pmi project management principles

1. PMI Project Management Principles
A Point of Reference
(based on the 5th Edition PMBOK® Guide)
By Tom Tiede

2. 2
Agenda
• What is PMI and the PMP?
• Why PMI Project Management Principles are
Useful to Know
• A Few Basic PMI Definitions
• Five Process Groups
o Initiating
o Planning
o Executing
o Monitoring and Controlling
o Closing
• Ten Knowledge Areas
o Integration
o Scope
o Time
o Cost
o Quality
o Human Resources
o Communication
o Risk
o Procurement
o Stakeholders
• Project Management Terms, such as:
o Triple Constraint
o Project Charter
o Project Management Plan
o Work Breakdown Structure (WBS)
o Predecessor Relationships
o Earned Value Management
o Gold Plating
o Responsibilities Assignment Matrix
o Forming, Storming, Norming, Performing,
Adjourning
o Communication Noise
o Risk Probability and Impact Matrix
o Contract Type
o Stakeholder Power vs. Interest Grid
• Code of Ethics and Professional Conduct
o Honor
o Responsibility
o Respect
o Fairness
o Honesty
This material will cover the following project management topics:

3. 3
The Project Management Institute (PMI) is the world’s largest
membership association for the advocacy of Project and Program
management.
What is PMI and the PMP?
• Over 400,000 current members across 180 countries
• Over 600,000 PMI certification holders
• Their most widely recognized certification is the PMP (Project Management
Professional). The PMP credential recognizes your:
o Experience,
o Education, and
o Competency to lead and manage projects
• Earning the PMP credential requires:
o A bachelor’s degree and 4,500 hours of documented project management experience, or a
secondary degree and 7,500 hours of documented project management experience
o 35 hours of certified project management training
o Passing the certification exam
• Regardless of your inclination to pursue PMP certification, PMI project management
principles apply to your role as a project leader or stakeholder
The purpose of this material is to share a few PMI project management
principles that apply to your role as a project leader or stakeholder

4. 4
Leveraging prescribed PMI project management principles reduces the
risk and impact of costly project omissions, changes, and errors.
Why Is This Useful to Know?
Project
Initiation
Project
Planning
Project
Execution
Project
Closure
Cost of Resolving Project Omissions, Changes, or Errors
(Illustrative)
The PMI approach places great emphasis on project initiation and planning when
requirements are clearly defined and agreed upon and the full scope of the project is planned

5. 5
Let’s Start with a Few PMI Definitions
• PMBOK ® - the Project Management Book of Knowledge
from which PMI defines terms, standards, and good practices
• Portfolio – Projects, programs, and operations managed as
a group to achieve strategic objectives
• Program - A group of projects and program activities
managed in a coordinated way
• Project – a temporary endeavor undertaken to create a
unique product, service, or result
• Project Management – the application of knowledge,
skills, tools, and techniques to project management activities
to meet project requirements
• Project Manager – the person authorized by the
performing organization to direct the team accountable for
realizing project objectives
• Project Stakeholder – includes all project team members
and anyone impacted by or impacting the project
• Triple Constraint – the foundation of project management
is balancing scope, time, and cost. Quality is at the center of
the triple constraint
Portfolio
Programs
Projects
A few basic definitions:
Quality
Time Cost
Scope

6. 6
Initiating Planning Executing
Monitoring
&
Controlling
Closing
A process group is a logical grouping of activities, inputs, tools,
techniques, and outputs required for any type of project.
Project Management Process Groups
Define a new project or
new phase, identify
stakeholders, and
obtain authorization
“Authorize the Work”
Develop an integrated
project management
plan to attain project
objectives
“Plan the Work”
Complete the work and
satisfy project
objectives
“Work the Plan”
Track and review
project progress and
performance; manage
variance and change
“Control the Plan”
Finalize all activities
and formally close the
project or phase
“End the Work”
• Project Charter
• Stakeholder Register
• Project Mgt. Plans &
Related Documents
- Scope
- Requirements
- Schedule
- Cost
- Quality
- Human Resources
- Communication
- Risk
- Procurement
- Change
- Stakeholders
• Project Deliverables
• Work Performance
Data
• Team Performance
Assessments
• Project
Communications (e.g.
status reports)
• Selected Suppliers &
Agreements
• Change Requests
• Issue Log
• Change Logs
• Approved Change
Requests
• Work Performance
Information
• Schedule Forecasts
• Cost Forecasts
• Updates to Project
Plan
• Quality Control
Measurements
• Verified Deliverable
• Accepted Deliverables
• Final Product,
Service, or Result
(i.e. purpose of
project)
• Closed Procurement
(e.g. formal signature
of acceptance)
Activities
Key
Outputs
Process
Groups

