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Presents PMP® Certification Test Preparation PMBOK® Fifth Edition PMP® Prep: PMBOK® 5th - 2013 The PMP® Certification Test Preparation Objectives  Provide a framework for structuring the Project Management Body of Knowledge;  Identify the most generally accepted practices within the discipline of project management;  Reveal “Exam Tips”;  Explain how to apply for and take the PMP® exam Page i PMP® Prep: PMBOK® 5th - 2013 The World of Business Management Consultants Bristol Brussels Houston Istanbul Singapore Warsaw Moscow Chicago Bristol Frankfurt Milan Phoenix Washington DC Atlanta Lisbon Vancouver Seoul Tokyo Beijing Taipei Shanghai Hong Kong Mumbai Page iii PMP® Prep: PMBOK® 5th - 2013 Our Learning Institutions Page iv PMP® Prep: PMBOK® 5th - 2013 Three Day Course Schedule Day One Introduction and overview of PMI, PMP and PMBOK Day Two Planning Processes (continued) Day Three Monitoring & Controlling Processes Closing Processes Initiating Processes Professional Responsibility Executing Processes Planning Processes Practice Test Preparing for the PMP Practice Test Sample Test Page vii PMP® Prep: PMBOK® 5th - 2013 Introduction and Overview of the PMP® PMP® Prep: PMBOK® 5th - 2013 Organization of this Workbook The PMBOK® Fifth Edition is organized by Knowledge Area. We believe that people learn the same way they work on-the-job: by project phases. So, this Test Preparation workbook is organized chronologically, start to finish, from Initiating a project through to Closing the project. Page 1 PMP® Prep: PMBOK® 5th - 2013 Organization is Chronological Monitoring & Controlling Processes Planning Processes Closing Processes Initiating Processes Executing Processes Page 1 PMP® Prep: PMBOK® 5th - 2013 New Test and New PMBOK® Edition The PMBOK® 5th Edition was released in January 2013. The test changed again on July 31, 2013. A new Knowledge Area was introduced: Stakeholder Management. Page 2 PMP® Prep: PMBOK® 5th - 2013 The T&T CD ID is E1091 and Awards 11 PDU’s Qualification Requirements PMTestOnline is C4070 and Awards 11 PDU’s Graduate, 4-Year Degree A minimum of 4500 hours PM experience within the past 8 years + Non-Graduate, or 2-Year Degree 35 contact hours (PDU’s) of PM education = Eligibility to take the PMP® examination A minimum of 7500 hours PM experience within the past 8 years This Course ID is E1078 and Awards 24 PDU’s Page 2 PMP® Prep: PMBOK® 5th - 2013 PMBOK Fifth Edition and the New Test  The PMBOK Fifth Edition was introduced in January 2013, and the new fifth edition test started on July 31, 2013.  The PMP examination consists of 200 questions, with a four hour time limit  That’s 72 seconds (or 1.2 minutes) per question This training course will give you everything you need, with a little self-study, to pass the PMP® examination  Visit www.pmi.org, download PMP Certification Handbook Page 2 PMP® Prep: PMBOK® 5th - 2013 PMBOK 5th Edition PMP Test Domain Content Project Initiation Project Planning Project Execution Project Monitoring & Control Project Closing 13% 24% 30% 25% 8% To pass, you need to get a minimum of 122 questions correct out of 200 questions (61%) Pass rate on the 4th Edition test is about 74% Page 2 PMP® Prep: PMBOK® 5th - 2013 Apply to PMI to take the test, Schedule a date with Prometric Submit your application to Project Management Institute (PMI) http://www.pmi.org/Certification/Project-Management-Professional-PMP.aspx Log in with your User Name and Password Follow the instructions Schedule a test date with Prometric http://www.prometric.com/PMI/default.htm Control is through audit http://www.pmi.org/info/PDC_PMPHandbook.pdf PMI ® may audit when you pay your exam fee to PMI. If you cancel or reschedule within 30 days of the test, there is a fee of $70; within 2 days, you forfeit the entire fee. Candidates have three (3) opportunities to pass the exam in one year. If they do not pass any, they must wait one (1) year from the date of the last attempt. Page 3 PMP® Prep: PMBOK® 5th - 2013 Types of questions to expect Questions requiring experience more than study You are advised that a major purchased part on your project will be delayed. What do you do? A. B. C. D. Ignore it. It will go away Notify your boss Let the customer know about it and talk over options Meet with the team and identify alternatives D. Meet with the team and identify alternatives Page 4 PMP® Prep: PMBOK® 5th - 2013 Types of questions to expect Information that does not matter (distractors) Study show that every time you double the production of “widgets”, unit cost goes down by 10%. Based on the study, the company concludes that the production of 4,000 “widgets” will cost $19,000. This illustrates: A. B. C. D. Learning curve effects Law of diminishing returns The 80/20 rule Bottoms up cost estimating A. Learning curve effects Page 4 PMP® Prep: PMBOK® 5th - 2013 Types of questions to expect Questions designed to make you make you think carefully The theory “optimum quality level is obtained when Incremental revenue from product improvement equals incremental cost to secure it” comes from A. B. C. D. Quality control analysis Marginal analysis Standard quality analysis Conformance analysis B. Marginal Analysis Page 4 PMP® Prep: PMBOK® 5th - 2013 Types of questions to expect Questions using unfamiliar words and expressions Parking places, corner office/door, and a key to the executive bathroom are example of: A. B. C. D. Perquisites Overhead Herzberg’s motivators Entitlements A. Perquisites (aka “Perks”) Page 5 PMP® Prep: PMBOK® 5th - 2013 Types of questions to expect Questions requiring understanding of the subject matter Decomposing deliverables into smaller manageable activities Is complete when: A. B. C. D. Project justification has been established Change requests have occurred Cost and duration estimates can be developed for each work element at this level Each work element is found in the WBS dictionary C. Cost and duration estimates can be developed for each work element at this level Page 5 PMP® Prep: PMBOK® 5th - 2013 Types of questions to expect Questions requiring study (memorization) more than experience Conflict resolution techniques that may be used on a project include: A. B. C. D. Withdrawing, compromising, controlling, and forcing Controlling, forcing, smoothing, and withdrawing Confronting, compromising, smoothing, and directing Smoothing, confronting, forcing and withdrawing D. Smoothing, confronting, forcing and withdrawing Page 5 PMP® Prep: PMBOK® 5th - 2013 Types of questions to expect New thinking about a known topic In a matrix organization, information dissemination is most likely to be effective when? A.Information flows both horizontally and vertically B.The communication flows are kept simple C.There is inherent logic in the type of matrix selected D.Project managers and functional managers socialize A. Information flows both horizontally and vertically Page 6 PMP® Prep: PMBOK® 5th - 2013 Types of questions to expect Questions requiring calculation and knowledge of formulae A project was estimated to cost $1.5 million and scheduled to last six months. After three months, the earn value analysis shows the following: BCWP (EV) = $650,000 BCWS (PV) = $750,000 ACWP (AC) = $800,000 What are the schedule and cost variances? A. B. C. D. SV = +$100,000 - - - CV = +$150,000 SV = +$150,000 - - - CV = -$100,000 SV = -$50,000 - - - - CV = +$150,000 SV = -$100,000 - - - -CV = -$150,000 D. SV=-S100,000 : CV=-$150,000 Page 6 PMP® Prep: PMBOK® 5th - 2013 Types of questions to expect Questions designed to take up your time You’ve been engaged to manage a project. The estimated cost of the project is $1,000,000. The project sponsor has approved this amount. Your earned value calculations indicate that the project will be completed on time and under budget by $200,000. Based on your calculation, your personal profit will decrease by $2,000. Given estimated decrease in personal profit, what action should you take? A. B. C. D. Invoice for the full $1,000,000 based on contract and to cover profit Add tasks to improve the outcome and increase the actual project cost Inform the end-user that you can add features to the project in order to use the entire budget Communicate the projected financial outcome to the project sponsor D. Communicate the outcome to the project sponsor Page 6 PMP® Prep: PMBOK® 5th - 2013 Types of questions to expect Questions using acronyms you need to understand There are several different types of network analysis tools for determining critical path. Which method for analysis is also called Method of Moments? A. B. C. D. GERT CPM PERT Monte Carlo C. PERT (Program Evaluation and Review Technique) Extra PMP® Prep: PMBOK® 5th - 2013 Mapping Process Groups to Knowledge Areas Process Groups Knowledge Areas 4. Project Integration Management Initiating 4.1 Develop Project Charter Planning 4.2 Develop Project Management Plan Executing 4.3 Direct & Manage Project Work Monitoring & Controlling 4.4 Mon/Ctrl Proj Work 4.5 Perform Integrated Change Control 5. Project Scope Management 5.1 5.2 5.3 5.4 Plan Scope Mgt. Collect Requirements Define Scope Create WBS 5.5 Validate Scope 5.6 Control Scope 6. Project Time Management 6.1 6.2 6.3 6.4 6.5 6.6 Plan Schedule Mgt. Define Activities Sequence Activities Est. Activity Resources Est. Activity Durations Dev. Schedule 6.7 Control Schedule 7. Project Cost Management 7.1 Plan Cost Mgt. 7.2 Estimate Costs 7.3 Determine Budget 8. Project Quality Management 8.1 Plan Quality Mgt. 8.2 Perform Quality Assurance 9. Project Human Resource Management 9.1 Plan Human Resource Mgt. 9.2 Acquire Project Team 9.3 Develop Project Team 9.4 Manage Project Team 8.3 Control Quality PMBOK 5th Edition, Table 3-1, Page 61 10.1 Plan Communications Management 11. Project Risk Management 11.1 Plan Risk Management 11.2 Identify Risks 11.3 Perform Qualitative Risk Analysis 11.4 Perform Quantitative Risk Analysis 11.5 Plan Risk Response 12. Project Procurement Management 12.1 Plan Procurement Mgt. 12.2 Conduct Procurements 12.3 Control Procurements 13.2 Plan Stakeholder Management 13.3 Manage Stakeholder Engagement 13.4 Control Stakeholder Engagement Page 17 13.1 Identify Stakeholders 4.6 Close Project or Phase 7.4 Control Costs 10. Project Communications Management 13. Project Stakeholder Management Closing 10.2 Manage Communications 10.3 Control Communications (47 Processes) 11.6 Control Risks 12.4 Close Procurements PMP® Prep: PMBOK® 5th - 2013 Mind Maps: Integration Handout PMP® Prep: PMBOK® 5th - 2013 Mind Maps: Scope Handout Scope PMP® Prep: PMBOK® 5th - 2013 Time Handout PMP® Prep: PMBOK® 5th - 2013 Mind Maps: Cost Handout PMP® Prep: PMBOK® 5th - 2013 Project Quality Management Mind Maps: Quality Handout PMP® Prep: PMBOK® 5th - 2013 Mind Maps: Human Resource Handout PMP® Prep: PMBOK® 5th - 2013 Communication Handout PMP® Prep: PMBOK® 5th - 2013 Risk Handout PMP® Prep: PMBOK® 5th - 2013 Procurement Handout PMP® Prep: PMBOK® 5th - 2013 Stakeholders PMP® Prep: PMBOK® 5th - 2013 So, what is a project? • A project is a temporary endeavor undertaken to create a unique product, service or result. • A program is a group of related projects, subprograms, and program activities managed in a coordinated way to obtain benefits not obtainable from managing them individually. • A portfolio is a collection of projects, programs, and operations managed as a group to achieve strategic objectives. • An operation is an organizational function performing the ongoing execution of activities that produce the same product or provide the same repetitive service Page 7 PMP® Prep: PMBOK® 5th - 2013 The Triple Constraint, plus some. PMBOK 5th Edition, Page 6 Resource Scope (Budget) (Planned Results) Schedule (Time) Page 8 PMP® Prep: PMBOK® 5th - 2013 Organizational Governance: Linkages PMBOK 5th Edition, Page 7 Strategic Planning Management by Projects Portfolio Management Management of Operations Program Management Project Management Processes, Tools, Metrics Page 8 PMP® Prep: PMBOK® 5th - 2013 Organizational Governance: Linkages VISION Mission Organizational Strategy & Goals High-Level Operations Planning & Management Project Portfolio Planning & Management Management of On-Going Operations (recurring activities) Management of Authorized Programs & Projects (projectized activities) (producing value) (increasing value production capability) Organizational Resources Page 9 PMP® Prep: PMBOK® 5th - 2013 Comparison: Project, Program & Portfolio Organizational Project Management Project Programs Portfolios Scope Projects have defined objectives. Scope is progressively elaborated throughout the project life cycle. Programs have a larger scope and provide more significant benefits. Portfolios have an organizational scope that changes with the strategic objectives of the organization. Change Project managers expect change and implement processes to keep change managed and controlled. Program managers expect change from both inside and outside the program and are prepared to manage it. Portfolio managers continuously monitor changes in the broader internal and external environment. Planning Project managers progressively elaborate high-level information into detailed plans throughout the project life cycle.. Program Managers develop the overall program plan and create high-level plans to guide detailed planning at the component level. Portfolio managers create and maintain necessary processes and communication relative to the aggregate portfolio. Management Project managers manage the project team to meet the project objectives. Program managers manage the program staff and the project managers; they provide vision and overall leadership. Portfolio managers may manage or coordinate portfolio management staff, or program and project staff that may have reporting responsibilities into the aggregate portfolio. Success Success is measured by product and project quality, timeliness, budget compliance, and degree of customer satisfaction.. Success is measured by the degree to which the program satisfies the needs and benefits for which it was undertaken.. Success is measured in terms of aggregate investment performance and benefit realization of the portfolio. Project managers monitor and control the work of producing the products, services, or results that the project was undertaken to produce. Program managers monitor the progress of program components to ensure the overall goals, schedules, budget and benefits of the program will be met. Portfolio managers monitor strategic changes and aggregate resources allocation, performance results, and risk of the portfolio. Monitoring Page 10 PMP® Prep: PMBOK® 5th - 2013 How do projects come about? PMBOK 5th Edition, Page 10 Projects can come about in the following ways: Market demand Strategic opportunity Social need Environmental Customer request Technological advance Legal requirement More on selection methods later Page 10 PMP® Prep: PMBOK® 5th - 2013 The Project Management Office (PMO) A PMO is an organizational structure: • standardizes project governance processes, • facilitates the sharing of resources, • develops methodologies, tools and techniques. Responsibilities can range from providing support functions to direct management of projects. Projects supported by a PMO may not be related, other than being managed together Project Manager  focuses on specific project objectives  controls assigned project resources  manages the constraints Page 12 PMOs  manages major program scope changes  optimizes shared resources across all projects  manages methodologies, standards, overall risk PMP® Prep: PMBOK® 5th - 2013 Types of Project Management Offices (PMO) • Supportive. Consulting role , e.g., supplying templates, best practices, training, computer information, and lessons learned from other projects. Control from this type of PMO is low. • Controlling. Provide support and require compliance, e.g., PM methodologies, specific templates-forms-tools, or conformance to governance. Control from this type of PMO is moderate. • Directive. Control projects by managing projects. Control from this type of PMO is high. Exam Tip Page 12 PMP® Prep: PMBOK® 5th - 2013 Project-Based Organizations (PBO)  PBOs can be created by various organizations (functional, matrix, projectized).  They can diminish hierarchy since work is measured by results rather than position or politics.  PBOs do a majority of their work as projects rather than as a function, but can have functional support areas. Page 13 PMP® Prep: PMBOK® 5th - 2013 Role of the Project Manager Project Managers Role is to achieve project objectives. Understanding tools and techniques is not enough. It requires general management skills, and:  Knowledge of project management,  Performance or accomplishment,  Personal behavior and effectiveness when performing the project including attitude, personality characteristics, and leadership. Page 15 PMP® Prep: PMBOK® 5th - 2013 The Role of the PMBOK® Project Management Body of Knowledge PMBOK® Guide Interpersonal Skills General Management Knowledge and Skills Page 15 Application Area Knowledge, Standards and Regulations Understanding the Project Environment PMP® Prep: PMBOK® 5th - 2013 Organizational Structures Organizational Structures Project Characteristics PMBOK® Fifth Edition, Page 22 Matrix Functional Weak Matrix Balanced Matrix Projectized Strong Matrix Project Manager’s Authority Little or None Low Low to Moderate Moderate to High High to Almost Total Resource Availability Little or None Low Low to Moderate Moderate to High High to Almost Total Functional Manager Functional Manager Mixed Project Manager Project Manager Project Manager’s Role Part-Time Part-Time Full-Time Full-Time Full-Time Project Management Administrative Staff Part-Time Part-Time Part-Time Full-Time Full-Time Who Manages the Budget? Page 16 PMP® Prep: PMBOK® 5th - 2013 Organizational Influences Exam Tip     Exam questions deal with matrix forms. Strong matrix: Weak matrix: Balanced matrix: Tight Matrix: Page 17 PMBOK® Fifth Edition, Page 22 The balance of power rests with the project manager. The balance of power rests with the functional manager. The power is balanced between the functional and the project managers. Beware here. It has nothing to do with the matrix organization. It refers to locating the project team’s offices in the same room. Watch for this one! PMP® Prep: PMBOK® 5th - 2013 Organizational Structure PMBOK® Fifth Edition, Page 22 Chief Executive Functional Organization Functional Manager Functional Manager Project Coordination Functional Manager Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff engaged in project activities Page 18 PMP® Prep: PMBOK® 5th - 2013 Organizational Structure PMBOK® Fifth Edition, Page 23 Chief Executive Weak Matrix Functional Manager Functional Manager Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff engaged in project activities Page 18 Functional Manager Project Coordination PMP® Prep: PMBOK® 5th - 2013 Organizational Structure PMBOK® Fifth Edition, Page 24 Chief Executive Balanced Matrix Functional Manager Functional Manager Staff Staff Staff Staff Staff Staff Project Manager Staff Staff Staff engaged in project activities Page 19 Functional Manager Project Coordination PMP® Prep: PMBOK® 5th - 2013 Organizational Structure Chief Executive Strong Matrix Functional Manager Functional Manager Functional Manager Manager of Project Managers Staff Staff Staff Project Manager Staff Staff Staff Project Manager Staff Staff Staff Project Manager Staff engaged in project activities Page 19 PMBOK® Fifth Edition, Page 24 Project Coordination PMP® Prep: PMBOK® 5th - 2013 Organizational Structure Chief Executive Projectized Project Manager Project Coordination Page 20 PMBOK® Fifth Edition, Page 25 Project Manager Project Manager Staff Staff Staff Staff Staff Staff Staff Staff Staff Staff engaged in project activities PMP® Prep: PMBOK® 5th - 2013 Organizational Structure Chief Executive Composite Functional Manager Functional Manager Functional Manager Manager of Project Managers Staff Staff Staff Project Manager Staff Staff Staff Project Manager Staff Staff Staff Project Manager Project B Coordination Page 20 PMBOK® Fifth Edition, Page 26 Staff engaged in project activities Project A Coordination PMP® Prep: PMBOK® 5th - 2013 The Organization and it’s Environment These are INPUTS to Processes Organizational Process Assets (OPA) OPA are assets available to the project team: (1) processes and procedures, and (2) corporate knowledge bases. They include plans, processes, policies, procedures, lessons learned, historical information, schedules, risk data, and earned value data. What have we got? Enterprise Environmental Factors (EEF) EEF are conditions not under the control of the team. They include government or industry standards, organization culture, infrastructure (facilities & equipment), human resources, marketplace conditions, risk tolerance, politics, communication channels, data bases, and PMIS. What is out there? Page 