></ul><ul><ul><li>Control Charts – plot results over time </li></ul></ul><ul><ul><li>Pareto diagrams – frequency of occurrence that identifies type or category of result (80/20 rule) – guides corrective action </li></ul></ul><ul><ul><li>Statistical sampling – select population of interest for inspection </li></ul></ul><ul><ul><li>Flowcharting </li></ul></ul><ul><ul><li>Trend Analysis – forecast future outcomes based on historical results </li></ul></ul><ul><ul><ul><li>Technical performance (# of errors identified; # of errors that remain) </li></ul></ul></ul><ul><ul><ul><li>Cost and Schedule performance (activities per period with significant variances) </li></ul></ul></ul>
  162. 162. Chapter 8 – Project Quality Management <ul><li>Outputs from Quality Control </li></ul><ul><ul><li>Quality Improvement </li></ul></ul><ul><ul><li>Acceptance Decisions (accept/reject) </li></ul></ul><ul><ul><li>Rework – action to bring defective item into compliance </li></ul></ul><ul><ul><ul><li>Frequent cause of project overruns </li></ul></ul></ul><ul><ul><li>Completed checklists </li></ul></ul><ul><ul><li>Process Adjustments – immediate corrective/preventive actions </li></ul></ul><ul><ul><ul><li>Most likely involves change control </li></ul></ul></ul>
  163. 163. Chapter 8 – Project Quality Management <ul><li>Tips from the Review Guide </li></ul><ul><ul><li>Philosophy: definition of quality, avoidance of “gold plating” – giving customer extras, prevention over inspection </li></ul></ul><ul><ul><li>“ Conformance to requirements, specifications and fitness of use” </li></ul></ul><ul><ul><li>Quality Management – processes required to ensure that the project will satisfy the needs for which it was undertaken </li></ul></ul><ul><ul><li>Continuous Improvement - small improvements to reduce costs and ensure consistency </li></ul></ul><ul><ul><li>Marginal Analysis – optimal quality is reached at the point when revenue from improvement equals the costs to secure it </li></

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