7. 7
The five process groups overlap and follow a basic cycle of “plan, do,
check, act” until project closure.
Applying Project Management Process Groups
Process Group Overlap
Time
Initiating
Planning
Executing
Monitoring & Controlling
Closing
Initiating
Planning Executing
Monitoring &
Controlling
Change
?
Complete
?
Closing
Ye
s
Ye
s
No
No
“Plan, Do, Check, Act”

8. 8
A project manager is responsible for applying and managing the following
ten knowledge areas:
Knowledge Areas
Identify, define, combine, unify and coordinate activities within the Project Management Process
Groups
Integration
Ensure the project includes all work required to complete the project successfully
Scope
Manage the timely completion of the project
Time
Manage the planning, estimating, budgeting, financing, funding, monitoring, and controlling of
cost to enable the project to be completed within the approved budget
Cost
Determine quality policies , objectives, and responsibilities so that the project will satisfy the needs
for which it was undertaken
Quality
Organize, manage, and lead the project team, including the identification of roles, responsibilities,
required skills, and reporting relationships
Human Resources
Ensure timely and appropriate planning, collection, creation, distribution, storage, retrieval,
management, control, monitoring and disposition of project information
Communication
Identify and assess risks, plan responses, and control risk to increase the likelihood and impact of
positive events and decrease the likelihood and impact of negative events on the project
Risk
Purchase or acquire and control products, services, or results needed from outside the project
team
Procurement
Identify people, groups, or organizations that could impact or be impacted by the project; analyze
expectations, and develop strategies to engage stakeholders in decisions and activities
Stakeholders

9. 9
Activity within each knowledge area is applied based on the appropriate
process group.
Knowledge Areas & Process Groups
Process Groups
Knowledge Areas
(Below)
Initiating Planning Executing
Monitoring &
Controlling
Closing
Integration Applicable Applicable Applicable Applicable Applicable
Scope Applicable Applicable
Time Applicable Applicable
Cost Applicable Applicable
Quality Applicable Applicable Applicable
Human Resources Applicable Applicable
Communication Applicable Applicable Applicable
Risk Applicable Applicable
Procurement Applicable Applicable Applicable Applicable
Stakeholders Applicable Applicable Applicable Applicable
Each shaded intersection has defined activities, inputs,
tools & techniques, and outputs

10. 10
1. Integration Management - Process Activities
Integration management connects all of the knowledge areas together
from beginning (project initiation) to end (project closure).
Develop a document that formally
authorizes the project
Define, prepare,
coordinate and
integrate all
subsidiary plans into
a comprehensive
plan
Lead and perform the work to
accomplish project objectives
Track, review, and report progress
to meet performance objectives
Review all change requests,
approve changes, and manage
changes to deliverables and the
project management plan
Finalize all activities across all
Process Groups to formally
complete the project or phase
Key:
Initiating
Planning
Executing
Monitoring & Controlling
Closing
Note, additional inputs, outputs, tools and techniques not depicted may apply

11. 11
• A typical charter will identify:
o Business need or justification
o Scope (high level)
o Objectives (such as the intended product, service, or result)
o Requirements (high level)
o Risks (high level)
o Assumptions and constraints
o Stakeholders (primary)
o Timing (anticipated)
o Costs (anticipated)
• The charter must be signed by someone who can invest authority for the project
(typically senior management or a sponsor)
A project charter formally authorizes the project and the project manager
to apply resources to project activities. Per PMI, without a charter, there
is no project.
Project Charter
Project Charter

12. 12
The project management plan is the collection of all plans and related
documents pertaining to planning, executing, monitoring, controlling, and
closing the project.
Project Management Plan
Project
Management
Plan
Procurement
Change
Scope
Cost
Process
Improvement
Risk
Stakeholders
Configuration
Schedule
Quality
Communication