21 PMP® Prep: PMBOK® 5th - 2013 Stakeholders Stakeholders are persons or organizations who may affect, be affected, or perceive that that they are affected by a decision, activity or outcome of the project. They: • May be actively involved in the project or have interests affected by the project, • May exert influence over the project/team to satisfy strategic business objectives. Project Governance is an oversight function aligned with the organization’s governance model and includes the project life cycle. Governance is alignment of the project with stakeholders’ needs or objectives. It is critical to management of stakeholder engagement, maximizing the value of project outcomes, and aligning projects to the business strategy. The Project Manager should manage the influences of stakeholders regarding project requirements to ensure successful outcome. Who are your stakeholders? Can you name them? See PMBOK® Fifth Edition, Pages 32-33 Pages 22-23 PMP® Prep: PMBOK® 5th - 2013 The Project Sponsor The Project Sponsor is the person or group who provides resources and support for the project and is accountable for enabling success. The sponsor promotes the project and serves as spokesperson to management. They play a significant role in project initiation and the development of the initial scope and charter Page 22 PMP® Prep: PMBOK® 5th - 2013 Project Life Cycle Cost and Staffing Level Starting a Project Organizing and Preparing Project Charter Executing the Work Project Management Plan Closing a Project Accepted Deliverables Archived Project Documents Time Page 24 PMP® Prep: PMBOK® 5th - 2013 Stakeholders Influence Over Project Performance Concept Planning Execution Close-Out Value Uncertainty (Risk) Amount at Stake Influence of Stakeholders Time Page 24 PMP® Prep: PMBOK® 5th - 2013 Process Groups are not Project Phases Project Phases or Life Cycle (Phase-end reviews of deliverables are called Stage Gates, Phase Exits, or Kill Points) INPUTS: Requirements Specification Market Knowledge Basic Concept Technology Appreciation Department’s Expertise Key Technical Risks Feasibility Study Laboratory Model IDEA Basic Concept Requirements Specification Key Risk Assessment Marketing Prototype Documentation Proof of Principle Proof of Principle Development Production Technology Prototype Product Product Quantity Production Documentation Beta Test Models Trials Production Documentation Production User Reaction LAUNCH Product Quantity Beta Test Models OUTPUTS: Phased System Development Life Cycle (SDLC) to Launch Page 25 PMP® Prep: PMBOK® 5th - 2013 Process Groups are not Project Phases Process Groups Plan Do Walter Shewhart, modified by Edwards Deming Act Exam Tip PMBOK® Fifth Edition, Pages 42-43 Check Monitoring Monitoring && Controlling Processes Controlling Processes Planning Planning Processes Processes Closing Processes Processes Initiating Initiating Processes Executing Executing Processes Processes Links between Process Groups in a Phase Page 26 PMP® Prep: PMBOK® 5th - 2013 Process Groups are not Project Phases Begin Charter Handover End Project Lifecycle Phase 1 Page 26 Phase 2 Phase 3 Phase 4 PMP® Prep: PMBOK® 5th - 2013 Understand the Differences Between: PMBOK Fifth Edition, Pages 42-46 • Phase-to-Phase Relationships • Predictive Life Cycles • Iterative and Incremental Life Cycles • Adaptive Life Cycles Page 26 PMP® Prep: PMBOK® 5th - 2013 Overview of Project Integration Chapter 4 of the PMBOK® by Knowledge Area Page 28 4.1 Develop Project Charter 4.2 Develop Project Management Plan 4.3 Direct and Manage Project Work 4.4 Monitor and Control Project Work 4.5 Perform Integrated Change Control, and 4.6 Close Project or Phase PMP® Prep: PMBOK® 5th - 2013 Initiating Process Group by Chronology Page 31 PMP® Prep: PMBOK® 5th - 2013 PMBOK® Fifth Edition, Page 61 Process Groups Knowledge Areas 4. Project Integration Management Initiating 4.1 Develop Project Charter Monitoring & Controlling Executing Planning 4.2 Develop Project Management Plan Initiating 4.3 Direct & Manage Project Work 4.4 Mon/Ctrl Proj Work 4.5 Perform Integrated Change Control 5. Project Scope Management 5.1 5.2 5.3 5.4 Plan Scope Mgt. Collect Requirements Define Scope Create WBS 5.5 Validate Scope 5.6 Control Scope 6. Project Time Management 6.1 6.2 6.3 6.4 6.5 6.6 Plan Schedule Mgt. Define Activities Sequence Activities Est. Activity Resources Est. Activity Durations Dev. Schedule 6.7 Control Schedule 4.1 13.1 Identify Stakeholders 7.1 Plan Cost Mgt. 7.2 Estimate Costs 7.3 Determine Budget 8. Project Quality Management 8.1 Plan Quality Mgt. 8.2 Perform Quality Assurance 9. Project Human Resource Management 9.1 Plan Human Resource Mgt. 9.2 Acquire Project Team 9.3 Develop Project Team 9.4 Manage Project Team 7.4 Control Costs 8.3 Control Quality 10. Project Communications Management 10.1 Plan Communications Management 11. Project Risk Management 11.1 Plan Risk Management 11.2 Identify Risks 11.3 Perform Qualitative Risk Analysis 11.4 Perform Quantitative Risk Analysis 11.5 Plan Risk Response 12. Project Procurement Management 12.1 Plan Procurement Mgt. 12.2 Conduct Procurements 12.3 Control Procurements 13.2 Plan Stakeholder Management 13.3 Manage Stakeholder Engagement 13.4 Control Stakeholder Engagement Page 28 13.1 Identify Stakeholders 4.6 Close Project or Phase Develop Project Charter 7. Project Cost Management 13. Project Stakeholder Management Closing 10.2 Manage Communications 10.3 Control Communications 11.6 Control Risks 12.4 Close Procurements PMP® Prep: PMBOK® 5th - 2013 Initiating Process Group Initiation results in: GO NO GO DECISION Page 30 PMP® Prep: PMBOK® 5th - 2013 Initiation: Project Integration Management 4.1 Develop Project Charter Inputs Project statement of work Business case Agreements Enterprise environmental factors Organizational process assets Page 31 Tools & Techniques Outputs Expert judgment Facilitation techniques Project charter PMP® Prep: PMBOK® 5th - 2013 4.1 Develop Project Charter Develop Project Charter is the process of developing a document that formally authorizes the existence of a project and provides the project manager with the authority to apply organizational resources to project activities. The project manager is assigned early in the project, during charter development. ALWAYS before start of planning. Page 31 Exam Tip PMP® Prep: PMBOK® 5th - 2013 4.1 Develop Project Charter Project Initiation Customer Requirements • Problem • Opportunity • Business Need Page 32 • Commitment to go • • ahead Project Charter Project Manager assigned Project Planning PMP® Prep: PMBOK® 5th - 2013 4.1 Develop Project Charter Input: Project Statement of Work (SOW) PMBOK® Fifth Edition, Page 68 • States the Business Need and CostBenefit analysis in the Business Case. What triggered the project? • Documents the characteristics of the end product • Is progressively elaborated throughout the project life cycle • Includes the Strategic Plan, a factor when making project selection decisions • Should describe both what the deliverable is and what it is not • With the project scope statement, the SOW protects against both scope creep and feature creep Page 32 PMP® Prep: PMBOK® 5th - 2013 4.1 Develop Project Charter Input: Business Case, Strategic Plan PMBOK® Fourth Edition, Page 75 Strategic planning analyzes an organization’s strengths, weaknesses, opportunities, and threats (SWOT) to determine long-range objectives and strategies for reaching them. Strategic planning often involves predicting future trends, including the need for new products and services. Senior management considers each project’s contribution to the strategic goals and its alignment with the strategic plan before deciding to undertake, continue, suspend, or terminate projects Page 33 PMP® Prep: PMBOK® 5th - 2013 4.1 Develop Project Charter Input: EEF and OPA PMBOK® Fifth Edition, Page 70 These are INPUTS to Develop Charter Enterprise Environmental Factors (EEF) Factors not under the control of the team that influence or constrain the charter process. EEF include government or industry standards, organization infrastructure, marketplace conditions, etc. What is out there? Organizational Process Assets (OPA) OPA are standard processes, policies, and corporate knowledge: lessons learned, historical information, templates and other documents. What have we got? Page 33 & 34 PMP® Prep: PMBOK® 5th - 2013 4.1 Develop Project Charter Output: Project Charter PMBOK® Fifth Edition, Page 71 Exam Tip Page 35 PMP® Prep: PMBOK® 5th - 2013 How do projects come about? Suggested Projects Page 35 Project Selection Techniques Net Present Value Return on Investment Internal Rate of Return Benefit/Cost Ratio Opportunity Cost Selected Projects PMP® Prep: PMBOK® 5th - 2013 Project selection methods Economic Models Exam Tip Net Present Value: net economic value (per year) of a project in terms of present-year monies. A higher overall net present value is better within cash flow constraints. Expected Present Value: Risk-adjusted NPV Return on Investment (ROI): income divided by investment. A higher ROI is better. Payback Period: the amount of time it will take to recover the cost of the project. A faster payback period is better. Internal Rate of Return (IRR) or Hurdle Rate: the rate of return for the investment in the project. Organizations may have a minimum rate of return (or hurdle rate). A higher rate of return is better Page 37 PMP® Prep: PMBOK® 5th - 2013 Project selection methods Economic Models FV Net Present Value (NPV) = (1+r)n Where, FV = Future Value r = Interest Rate n = Number of Time Periods Average Earnings After Tax Return on Investment (ROI) = Page 37 Average Investment = ARR (Accounting Rate of Return) Internal Rate of Return (IRR) : Solve the NPV equation for “r” (hurdle rate) when present value of “cash in” equals present value of “cash out” (i.e., at breakeven) Benefit Cost Ratio Benefits should exceed costs. The higher BCR wins. : PMP® Prep: PMBOK® 5th - 2013 Project selection methods Example Question Opportunity Cost: “A” has NPV of $45K, “B” has NPV of $75K, what is the Opportunity Cost of selecting Project “B”? Answer: $45K. Opportunity cost is what you gave up when you made your selection Exam Tip Page 37 Many things on the Exam are not in the PMBOK. A lot of these are cost questions. Only Present Value shows up on more than one question. PMP® Prep: PMBOK® 5th - 2013 Exercise Net present Value TIME PERIOD (YR) Page 38 AMOUNT ($) PRESENT VALUE AT 10% INTEREST RATE 1 50 45 2 100 83 3 300 225 PMP® Prep: PMBOK® 5th - 2013 Exercise Accounting Standards Net Present Value IRR Payback Period Benefit Cost Ratio Page 38 Which Project Would You Pick? PROJECT A PROJECT B $95,000 $75,000 A 13% 17% B 16 months 21 months A 2.79 1.3 A PMP® Prep: PMBOK® 5th - 2013 Project Selection Methods Weighted Scoring Removes personal bias, is more objective, and considers relative importance of different evaluation factors n 1) 2) 3) 4) 5) 6) Page 39 determine the evaluation factors assign a numerical weight to each factor rate the projects on each criterion multiply each rating by its weighting total the weighted ratings to compute an overall score highest number project wins Si =  sijwj j=1 PMP® Prep: PMBOK® 5th - 2013 Project Selection Methods Decision Models $12,000 Decision Trees: Define all the possible outcomes, the probability of each, and its value. Choose the best alternative. $10,000 $8,000 } } $10,200 $10,000 $12,000 Forced Choice: Decision makers choose among alternatives, often by pair-wise comparisons, selecting the one preferred and discarding the rest. Page 39 PMP® Prep: PMBOK® 5th - 2013 Initiation: Project Stakeholder Management PMBOK® Fifth Edition, Section 13.1, Page 393 13.1 Identify Stakeholders Inputs Project charter Procurement documents Enterprise environmental factors Organizational process assets Page 40 Tools & Techniques Stakeholder analysis Expert judgment Meetings Outputs Stakeholder register PMP® Prep: PMBOK® 5th - 2013 13.1 Identify Stakeholders • It is critical for project success to identify the stakeholders early in the project, and to analyze their levels of interest, expectations, importance and influence • Stakeholders should be classified according to their interest, involvement and influence in the project Who are your stakeholders? Make sure you can name them? Page 40 PMP® Prep: PMBOK® 5th - 2013 Stakeholder Analysis Tools and Techniques Position people on the Power/Influence Grid GU Think about who is essential for support: BG high Think about how to identify all stakeholders:  Brainstorming (free or structured)  Interviews  Past  Utilize the project team Develop, Monitor, Focus, Stabilize Power  Who are the most influential people?  How much will your project affect them?  How are they likely to react to your project?  Who is effected by the project’s objectives? AB LÖ medium CF AR JH low Resistor Bystander Change Agent Influence Note: The 5th Edition lists several classification models: • Power/Interest Grid • Power/Influence Grid • Influence/Impact Grid • Salience Model Understand the similarities and differences. Pages 42 and 43 PMP® Prep: PMBOK® 5th - 2013 Planning Process Group Page 45 PMP® Prep: PMBOK® 5th - 2013 PMBOK® Fifth Edition, Page 61 Process Groups Knowledge Areas 4. Project Integration Management Initiating 4.1 Develop Project Charter Planning 4.2 Develop Project Management Plan 5. Project Scope Management 5.1 5.2 5.3 5.4 Plan Scope Mgt. Collect Requirements Define Scope Create WBS 6. Project Time Management 6.1 6.2 6.3 6.4 6.5 6.6 Plan Schedule Mgt. Define Activities Sequence Activities Est. Activity Resources Est. Activity Durations Dev. Schedule 24 Plans 7. Project Cost Management 7.1 Plan Cost Mgt. 7.2 Estimate Costs 7.3 Determine Budget 8. Project Quality Management 8.1 Plan Quality Mgt. 9. Project Human Resource Management 9.1 Plan Human Resource Mgt. 10. Project Communications Management 10.1 Plan Communications Management 11. Project Risk Management 11.1 Plan Risk Management 11.2 Identify Risks 11.3 Perform Qualitative Risk Analysis 11.4 Perform Quantitative Risk Analysis 11.5 Plan Risk Response 12. Project Procurement Management 12.1 Plan Procurement Mgt. 13. Project Stakeholder Management Page 28 13.1 Identify Stakeholders 13.2 Plan Stakeholder Management Executing 4.3 Direct & Manage Project Work Monitoring & Controlling Planning 4.4 Mon/Ctrl Proj Work 4.5 Perform Integrated Change Control Closing 4.6 Close Project or Phase 4.2 Develop Project Management Plan 5.5 Validate Scope 5.1 Plan Scope Management 5.6 Control Scope 5.2 Collect Requirements 5.3 Define Scope 5.4 Create WBS 6.7 Control Schedule 6.1 Plan Schedule Management 6.2 Define Activities 6.3 Sequence Activities 6.4 Estimate Activity Resources 7.4 Control Costs 6.5 Estimate Activity Durations 6.6 Develop Schedule 8.2 Perform Quality 8.3 Control Quality 7.1 Assurance Plan Cost Management Estimate Costs 9.27.2 Acquire Project Team 9.37.3 Develop Project Team Determine Budget 9.4 Manage Project Team 8.1 Plan Quality10.3 Management 10.2 Manage Communications Control Communications 9.1 Plan Human Resource Management 10.1 Plan Communications Management 11.6 Control Risks 11.1 Plan Risk Management 11.2 Identify Risks 11.3 Perform Qualitative Risk Analysis 11.4 Perform Quantitative Risk Analysis Plan Risk Response 12.211.5 Conduct Procurements 12.4 Close Procurements 12.3 Control Procurements 12.1 Plan Procurement Management 13.4 Control Stakeholder 13.3 Manage Stakeholder 13.2 Plan Stakeholder Management Engagement Engagement PMP® Prep: PMBOK® 5th - 2013 Planning is Iterative Although the constraints of text and page layout force us to depict the planning process as a linear sequence of activities, this is not true and probably should not be practiced as such in reality. Planning is, in fact, an iterative activity. The various planning processes interact with each other; later processes may cause you to rethink the execution and output of earlier processes. Replanning at phase gates is called “progressive elaboration” or “rolling wave planning.” Exam Tip Page 45 Planning is done by the Project Team PMP® Prep: PMBOK® 5th - 2013 Project Planning Don’t over-plan and don’t under-plan (Your challenge is to match the degree of planning to the demands of the project). Document, distribute, and maintain the plan (You’re not the only one who is going to use the plan) Page 46 PMP® Prep: PMBOK® 5th - 2013 Planning: Integration Management 4.2 Develop Project Management Plan Inputs Project charter Outputs from other processes Enterprise environmental factors Organizational process assets Page 47 Tools & Techniques Expert judgment Facilitation techniques Outputs Project management plan PMP® Prep: PMBOK® 5th - 2013 4.2 Develop Project Management Plan Develop Project Management Plan is the process of defining, preparing, and coordinating all subsidiary plans and integrating them into a comprehensive project management plan. It is the central document that defines the basis of all project work. Page 47 PMP® Prep: PMBOK® 5th - 2013 The Project Management Plan Input: Outputs from Other Processes Output: The PM Plan The other 23 planning processes are integrated to create the project management plan. Updates to any plans require an update to the PM plan. Think of the PM plan as a bucket into which all the other plans “drip” until it is full.             Plan Scope Management Collect Requirements Define Scope Create WBS Plan Schedule Management Define Activities Sequence Activities Estimate Activity Resources Estimate Activity Durations Develop Schedule Plan Cost Management Estimate Costs Pages 45 & 49            Determine Budget Plan Quality Management Plan Human Resource Management Plan Communications Management Plan Risk Management Identify Risks Perform Qualitative Risk Analysis Perform Quantitative Risk Analysis Plan Risk Response Plan Procurement Management Plan Stakeholder Management PMP® Prep: PMBOK® 5th - 2013 The Project Management Plan Subsidiary Plans Documents that flow from these planning processes are called Subsidiary Plans. These documents, also controlled by the Integrated Change Control process. • • • • • Scope Management Plan Requirements Management Plan Schedule Management Plan Cost Management Plan Quality Management Plan Page 49 • • • • • • Process Improvement Plan Human Resource Plan Communications Management Plan Risk Management Plan Procurement Management Plan Stakeholder Management Plan PMP® Prep: PMBOK® 5th - 2013 Differentiation: PM Plan and Project Documents Project Management Plan Project Documents Change management plan Activity attributes Project staff assignments Communications management plan Activity cost estimates Project statement of work Configuration management plan Activity duration estimates Quality checklists Cost baseline Activity list Quality control measurements Cost management plan Activity resource requirements Quality metrics Human resource management plan Agreements Requirements documentation Process improvement plan Basis of estimates Requirements traceability matrix Procurement management plan Change log Resource breakdown structure Scope baseline • Project scope statement • WBS • WBS dictionary Change requests Resource calendars Quality management plan Forecasts • Cost forecast • Schedule forecast Risk register Requirements management plan Issue log Schedule data Risk management plan Milestone list Seller proposals Schedule baseline Procurement documents Source selection criteria Schedule management plan Procurement statement of work Stakeholder register Scope management plan Project calendars Team performance assessments Stakeholder management plan Project charter Project funding requirements Project schedule Project schedule network diagrams Work performance data Work performance information Work performance reports Page 50 PMP® Prep: PMBOK® 5th - 2013 Planning: Project Scope Management 5.1 Plan Scope Management Inputs Project management plan Project charter Enterprise environmental factors Organizational process assets Page 51 Tools & Techniques Expert judgment Meetings Outputs Scope management plan Requirements management plan PMP® Prep: PMBOK® 5th - 2013 Project Scope Management  Ensures that the project includes all the work required, and only the work required, for the project to complete successfully. It defines and controls what is and is not in the project (the positive and negative scope items).  If it is not in the scope, it is not in the WBS  The Scope Baseline includes: 1. Project scope statement (SOW) 2. Work breakdown structure (WBS) 3. WBS dictionary Page 51 PMP® Prep: PMBOK® 5th - 2013 Plan Scope Management 5.1.1 Inputs Outputs of Previous Processes:  Project Management Plan  Project Charter + Always Inputs:  EEF  OPA Page 52 PMP® Prep: PMBOK® 5th - 2013 Plan Scope Management 5.1.3 Outputs  Scope Management Plan  Part of the project management plan  Defines how the scope will be defined, developed, controlled, and verified.  