13. 13
This area includes collecting requirements, defining scope, creating the
work breakdown structure (WBS), and validating and controlling scope.
2. Scope Management - Process Activities
Project Scope is the work performed to deliver a product, service,
or result that satisfies specified features and functions
Determine,
document, and
manage
stakeholder
needs and
requirements to
meet objectives
Create a plan that documents how
the project scope will be defined,
validated, and controlled
Develop a
detailed
description of
the project
and product
Subdivide project
deliverables into
smaller, more
manageable
components
Gain formal
acceptance of
completed project
deliverables
Monitor
status of the
project scope
and manage
changes to
the scope
baseline
Key:
Initiating
Planning
Executing
Monitoring & Controlling
Closing
Note, additional inputs, outputs, tools and techniques not depicted may apply
Scope

14. 14
The WBS is the decomposition of the work to be performed. The output is
called the Scope Baseline.
Work Breakdown Structure (WBS)
Scope Baseline:
• Scope Statement – description of project scope, major deliverables, assumptions, and
constraints
• WBS – hierarchical decomposition of the total scope of work
• WBS Dictionary – provides details regarding the deliverables, activities, and scheduling
information of each component of the WBS
Project Title
Deliverable 1
Work
Packages
Deliverable 2
Work
Packages
Control
Account
Planning
Packages
Work
Packages
Illustrative WBS
Used when
insufficient detail is
available at the
work package level
Break down the
work into the
smallest level for
which cost and time
can be assessed and
administered

15. 15
Time management includes all activity related to developing and
managing the project schedule.
3. Time Management – Process Activities
Establish the policies,
procedures, and
documentation for planning,
developing, managing,
executing, and controlling
the project schedule
Define and document specific
actions to be performed to
produce project deliverables
Identify and document
relationships among project
activities
Estimate the type and quantities of
material, human resources, or suppliers
required to perform each activity
Estimate the number of work periods
needed to complete individual activities
with estimated resources
Analyze activity sequences, durations,
resource requirements, and schedule
constraints to create the project schedule
Monitor the
status of project
activities to
update project
progress and
manage
changes to the
schedule
baseline to
achieve the plan
Key:
Initiating
Planning
Executing
Monitoring & Controlling
Closing
Note, additional inputs, outputs, tools and techniques not depicted may apply

16. 16
Below are a few of many terms project managers should know when
developing and managing a project schedule.
Time (Schedule) Management Terms
PMI Terms Descriptions
3-Pt. Estimating Based on estimated Pessimistic (P), Optimistic (O), and Most Likely (M) durations
Analogous Estimating High level, top down estimate based on similar projects (usually by a SME - subject matter expert)
Bottom-Up Estimating Estimate at the lowest level of the WBS (level 3) and then roll up for the total project estimate
Parametric Estimating Based on an existing, comparable parameter (e.g. $/ft. in the same neighborhood)
Reserve Analysis Contingency (buffer based on known risk) & include in project budget or Managerial (buffer based on unknown risks)
Rolling Wave Planning An iterative technique used when future details aren't known; near term is planned in detail; future is higher level
Predecessor
Relationships
Finish to Start (FS) Finish to Finish (FF) Start to Start (SS) Start to Finish (SF)
Default relationship; B cannot
start until A is finished
B cannot finish until A is
finished
B cannot start until A starts
Rare, A starts before B
finishes (e.g. when replacing
an old system B with a new
system A)
Free Slack The latest an activity can start without delaying next activities
Total Slack The latest an activity can start without delaying project finish date
Float Often referred to as the same as Slack
Lag Lag (a delay) = the successor must wait due to some delay after the predecessor is complete
Lead Lead (an accelerant) = the successor can begin before the predecessor is complete
Schedule Compression Crashing or fast tracking the schedule to adjust the schedule to align with the plan
Fast Tracking Compression technique based on overlapping sequential activities (risky)
Resource Leveling Adjusting peaks and valleys to create a level usage of resources
Resource Smoothing Adjusting peaks and valleys to create a level usage of resources AND also accounts for individual resource limitations
A B
A
B
A
B
A
B

17. 17
This area includes defining how project costs will be managed, estimating
activity costs, determining the budget, and controlling costs.
4. Cost Management – Process Activities
Establish the
policies,
procedures, and
documentation
for planning,
managing,
expending, and
controlling
project costs
Develop an approximation
of the monetary resources
needed to complete
project activities
Aggregate estimated costs of
individual activities or work
packages to establish an
authorized cost baseline
Monitor the status of the
project to update project
costs and manage changes to
the cost baseline
Key:
Initiating
Planning
Executing
Monitoring & Controlling
Closing
Note, additional inputs, outputs, tools and techniques not depicted may apply