Requirements Management Plan  Also part of the project management plan  Describes how requirements will be analyzed, documented, and managed  Includes configuration management, requirements prioritization, metrics, and traceability. Page 53 PMP® Prep: PMBOK® 5th - 2013 Planning: Scope Management PMBOK® Fifth Edition, Section 5.2, Page 110 5.2 Collect Requirements Inputs Scope Management Plan Requirements Management Plan Stakeholder Management Plan Project Charter Stakeholder Register Page 54 Tools & Techniques Interviews Focus Groups Facilitated Workshops Group Creativity Techniques Group Decision Making Techniques Questionnaires and Surveys Observations Prototypes Benchmarking Context Diagrams Document Analysis Outputs Requirements documentation Requirements traceability matrix PMP® Prep: PMBOK® 5th - 2013 5.2 Collect Requirements Tools and Techniques Interviews Focus Groups Facilitated Workshops Group Creativity Techniques Group Decision Making Techniques Questionnaires and Surveys Observations Prototypes Benchmarking Context Diagrams Document Analysis Page 48 Collecting Requirements is the process of determining, documenting, and managing stakeholders needs and requirements to meet project objectives Requirements include the quantified and documented needs and expectations of the sponsor, customer and other stakeholders Requirements must be detailed enough to allow precise measurements during Project Execution. PMP® Prep: PMBOK® 5th - 2013 5.2.1 Collect Requirements Tools and Techniques to define features and functions Interviews: talk with all stakeholders, checklists Focus groups: talk with prequalified stakeholders Facilitated workshops: allow key cross-functional stakeholders to define Exam Tip product/project features and to reconcile differences. Joint Application Design/Development (JAD): software Quality Function Deployment (QFD): new products, manufacturing Voice of the Customer (VOC): when QFD collects client needs Group creativity techniques (see list on next page) Group decision making techniques Questionnaires and surveys: written sets of questions Observations: job shadowing Prototypes: working model Benchmarking: comparing to best practices Context Diagrams: a scope model Document Analysis: analyzing existing documentation Pages 55-57 PMP® Prep: PMBOK® 5th - 2013 5.2.2 Collect Requirements Exam Tip Tools and Techniques: Group Creativity Techniques Brainstorming: a technique to generate multiple ideas on requirements. Does not include voting or prioritization., but is often used with creative methods that do. Nominal Group Technique: enhances brainstorming with a voting process to rank the best ideas. Delphi Technique: questionnaires are sent to experts: anonymous. responses are compiled, prioritized, and sent back. A method for building consensus. Idea/Mind Mapping: a graphical method to consolidate brainstorm ideas show commonality and differences: generate new ideas Affinity Diagram: gathering lots of ideas and sorting them into groups analyze to identify patterns within data Multicriteria Decision Analysis: uses a decision matrix to establish criteria (risk, uncertainty, valuation), evaluate, and rank many ideas. Page 56 PMP® Prep: PMBOK® 5th - 2013 5.2.2 Collect Requirements Tools and Techniques: Group Decision-Making Techniques Page 57 Unanimity: everyone agrees. Example: Delphi Technique. Majority: more than 50% agree. Plurality: largest block in the group decides. Dictatorship: one person decides. Example: Forced Choice. PMP® Prep: PMBOK® 5th - 2013 5.2.3 Collect Requirements Outputs Requirements Documentation: progressively elaborated record: how each requirement meets the business need. explicit, measurable, accepted in writing Traceability Matrix: a table linking requirements to their origin traces then over the project life cycle a structure for managing scope changes Example Requirements Traceability Matrix Page 58 PMP® Prep: PMBOK® 5th - 2013 Planning: Scope Management PMBOK® Fifth Edition, Section 5.3, Page 120 5.3 Define Scope Inputs Scope management plan Project charter Requirements documentation Organizational process assets Page 59 Tools & Techniques Expert judgment Product analysis Alternatives generation Facilitated workshops Outputs Project scope statement Project documents updates PMP® Prep: PMBOK® 5th - 2013 5.3 Define Scope “... process required to ensure that the project includes all the work required, and only the work required, to complete the project successfully. Documents the features and functionality of the product, service, or result” • • • • Exam Tip Page 59 Exam Tip Know and understand for exam Objectives = Agreement by all parties PMI-ism: give customer “No more - No less” Controls what IS and what IS NOT in project • Giving the customer more than they ask for is “Gold Plating”. PMI® does not approve of Gold Plating. • Currently only 26% of projects succeed, concentrate on doing the agreed scope of work. • You may see a variety of questions relating to this in Scope and Quality areas. PMP® Prep: PMBOK® 5th - 2013 Requirements vs. Scope PMBOK Fifth Edition, Page 121 Not all of the requirements identified in “Collect Requirements” may be included in “Define Scope.” “Define Scope” selects the final project requirements. Scope is progressively elaborated. Detailed scope is determined one iteration at a time. Exam Tip Page 60 PMP® Prep: PMBOK® 5th - 2013 5.3.1 Define Scope Inputs t rojec e the p ) and th t W c s ar e uisite work (SO the proje q re re of d for e o P tement e e (n nalysis s sta a c n ta ess atio busin st/ benefi or justific o ority and c t purpos e ctiv es auth rojec ble obje anager, P ra o tm easu rojec ct je o o M signed p ibility r ts, p s s o A d r espon quiremen an nes el re d risks v to e s -l e igh mil , an o H scription dget and de ry bu s factors and their a m um ces ons o S tical suc nizati ri orga o C nctional ns or f sp o n u o F rticipatio thority o u a pa d n a am e o N + + Outputs of Previous Processes: • Scope Management Plan • Requirements Documentation Always an Input: OPA There have been as many as 20 “Input, Tools, and Output” questions on past tests (10%). We want you to get these right! (One person had 40 ITO questions on his test) Pages 60 & 61 PMP® Prep: PMBOK® 5th - 2013 5.3.2 Define Scope Tools and Techniques Almost always a Tool: • Expert Judgment + • Alternatives Generation develop options using brainstorming, lateral thinking, alternatives analysis, etc. + • Facilitated Workshops key players reach understanding of the project objectives and their limits. • Product Analysis Translate objectives into deliverables Page 61 PMP® Prep: PMBOK® 5th - 2013 5.3.2 Define Scope PMBOK Fifth Edition, Section 5.3, Page 122 Tools and Techniques: Product Analysis, Value Analysis Example Cost/Benefit Analysis Page 61 Benefits: Costs: increased revenue capital assets regulatory compliance strategic positioning liquid assets consumed resources occupied deferred opportunities PMP® Prep: PMBOK® 5th - 2013 5.3.3 Define Scope PMBOK Fifth Edition, Section 5.3, Page 123 Outputs Subject matter document: Includes • Project Scope Statement + • Documents Updates:  Stakeholder register  Requirements docs  Traceability matrix Page 62 & 63 PMP® Prep: PMBOK® 5th - 2013 5.3.3 Define Scope Exam Tip Remember the difference between the Charter and the Scope Statement: • the charter contains high-level information, • the scope statement is a detailed description of the scope elements. See table 5-1, PMBOK Fifth Edition, Section 5.3, Page 124 Both are progressively elaborated throughout the project Page 62 PMP® Prep: PMBOK® 5th - 2013 5.3 Define Scope Sponsor Scope Statement Product scope description Acceptance criteria Deliverables Project exclusions Constraints Assumptions Summary Charter Project Manager High level PMP® Prep: PMBOK® 5th - 2013 Planning: Scope Management 5.4 Create WBS Inputs Scope management plan Project scope statement Requirements documentation Enterprise environmental factors Organizational process assets Page 64 Tools & Techniques Decomposition Expert judgment Outputs Scope baseline Project document updates PMP® Prep: PMBOK® 5th - 2013 5.4 Create WBS  The Work Breakdown Structure is the process of subdividing project deliverables into smaller, more manageable components.  It is a hierarchical decomposition of the total scope of work done by the project team to satisfy the objectives and create the deliverables.  If it is not in the scope, it is not in the WBS, and vice versa. This is called the 100% rule.  The Scope Baseline includes: 1. Project scope statement (SOW) 2. Work breakdown structure (WBS) 3. WBS dictionary Exam Tip Page 64 PMP® Prep: PMBOK® 5th - 2013 5.4 Create WBS PMBOK® Fifth Edition, Page 129 • At the lowest level of the WBS, work can be properly scheduled, cost estimated, monitored and controlled • The WBS is critical to project success The WBS is very important • The lowest level WBS components are called Work Packages City Gentrification Preparation Work Packages Page 67 Mark Holes Dig Holes Tree Planting Plant Trees Landscaping Fill Holes Lay Turf Water Soil PMP® Prep: PMBOK® 5th - 2013 5.4.1 Create WBS PMBOK® Fifth Edition, Page 127 Inputs Outputs of Previous Processes: • Scope Management Plan • Project Scope Statement • Requirements Documentation + Always Inputs: Page 65 • EEF (industry WBS standards) • OPA (procedures, templates, lessons learned, files) PMP® Prep: PMBOK® 5th - 2013 5.4.2 Create WBS PMBOK® Fifth Edition, Page 128 Tools and Techniques Decomposition Decomposition is the subdivision of deliverables into smaller, more manageable components until they are defined to the work package level, where schedule and cost can be reliably estimated without going to level that takes more effort to administer than is worthwhile. Decomposition may be difficult for work to be done far in the future, so the team does rolling wave planning. Parts of the WBS done by a supplier are known as the contract work breakdown structure (CWBS). Each component in a WBS should be assigned to a department, and sorting by organizational unit creates an Organizational Breakdown Structure (OBS). Page 66 PMP® Prep: PMBOK® 5th - 2013 5.4.2 Create WBS Tools and Techniques Whole Project 001 Main Divisions Activity Deliverables Work Packages Page 67 100 200 210 220 230 221 222 231 240 300 250 251 310 252 320 321 400 330 322 410 411 420 412 PMP® Prep: PMBOK® 5th - 2013 5.4.2 Create WBS Tools and Techniques: Example Chronological Typical Project Study Concept Prototype Pilot Production Project Management Typical Project Functional Sales Page 67 Qualification Product Engineering Purchasing Quality Control Job Shop Manufacturing Department Project Management PMP® Prep: PMBOK® 5th - 2013 5.4.2 Create WBS Tools and Techniques: Example of WBS by Phase Seagram MIS Project Project Definition Page 68 Analysis Design Construction Implementation Functional Requirements Definition Design & Integration User Procedures & Training Training & User Acceptance Process & Package Evaluation Installation Program Generation & Testing User Sign Off Analysis Check Point Design Check Point Development Sign Off Support Project Management PMP® Prep: PMBOK® 5th - 2013 5.4.2 Create WBS PMBOK® Fifth Edition, Page 131-132 Outputs  Work not included in the WBS is outside the scope of the project. This is called the 100% rule.  People who do the work must create their part of the WBS.  The work breakdown structure is a KEY document. It provide for hierarchical summation of cost, schedule and resource information, sometimes called “rolling up the WBS.”  Rules of thumb are applied to the size of a work package: the 80-hour and 2-week rules. Heuristics Exam Tip  Include all project work and all aspects of the project deliverables. Remember, the scope of the project is always greater than the scope of the product alone! Page 69 PMP® Prep: PMBOK® 5th - 2013 5.4.2 Create WBS Outputs, example of software to create WBS Page 70 PMP® Prep: PMBOK® 5th - 2013 5.4.2 Create WBS Outputs, The WBS Dictionary, PMBOK Fifth Edition, Page 132 WBS Dictionary = • Controls what work is done, when, by whom, for how much. • Created with help of the team member. Creating a WBS (Post-It Note Process) Who? Est. Hours Task “A” Specs. & Req. Start Date Page 70 Stop Date Task Description Project Title: ___________________________________ Task Title: ___________ Charge Number: ___________ Task Leader: _______________ Department: ________________ Project Manager: ____________ Task: Scheduled Start: _____ Scheduled Completion: _____ Description: ___________________________________ ______________________________________________ ______________________________________________ ______________________________________________ End Requirements: _____________________________ ______________________________________________ ______________________________________________ Budget: Labor _____________ _____________ _____________ Hours Other Direct ________ _____________________ ________ _____________________ ________ _____________________ Work Package Completed: _______________________ Hours Expended: ________ Date Completed: ______ PMP® Prep: PMBOK® 5th - 2013 5.4.2 Create WBS Do not confuse WBS with other breakdown structures Page 71  WBS: a deliverable-oriented hierarchical decomposition of the work to be executed by the project team to accomplish project objectives and to create required deliverables.  OBS: Organizational Breakdown Structure: a hierarchical view of the project organization showing how work packages relate to functional departments in the performing organization, i.e., a departmental breakdown for the project.  BOM: Bill of Material: a hierarchical tabulation of parts to fabricate a manufactured product.  RBS: Risk Breakdown Structure: a hierarchical depiction of identified risks arranged by risk category.  Resource Breakdown Structure (another RBS?): a hierarchical view of resources by type used on the project. PMP® Prep: PMBOK® 5th - 2013 5.4.2 Create WBS OBS: Organizational Breakdown Structure Project Cost Accounts provide a way to control how functional organizations to charge to projects. Page 71 Comp. #1 Comp. #2 Assembly Cost Account Cost Account Parts Cost Account Cost Account Comp. #2 Electrical Comp. #1 Production Cost Account Cost Account Mechanical Engineering Company Manufacturing WBS Codes show functional managers exactly what their people are doing on the project. Design Cost Account Cost Account PMP® Prep: PMBOK® 5th - 2013 5.4.2 Create WBS Outputs Exam Tip W.B.S. Phrases about WBS that have been answers on the exam:  Graphical picture of the project  Identifies all tasks  Foundation upon which the project is built  Is VERY important Page 72  Forces you to think through all aspects of the project  A WBS can be re-used for other projects PMP® Prep: PMBOK® 5th - 2013 5.4.2 Create WBS Outputs, WBS • The structure of the WBS should reflect the way the project work will be performed and managed • The WBS should be broken down to the level of detail needed to provide control of the work (80 hour and 2 week rules) • Smart PM’s know they need to manage the pieces, not the whole project. • Each element of the WBS should be given a unique identifier that codes its position in the WBS and any parent/child relationship among WBS elements • Each WBS element should have an associated deliverable or set of deliverables that allow an indication of work progress and completion Page 72 PMP® Prep: PMBOK® 5th - 2013 5.4.2 Create WBS WBS Terminology Chart of Accounts: a numbering system used to monitor costs by category (e.g., labor, supplies, travel) Code of Accounts: The collection of unique identifiers for each WBS element Cost Account: A code that allows a functional group to charge for work on a specific element of project work Work Order: A request for a functional group to work on a specific element of a project Work Package: An element of work or deliverable at the lowest level of the WBS (relates to tasks or activities on most projects) -- may be subdivided into tasks or activities by team members on larger projects. Page 73 PMP® Prep: PMBOK® 5th - 2013 Planning: Project Time Management PMBOK Fifth Edition, Page 145 6.1 Plan Schedule Management Inputs Project Management Plan Project Charter Enterprise environmental factors Organizational process assets Page 74 Tools & Techniques Expert judgment Analytical techniques Meetings Outputs Schedule management plan PMP® Prep: PMBOK® 5th - 2013 6.1 Plan Schedule Management  Plan Schedule Management is the process of establishing policies, procedures, and documentation for planning, developing, managing, executing and controlling the project schedule.  It defines how schedule contingencies will be reported and assessed. Page 74 PMP® Prep: PMBOK® 5th - 2013 6.1.1 Plan Schedule Management PMBOK® Fifth Edition, Page 146 Inputs Outputs of Previous Processes: • Project Management Plan (includes the Scope Baseline) • Project Charter + Always Inputs: Page 74 • EEF (resource availability, scheduling tool, commercial databases) • OPA (reporting tools, lessons learned, control tools, closure) PMP® Prep: PMBOK® 5th - 2013 6.1.2 Plan Schedule Management Tools and Techniques • Expert Judgment • Analytical Techniques (techniques to estimate and schedule the project, PM software, fast track or crash, risk assessment) • Meetings (to develop the plan) Page 75 PMP® Prep: PMBOK® 5th - 2013 6.1.3 Plan Schedule Management Outputs • Schedule Management Plan (model development, accuracy, units, procedures, control thresholds, performance measurement rules, report formats, process descriptions) Page 76 PMP® Prep: PMBOK® 5th - 2013 Planning: Project Time Management PMBOK® Fifth Edition, Page 149 6.2 Define Activities Inputs Schedule Management Plan Scope baseline Enterprise environmental factors Organizational process assets Page 77 Tools & Techniques Decomposition Rolling wave planning Expert judgment Outputs Activity list Activity attributes Milestone list PMP® Prep: PMBOK® 5th - 2013 6.2 Define Activities Activity definition identifies specific actions at the work package level of the WBS to produce the deliverables. Work packages have smaller elements called schedule activities that have to be planned, i.e., estimated, scheduled, executed and monitored & controlled, to meet project objectives. The best way to think about activity definition is that the outputs are ACTIONS to be done. Page 77 PMP® Prep: PMBOK® 5th - 2013 6.2 Define Activities City Gentrification Preparation Work Packages Actions Page 80 Mark Holes Dig Holes Tree Planting Plant Trees Fill Holes Landscaping Lay Turf Water Soil Check ground Measure distances Nail stakes… PMP® Prep: PMBOK® 5th - 2013 6.2.1 Define Activities Inputs Outputs of Previous Processes: • Schedule Management Plan • Scope Baseline (Scope Statement, WBS, and WBS Dictionary) + Always Inputs: • EEF (culture, commercial databases, PMIS) • OPA (lessons learned, processes, templates, activity procedures) Page 78 PMP® Prep: PMBOK® 5th - 2013 6.2.2 Define Activities Tools and Techniques • Decomposition  Subdividing work packages into actions or work effort necessary to complete the deliverable of the work package.  