18. 18
EVM is a means of measuring project cost and schedule vs. the plan.
Earned Value Management (EVM)
Time
Dollars
Cost Baseline (“S” Curve)
Approved Time-Phased Budget
BAC
Budget at Completion (BAC) = total
project budget
ETC
Estimate to Complete (ETC) = cost to complete
the project based on current spending efficiency
EAC
Estimate at Completion (EAC) =
current projected final cost based on
current spending efficiency
Variance at Completion (VAC)
Cost Variance
(CV)
Cost Performance (CPI) = EV/AC
Schedule Variance
(SV)
Schedule Performance (SPI) = EV/PV
Planned Value (PV) = budgeted cost for work scheduled
Actual Cost (AC)
at point in time
AC
PV
Point in Time
Earned Value (EV) = budgeted cost for work actually completed
EV

19. 19
Quality management includes identifying quality requirements and
standards, auditing requirements and control measurements, assessing
quality performance, and recommending changes, when needed.
5. Quality Management – Process Activities
Identify quality requirements
and/or standards for the
project and its deliverables,
and document how the project
will demonstrate compliance
Audit the quality requirements
and the results from quality
control measurements to ensure
appropriate standards and
operational definitions are used
Monitor and record results of
quality activities to assess
performance and recommend
necessary changes
Key:
Initiating
Planning
Executing
Monitoring & Controlling
Closing

20. 20
Quality Management Philosophies and Principles
Quality Philosophies:
• Total Quality Management (Deming) –
proactive approach with statistical analysis
• Zero Defects (Crosby) – Do it right the first time
• Fitness for Use (Juran) – Satisfy customer
needs
• Continuous Improvement (Kaizen) – proactive
approach to process improvement
• Gold Plating – unacceptable practice of
providing more than requested
• Cost of Quality – cost of conforming is less than
cost of non-conforming
• Design of Experiments – isolate factors that
influence results
• 6 Sigma – strive for 99.9997% error free
• ISO 9000 – document what you do; do what you
document
Quality Principles:
• Define and satisfy customer needs
• Prevent rather than inspect
• Be proactive rather reactive
• Validate project processes
• Measure against approved
standards
• Continually improve
• Take accountability
PMI quality management principles are based on a few popular
philosophies.

21. 21
Project managers should be familiar with common quality management
tools and terms.
Quality Management Tools and Terms
Tools Description
1. Cause and Effect Diagrams Fishbone (Ishikawa) diagram
2. Flowcharts Basic flow chart or GERT diagram with feedback loop
3. Checksheets Check list (e.g. pre-flight list to ensure you are "cockpit ready" before taking flight)
4. Pareto Diagrams Cumulative histogram (e.g. 80/20 rule)
5. Histograms Depiction of volume or frequency of occurrences of several events
6. Control Charts Depiction of process output over time with UCL & LCL at 3 sigma from mean
7. Scatter Diagrams Depicts pattern of results across two variables
Terms Description
Benchmarking Comparing actual or planned processes to comparable projects to identify best practices
Design of Experiments Variable based analysis (freeze all variables but one and assess outcome)
Statistical Sampling Using a % of the population and extrapolating the results within an acceptable confidence level
Quality Audits Identify best practices; identify gaps; share best practices; offer assistance to improve; highlight lessons learned
Process Analysis Assess process, identify root causes, alleviate root causes
Inspection Examination of work product and comparison to documented standards (e.g. reviews, audits)
85/15 Rule 85% of quality relates to mgt.; 15% is worker related
80/20 Rule 80% of problems come from 20% of the issues
Rule of 7 Must have 7 consecutive data points above or below mean to consider process "out of control"
Mean Time Before Failure MTBF, example quality metric
Mean Time to Repair MTTR, example quality metric
Grade vs. Quality Not the same; you can have a lower grade product with high quality and vice versa (e.g. automobile models)
Upper Control Limit UCL = 3 sigma above mean (average)
Lower Control Limit LCL = 3 sigma below mean (average)
Upper Specification Limit USL is customer established and can be above or below UCL
Lower Specification Limit USL is customer established and can be above or below LCL

22. 22
Human resource management consists of planning, acquiring, developing,
and managing the project team.
6. Human Resource Management - Process Activities
Define roles,
responsibilities,
required skills,
and reporting
relationships
Confirm availability
and obtain the
necessary team
Improve competencies,
team interaction, the
team environment, and
enhance project team
performance
Track team member
performance, provide
feedback, resolve issues,
and manage changes to
the team to optimize team
performance
Key:
Initiating
Planning
Executing
Monitoring & Controlling
Closing
Note, additional inputs, outputs, tools and techniques not depicted may apply

23. 23
Responsibility assignment matrix (RAM) charts such as a “RACI” let each
team member know who is responsible for each activity and deliverable.
Roles and Responsibilities
• (R) Responsible - those who do the work
• (A) Accountable - The one who:
o Is ultimately answerable for the completion of the deliverable
o Delegates the work to those responsible
o Approves the work that the responsible person provides
• (C) Consulted – those whose opinions are sought (typically subject matter experts); typically this is a two
way communication
• (I) Informed – those who are kept up-to-date on progress; typically this is a one way communication
RACI Person
Activity Ann Ben Carlos Denny
Develop Schedule A R I I
Collect Requirements I A R C
Develop Test Plan I A R C
Develop Training Plan A C I R

24. 24
Project Life Cycle - Team Building & Leadership Styles
Team Building Stages
• Forming – creating the team
• Storming – team chaos as people start
working with one another
• Norming – team behavior starts to
normalize
• Performing – team performs as a unit
• Adjourning – team completes work
and disbands
Situational Leadership Styles
• Directing – provide specific, clear
instructions and closely supervise
• Coaching – solicit input, offer rationale
and examples
• Facilitating –maintain team progress;
delegate day-to-day control
• Supporting – support and motivate
the team to complete objectives
Project managers should be aware of typical team building dynamics and
situational leadership styles across a project life cycle.
Time
Team
Building:
Forming Storming Norming Performing Adjourning
Directing Coaching Facilitating Supporting
Leadership Style:
Project Life Cycle
Initiating Closing

25. 25
Conflict Management
• Scheduling Priorities
• Scarce Resources
• Personal Work Styles
• Methodology/Details
• Cost/Budget
• Personalities
Recommended:
1. Collaborate/Problem Solve
2. Compromise/Reconcile
3. Force/Direct
Not Recommended:
1. Smooth/Accommodate
2. Withdraw/Avoid
Conflict is inevitable. A project manager should be aware of typical
sources of project conflict and recommended techniques to resolve them.
Higher
Lower
Probability
of Conflict
Sources of Conflict Conflict Resolution Techniques

26. 26
Roughly 90% of a project manager’s job is communication.
7. Communication Management - Process Activities
Develop a
communication
approach based
on stakeholder’s
informational
needs
Create, collect,
distribute, store,
and retrieve
information
Monitor and control
communication
throughout the entire
project life cycle
Key:
Initiating
Planning
Executing
Monitoring & Controlling
Closing
Note, additional inputs, outputs, tools and techniques not depicted may apply

27. 27
Communication Paths
N
N N
N
• # of Communication Paths
equals [N x (N-1)]/2
• N equals # of Stakeholders
• Example: [4 x (4-1)]/2 = 6
Communication Methods
• Interactive – between two people
• Push – send to specific recipients
• Pull – recipient actively seeks information
Communication Management
Communication Types
• Active listening – receiver verifies correct
interpretation
• Effective listening – receiver observes visual
and vocal cues
• Feedback – sender receives feedback from
receiver
• Nonverbal - ~55% of communication (e.g.
body and facial language)
• Para-lingual – Voice characteristics
Project managers should be aware of the basics of effective
communication across the broad stakeholder community.
Communication Model
Sender/Encode Decode/Receiver
Transmit
Acknowledgement
Response
Noise
Noise

28. 28
8. Risk Management – Process Activities
Risks are possible events that could impact the project in a positive (an
opportunity) or negative (a threat) way.
Define how to
conduct risk
management
activities
Determine and document the
characteristics of risk which
may affect the project
Prioritize risks for further analysis or
action by assessing their probability of
occurrence and impact
Analyze the effect of
identified risks on overall
project objectives
Develop options
and actions to
enhance
opportunities and
reduce threats to
project objectives
Implement risk response plans, track identified
risks, monitor residual risks, identify new risks,
and evaluate risk process effectiveness
Key:
Initiating
Planning
Executing
Monitoring & Controlling
Closing
Note, additional inputs, outputs, tools and
techniques not depicted may apply