These actions or work effort are sometimes called “schedule activities.” • Rolling Wave Planning (see next page) • Expert Judgment (Always a tool) Page 78 PMP® Prep: PMBOK® 5th - 2013 6.2.2 Define Activities Tools and Techniques Rolling Wave Planning Rolling wave planning is progressive elaboration of the plan throughout the project life cycle. Work accomplished in the near term is planned in detail at a low level of the WBS, while work far in the future is planned at a higher level of the WBS. Therefore, schedule activities can exist at various levels in the project life cycle. For example, in the initiation stage where strategic planning is done, activities might be kept at the milestone level. As each project phase is completed, rolling wave planning means that the next phase can now be planned in more detail as more is known about the detail activities. Page 78 & 79 PMP® Prep: PMBOK® 5th - 2013 6.2.1 Define Activities Definitions Exam Tip Sometimes PMP Candidates do not understand the subtle distinction between an Activity Definition and a Work Breakdown Structure (WBS). This may help: Page 79  Activity Definition Outputs are ACTIONS TO BE DONE  W.B.S. Outputs are DELIVERABLES (Tangible Items) PMP® Prep: PMBOK® 5th - 2013 6.2.3 Define Activities Outputs City Gentrification Preparation Mark Holes Activity List Page 80 Dig Holes Tree Planting Plant Trees Fill Holes Landscaping Lay Turf Water Soil 1. Check ground 2. Measure distances 3. Nail stakes… PMP® Prep: PMBOK® 5th - 2013 Planning: Time Management PMBOK® Fifth Edition, Page 153 6.3 Sequence Activities Inputs Schedule management plan Activity list Activity attributes Milestone list Project scope statement Enterprise environmental factors Organizational process assets Page 82 Tools & Techniques Precedence diagramming method (PDM) Dependency determination Leads and lags Outputs Project schedule network diagrams Project documents updates PMP® Prep: PMBOK® 5th - 2013 6.3 Sequence Activities Activity Sequencing Activity sequencing means identifying and documenting logical relationships among project activities. Think NETWORKS ! Accurate and complete activity sequencing is critical to developing schedules. Schedule activities (actions) can be sequenced to develop the project schedule. The project planning team should work together to clarify the sequence of activities and dependencies. It is usually more effective to have the team do some form of manual activity sequencing before turning to project management software for scheduling. Page 82 PMP® Prep: PMBOK® 5th - 2013 6.3 Sequence Activities  Activities are commonly sequenced using the Precedence Diagramming Method (PDM) which allows finish-to-start, finish-to-finish, start-to-start and start-to-finish  Finish-to-start is the most common type of relationship  There are three types of dependencies – mandatory dependencies, discretionary dependencies and external dependencies  Lead and lag times add realism to the schedule (you Lead In to fast track, and Lag out to add a gap between activities) Page 82 PMP® Prep: PMBOK® 5th - 2013 6.3.1 Sequence Activities Inputs • Schedule Management Plan • Activity List (activities or actions to be sequenced) • Activity Attributes (activities have durations, resources, and costs associated and are used for schedule development) • Milestone List (A significant event in a project. The list identifies all milestones and if they are mandatory (contractual) They have zero duration. • Project Scope Statement • EEF and OPA Page 83 PMP® Prep: PMBOK® 5th - 2013 6.3.2 Sequence Activities Tools and Techniques, Precedence Diagramming Method (PDM) Dependencies used in PDM F-S Activity B Activity A F-F Activity C S-S Activity D S-F Page 84 Activity E PMP® Prep: PMBOK® 5th - 2013 6.3.2 Sequence Activities Tools and Techniques, Precedence Diagramming Method (PDM) also called Activity on Node Lead in Lag out Finish-to-Start (most often used) Finish-to-Finish Start-to-Start Start-to-Finish (rarely used) A B A-B; B-C; etc. B-E B-D F-C C Start Finish D E F Exam Tip • No repetitive activities or conditional loops! No Dummies! • Often used for Three Point Estimates (PERT) and Critical Path Method (CPM) analysis Page 84 PMP® Prep: PMBOK® 5th - 2013 6.3.2 Sequence Activities Tools and Techniques, Arrow Diagramming Method (ADM) also called Activity on Arrow [ Not in Fifth Edition, may be on test ] 2 Start Page 85 3 C 1 6 D • • • • • B 4 E 5 Finish F Finish-to-Start only (need additional nodes for leads and lags) No repetitive activities or conditional loops May use “dummy” activities Nodes numbered, activities lettered, numbers above arrows are duration Often used for Three Point Estimates (PERT) and Critical Path Method (CPM) analysis Exam Tip PMP® Prep: PMBOK® 5th - 2013 6.3.2 Sequence Activities Tools and Techniques, Conditional Diagramming Method Graphical Evaluation and Review Technique (GERT) Not in the Fifth Edition, But has been on recent tests Scrap Rework Manufacture Inspect Inspect Package Ship • Allows repetitive activities (looping back) and conditional branches • Combines features of flow diagrams and decision tree models Not in Book PMP® Prep: PMBOK® 5th - 2013 6.3.2 Sequence Activities Tools and Techniques, Dependency Determination Mandatory Dependencies (Hard Logic): Dependencies based on technological constraints, such as not being able to paint a wall before it is constructed Discretionary Dependencies (Soft Logic): Dependencies based on management preference, such as delaying one task until another is completed in order to use the same resources on both. External Dependencies: Dependencies based on external constraints such as a required inspection before proceeding to the next activity. Internal Dependencies: Dependencies within the project team’s control, such as not testing a product until the product is fully assembled. Page 86 PMP® Prep: PMBOK® 5th - 2013 6.3.2 Sequence Activities Tools and Techniques Applying Leads and Lags A lead allows acceleration of the successor activity (you “lead in” to fast track a project). For example, a team of technical writers can begin writing the second draft of a large document 15 days before they finish the first draft. When scheduling, this is accomplished with a finish-start relationship and a 15 day lead time. Exam Tip A lag directs a delay in the successor activity (you “lag out” to allow a waiting time). For example, you have to wait 10 days to discover infant mortality of new semiconductor chips. This is accomplished using a finish start relationship and a 10 day lag time. Page 87 PMP® Prep: PMBOK® 5th - 2013 6.3.2 Sequence Activities Tools and Techniques o A hammock is a summary level activity representing a group of related activities o A subnet or fragnet is a sub-project of a larger network diagram o A hanger is an unintentional break in the network diagram usually due to omitting either activities or logical relationships Page 87 PMP® Prep: PMBOK® 5th - 2013 6.3.3 Sequence Activities Outputs • Project Schedule Network Diagrams (a graphical representation of activities showing dependencies) • Project Documents Updates (include activity lists and attributes, milestone list, and risk register) F-S Activity B Activity A F-F Activity C S-S Activity D S-F Page 88 Activity E PMP® Prep: PMBOK® 5th - 2013 Planning: Time Management PMBOK® Fifth Edition, Page 160 6.4 Estimate Activity Resources Inputs Schedule management plan Activity list Activity attributes Resource calendars Risk register Enterprise environmental factors Organizational process assets Page 89 Tools & Techniques Expert judgment Alternative analysis Published estimating data Bottom-up estimating Project management software Outputs Activity resource requirements Resource breakdown structure Project documents updates PMP® Prep: PMBOK® 5th - 2013 6.3 Estimate Activity Resources Estimate Activity Resources is the process of estimating the type and quantities of material, human resources, equipment or supplies required to perform each activity. There are five tools and techniques: • Expert judgment • Alternative analysis • Published estimating data • Bottom-up estimating • Project management software Page 89 PMP® Prep: PMBOK® 5th - 2013 6.3.1 Estimate Activity Resources Inputs • Schedule Management Plan • Activity List (Activities that need resources) • Activity Attributes (data for estimating resources) • Resource Calendars (periods when resources are available and skill level) • Risk Register (shows events that impact resource availability) • Activity Cost Estimates • EEF and OPA Pages 89-90 PMP® Prep: PMBOK® 5th - 2013 6.3.1 Estimate Activity Resources Inputs, Resource Calendars Resource calendars document the time periods when each team member can work on the project. To do this we must have a good understanding of the person’s schedule conflicts, including holiday time and commitments to other projects. We document active and idle time for each person over the life of the project and show the results in a project histogram. Resources include people, material, equipment and facilities. Page 78 PMP® Prep: PMBOK® 5th - 2013 6.3.2 Estimate Activity Resources Tools and Techniques • Expert Judgment • Alternative Analysis (Different people, skills, equipment, tools, make-buy) • Published Estimating Data (data for estimating resources) • Bottom-Up Estimating (Estimating at the bottom level of the WBS and adding [aggregating] to the top. Yields best accuracy) • Project Management Software (a scheduling tool helps plan, manage resource pools, and develop resource estimates) Pages 90-92 PMP® Prep: PMBOK® 5th - 2013 6.3.2 Estimate Activity Resources Tools and Techniques Alternative Analysis Brainstorming: a method of joint creative thinking that first records and considers all possible options/solutions without judgment before proceeding to critical evaluation of the project/product requirements. Nominal Group Technique: enhances brainstorming with a voting process to rank the best ideas for further brainstorming or prioritization. Delphi Technique: questionnaires are sent to a group of experts who provide answers and are kept anonymous. Responses are compiled, prioritized, and sent back for another round of requirements gathering. A method for building consensus. Idea/Mind Mapping: a graphical method of consolidating brainstorm ideas to show commonality and differences and to generate new ideas. Affinity Diagram: gathering large numbers of ideas and sorting them into groups for review and analysis – they help to identify patterns within data. Post-It Note Process: A Method For Bottoms Up Estimating The WBS dictionary describes the detailed content of the WBS work packages. WBS Dictionary = Task Description (PMBOK 3rd Edition, Page 117) • Controls what work is done, when, by whom, for how much. • Created with team member’s help Creating a WBS (Post-It Note Process) Who? Est. Hours Task “A” Specs. & Req. Project Title: ___________________________________ Task Title: ___________ Charge Number: ___________ Task Leader: _______________ Department: ________________ Project Manager: ____________ Task: Scheduled Start: _____ Scheduled Completion: _____ Description: ___________________________________ ______________________________________________ ______________________________________________ ______________________________________________ End Requirements: _____________________________ ______________________________________________ ______________________________________________ Budget: Labor Hours Other Direct _____________ ________ _____________________ _____________ ________ _____________________ _____________ ________ _____________________ Work Package Completed: _______________________ Start Date Page 91 Stop Date Hours Expended: ________ Date Completed: ______ PMP® Prep: PMBOK® 5th - 2013 6.3.3 Estimate Activity Resources Outputs Activity Resource Requirements The output of resource planning is a set of resource requirements. The resource requirements describe what types of resources are required and in what quantities for each element of the WBS. The list of resource requirements will be used for staff acquisition and procurement planning. Develop Schedule determines when the resources are needed. Resource Breakdown Structure This is a hierarchical structure of identified resources, sorted by category and type. When limited to people resources, it is sometimes referred to as a project organization chart. Project Documents Updates Updates include activity list, activity attributes, and resource calendars Page 92 PMP® Prep: PMBOK® 5th - 2013 Planning: Time Management PMBOK® Fifth Edition, Page 166 6.5 Estimate Activity Durations Inputs Schedule management plan Activity list Activity attributes Activity resource requirements Resource calendars Project scope statement Risk register Resource breakdown structure Enterprise environmental factors Organizational process assets Page 93 Tools & Techniques Expert judgment Analogous estimating Parametric estimating Three-point estimating Group decision-making techniques Reserve analysis Outputs Activity duration estimates Project documents updates PMP® Prep: PMBOK® 5th - 2013 6.5 Estimate Activity Durations PMBOK® Fifth Edition, Page 166 Estimates may be obtained in the following ways: • Expert judgment • Analogous estimating • Parametric estimating • Three-point estimates • Group decision-making A contingency reserve (or time reserve, or buffer) may be used to account for schedule uncertainty Page 93 PMP® Prep: PMBOK® 5th - 2013 6.5 Estimate Activity Durations  Definition: Estimating the number of work periods needed to complete each activity with estimated resources.  The team members should make the estimate.  Estimates: (1) amount of work to complete each activity, (2) number of resources to be applied, and (3) number of work periods needed to finish each activity.  Duration estimates are progressively elaborated.  Rolling Wave applies to duration estimating  Estimating duration includes elapsed time as well as work time. Page 93 PMP® Prep: PMBOK® 5th - 2013 6.5.1 Estimate Activity Durations Inputs           Pages 94-96 Schedule management plan Activity list Activity attributes Activity resource requirements Resource calendars Project scope statement Risk register Resource breakdown structure Enterprise environmental factors Organizational process assets PMP® Prep: PMBOK® 5th - 2013 6.5.2 Estimate Activity Durations PMBOK® Fifth Edition, Page 169 Tools and Techniques, Estimating Methods Analogous Time Estimating (a form of expert judgment): Estimating the time to do tasks or to do a current project by extrapolating from actual cost of a previous project. Also called top-down time estimating. Inexpensive but may also be inaccurate. Parametric Time Estimating: Using a statistical relationship to predict project times, e.g., activity multiplied by productivity rate predicts time standards, or number of drawings multiplied by labor hours per drawing calculates drawing duration. Expert Judgment: By the project team, or other experts, e.g., rolling up the WBS time estimates to get a project total. Who? Task “A” Reserve Analysis (Contingency): Project Teams can incorporate additional time into projects for schedule risk contingency or buffer. Qual. (%) or Quant. (Monte Carlo) Page 98 Est. Hours Start Date Exam Tip Stop Date People doing the work create time & cost estimates PMP® Prep: PMBOK® 5th - 2013 6.5.2 Estimate Activity Durations PMBOK® Fifth Edition, Page 170 Tools and Techniques, Analysis Methods Critical Path Method (CPM) • • • • One time estimate per task = “most likely” duration. The emphasis is on controlling cost and leaving schedule flexible. Used on ADM (AOA) diagrams, can have dummies. Is used on PDM diagrams also, but they have no dummies Three Point Estimates (PERT=Program Evaluation and Review Technique) • • • • • Sometimes called Method of Moments te = Sometimes called Beta Distribution Pessimistic + Optimistic + (4 x Most Likely) Pessimistic - Optimistic Standard = Deviation 6 Page 98 Exam Tip Uses a weighted average to estimate activity and project durations. Provides variance estimates for duration dates. Emphasis is on controlling schedule and leaving cost flexible Used on ADM (AOA) diagrams, can have dummies. Is used on PDM diagrams also, but they have no dummies 6 Variance = Pessimistic - Optimistic 2 6 PMP® Prep: PMBOK® 5th - 2013 6.5.2 Estimate Activity Durations Tools and Techniques, Duration Estimates o = most optimistic completion time p = most pessimistic completion time m = most likely completion time te = o + 4m + p 15 3-Point or PERT Analysis 16 17 18 19 20 21 22 23 24 6  (te) = p–o 6 te  1  <=> 68% probability te  2  <=> 95.5% probability te  3  <=> 99.7% probability Page 99 19  1days with 68% confidence 19  2 days with 95.5% confidence 19  4 days with 99.7% confidence  Quantitative Estimate Indication of Range Indication of Confidence PMP® Prep: PMBOK® 5th - 2013 Exercise Calculate the following values using PERT… Task Opt Likely Pess PERT Std. Dev Variance A 14 27 47 28.166 5.5 30.25 B 41 60 89 61.666 8 64 C 39 44 48 43.833 1.5 2.25 D 29 37 42 36.5 2.166 4.693 Assuming that the tasks listed above make up the entire critical path for the project, how long will the project take? 170.2 days ± 10.1 days (add the variances and take square root) Page 99 PMP® Prep: PMBOK® 5th - 2013 Planning: Time Management PMBOK® Fifth Edition, Page 172 6.6 Develop Schedule Inputs Schedule management plan Activity list Activity attributes Project schedule network diagrams Activity resource requirements Resource calendars Activity duration estimates Project scope statement Risk register Project staff assignments Resource breakdown structure Enterprise environmental factors Organizational process assets Page 101 Tools & Techniques Schedule network analysis Critical path method Critical chain method Resource optimization techniques Modeling techniques Leads and lags Schedule compression Scheduling tool Outputs Schedule baseline Project schedule Schedule data Project calendars Project management plan updates Project documents updates PMP® Prep: PMBOK® 5th - 2013 6.6 Develop Schedule Develop Schedule is the process of analyzing activity sequences, durations, resource requirements and schedule constraints to create the project schedule Schedule Network Analysis A technique to generate the project schedule employing various analytical techniques such as critical path, critical chain, what-if analysis and resource optimization Pages 103-105 & 110 Critical Path Method Critical Chain Method A method used to estimate minimum duration and flexibility in network paths. Calculates theoretical early and late start and finish dates for all activities without regard to resource limitations, using forward and backward pass analysis Allows the team to place buffers on any network path to account for limited resources and duration uncertainties. The resourceconstrained critical path is the critical chain. A project buffer can be placed at the end of the critical chain, and feeding buffers can be places on non-critical legs that feed into the critical chain. PMP® Prep: PMBOK® 5th - 2013 6.6 Develop Schedule Page 101  Determines planned start and finish calendar dates for project activities  Schedule development is iterative and continuously elaborated  Requires review of duration and resource estimates to create a schedule  Creates a baseline against which to track progress PMP® Prep: PMBOK® 5th - 2013 6.6.2 Develop Schedule Tools and Techniques, Schedule Network Analysis Network analysis is a technique that generates the project schedule. It employs a schedule model and includes CPM, critical chain method, what-if analysis and resource optimization to calculate early and late start and finish dates. Critical Path Method (CPM) • One time estimate per task = “most likely” duration. • The emphasis is on controlling cost and leaving schedule flexible. Three Point Estimates (PERT=Program Evaluation and Review Technique) • Uses a weighted average to estimate activity and project durations. • Provides variance estimates for duration dates. • Emphasis is on controlling schedule and leaving cost flexible te = Pessimistic + Optimistic + (4 x Most Likely) Pessimistic - Optimistic Standard = Deviation 6 Page 103 6 Variance = Pessimistic - Optimistic 2 6 PMP® Prep: PMBOK® 5th - 2013 6.6.2 Develop Schedule Tools and Techniques, Critical Path Method (CPM) CPM calculates early and late start and finish dates for activities using forward and backward pass analyses through the network paths. The early and late start and finish dates may not be the same on different network paths since total float may be positive, negative, or zero. Total float provides schedule flexibility. Critical paths have either zero or negative total float. The definition of “Critical Path” is the longest addition of activity durations on a path from start to finish. It is also defined as the shortest period of time in which the project can be completed. Exam Tip The definition of “Total Float” is the total amount of time a schedule activity can be delayed from its early start date without delaying the project finish date. CPM calculates total float by determining the difference between early finish and late finish dates, or early and late start dates. Also known as slack, float, or project float. “Free Float” is the amount of time a schedule activity can be delayed without delaying the early start date of its successor. Page 96 PMP® Prep: PMBOK® 5th - 2013 Slack Analysis If you have a network with parallel paths and one leg has slack, when you create the schedule, do you take the slack at the end of that leg or at the start? JIT 12 days 9 days 16 days 13 days 6 days Slack 16 days 12 days OR 6 days Slack 9 days 13 days When first laying out a schedule, put the slack at the end of the shorter leg. It helps with resource leveling and recovery if something happens to either of the two shorter legs during execution. Don’t schedule projects JIT. Page 103 PMP® Prep: PMBOK® 5th - 2013 Example of Critical Path Method ©2013 PMI. A Guide to the Project Management Body of Knowledge (PMBOK® Guide), Fifth Edition 6 5 10 B 11 1 5 5 15 5 Path A, B, D = 25 16 A Start 1 0 15 30 Finish D 5 16 6 10 15 C 6 0 0 30 Path A, C, D = 30 15 Legend Early Early Start Duration Finish Activity Name Late Start Total Float Late Finish Critical Path Non-Critical Path Page 105 PMP® Prep: PMBOK® 5th - 2013 3 Weeks 6.6.2 Develop Schedule Sales Aids & Brochure Production 2 Weeks Critical Path Method Support 1 Week Brochures 2 Weeks 0 Week 4 Weeks 0 Week Training Go/No Go Decision Advertising Go/No Go Launch 1 Week 2 Weeks 1 Week Definition Margin Acceptance 5 Weeks 1 Week Training Program Launch 4 Weeks Stock Profile 7 Weeks • The critical path is the longest addition of durations over a network. • It is the shortest period of time the project can be done. • A project may have more than one critical path • The critical path may change as the project progresses • Critical Path may be found using CPM, ThreePoint, or Monte Carlo analyses. Page 106 DBT Stocking & Measuring Sys 12 Weeks Sales PMP® Prep: PMBOK® 5th - 2013 Calculate the Critical Path 1 2 5 2 days Activity C 3 3 5 0 9 1 6 0 9 5 4 5 6 1 day Activity D 5 7 number above the node is the earliest possible start date number below the node is the latest possible start date critical path is where earliest start date = latest start date Page 106 ® ®Prep: ® 5 PMP PMP Prep:PMBOK PMBOK 4th® - 2013 Critical Path: Related terms Early Start Date is the earliest date that uncompleted activities can be started given the network logic and any schedule constraints Early Finish Date is the earliest date that uncompleted activities can be finished given the network logic and any schedule constraints Late Start Date is the latest date that an activity can begin without compromising a specified milestone (generally the project finish date) Late Finish Date is the latest date than an activity can finish without compromising a specified milestone (generally the project finish date) Total Float is the amount of time an activity can be delayed from its scheduled start date without delaying the project finish date, or violating a schedule constraint. Also know as float, slack, or project float Free Float is the amount of time an activity can be delayed without delaying the early start of any following activities Slack Time or Total Float = Late Finish Date - Early Finish Date, or Late Start - Early Start Page 107 PMP® Prep: PMBOK® 5th - 2013 Calculating Critical Path and Float Critical Path (C-E-F) = 24 Total Float in A-D-F = 14 Total Float in B-E-F = 9 Free Float of A = 0 (5-0-5) Free Float of B = 2 (5-0-3) Free Float of D = 14 (21-5-2) 0 0 9 TF = 14 FF = 14 5 19 3 3 B 12 0 12 12 C 0 Page 108 5 Free float: The difference between early start of predecessor and early start of successor, minus the estimated time of the predecessor A 14 TF = 9 FF = 2 ------ = Forward Pass ------ = Backward Pass TF = 14 FF = 0 12 5 19 2 7 D 21 12 9 21 E 12 21 3 24 F 21 24 21 TF = 0 FF = 0 PMP® Prep: PMBOK® 5th - 2013 Exercise (1) Draw the network diagram and find the critical path… Work Package Preceding Activity START Estimate in Months 0 D START 4 A START 6 F D,A 7 E D 8 G F,E 5 B F 5 H G 7 C H 8 (2) Find the slack of task A-F-B path, and of the D-E-G-H-C path from the answer above. END C,B 0 Answer: A-F-B = 15 Months, D-E-G-H-C = 1 Month Page 109 E D G H C START F B END A Answer: The critical path (project duration) is 33 months PMP® Prep: PMBOK® 5th - 2013 Exercise: ADM There may be 5-7 questions on network diagrams on the exam. Here is an example of a form of question that has a table of information and four questions that relate to it: B: (0 - 2) C: (1 - 3) (2 - 3) E: (2 - 5) D: (3 - 4) F: (3 - 5) G: (5 - 6) Estimate In Weeks 3 9 3 Dummy 2 2 1 4 H: (4 - 6) 2 Work Package (Nodes) A: (0 - 1) C=3 A=3 1 0 B=9 D=2 3 Dummy 2 4 6 F=1 5 H=2 G=4 E=2 1. What tasks are on the critical path? The critical path is B, E, G. (Note that 0, 1, 2, 3, 4, 5, and 6 are nodes in the AOA or ADM Diagram). Critical Path = 15 Weeks. B-Dummy-F-G also becomes critical 2. If the duration of task F changes to 2 weeks, what is the effect on the project? 3. What task(s) must be completed before task D begins? Tasks A, B and C 4. If the management tells you to complete the project two weeks early, what is the project float? Does the critical path change? Float is -2 weeks. No CP change unless Crashed or Fast Tracked Page 109 PMP® Prep: PMBOK® 5th - 2013 6.6.2 Develop Schedule Tools and Techniques, Critical Chain Method Critical chain modifies the schedule to account for limited resources. Initially the critical path of a network is calculated using activity duration estimates. Then, resources are applied and the resulting schedule may be resource limited. The critical chain method adds duration buffers that are non-work activities. The planned activities are then scheduled to their latest start and finish dates. Instead of managing total float, critical chain focuses on managing the buffer durations and the resources applied to the planned activities. Pages 110 PMP® Prep: PMBOK® 5th - 2013 Example of Critical Chain Method Start Activity A Activity B Feeding Buffer Activity C Activity D Activity E Activity G Feeding Buffer Activity F Legend Pages 110 Project Buffer Finish Critical Chain Link Non-Critical Link PMP® Prep: PMBOK® 5th - 2013 6.6.2 Develop Schedule Tools and Techniques, Resource Optimization: Leveling and Smoothing The resource histogram is a time-phased display of the amount of project work assigned to each resource (PMBOK Fourth Edition, Page 156) Resource plans are best when resource requirements increase and decrease without variations Month 1 Month 2 Month 3 Scheduling Tool Month 4 1.5 1.0 0.5 Product Manager • May be used at the individual or group level • May be used to detect over-allocation of resources • Avoid over-allocation, under-allocation, and peaks and valleys Pages 111 PMP® Prep: PMBOK® 5th - 2013 Network Analysis and Resource Leveling Critical Path: A-D-F and B-E-F 2 2 A C 4 2 Start 2 3 F B E 2 1 1 2 A 1 1 3 1 1 1 Page 112 2 3 B D 2 2 F 4 Days Slack 1 4 5 1 Work Force Required C 1 3 5 1 3 1 Finish 2 1 3 3 3 D Work Force Available Each Day: 4 People Work Force Duration in Days 1 5 2 E 6 2 7 2 8 Days 2 PMP® Prep: PMBOK® 5th - 2013 Network Analysis and Resource Leveling 2 2 A C 4 2 Start D 2 1 3 F B E 2 1 1 A 1 1 1 3 3 Work Force Page 112 3 2 3 1 1 3 4 1 4 4 1 D 2 2 F C 1 B 1 Finish 2 1 3 2 3 1 5 2 2 Days Slack E 6 2 7 1 8 1 9 2 10 Days 2 PMP® Prep: PMBOK® 5th - 2013 6.6.2 Develop Schedule Tools and Techniques, “What if” Scenario Analysis “What-If” analysis is the process of evaluating scenarios and their effect on schedule, i.e., “what if” a major component delivery is delayed? It assesses effect of adverse conditions on the project schedule and helps with response planning. Simulations calculate multiple project durations with different activity assumptions. They use three-point estimates (PERT) to determine duration uncertainty. The most common simulation uses Monte Carlo analysis. Possible activity durations are defined and used to calculate outcomes for the total project. Simulations are valuable for analyzing the sensitivity of the project to changes and for addressing the impact of uncertainty in the network logic, duration of activities, and availability of resources. Pages 113 PMP® Prep: PMBOK® 5th - 2013 Applying Leads and Lags A lead allows acceleration of the successor activity (you “lead in” to fast track a project). A lag directs a delay in the successor activity (you “lag out” to allow a waiting time). Pages 114 Exam Tip PMP® Prep: PMBOK® 5th - 2013 6.6.2 Develop Schedule Tools and Techniques, Schedule Compression If you can’t change the scope, there are two ways to meet schedule constraints: Fast Tracking A technique where activities or phases normally done in sequence are done in parallel for at least a portion of their duration. Fast tracking may result in rework and increased risk. Exam Tip Crashing A technique used to shorten the schedule duration for the least incremental cost by adding resources. Page 114 PMP® Prep: PMBOK® 5th - 2013 Exercise 1. What option below would you select to save three months on the project assuming that the tasks listed below represent critical path? There is no answer. The answer depends on whether cost or risk is most important. Task F A H G C Original Crash Duration Duration in months in months 14 12 9 7 3 2 7 6 11 8 Time Savings 2 2 1 1 3 Original Cost in $ 10,000 17,000 25,000 14,000 27,000 Crash Cost in $ 14,000 27,000 26,000 16,000 36,000 Extra Cost in $ 4,000 10,000 1,000 2,000 9,000 Extra Cost in $ per mth 2,000 5,000 1,000 2,000 3,000 Risk Impact HIGH LOW LOW HIGH NONE 2 Lets assume that time is of most importance followed by cost. Such questions are on the exam. What would be your answer? The answer would be to select tasks F and H for an additional cost of $5,000. If risk is second to time in importance the answer would be to select task C for an additional cost of $9,000. The exam will probably not include risk column because risk (nor quality) is not considered when most people crash or fast track their projects. Without a risk column, simply pick the least cost alternative Page 116 PMP® Prep: PMBOK® 5th - 2013 6.6.3 Develop Schedule Outputs, Project Schedule The Project Schedule may be presented in tabular form, however it’s more often presented graphically using milestone charts, bar charts or project schedule network diagrams. The schedule baseline is a specific version of the project schedule that is accepted and approved by the project team. It is a component of the project management plan Page 117 PMP® Prep: PMBOK® 5th - 2013 6.6.3 Develop Schedule Outputs, Project Schedule Example Schedules Example: Bar Chart, Gantt Chart ID 1 Nov 9, '97 Tas k Name Mark Out Site 2 Dig Foundation A 3 Dig Foundation B 4 Concrete Foundation A 5 Concrete Foundation B 6 Com plete Base at A 7 Erect Plinth 8 Erect Tower A 9 Erect Tower B 10 Erect Span Nov 16, '97 Nov 23, '97 Nov 30, '97 Dec 7, '97 Dec 14, '97 Dec 21, '97 F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T F S S M T W T Example: Milestone Chart Page 117 PMP® Prep: PMBOK® 5th - 2013 The Project Schedule • May be represented by a Gantt chart, an activity network diagram, or a milestone chart • Indicates the planned start and finish dates for each WBS element • May also indicate early start, late start, early finish, and late finish dates for each activity Name Duration 1w Definition 30d Feasibility 1w Brochures 2w Margin 4w Stock Profile 2w Support 2w Training 1w Acceptance 0d Go/No Go Decision 35d Program Development 3w Sales Aids & Brochure 4w Advertising Training 5w 7w DBT Stock & Measure 0d 1w Program Launch 12w Sales Page 118 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Sales Aids & Brochure Production Month 7 Support Brochures Definition Go/No Go Decision Training Margin Advertizing Go/No Go Launch Acceptance Training Program Launch Stock Profile DBT Stocking & Measuring Sys Sales PMP® Prep: PMBOK® 5th - 2013 Practice Test #1 Turn to page 387 in the workbook There are 60 questions. You have 72 minutes to complete Answers are on page 404 Hint: Use scratch paper for answers, so you can reuse the questions for practice Page 387 PMP® Prep: PMBOK® 5th - 2013 Planning: Cost Management PMBOK® Fifth Edition, Page 195 7.1 Plan Cost Management Inputs Project management plan Project charter Enterprise environmental factors Organizational process assets Page 119 Tools & Techniques Expert judgment Analytical techniques Meetings Outputs Cost management plan PMP® Prep: PMBOK® 5th - 2013 Plan Cost Management Plan Cost Management is the process that establishes policies, procedures, documentation for planning, expending, and controlling project costs. This is a component of the project management plan. Inputs • Project Management Plan Information to develop the Cost Management Plan: • Scope baseline • Schedule baseline • Other information • Project Charter (Provides a summary budget) • EEF and OPA Page 120 PMP® Prep: PMBOK® 5th - 2013 Plan Cost Management Tools and Techniques • Expert Judgment • Analytical Techniques (Choosing options to fund the project: self-funding, equity funding, or debt funding. Ways to finance resources: make, buy, rent, or lease. Policies may influence: ROI, payback period, internal rate of return, discounted cash flow, and net present value.) • Meetings Page 120 PMP® Prep: PMBOK® 5th - 2013 Plan Cost Management Outputs • Cost Management Plan  units of measure,  level of precision,  level of accuracy (e.g., ±10%),  organizational procedures (the WBS is a framework for cost estimating),  control threshold (% deviation from the baseline plan),  rules of performance measurement (EVM),  reporting formats (format and frequency of cost reports),  process descriptions,  strategic funding, exchange rate fluctuations, and cost recording. Page 121 PMP® Prep: PMBOK® 5th - 2013 Planning: Cost Management PMBOK® Fifth Edition, Page 200 7.2 Estimate Costs Inputs Cost management plan Human resource mgt. plan Scope baseline Project schedule Risk register Enterprise environmental factors Organizational process assets Page 122 Tools & Techniques Expert judgment Analogous estimating Parametric estimating Bottom-up estimates Three-point estimates Reserve analysis Cost of quality Project management software Vendor bid analysis Group decisionmaking techniques Outputs Activity cost estimates Basis of estimates Project documents updates PMP® Prep: PMBOK® 5th - 2013 7.2 Estimate Costs Estimate Costs is the process of developing an approximation of the monetary resources needed to complete project activities. Usually they are expressed in monetary terms, although other units of measure such as person hours or staff days are often used. Costs include the resources to be charged to the project which includes labor, but may also include also materials, equipment and facility fees and services. Both direct and indirect costs should be considered. Page 123 PMP® Prep: PMBOK® 5th - 2013 7.2 Estimate Costs PMBOK® Fifth Edition, Page 201 Cost estimates are progressively elaborated during the course of the project as additional detail becomes available. Accuracy increases through the project life cycle. For example, a project in the Initiation phase could have a rough order of magnitude (ROM) estimate in the range of -25% to +75%. Later in the project as more detail is known, estimates could narrow to -5% to +10%. Page 124 PMP® Prep: PMBOK® 5th - 2013 7.2.2 Estimate Costs Inputs • Cost Management Plan (how project costs will be managed and controlled) • Human Resource Management Plan (project staffing plan, personnel rates, rewards/recognition) • Scope baseline (Scope statement, WBS, and WBS dictionary) • Project Schedule (type and quantity of resources and time required to complete the work) • Risk Register (negative risks cause near-term costs to increase and project schedules may be delayed) • EEF and OPA Pages 123-125 PMP® Prep: PMBOK® 5th - 2013 7.2.2 Estimate Costs Inputs • Should be determined per unit of use (e.g., hours, meters, kilos) • Salaries should be known at the individual or group rate • Components of labor rates may include: – base rate – tax burden if applicable (as a percentage of base rate) – benefit burden if applicable (fixed or percentage of base rate) – allocation for overhead (percentage of burdened rate) Charge Rate = [(Base Rate) * (Burden)] * Overhead i.e., Charge Rate = [($30/hr) * (1.3)] * 1.8 = $70/hr. Page 123 PMP® Prep: PMBOK® 5th - 2013 7.2.2 Estimate Costs Tools and Techniques Expert Judgment: consult with experts and obtain historical information. Analogous Estimating: top-down estimating - a similar project is the basis of estimates for the current one. It is most reliable when previous projects are similar. Parametric Estimating: uses a statistical link between historical data and the current project which is then used for calculation (e.g., cost per square foot). Bottom-Up Estimating: the smaller the activity, the more accurate is the cost estimate. Three-Point Estimates (PERT): a weighted average, more accuracy. Ce = o + 4m + p 6 Reserve Analysis: a contingency reserve may be used to account for cost uncertainty Cost of Quality (COQ): determining costs incurred to assure quality Project Management Software: simplifies cost estimating. Rapid alternatives evaluation Vendor Bid Analysis: bids from suppliers help analyze what a project should cost Group Decision-Making Techniques: Delphi or nominal group techniques improve cost accuracy and the team commitment to cost estimates Pages 126-129 PMP® Prep: PMBOK® 5th - 2013 7.2.2 Estimate Costs Tools and Techniques Analogous Cost Estimating (a form of expert judgment): Estimating cost of a current project by extrapolation from actual cost of a previous project. Also called top-down estimating. Inexpensive but may also be inaccurate. Parametric Cost Estimating: The quantities for specific work multiplied by the resource rate can estimate cost (number of drawings times cost per drawing, cost per line of code, cost per square foot for types of construction). Bottom-Up Estimating: Rolling up the WBS estimates to get a project total. Who? Est. Hours Task “A” Start Date Page 128 Exam Tip People doing the work create time & cost estimates Stop Date PMP® Prep: PMBOK® 5th - 2013 7.2.2 Estimate Costs Tools and Techniques 3-Point Analysis or PERT o = most optimistic cost estimate p = most pessimistic cost estimate m = most likely cost estimate Ce = o + 4m + p  (Ce) = 45 50 55 60 65 70 75 80 85 Hours 6 p–o 6 Ce  1  <=> 68% probability Ce  2  <=> 95.5% probability Ce  3  <=> 99.7% probability Page 128 40 60  5days with 68% confidence 60  10 days with 95.5% confidence 60  20 days with 99.7% confidence  Quantitative Estimate Indication of Range Indication of Confidence PMP® Prep: PMBOK® 5th - 2013 7.2.3 Estimate Costs Outputs, Accuracy of Estimates AACE International Cost Classification Recommended Practices Class 5 4 3 2 1 Name Rough Order of Magnitude (ROM) Concept End Usage Concept Screening Level of Project Accuracy Definition Range 0 to 2% L: -20 to -50% H: +30 to +100% Study or Feasibility 1 to 15% L: -15 to -30% H: +20 to +50% These come up often on the exam, but are easy Exam Budget/Authorization Budget Authorization 10 to 40% L: -10 to -20% Tip to answer onceoryou memorize the numbers. H: +10 to +30% Control Definitive/Control Control or Bid/Tender 30 to 70% L: -5 to +15% H: +5 to +20% Detail/Bid/Tender Check Estimate or 50 to 100% L: -3 to -10% Bid/Tender H: +3 to +15% PMI, PMBOK® Order of Magnitude Estimates: (Usually made during Initiation Phase) Budget Estimate: (Usually made during the Planning Phase) Definitive Estimate: (Roll up of WBS? Rule of 80 hours or two weeks?) Page 130 -25% to +75% -10% to +25% -5% to +10% PMP® Prep: PMBOK® 5th - 2013 Planning: Cost Management PMBOK® Fifth Edition, Page 208 7.3 Determine Budget Inputs Cost management plan Scope baseline Activity cost estimates Basis of estimates Project schedule Resource calendars Risk register Agreements Organizational process assets Page 131 Tools & Techniques Cost aggregation Reserve analysis Expert judgment Historical relationships Funding limit reconciliation Outputs Cost baseline Project funding requirements Project documents updates PMP® Prep: PMBOK® 5th - 2013 7.3.1 Determine Budget Determine Budget is the process of aggregating estimated costs of individual activities or work packages to establish an authorized cost baseline. The cost baseline is the time-phased project budget, but excludes management reserves. Inputs          Pages 131-132 Cost Management Plan Scope Baseline Activity Cost Estimates Basis of Estimates Project Schedule Resource Calendars Risk Register Agreements Organizational Process Assets PMP® Prep: PMBOK® 5th - 2013 7.3.2 Determine Budget Tools and Techniques Cost Aggregation: work package costs at the bottom of the WBS are summed (aggregated) to the next level, then costs at this level are summed to higher levels, etc. This is called “rolling costs up the WBS” to develop an overall cost budget. Reserve Analysis: establishes both contingency reserves (unplanned changes due to identified risks, “known unknowns”), and management reserves (unplanned changes to Exam project scope and cost, “unknown unknowns”). Reserves are NOT part of cost baseline, Tip and not part of earned value calculations, but are included in the budget. Expert Judgment: budgeting information from prior, similar projects. Historical Relationships: parametric analysis from historical sources can predict total costs. Math models are used. Funding Limit Reconciliation: funding limits may be set by the customer to which spending must be reconciled. This might cause rescheduling and reallocation of resources to regulate cash flow. Pages 133-134 PMP® Prep: PMBOK® 5th - 2013 7.3.3 Determine Budget Outputs, Cost Baseline, or Performance Measurement Baseline (PMB) Cost Baseline: a time-phased budget (either by period or cumulative over the life of the project) used to measure, monitor and control project costs. Cost Cost Baseline Exam Tip BAC Cumulative Planned Value (PV) Spending Plans and Cash Flow Plans are special types of Cost Baselines Monthly Planned Value (PV) Time Page 134 PMP® Prep: PMBOK® 5th - 2013 Project Budget Components Project Budget Management Reserve Cost Baseline Control Accounts Contingency Reserve Work Package Cost Estimates Activity Contingency Reserve Activity Cost Estimates Total Amount Project Budget Component ©2013 PMI. A Guide to the Project Management Body of Knowledge (PMBOK® Guide), Fifth Edition Page 135 PMP® Prep: PMBOK® 5th - 2013 7.3.3 Determine Budget Outputs: Funding Requirements and Management Reserve Project Budget Cost Cost Baseline Cumulative Planned Value (PV) BAC Management Reserve } Exam Tip Cash Flow Funding Expenditures Time Page 136 PMP® Prep: PMBOK® 5th - 2013 The Project Management Plan A Review Think of the PM plan as a bucket into which all the other plans “drip” until it is full.             