29. 29
Risk Probability and Impact Matrix
A probability and impact matrix can be used to evaluate the impact of a
risk and the probability of its occurrence.
Low High
High
Moderate
Moderate
Probability of
Occurrence
Level of Impact
Positive Risk Responses
• Share – split the responsibility
and benefit to maximize the
opportunity
• Exploit – take steps to ensure
success
• Enhance – improve the size of
the risk event and impact
• Accept – do nothing
Negative Risk Responses
• Avoid – get rid of the potential
problem
• Transfer – re-assign to another
party
• Mitigate – minimize the bad
characteristics of the risk
• Accept – do nothing
Probability and Impact Matrix
The higher the combined probability and impact of the risk
event the greater the need to develop a risk response plan

30. 30
Project managers should be aware of risk management terms.
Risk Management
Risk Management Terms
• Monte Carlo – simulation of possible outcomes
• Risk Breakdown Structure – breakdown by category (e.g. internal, external, technology,
organizational, etc.)
• Risk Trigger – an indicator that an event “could” occur
• SWOT Analysis – strengths, weaknesses, opportunities, and threats
• Expected Monetary Value (EMV) – summation of probability x impact of alternative decisions (…not
to be confused with EVM – earned value management)
• Contingency Reserves – for known risks (include in budget and schedule)
• Management Reserves – for unknown risks (excluded from baselines for budget and schedule)
• Residual Risk – risk remaining after risk response
• Secondary Risk – potential risk as a result of risk response
• Workaround – “wing it” response when other risk response plans don’t work
• Types of Risk Tolerance
o Averse – Avoids risk
o Seeker – Seeks risk
o Neutral – Middle ground

31. 31
Procurement management includes planning, selecting, contracting,
controlling, and closing outsourced products and services.
9. Procurement Management – Process Activities
Document
project
procurement
decisions,
specify the
approach, and
identify
potential sellers
Obtain seller response,
select a seller, and
award a contract
Manage procurement
relationship, monitor contract
performance, and make changes
and corrections as appropriate
Complete each project
procurement, including
finalizing open claims,
updating records to
reflect final results, and
archiving information
Key:
Initiating
Planning
Executing
Monitoring & Controlling
Closing
Note, additional inputs, outputs, tools and techniques not depicted may apply

32. 32
Project managers should be aware of the benefits and risks of different
contract types from a buyer’s perspective and a seller’s perspective.
Contract Types
Buyer’s Risk
Seller’s Risk
Low High
High Low
• (FFP) Firm Fixed Price – allows buyer to budget fixed price; requires seller to detail scope and accurately
estimate price; very common
• (FFIF) Fixed Price Incentive Fee – includes incentive to motivate seller to produce at greater speed
• (FF EPA) Fixed Price Economic Price Adjustment – compensates for year to year economic changes
• (T&M) Time and Materials – typically used for smaller initiatives
• (PO) Purchase Order – typically used for commodity items
• (CPFF) Cost Plus Fixed Fee – typically variable costs are cost-plus and predictable costs are fixed fee
• (CPIF) Cost Plus Incentive Fee – actual costs plus incentive to motivate seller to produce at greater speed
• (CPAF) Cost Plus Award Fee – actual costs plus award based on customer satisfaction with agreed criteria
• (CPPC) Cost Plus Percent of Cost – actual cost plus % of actual; the higher the cost, the higher the fees
FFP FPIF FP EPA T&M PO CPFF CPIF CPAF CPPC