Plan Scope Management Collect Requirements Define Scope Create WBS Plan Schedule Management Define Activities Sequence Activities Estimate Activity Resources Estimate Activity Durations Develop Schedule Plan Cost Management Estimate Costs Pages 45 & 49            Determine Budget Plan Quality Management Plan Human Resource Management Plan Communications Management Plan Risk Management Identify Risks Perform Qualitative Risk Analysis Perform Quantitative Risk Analysis Plan Risk Response Plan Procurement Management Plan Stakeholder Management PMP® Prep: PMBOK® 5th - 2013 Exercise Make a list of items that go into a Project Plan in the spaces provided below : PMP® Prep: PMBOK® 5th - 2013 Exercise Make a list of items that go into a Project Plan in the spaces provided below : Project Management Plan Estimate Costs Plan Scope Management Determine Budget Collect requirements Plan Quality Define Scope Develop HR Plan Create WBS Plan Communications Plan Schedule Management Plan Risk Management Define Activities Identify Risks Sequence Activities Perform Qual. Risk Analysis Est. Activity Resources Perform Quant. Risk Analysis Est. Activity Durations Plan Risk Responses Develop Schedule Plan Procurement Plan Cost Management Plan Stakeholder Mgt. PMP® Prep: PMBOK® 5th - 2013 Chapter 8: Project Quality Management PMBOK Fifth Edition, Page 227 Knowledge Area Quality management processes include: 8.1 Plan Quality Management: The process of identifying quality requirements/standards for the project and its deliverables, and documenting how the project will demonstrate compliance. 8.2 Perform Quality Assurance: The process of auditing the quality requirements, and results from quality control measurements, to ensure that appropriate quality standards and operational definitions are used. 8.3 Control Quality: The process of monitoring and recording results from executing quality activities to assess performance and recommend changes. Quality management here is compatible with ISO (International Organization for Standardization) as well as Shewhart, Deming, Juran, Crosby, FMEA (Failure Modes and Effects Analysis), Customer Satisfaction, The Voice of the Customer, Prevention over Inspection, COQ (Cost of Quality), and Continuous Improvement (Total Quality Management, Six-Sigma, maturity models), and Management Responsibility. Quality is the degree to which a set of inherent characteristics fulfill requirements Page 139 PMP® Prep: PMBOK® 5th - 2013 Chapter 8: Project Quality Management Quality vs. Grade Quality: The degree to which a set of inherent characteristics fulfill requirements. Grade: Products that perform the same function but have different technical characteristics. Exam Tip A product may be high quality (no obvious defects) but low grade (limited number of features) Page 139 PMP® Prep: PMBOK® 5th - 2013 Chapter 8: Project Quality Management Precision vs. Accuracy Exam Tip Precision = Consistency. Accuracy = Correctness. Precision: repeated measurements have little scatter. Accuracy: measured value is close to the true value. Precision Accuracy Page 140 PMP® Prep: PMBOK® 5th - 2013 Note to Test Takers Quality is one of the most heavily tested areas on the examination. Study it completely during your preparations to take the test! Page 141 PMP® Prep: PMBOK® 5th - 2013 Planning: Project Quality Management 8.1 Plan Quality Management Inputs Project management plan Stakeholder register Risk register Requirements documentation Enterprise environmental factors Organizational process assets Page 142 Tools & Techniques Cost-benefit analysis Cost of quality (COQ) Seven basic quality tools Benchmarking Design of experiments Statistical sampling Additional quality planning tools Meetings Outputs Quality management plan Process improvement plan Quality metrics Quality checklists Project documents updates PMP® Prep: PMBOK® 5th - 2013 8.1 Plan Quality Management PMBOK® Fifth Edition, Page 231 Plan Quality is the process of identifying quality requirements and/or standards for the project and its deliverables, and documenting how the project will demonstrate compliance. The Quality Management Plan, which is an output of this process, describes how the project management team will implement the quality policy and meet the quality requirements. Quality is planned, designed, and built into the project. It is not inspected in. Page 142 PMP® Prep: PMBOK® 5th - 2013 8.1.1 Plan Quality Management Inputs • Project Management Plan, which includes: Scope Baseline (Scope statement, WBS, and WBS dictionary), Schedule & Cost Baselines, etc. • Stakeholder Register • Risk Register • Requirements Documentation (stakeholder quality requirements) • EEF and OPA Pages 142 & 143 PMP® Prep: PMBOK® 5th - 2013 8.1.2 Plan Quality Management Tools and Techniques Cost-Benefit Analysis: compares COQ with expected benefits. Cost of Quality (COQ): investment in preventing non-conformance to requirements. Seven Basic Quality Tools: (1) cause and effect diagrams, (2) flowcharts, (3) checksheets, (4) Pareto diagrams, (5)histograms, (6) control charts, (7) scatter diagrams. Benchmarking: comparing to similar projects to identify best practices. Design of Experiments: statistical: what factors influence project variables? Statistical Sampling: inspecting part of a batch to qualify the whole population. Additional Quality Planning Tools: brainstorming, force field analysis, nominal group technique, quality management and control tools. Meetings Pages 144 - 151 PMP® Prep: PMBOK® 5th - 2013 8.1.2 Plan Quality Tools and Techniques: Quality Definitions Conformance to Requirements, Specifications and Fitness For Use: • This one phrase will help you to answer about 4 questions on the exam. Memorize it! • The PM should perform careful “needs” analysis of the stakeholders which become foundations of the Scope Gold Plating: Exam Tip • PMI® does not support giving the customer “extras”. • Gold Plating adds no value to the project. • Exam questions have the team member’s coming to the PM with impressions of what the customer would like. Prevention over Inspection Note: There may be 15 or more questions relating to definitions and control charts Page 143 PMP® Prep: PMBOK® 5th - 2013 8.1.2 Plan Quality Tools and Techniques: Cost of Quality (COQ) Cost of Conformance Cost of Nonconformance Prevention Costs Internal Failure Costs (Build a quality product) (Failures found by project team) • • • • Training Documentation processes Equipment Time to do it right • Rework • Scrap External Failure Costs (Failures found by the customer) Appraisal Costs (Assess the quality) • Testing • Destructive testing loss • Inspections Money spent to avoid failures Page 145 • Liabilities • Warranty work • Lost business Money spent because of failures Exam Tip PMP® Prep: PMBOK® 5th - 2013 8.1.2 Plan Quality Management Tools and Techniques: Flowcharting Cause & Effect, Ishikawa or Fishbone Diagrams People Not Following Procedures Material Methods Lack of Training CAUSES Transport IT System EFFECT Procedure Process Flowchart Design Yes Review OK? Proceed No Revise Page 145-146 PMP® Prep: PMBOK® 5th - 2013 8.1.2 Plan Quality Management Tools and Techniques: Flowcharting, SIPOC Model Suppliers ____________ ____________ ____________ Inputs ____________ ____________ ____________ Process ____________ ____________ ____________ Outputs ____________ ____________ ____________ Input Supplier Customers ____________ ____________ ____________ Output Process Requirements and Feedback Loop Customer Requirements and Feedback Loop Requirements List Measurements List Requirements List Measurements List ____________ ____________ ____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ _____________ ©2013 PMI. A Guide to the Project Management Body of Knowledge (PMBOK® Guide), Fifth Edition Page 145-146 PMP® Prep: PMBOK® 5th - 2013 8.1.2 Plan Quality Management % contribution (or frequency of occurrence) Tools and Techniques: Pareto Diagrams and Design of Experiments 80%? Pareto’s Law: Design of Experiments: 80/20 Rule Which factors may influence specific variables? “What If” Analysis source Page 147 PMP® Prep: PMBOK® 5th - 2013 8.1.2 Plan Quality Management Tools and Techniques: Histograms A histogram shows central tendency, dispersion, and shape of a statistical distribution. 1.5 1.0 0.5 Page 147 PMP® Prep: PMBOK® 5th - 2013 8.1.2 Plan Quality Management Tools and Techniques: Control Charts A chart of process performance over time used to determine if the process is in control or out of control UCL ±3 99.7% . . . . . . .. . . . . .. . . . . .. . .. . . .. . . . . . .. . . ±2 95.5% Expected Variation Out of Control (Assignable Cause) ±1 68% Normal Distribution Curve Mean LCL in control  normal distribution of outcomes  due to common causes of variation inherent in the process Page 148 out of control  rule of seven, trends, and cycles  due to special causes of variation external to the process PMP® Prep: PMBOK® 5th - 2013 8.1.2 Plan Quality Management Tools and Techniques: Control Chart Hours recorded for this project started on plan, but if the trend continues, hours spent will drift out of control. Upper Spec. Limit UCL Plan or Mean LCL Lower Spec. Limit Actual Page 149 PMP® Prep: PMBOK® 5th - 2013 8.1.2 Plan Quality Management Tools and Techniques: Scatter Diagram Page 149 PMP® Prep: PMBOK® 5th - 2013 8.1.2 Plan Quality Management Tools and Techniques: Scatter Diagram Timecard Submission vs. Travel Days Submission Days, Early (-), Late (+) 6 o o o o o 4 o o o o o o o o 2 o o o o o o 5 0 0 -2 10 15 20 25 o o -4 o -6 Total Travel Days in the Month Page 150 PMP® Prep: PMBOK® 5th - 2013 8.1.2 Plan Quality Management Tools and Techniques: Seven Basic Quality Tools ©2013 PMI. A Guide to the Project Management Body of Knowledge (PMBOK® Guide), Fifth Edition PMBOK® Fifth Edition, Page 239 PMP® Prep: PMBOK® 5th - 2013 8.1.2 Plan Quality Management Tools and Techniques: Statistical Sampling …a technique for accepting or rejecting a larger population by choosing a part of the population for inspection ... • Statistical sampling can reduce the cost of QC on a project. • The validity of statistical sampling depends on an appropriate choice of sample items and sample size. • Sample size increases exponentially as the level of desired certainty increases and the acceptable level of error decreases. • Sampling strategies include single samples from a lot, multiple small samples from a lot, and double sampling methods where the size of the second sample depends on the results of the first sample. • All sampling strategies involve some risk of producer error (type I error) where acceptable lots are rejected based on a non-representative sample or consumer error (type II error) where unacceptable lots are accepted based on a non-representative sample. Page 150-151 PMP® Prep: PMBOK® 5th - 2013 8.1.2 Plan Quality Management Tools and Techniques: Additional Quality Planning Tools, Affinity Diagram These include brainstorming, affinity diagrams, force field analysis, nominal group techniques, matrix diagrams, flowcharts, and prioritization matrices. Affinity Diagrams are useful for gathering large amounts of data (opinions, ideas etc.) and for organizing them into groupings based on their relationship. An Affinity Diagram can help to identify patterns within data providing recourse for further investigation or action. Force Field Analysis looks at all the forces for and against a decision. In effect, it is a specialized method of weighing pros and cons. You can plan to strengthen the forces supporting a decision, and reduce the impact of opposition to it. A nominal group technique is a structured process which identifies and ranks the major problems or issues that need addressing. Page 151 PMP® Prep: PMBOK® 5th - 2013 8.1.2 Plan Quality Tools and Techniques: Additional Quality Planning Tools, Group Creativity Brainstorming: a method of joint creative thinking that first records and considers all possible options/solutions without judgment before proceeding to critical evaluation of the project/product requirements. Nominal Group Technique: enhances brainstorming with a voting process to rank the best ideas for further brainstorming or prioritization. Delphi Technique: questionnaires are sent to a group of experts who provide answers and are kept anonymous. Responses are compiled, prioritized, and sent back for another round of requirements gathering. A method for building consensus. Idea/Mind Mapping: a graphical method of consolidating brainstorm ideas to show commonality and differences and to generate new ideas. Affinity Diagram: gathering large numbers of ideas and sorting them into groups for review and analysis – they help to identify patterns within data. Page 151 PMP® Prep: PMBOK® 5th - 2013 8.1.3 Plan Quality Management Outputs • Quality Management Plan • Process Improvement Plan (process boundaries, configuration, metrics, and targets for improved performance) • Quality Metrics • Quality Checklists • Project Documents Updates (stakeholder register, responsibility assignment matrix, WBS, WBS dictionary, etc.) Pages 152 & 153 PMP® Prep: PMBOK® 5th - 2013 8.1.3 Plan Quality Management Outputs: Update Responsibility Assignment Matrix (RACI Chart) R A C I Pages 155 = = = = Responsible Accountable Consulted Informed PMP® Prep: PMBOK® 5th - 2013 Chapter 9: Plan Human Resource Management PMBOK Fifth Edition, Page 255 Knowledge Area Project Human Resource Management processes include: 9.1 Plan Human Resource Management: The process of identifying and documenting project roles., responsibilities required skills, reporting relationships, and creating a staffing management plan. 9.2 Acquire Project Team: confirming HR availability and obtaining the team to complete project activities. 9.3 Develop Project Team: improving competencies, team members interaction, and team environment to enhance performance. 9.4 Manage Project Team: tracking team member performance, providing feedback, resolving issues, and managing change to enhance project performance. Human resource management includes the processes that organize, manage, and lead the project team The project management team (core, executive, or leadership team) is a subset of the project team and is responsible for leadership activities. Page 155 Exam Tip PMP® Prep: PMBOK® 5th - 2013 Planning: Human Resource Management PMBOK Fifth Edition, Page 258 9.1 Plan Human Resource Management Inputs Project management plan Activity resource requirements Enterprise environmental factors Organizational process assets Page 156 Tools & Techniques Organization charts and position descriptions Networking Organizational theory Expert judgment Meetings Outputs Human resource management plan PMP® Prep: PMBOK® 5th - 2013 9.1 Plan Human Resource Management PMBOK® Fifth Edition, Page 258 Plan Human Resource Management is the process of identifying and documenting project roles, responsibilities, required skills and reporting relationships and creating a staffing management plan Page 156 PMP® Prep: PMBOK® 5th - 2013 9.1.2 Plan Human Resource Management Tools and Techniques: Organization Charts and Position Descriptions Hierarchical Chart Project Organization Chart. shows project team members related to their work on the project. Simply substitute the name of the team member into the box of the WBS Banking Protocols Customer Services (TM #1) Product Planning (TM #11) Sales (TM #12) Information Tech. and IS (TM #2) System Analysis (TM #21) System Design (TM #22) System Development (TM #23) Pages 158-159 Operations (TM #3) Training (TM #31) Integration Protocols (TM #32) Regulatory (TM #4) Project Management (PM) Treasury (TM #5) Legal (TM #41) Global Trans. Services (TM #51) Accounting Relations (TM #61) Filing & Documentation (TM #42) Cash Management (TM #52) Audit & Inspection (TM #53) Strategic Planning (TM #62) PMP® Prep: PMBOK® 5th - 2013 9.1.2 Plan Human Resource Management Tools and Techniques: Organization Charts and Position Descriptions Resource Breakdown Structure and Organizational Breakdown Structure Resource Breakdown Structure breaks down projects by type of resource. It can help track project costs and can contain categories other than human resources. Organizational Breakdown Structure (OBS) is a depiction of the project organization arranged to relate work packages to functional departments. Pages 158-159 PMP® Prep: PMBOK® 5th - 2013 9.1.2 Plan Human Resource Management Tools and Techniques: Organization Charts and Position Descriptions Organizational Breakdown Structure Project Cost Accounts provide a way to control how functional organizations to charge to projects. Page 159 Comp. #2 Assembly Cost Account Cost Account Parts Production Comp. #1 Cost Account Cost Account Comp. #2 Electrical Comp. #1 Cost Account Cost Account Mechanical Engineering Company Manufacturing WBS Codes show functional managers exactly what their people are doing on the project. Design Cost Account Cost Account PMP® Prep: PMBOK® 5th - 2013 9.1.2 Plan Human Resource Management Tools and Techniques: Organization Charts and Position Descriptions Matrix Charts Responsibility Assignment Matrix (RAM) RAM (n.) a structure that relates the OBS to the WBS to ensure that the scope of work components are assigned to a responsible person. Tom Bob Gavin Mary Dave PMI® advocates that all roles and responsibilities on a project be clearly assigned and be linked to scope and to the WBS. Design Lead Support Advise Advise Advise Prototype Support Lead Advise Advise Advise Scale Up Advise Advise Lead Support Support Production Advise Advise Advise Lead Support Assembly Advise Advise Advise Support Lead R A C I = = = = Responsible Accountable Consulted Informed • Often used for decision responsibilities or to resolve conflict. • Multiple RAMs at different levels of the project, also called LRCs. • Other responsibility charts: Resource Histogram, Resource Gantt Chart - know these. Page 160 PMP® Prep: PMBOK® 5th - 2013 9.1.2 Plan Human Resource Management Tools and Techniques: Organization Charts and Position Descriptions Text-Oriented Forms Position Descriptions show team member responsibilities, authority, competencies, and qualifications outlined in a text document. These can be used for Performance Evaluations Page 161 PMP® Prep: PMBOK® 5th - 2013 9.1.3 Plan Human Resource Management Outputs Human Resource Management Plan roles and responsibilities, project organization charts, staffing management plan:  Staff Acquisition  Resource Calendars  Staff Release Plan  Training Needs  Recognition and Rewards  Compliance  Safety. Pages 162-163 PMP® Prep: PMBOK® 5th - 2013 9.1.2 Develop Human Resource Plan Outputs: Resource Calendars, PMBOK Fifth Edition, Page 265 Resource Histogram is a time-phased display of the amount of project work assigned to each resource • • Page 163 May be used at the individual or group level May be used to detect over-allocation of resources PMP® Prep: PMBOK® 5th - 2013 Chapter 10: Project Communications Management PMBOK Fifth Edition, Page 287 Knowledge Area Project Communications Management processes include: 10.1 Plan Communication Management: the process of developing an appropriate approach and plan for project communications based on stakeholder’s information needs and requirements, 10.2 Manage Communications: the process of creating, collecting, distributing, storing, retrieving, and disposition of project information. 10.3 Control Communications - the process of monitoring and controlling communications throughout the entire project life cycle to ensure information needs of stakeholders are met. Project Communications Management includes the processes required to ensure timely and appropriate generation, collection, distribution, storage, retrieval, and disposition of project information. Page 164 PMP® Prep: PMBOK® 5th - 2013 Planning: Project Communications Management 10.2 Plan Communications Management Inputs Project management plan Stakeholder register Enterprise environmental factors Organizational process assets Page 165 Tools & Techniques Communication requirements analysis Communication technology Communication models Communication methods Meetings Outputs Communications management plan Project documents updates PMP® Prep: PMBOK® 5th - 2013 10.2 Plan Communications Management PMBOK® Fifth Edition, Page 289 Communications Management is so important that it is sometimes included as a major WBS element Typical Project Study Page 165 Concept Prototype Qualification Pilot Production Project Management & Communications Plan PMP® Prep: PMBOK® 5th - 2013 10.2.2 Plan Communications Management Tools and Techniques Communications Requirements Analysis Consider the following information as you plan your project communications: • the project organization and stakeholder responsibility relationships • the functional departments involved in the project • the logistics: persons involved with the project and their locations • external information needs: communicating with external stakeholders and the media Communication Technology Communications planning will be both enhanced and constrained by the available communications technology. • urgency of need for the information • availability, ease of use, and cost of the technology • experience and expertise of the project staff and other stakeholders • life of the available technology relative to the length of the project • project environment. Does the team meet face-to-face or in a virtual environment • Sensitivity and confidentiality of the information. Pages 166-167 PMP® Prep: PMBOK® 5th - 2013 10.2 Plan Communications Management Tools and Techniques Plan Communications is the process of determining the project stakeholder information needs and defining a communication approach The formula: Channels = N(N – 1) 2 Reveals the number of possible channels of communication in a group, where N is the number of people in the group Page 166-167 PMP® Prep: PMBOK® 5th - 2013 10.2.2 Plan Communications Management Tools and Techniques Try it …. If a project team of 5 people adds one more person to the team, how many more channels of Communication are there? 5 more Page 167 PMP® Prep: PMBOK® 5th - 2013 10.2.2 Plan Communications Management Tools and Techniques: Communication Models Sending Thinking The basic model of communication is the send-receive model which includes: • Encoding (translating ideas to language), • Transmit Message (transmitting), • Medium (methods used to transmit) • Noise (disruptions), and • Decoding (translate for receiver) • Acknowledge (receipt of message) • Feedback (back to sender). Hearing Articulating Transmitting Listening Receiving Feedback !! Page 168 PMP® Prep: PMBOK® 5th - 2013 10.2.3 Plan Communications Management Outputs: Communications Management Plan The Communications Management Plan usually provides: • • • • • Page 169 Stakeholder communication requirements Information to be distributed Reason for the distribution Time frame and frequency Communication responsibilities PMP® Prep: PMBOK® 5th - 2013 10.2.3 Plan Communications Outputs: Communications Management Plan documents a communication strategy for the project and describes:            Page 170 Stakeholder communication requirements Which information flows from whom, when, via which media, and in what format. Schedule and frequency for information collection and distribution. Methods to convey information (memos, e-mail, press releases, etc.) Resources for communication activities, including time and budget Problem escalation procedure Method for updating the communication plan Flow charts of information flow List of reports and meetings planned (schedule and attendees) Communications constraints “Communications infrastructure” for the project (who may talk to whom) PMP® Prep: PMBOK® 5th - 2013 Chapter 11: Project Risk Management PMBOK Fifth Edition, Page 309 Knowledge Area Project Risk Management processes include: 11.1 Plan Risk Management: deciding how to approach, plan and execute risk management, 11.2 Identify Risks: which risks might affect the project and documenting their characteristics, 11.3 Perform Qualitative Risk Analysis: probability of occurrence and severity of impact, 11.4 Perform Quantitative Risk Analysis: numerically analyzing the effect of risks on objectives, 11.5 Plan Risk Responses: developing options to enhance opportunities and reduce threats. 11.6 Control Risks: implementing risk response plans, tracking risks, monitoring residual risks, ID new risks, and evaluating effectiveness throughout the project life cycle. Project risk management includes the processes of conducting risk planning, identification, analysis, response planning, and monitoring and control on a project. Page 171 PMP® Prep: PMBOK® 5th - 2013 Chapter 11: Project Risk Management • Project risk includes both threats to the project’s objectives (negative outcomes) and opportunities to improve on those objectives (positive outcomes) - PMBOK® Fifth Edition, page 310. • Uncertainty: An uncommon state of nature, characterized by absence of information related to a desired outcome. • Risk Management: The process of identifying, analyzing and responding to risk - maximizing positive events and minimizing consequences of negative events. • Risk arises throughout a project and must be identified and evaluated on a regular basis over the life cycle of the project. • Inputs to risk management process : All other planning processes, including Create WBS and Exam Tip Page 171 PMP® Prep: PMBOK® 5th - 2013 Planning: Project Risk Management PMBOK® Fifth Edition, Page 313 11.1 Plan Risk Management Inputs Project management plan Project charter Stakeholder register Enterprise environmental factors Organizational process assets Page 173 Tools & Techniques Analytical techniques Expert judgment Meetings Outputs Risk management plan PMP® Prep: PMBOK® 5th - 2013 11.1 Plan Risk Management Plan Risk Management is the process of defining how to conduct risk management activities for a project. Risk planning should be commensurate with both the risks and the importance of the project to the organization Page 173 PMP® Prep: PMBOK® 5th - 2013 11.1.1 Plan Risk Management Inputs • Project Management Plan provides current state of risk-affected areas including scope, schedule, and cost • Project Charter high-level requirements • Stakeholder Register • EEF and OPA 11.1.2 Tools and Techniques: Analytical Techniques, Expert Judgment, and Meetings Pages 174-175 PMP® Prep: PMBOK® 5th - 2013 11.1.3 Plan Risk Management Outputs Risk Management Plan, includes: • Methodology: Approaches, tools and data sources. • Roles and Responsibilities: Team member ownership for risk activities. • Budgeting: Funds needed for contingency reserves and management reserves. • Timing: When processes will be done, reserves applied, and how risk appears in schedule. • Categories: Risk groupings. The RBS looks at sources of risk, IDs and categorizes them. • Thresholds: What is the trigger? Stakeholders have different thresholds of risk tolerance, define them, and the must be agreed by all. • Define P/I Levels: Qualitative (low to high) or probabilities. • Risk Matrix: Likelihood-Severity, or Probability-Impact. • Stakeholder Risk Tolerances: Progressively elaborated. • Reporting Formats and Tracking: Document risk, auditing, defines content of risk register. Page 176 PMP® Prep: PMBOK® 5th - 2013 Planning: Project Risk Management PMBOK® Fifth Edition, Page 319 11.2 Identify Risks Inputs Risk management plan Cost management plan Schedule management plan Quality management plan Human resource mgt. plan Scope baseline Activity cost estimates Activity duration estimates Stakeholder register Project documents Procurement docs. EEF OPA Page 177 Tools & Techniques Documentation reviews Information gathering techniques Checklist analysis Assumptions analysis Diagramming techniques SWOT analysis Expert judgment Outputs Risk register PMP® Prep: PMBOK® 5th - 2013 11.2 Identify Risks Identify Risks is the process of determining which risks may affect the project and documenting their characteristics . All project personnel should be encouraged to identify potential risks Page 177 PMP® Prep: PMBOK® 5th - 2013 11.2.1 Identify Risks Inputs • Risk Management Plan provides risk responsibilities, risk breakdown structure • • • • • • • Pages 178 Cost, Schedule, Quality, and HR Management Plans Scope Baseline (scope statement, WBS, WBS dictionary) Activity Cost and Duration Estimates Stakeholder Register Project Documents (Charter, schedule, network, issue log) Procurement Documents EEF and OPA PMP® Prep: PMBOK® 5th - 2013 11.2.2 Identify Risks Tools and Techniques: Information Gathering Techniques Brainstorming: a method of joint creative thinking that first records and considers all possible options/solutions without judgment before proceeding to critical evaluation of the project/product requirements. Delphi Technique: questionnaires are sent to a group of experts who provide answers and are kept anonymous. Responses are compiled, prioritized, and sent back for another round of requirements gathering. A method for building consensus. Interviewing: experienced stakeholders and SME can identify risks Root Cause Analysis: Cause and Effect analysis to find causes and develop prevention actions. Page 179 PMP® Prep: PMBOK® 5th - 2013 11.2.2 Identify Risks Tools and Techniques: Checklist Analysis Checklist Analysis:  Risk identification checklists are developed from previous projects or lessons learned.  Lowest level of the WBS or RBS can be used as checklists.  Teams should explore items not on the checklist. It should be pruned as it is progressively elaborated.  Review the checklist during project closure to incorporate new lessons learned. Page 180 PMP® Prep: PMBOK® 5th - 2013 11.2.2 Identify Risks Tools and Techniques: Assumption Analysis Assumption: a factor in the planning process considered to be true, real, or certain, without proof or demonstration: • • • • resource, equipment, and facilities availability external timelines technology compatibility interpretation of legal and regulatory constraints Assumption Analysis: explores the accuracy of assumptions and identifies risks to the project from inaccuracy, inconsistency, or incompleteness, Assumptions involve risk -- identify the risk! Page 180 PMP® Prep: PMBOK® 5th - 2013 11.2.2 Identify Risks Tools and Techniques: Diagramming Techniques Cause & Effect, Ishikawa or Fishbone Diagrams People Not Following Procedures Material Methods Lack of Training CAUSES Transport Page 181 IT System EFFECT Procedure PMP® Prep: PMBOK® 5th - 2013 11.2.2 Identify Risks Tools and Techniques: Diagramming Techniques An Influence Diagram is a visual representation of situations showing causal influences, time ordering of events, or other relationships among variables. For example, “Unit sales” is a confluence point. What is the probability that all activities leading into it and out of it will happen at the scheduled time? It is a causal influence of risk. Page 181 PMP® Prep: PMBOK® 5th - 2013 11.2.2 Identify Risks Tools and Techniques: Diagramming Techniques Influence Diagram Project Estimates Risk Condition Project Activity Deliverables ©2013 PMI. A Guide to the Project Management Body of Knowledge (PMBOK® Guide), Fifth Edition Page 181 PMP® Prep: PMBOK® 5th - 2013 11.2.3 Identify Risks Outputs: Risk Register Risk Register a document where results of risk analysis and risk response planning are recorded:  List of identified risks • “EVENT” may occur causing “IMPACT” • If “CAUSE” exists, “EVENT” may occur leading to “EFFECT”  List of potential responses Page 182 PMP® Prep: PMBOK® 5th - 2013 Planning: Project Risk Management PMBOK® Fifth Edition, Page 328 11.3 Perform Qualitative Risk Analysis Inputs Risk management plan Scope baseline Risk register Enterprise environmental factors Organizational process assets Page 183 Tools & Techniques Risk probability and impact assessment Probability and impact matrix Risk data quality assessment Risk categorization Risk urgency assessment Expert judgment Outputs Project documents updates PMP® Prep: PMBOK® 5th - 2013 11.3 Perform Qualitative Risk Analysis Perform Qualitative Risk Analysis is the process of prioritizing risks for further analysis or action by assessing or combining their probability of occurrence and impact. The Perform Qualitative Risk Analysis assesses priority of identified risks using “probability/Impact” or “likelihood of occurrence/severity” analysis to determine impact on project objectives if the risks occur. Probability Impact Page 183 PMP® Prep: PMBOK® 5th - 2013 11.3.1 Perform Qualitative Risk Analysis Inputs • Risk Management Plan provides risk responsibilities, budget/schedule, P/I matrix, stakeholder risk tolerance, etc. • Scope Baseline (scope statement, WBS, WBS dictionary) • Risk Register • EEF and OPA Page 184 PMP® Prep: PMBOK® 5th - 2013 11.3.2 Perform Qualitative Risk Analysis Tools and Techniques, Risk P/I Assessment Risk Probability and Impact Assessment • Probability is the likelihood that a risk event will occur. • Impact is the effect (severity) on the objective (scope, schedule, cost, quality, performance) if the risk event occurs. • These apply to specific risk events, not to the overall project. • High likelihood and high consequence defines a risk that must be managed aggressively, or must be mitigated. • Risks with low P/I ratings will be included on a watch list. Page 184 PMP® Prep: PMBOK® 5th - 2013 11.3.2 Perform Qualitative Risk Analysis Tools and Techniques, Probability and Impact Matrix Risk Probability and Impact Matrix • The risk matrix is one of the simplest and most effective tools to analyze risk. It has probability (likelihood) on one axis and impact (consequence or severity) on the other. • The scales can be either numeric or subjective. • The organization should determine the threshold of risk that can be tolerated. This will determine:  high risk (red light),  moderate risk (yellow light), and  low risk (green light). • The score guides risk response actions. Page 185 PMP® Prep: PMBOK® 5th - 2013 ©2013 PMI. A Guide to the Project Management Body of Knowledge (PMBOK® Guide), Fifth Edition 11.3.2 Perform Qualitative Risk Analysis Tools and Techniques: P/I Matrix Project risk includes both threats to the project’s objectives (negative outcomes) and opportunities to improve on those objectives (positive outcomes) - PMBOK® 5th Edition, 331. Exam Tip Probability Threats Opportunities 0.90 0.05 0.09 0.18 0.36 0.72 0.72 0.36 0.18 0.09 0.05 0.70 0.04 0.07 0.14 0.28 0.56 0.56 0.28 0.14 0.07 0.04 0.50 0.03 0.05 0.10 0.20 0.40 0.40 0.20 0.10 0.05 0.03 0.30 0.02 0.03 0.06 0.12 0.24 0.24 0.12 0.06 0.03 0.02 0.10 0.01 0.01 0.02 0.04 0.08 0.08 0.04 0.02 0.01 0.01 0.05 0.10 0.20 0.40 0.80 0.80 0.40 0.20 0.10 0.05 Impact (ratio scale) on an Objective Page 185 PMP® Prep: PMBOK® 5th - 2013 11.3.2 Perform Qualitative Risk Analysis Tools and Techniques: Risk Matrix Risk Legend Unacceptable Must Mitigate High Managed Controlled Medium Low Identified, no contingent plan Low Medium High Likelihood (Probability) Page 186 PMP® Prep: PMBOK® 5th - 2013 11.3.2 Perform Qualitative Risk Analysis Tools and Techniques: Industry Guidelines Page 196 PMP® Prep: PMBOK® 5th - 2013 11.3.3 Perform Qualitative Risk Analysis Outputs: Project Documents Updates Project Documents Updates  Risk register • Assessments of P/I for each risk • Risk ranking • Risk categorization • Watch list for low probability risks  Assumptions log updates Page 187 PMP® Prep: PMBOK® 5th - 2013 Planning: Project Risk Management PMBOK® Fifth Edition, Page 333 11.4 Perform Quantitative Risk Analysis Inputs Risk management plan Cost management plan Schedule management plan Risk register Enterprise environmental factors Organizational process assets Page 188 Tools & Techniques Data gathering and representation techniques Quantitative risk analysis and modeling techniques Expert judgment Outputs Project documents updates PMP® Prep: PMBOK® 5th - 2013 11.4 Perform Quantitative Risk Analysis Perform Quantitative Risk Analysis is the process of numerically analyzing the effect of identified risks on overall project objectives. Perform Quantitative Analysis is used on risks that have been prioritized by qualitative analysis as substantially impacting project objectives. Page 188 PMP® Prep: PMBOK® 5th - 2013 11.4 Perform Quantitative Risk Analysis Quantitative risk analysis The Quantitative process analyzes priority risk events and assigns a numerical rating. It also helps you make decisions in areas of uncertainty. Quantitative Risk process uses techniques like Monte Carlo Simulation and decision tree analysis to: ★ Quantify outcomes for the project and the probabilities. ★ Assess the probability of achieving project objectives ★ Identify priority risks by quantifying their contribution to overall project risk. ★ Identify realistic cost, schedule, scope and quality targets, given the project risks. ★ Determine the best project decision when some outcomes are uncertain. Page 188 PMP® Prep: PMBOK® 5th - 2013 11.4.2 Perform Quantitative Risk Analysis Tools and Techniques: Data Gathering and Representation Techniques Risk Interview WBS Element Optimistic Most Likely Pessimistic Design $4 M $6 M $10 M Build $16 M $20 M $35 M Test $11 M $15 M $23 M Total Project $31 M $41 M $68 M Likelihood of completing the project at or below $41 million is relatively low given the range and skew of the simulation results. ©2013 PMI. A Guide to the Project Management Body of Knowledge (PMBOK® Guide), Fifth Edition Page 190 PMP® Prep: PMBOK® 5th - 2013 11.4.2 Perform Quantitative Risk Analysis Tools and Techniques: Data Gathering and Representation Techniques Probability Distributions 3-Point Analysis or PERT o = most optimistic cost estimate p = most pessimistic cost estimate m = most likely cost estimate Ce = o + 4m + p  (Ce) = 45 50 55 60 65 70 75 80 85 Hours 6 p–o 6 Ce  1  <=> 68% probability Ce  2  <=> 95.5% probability Ce  3  <=> 99.7% probability Page 190 40 60  5 hours with 68% confidence 60  10 hours with 95.5% confidence 60  20 hours with 99.7% confidence Beta Distribution PMP® Prep: PMBOK® 5th - 2013 11.4.2 Perform Quantitative Risk Analysis Tools and Techniques: Quantitative Risk Analysis and Modeling Techniques Sensitivity Analysis Sensitivity Analysis helps determine which risks have the most impact on a project. A typical display of sensitivity is the tornado diagram, which compares the importance of variables having high uncertainty to those that are more stable. Expected Monetary Value Expected Monetary Value (EMV) calculates average outcomes on uncertain future scenarios. The EMV of opportunities will be positive values, where those of risks may be negative. That is, when evaluating alternatives during project selection, EMV that is most positive (the higher number) is probably the best outcome. However, when alternative risks are evaluated, perhaps the lower number (minimum risk) is best. Decision Tree Analysis Decision Tree Analysis is a common use of EMV analysis. It incorporates the cost of each available choice, the probabilities in each path, and the outcomes. Solving the decision tree provides the EMV for each alternative. As said before, in selecting competing projects the higher number may give the best payback, but in evaluating risk alternatives, the lower number may be best. Pages 191-193 PMP® Prep: PMBOK® 5th - 2013 11.4.2 Perform Quantitative Risk Analysis Tools and Techniques: Quantitative Risk Analysis and Modeling Techniques Sensitivity Analysis: Tornado Diagram High Risk 1 Variables Low Uncertainty Risk 2 Risk 3 What is a Tornado Diagram? The purpose of sensitivity analysis is to identify which uncertainty variables have the greatest impact on total value. Why create a Tornado Diagram? The tornado diagram helps identify uncertainties with the highest economic impact. (Risk-Adjusted NPV). 