33. 33
Project managers should be familiar with additional procurement terms
in the table below:
Procurement Terms
Terms Description
Make or Buy Analysis Is it more practical to insource or outsource (based on a cost comparison between the two)?
Bidder Conference Prior to bid submission, offers opportunities for prospective sellers to obtain requirements clarification from buyer
Independent Estimates Used to validate proposal information
Contract (CCOLA) Must have 5 Components: Capacity, Consideration, Offer, Legal Purpose, Acceptance
Point of Total Assumption
Point at which seller is responsible for all cost overruns; PTA = (Ceiling Price - Target Price)/Buyer Share + Target
Cost
Ceiling Price % of Target Cost (e.g. Ceiling = 140% of target cost)
Target Cost Expected cost of work in the contract
Target Price Equals Target Cost + Target Profit
Share Ratio Ratio of split between buyer and seller of cost savings or overruns (e.g. 70/30)
RFP Request for Proposal, typically used for higher priced, customized services or products
RFQ Request for Quote, typically used for small dollar commodity type products
IFB Invitation to Bid, used for government sealed bids (similar to RFP)
Design Scope of Work (SOW) Buyer provides exact details; generally results in fixed price contract
Functional Scope of Work (SOW) Buyer provides functionality needed; generally results in cost plus contract
Sole Source Go direct to a supplier without any available competition (e.g. supplier holds the patent)
Single Source Go direct to a supplier although competitors are available (e.g. "preferred supplier")
Negotiation PMI prefers "win/win" negotiation approach
Standard Terms & Conditions Typical common (non-negotiable) contract items with a tight range or parameters
Special Provisions Typically added to account for changes to standard terms and conditions
Claims Administration Means of administering contested changes or disagreements regarding compensation
ADR Alternative dispute resolution (e.g. arbitration) used when claims cannot be negotiated between buyer and seller

34. 34
It is critical to project success to identify stakeholders, address their
requirements, meet their expectations, and foster their engagement.
10. Stakeholder Management – Process Activities
Identify the people,
groups, or
organizations that
could impact or be
impacted by the
decision, activity, or
outcome of the
project.
Develop appropriate management
strategies to effectively engage
stakeholders throughout the project
life cycle based on their needs and
potential impact on project success
Communicate and work with stakeholders to meet
their needs and expectations, address issues as
they occur, and foster appropriate stakeholder
engagement throughout the project life cycle
Monitor overall
project stakeholder
relationships and
adjust strategies and
plans for engaging
stakeholders
Key:
Initiating
Planning
Executing
Monitoring & Controlling
Closing
Note, additional inputs, outputs, tools and techniques not depicted may apply

35. 35
Keep Satisfied Manage Closely
Monitor Keep Informed
All stakeholders are different and, therefore, need to be managed
differently based on their relative authority (power) and level of concern
(interest).
Stakeholder Power vs. Interest Grid
Low High
High
Moderate
Moderate
Power
Interest
Stakeholder
Power vs. Interest Grid

36. 36
All PMI members must agree to adhere to a high personal standard of
ethical and professional behavior.
PMI Code of Ethics and Professional Conduct
Tenets of Code:
1. Honor
o Do what is right and honorable
o Set high standards for yourself and aspire to meet those standards is all aspects of life
2. Responsibility – Take ownership of:
o The decisions you make or fail to make
o The actions you take or fail to take
o The consequences that result
3. Respect
o Show high regard for yourself, others, and the resources (e.g. people, money, reputation,
safety) entrusted to you
o Engender trust confidence, performance excellence, and mutual cooperation in an environment
of diverse perspectives and views
4. Fairness
o Make decisions and act impartially and objectively
o Conduct yourself in a way free from competing self interest, prejudice, and favoritism
5. Honesty
o Understand the truth
o Act in a truthful manner both in your communication and in your conduct

37. 37
Summary
• What is PMI and the PMP?
• Why PMI Project Management Principles are
Useful to Know
• A Few Basic PMI Definitions
• Five Process Groups
o Initiating
o Planning
o Executing
o Monitoring and Controlling
o Closing
• Ten Knowledge Areas
o Integration
o Scope
o Time
o Cost
o Quality
o Human Resources
o Communication
o Risk
o Procurement
o Stakeholders
• Project Management Terms, such as:
o Triple Constraint
o Project Charter
o Project Management Plan
o Work Breakdown Structure (WBS)
o Predecessor Relationships
o Earned Value Management
o Gold Plating
o Responsibilities Assignment Matrix
o Forming, Storming, Norming, Performing,
Adjourning
o Communication Noise
o Risk Probability and Impact Matrix
o Contract Type
o Stakeholder Power vs. Interest Grid
• Code of Ethics and Professional Conduct
o Honor
o Responsibility
o Respect
o Fairness
o Honesty
This material covered the following project management topics:
Thank you for taking the time to review this material!