80% of the total uncertainty can be discovered by using the top 5-8 variables in the tornado diagram Page 191 Uncertainty at base Values Risk 4 Risk 5 (+) Positive Impact (-) Negative Impact PMP® Prep: PMBOK® 5th - 2013 11.4.2 Perform Quantitative Risk Analysis Tools and Techniques: Quantitative Risk Analysis and Modeling Techniques Expected Monetary Value (EMV) $ 12,000   $ 10,200 $ 10,000 $ 8,000 $ 10,000 $ 12,000 Select “B” for lowest Risk Page 192 PMP® Prep: PMBOK® 5th - 2013 Exercise A Decision Tree : a common use of EMV analysis 0.6 Flagship store in new mall (-$1,000,000) 0.8 Renovate existing store (-$250,000) Stronger competition (-$50,000) Initial business surge (+$50,000) -$230,000 0.2 Page 192 Answer: -$960,000 0.4 New store or renovation? Increased shopper traffic (+$100,000) Dwindling shopper traffic (-$100,000) PMP® Prep: PMBOK® 5th - 2013 Exercise Exam Tip EMV is the second most-tested topic on the exam after “the process of risk management” 1. Test yourself: You are planning modifications to a product line. Below is the complete assessment of risks on the project Calculate the EMV of your budget’s reserve. Page 193 • 30% probability that parts delivery will be delayed at a cost of $50,000. - • 20% chance that the parts will be $10,000 less expensive. + • 25% likelihood that two parts will have interference fit, resulting in extra cost of $3,500. - • 30% chance that production will be simpler, saving us $2,500. • 5% probability that design defects will cause $5,000 in rework. - $13,375 + - PMP® Prep: PMBOK® 5th - 2013 Exercise 2. Test yourself on a decision tree: What is the EMV of A and B? B A Answer: $42K+$6K = $48K Page 193 PMP® Prep: PMBOK® 5th - 2013 11.4.2 Perform Quantitative Risk Analysis Tools and Techniques: Quantitative Risk Analysis and Modeling Techniques Modeling and Simulation Monte Carlo Simulation The most common simulation technique is Monte Carlo simulation. Earlier in the workbook it was called “What-If” analysis, where a computer is used to calculate a distribution of possible outcomes for the total project. For example, calculate multiple project durations with different sets of activity assumptions and calculate a risk probability distribution. For cost risk, simulations can use the WBS or cost breakdown structure as its model. For schedule risk, simulations use Precedence Diagramming Method (PDM) models. Page 193 PMP® Prep: PMBOK® 5th - 2013 11.4.2 Perform Quantitative Risk Analysis Tools and Techniques: Quantitative Risk Analysis and Modeling Techniques Modeling and Simulation Monte Carlo Simulation Uses the network diagram (PDM) and Three-Point Estimates as models to simulate schedule impacts on the project, and the WBS as its model using Three-Point estimates to simulate cost impacts, then “performs” the project several times to determine uncertainty. • Indicates schedule risk by estimating probability that each task will be on the critical path. • Accounts for task convergence - calculates increased schedule risk where paths in a network diagram converge into one task. • Stakeholders (team) estimate cost ranges for each WBS element. Simulation shows probability of meeting the most likely budget estimate. Page 194 PMP® Prep: PMBOK® 5th - 2013 11.4.2 Perform Quantitative Risk Analysis Tools and Techniques: Quantitative Risk Analysis and Modeling Techniques Modeling and Simulation, Cost Risk Simulation 100% Total Project Cost (cumulative) 50% 25% Probability 75% Mean = $46M 12% $50M 0% $41M $30 M $38M $47M $56M $65M Cost The project is only 12% likely to meet the 41 million “most likely” cost estimate. If the organization wants 75% chance of success, $50 million is required (at contingency of 22%, [$50M-41M)/$41M]). Page 194 PMP® Prep: PMBOK® 5th - 2013 11.4.2 Perform Quantitative Risk Analysis Tools and Techniques: Quantitative Risk Analysis and Modeling Techniques Modeling and Simulation Monte Carlo Simulation Road Closed 30% Mean Probability of Project Failure Running out of Gas Monte Carlo Simulation, Overall Project Risk Getting Stuck in Snow Drift 5% Chance That Probability is 75% 0 Page 195 .25 .5 .75 1.0 0 .25 .5 .75 1.0 PMP® Prep: PMBOK® 5th - 2013 11.4.2 Perform Quantitative Risk Analysis Outputs: Project Documents Updates Risk Register Updates include:  Probability analysis of the project • confidence levels and distributions are used to calculate cost and time reserves.  Probability of achieving cost and time objectives  Priority list of quantified risks  Trends in risk analysis results PMP® Prep: PMBOK® 5th - 2013 Planning: Project Risk Management PMBOK® Fifth Edition, Page 342 11.5 Plan Risk Responses Inputs Risk management plan Risk register Page 196 Tools & Techniques Strategies for negative risks or threats Strategies for positive risks or opportunities Contingent response strategies Expert judgment Outputs Project management plan updates Project documents updates PMP® Prep: PMBOK® 5th - 2013 11.5 Plan Risk Responses Plan Risk Responses is the process of developing options and actions to enhance opportunities and to reduce threats to project objectives Page 196 PMP® Prep: PMBOK® 5th - 2013 11.5.2 Plan Risk Responses Tools and Techniques: Strategies for Threats or Opportunities • Avoid Eliminate the threat by eliminating the cause. • Transfer Contract the risk out. Transfer it to a third party with incentives, penalties, warranties, bonding, .. , purchase insurance. • Mitigate Negative Risk or Threats Effect the probability and/or the impact of the risk. • Exam Tip Exploit Eliminate uncertainty of upside risk to ensure opportunity happens • Positive Risk or Opportunities Share Third party helps to capture the opportunity • Enhance Opposite of Mitigation. Proactively target and reinforce the trigger to achieve a positive opportunity. • Acceptance Know about the risk, but decide to accept the consequences if failure occurs. • Pages 197-199 Knowledge and Research Perform tests & simulations. Consult experts. Start risk tasks as early as possible within available slack. Both PMP® Prep: PMBOK® 5th - 2013 11.5.3 Plan Risk Responses Outputs: Contingency Reserve, Part of the Risk Register A provision in the project plan to mitigate cost and/or schedule risk May be calculated as a percent of baseline to allow for overruns May be established as a separate fund for unforeseen problems May have many different (and application area specific) names: • management reserve • contingency May be assigned to any level of the WBS Exam Tip PMI recommends a minimum total reserve of 10% Page 200 PMP® Prep: PMBOK® 5th - 2013 11.5.3 Plan Risk Responses Outputs: Project Documents Updates Risk Register Updates include:           Risk owners and their responsibilities, Agreed response strategies, Actions to implement from the response strategy, Trigger conditions and warning signs of risk occurrence, Budget and schedule activities to implement the response, Contingency plans and triggers that call for their execution, Fallback plans for inadequate risk responses, Residual risks remaining after response has been taken, and those that have been deliberately accepted, Secondary risks that arise from implementing a risk response, Calculated contingency reserves, Other Documents Updates:    Page 201 Assumption log updates. Technical documentation updates, Change requests processed PMP® Prep: PMBOK® 5th - 2013 Chapter 12: Project Procurement Management PMBOK Fifth Edition, Page 355 Knowledge Area 12.1 Plan Procurement Management: Documenting purchase decisions, specifying the approach, and identifying potential sellers. 12,2 Conduct Procurements: Obtaining seller responses, selecting a seller, and awarding a contract. 12.3 Administer Procurements: Managing procurement relationships, monitoring contract performance, and making changes and corrections as needed. 12.4 Close Procurements: Competing each project procurement. Plan Procurement Management includes the processes necessary to purchase or acquire products, services, or results needed from outside the project team. It includes contract management and change control processes, as well as administering contracts and obligations under the contracts. Page 202 PMP® Prep: PMBOK® 5th - 2013 Chapter 12: Project Procurement Management Procurement Process Plan Purchases & Acquisitions Plan Contracting Make or Buy Page 202 RFP/RFQ Issued Request Seller Responses Q&A Select Sellers Proposal Received Contract Administration Contract Award Contract Closure Substantive Completion PMP® Prep: PMBOK® 5th - 2013 Planning: Plan Procurement Management 12.1 Plan Procurements Inputs Project management plan Requirements documentation Risk register Activity resource requirements Project schedule Activity cost estimates Stakeholder register Enterprise environmental factors Organizational process assets Page 203 Tools & Techniques Make-or-buy analysis Expert judgment Market research Meetings Outputs Procurement management plan Procurement statement of work Procurement documents Source selection criteria Make-or-buy decisions Change requests Project documents updates PMP® Prep: PMBOK® 5th - 2013 12.1 Plan Procurement Management PMBOK® Fifth Edition, Page 358 Plan Procurement Management is the process of documenting project purchasing decisions, specifying the approach and identifying potential sellers. The plan procurements process involves deciding whether to “make-or-buy”, the consideration of potential sellers, and the consideration of the risks involved Page 202 PMP® Prep: PMBOK® 5th - 2013 12.1.2 Plan Procurement Management Inputs: Organizational Process Assets Contract Types There are several contract types that may be used, and the contract type determines how the risk is shared between the buyer and the seller. Page 204-206 PMP® Prep: PMBOK® 5th - 2013 12.1.2 Plan Procurement Management Fixed Price/Lump Sum Contracts: • Firm Fixed Price (FFP) • Fixed Price Incentive Fee (FPIF) • Fixed Price with an Economic Price Adjustment (FP-EPA) Cost Reimbursable Contracts: • Cost Plus Fixed Fee (CPFF) • Cost Plus Incentive Fee (CPIF) • Cost Plus Award Fee (CPAF) Unit Price or Time & Materials Contracts (T&M)  Contracts are risk mitigation tools  Other professionals may handle the contract, but contracts should not be created before the PM is assigned  Match the contract type to the type of project  Contract type will determine the balance of financial risk between the buyer and the supplier. Page 204-207 PMP® Prep: PMBOK® 5th - 2013 12.1.2 Plan Procurement Management Fixed Price (or Lump Sum) Type Contracts: Used on well specified projects for which costs can be accurately estimated. Cost risk is on the supplier. (includes FFP, FPIF, FP-EPA) Cost Reimbursable Type Contracts: Exam Tip Used on development projects for flexibility. Cost risk is on the buyer, so establish administrative & reporting systems to allow both buyer and seller visibility into costs. (Includes CPFF, CPIF, CPAF) Time & Materials Type Contracts: Used on projects where the deliverables are well defined, repetitive units but the quantities are not yet known (e.g., identical pieces of equipment, or labor hours and associated material costs – includes overhead and burden) Page 207 PMP® Prep: PMBOK® 5th - 2013 12.1.2 Plan Procurement Management Inputs: Organizational Process Assets 100% 0% FFP Client, Customer or Buyer FPEPA On the exam, contract questions are written from the buyer’s perspective FPAF FPIS FPIF RISK RISK CPIF CPAF CPFF Contractor or Seller 0% Page 208 CS COST 100% PMP® Prep: PMBOK® 5th - 2013 12.1.2 Plan Procurements Inputs: OPA US Federal Acquisition Regulations (FAR 16.104) FFP Firm Fixed Price: A negotiated fixed price to produce the good or service. FPEPA Fixed Price with Economic Price Adjustment: Unstable market or labor FPAF conditions, price can be adjusted up or down with a ceiling Fixed Price Award Fee: award amount related to a subjective judgment of the quality of the contractor's performance. FPIS Fixed Price Incentive (Successive Targets): Contains production point (s) FPIF Fixed Price Incentive (Fee or Firm Target): target profit, and profit sharing CPIF Cost Plus Incentive Fee: positive profit incentives are negotiated. CPAF Cost Plus Award Fee: Award fee is earned for performance, quality, CPFF Cost Plus a Fixed Fee: Level of effort is unknown, fee is expressed as CS COST Page 208 at which either a firm target and final profit formula can be negotiated. formula are negotiated into contract, profit is adjusted upon contract completion. timeliness, and cost effectiveness and can be earned in whole or in part. percentage of estimated cost at time contract is awarded. Cost Sharing: Development or research projects, contractor sees a commercial benefit which they accept in lieu of fee. Cost: Typically for R&D with nonprofit organizations, educational institutions, and facilities contracts. PMP® Prep: PMBOK® 5th - 2013 12.1.2 Plan Procurement Management Tools and Techniques: Budget Implications Page 209 PMP® Prep: PMBOK® 5th - 2013 12.1.2 Plan Procurement Management Tools and Techniques: Profit or Fees for Different Contracts Page 209 PMP® Prep: PMBOK® 5th - 2013 12.1.2 Plan Procurement Management Tools and Techniques: Point of Total Assumption Page 209 Exam Tip Is on the exam PMP® Prep: PMBOK® 5th - 2013 Exercise Incentive Fee Calculation You may have to calculate both the Fee and the Final Price for the Exam! Cost Plus Incentive Fee Calculation Fee Target cost Target fee Target price $210,000 $ 25,000 $235,000 Sharing ratio Actual cost 80/20 $200,000 $210,000 - $200,000 = $10,000 x 20% = $2000 $25,000 target fee + $2,000 = $27,000 fee Final Price Page 210 $200,000 + $27,000 = $227,000 PMP® Prep: PMBOK® 5th - 2013 12.1.2 Plan Procurement Management Tools and Techniques: Make-or-Buy Analysis A general management technique to determine whether work is best done by the project team or purchased from an outside source. Considerations such as capability, risk, budget and schedule are all considered as well as whether to purchase, lease or rent Expert Judgment Experts may be used in several areas. Technical experts will assess capability, inputs and outputs. Purchasing experts will generate the criteria to select appropriate sellers, and legal experts will focus on terms, conditions and issues Market Research Capabilities of industry and seller must be researched by information gained at conferences, on-line, and other sources. Leverage mature technologies while balancing the risks with other less mature technologies. Meetings Information exchange with potential bidders can benefit the project. Page 206 PMP® Prep: PMBOK® 5th - 2013 12.1.3 Plan Procurement Management Outputs: Procurement Management Plan, and Procurement Statement of Work A narrative description of products or services to be supplied under contract. • Provides the basis of agreement between buyer and supplier • Sufficient detail to allow prospective suppliers to determine whether or not they can comply • Sufficient latitude for creative solutions only if appropriate • Each procurement requires a separate SOW. But one SOW may cover many items in a single procurement • May be revised as the procurement progresses • Should be clear, concise, and unambiguous • May be developed by the project team or supporting offices (or even the seller) depending on policy and ability • Your best defense against procurement scope creep! Page 211 PMP® Prep: PMBOK® 5th - 2013 12.1.3 Plan Procurement Management Outputs: Procurement Documents Procurement documents from the buyer: TECHNICALLY-DRIVEN CONTRACTS: • Request for Proposal (RFP) - requests a detailed proposal on how the work will be done, who will do it, . . . , basically a Project Execution Plan from the contractor or seller. PRICE-DRIVEN CONTRACTS: • Invitation for Bid (IFB, or RFB) - requests one price to do all the work. • Request for Quotation (RFQ) - Requests a price quote per item, per hour charges, etc. Procurement Terminology is not universal Page 212 PMP® Prep: PMBOK® 5th - 2013 12.1.3 Plan Procurement Management Outputs: Source Selection Criteria Examples of source selection criteria are: Understanding of need Life-cycle cost Technical capability Risk Management approach Technical approach Warranty Financial stability Production capacity Business size and type Past performance of sellers References Intellectual property rights Proprietary rights Exam Tip • The Contracting Officer or Administrator is the one with authority to change the contract • The Project Manager must understand the contract and manage its completion • The exam tests conflicts that arise between the two Page 212 PMP® Prep: PMBOK® 5th - 2013 Notes on procurement for the exam • The exam questions are always from the buyer’s perspective • Different words are sometimes used (vendor, owner, contractor, subcontractor etc.) • A contract is a formal agreement • All requirements should be specifically stated in the contract • Changes must be in writing and formally controlled • The US Government backs all contracts by providing a court system (this is a US exam) Page 213 PMP® Prep: PMBOK® 5th - 2013 Planning: Project Stakeholder Management PMBOK® Fifth Edition, Section 13.2, Page 393 13.2 Plan Stakeholder Management Inputs Project management plan Stakeholder register Enterprise environmental factors Organizational process assets Page 314 Tools & Techniques Expert judgment Meetings Analytical techniques Outputs Stakeholder management plan Project documents updates PMP® Prep: PMBOK® 5th - 2013 13.2 Plan Stakeholder Management Plan Stakeholder Management is the process of developing management strategies to engage stakeholders throughout the project life cycle, based on the analysis of their needs, interests, and impact on project success. It allows the project manager the develop ways to engage stakeholders in the project, to manage their expectations, and to achieve the project objectives. Page 214 PMP® Prep: PMBOK® 5th - 2013 13.2 Plan Stakeholder Management Tools and Techniques: Analytical Techniques Engagement Level of Stakeholders Engagement level of the stakeholders can be classified as follows: • • • • • Page 216 Unaware. of project and potential impacts Resistant. Aware of project and impacts, and resistant to change Neutral. Aware of project yet neither supportive nor resistant Supportive. Aware of project/impacts and supportive to change Leading. Aware of project/impacts and actively engaged in ensuring success. PMP® Prep: PMBOK® 5th - 2013 13.2 Plan Stakeholder Management Tools and Techniques: Analytical Techniques Stakeholder Engagement Assessment Matrix Stakeholder Stakeholder 1 Stakeholder 2 Unaware Resistant Neutral Supportive Leading C D C Stakeholder 3 D DC Legend: “C” = Current Engagement “D” = Desired Engagement Exam Tip ©2013 PMI. A Guide to the Project Management Body of Knowledge (PMBOK® Guide), Fifth Edition Page 216 PMP® Prep: PMBOK® 5th - 2013 13.2 Plan Stakeholder Management Outputs: Stakeholder Management Plan This plan identifies the management strategies required to engage stakeholders. • Desired engagement levels of key stakeholders, • Scope and impact of change to stakeholders, • Interrelationships and overlap between stakeholders, • Stakeholder communication requirements for the current phase, • Information to be distributed to stakeholders (language, format, content, level of detail), • Timing and frequency for distributing the information, • Method for updating the stakeholder management plan as the project progresses. Page 217 PMP® Prep: PMBOK® 5th - 2013 Executing Process Group PMBOK® Fifth Edition, Page 79 Page 219 PMP® Prep: PMBOK® 5th - 2013 PMBOK® Fifth Edition, Page 61 Process Groups Knowledge Areas 4. Project Integration Management Initiating Executing 4.1 Develop Project Charter 5. Project Scope Management Planning 4.2 Develop Project Management Plan 5.1 5.2 5.3 5.4 4.3 Executing 4.3 Direct & Manage Project Work Plan Scope Mgt. Collect Requirements Define Scope Create WBS Direct and Manage6.1Project Plan Schedule Mgt. 6.2 Define Activities Work 6.3 Sequence Activities 6.4 Est. Activity Resources 8.2 Perform Quality Assurance 6.5 Est. Activity Durations 6.6 Dev. Schedule 9.2 Acquire Project Team 7. Project Cost 7.1 Plan Cost Mgt. Management 7.2 Estimate Costs 9.3 Develop Project Team 7.3 Determine Budget 9.4 8. Project Quality Manage Project Team 8.1 Plan Quality Mgt. Management 10.2 Manage Communications 9.1 Plan Human 9. Project Human Resource Resource Mgt. 12.2 Conduct Procurements Management 10. Project 10.1 Plan Communications 13.3 Manage Stakeholder Communications Management Management Engagement 11. Project Risk 11.1 Plan Risk Management Page 28 4.6 Close Project or Phase 6.7 Control Schedule 7.4 Control Costs 8.2 Perform Quality Assurance 8.3 Control Quality 9.2 Acquire Project Team 9.3 Develop Project Team 9.4 Manage Project Team 10.2 Manage Communications 10.3 Control Communications 11.6 Control Risks 11.2 Identify Risks 11.3 Perform Qualitative Risk Analysis 11.4 Perform Quantitative Risk Analysis 11.5 Plan Risk Response 12. Project Procurement Management 13. Project Stakeholder Management 4.4 Mon/Ctrl Proj Work 4.5 Perform Integrated Change Control Closing 5.5 Validate Scope 5.6 Control Scope 6. Project Time Management Management Monitoring & Controlling 13.1 Identify Stakeholders 12.1 Plan Procurement Mgt. 12.2 Conduct Procurements 12.3 Control Procurements 13.2 Plan Stakeholder Management 13.3 Manage Stakeholder Engagement 13.4 Control Stakeholder Engagement 12.4 Close Procurements PMP® Prep: PMBOK® 5th - 2013 Executing: Integration Management PMBOK® Fifth Edition, Page 79 4.3 Direct and Manage Project Work Inputs Project management plan Approved change requests Enterprise environmental factors Organizational process assets Page 220 Tools & Techniques Expert judgment Project management information system Meetings Outputs Deliverables Work performance data Change requests Project management plan updates Project documents updates PMP® Prep: PMBOK® 5th - 2013 4.3 Direct and Manage Project Work Direct and Manage Project Work is the process of leading and performing the work defined in the project management plan and implementing approved changes to achieve the project’s objectives Page 220 PMP® Prep: PMBOK® 5th - 2013 4.3 Direct and Manage Project Work The activities of Direct and Manage Project Work include: • • • • • • • • • • • • Page 220 Perform activities to accomplish project objectives, Create deliverables, Provide, train, and manage team members Obtain materials, equipment, and facilities, Implement methods and standards, Establish communication channels, Generate project date: cost schedule, technical, quality, and status to facilitate forecasting, Issue change requests and manage approved changes (corrective action, preventative action, defect repair), Manage risks and risk responses, Manage sellers and contractors, Manage stakeholders and their engagement, and Collect and document lessons learned PMP® Prep: PMBOK® 5th - 2013 4.3.1 Direct and Manage Project Work Inputs: The Project Management Plan The other 23 planning processes are integrated to create the project management plan. Updates to any plans require an update to the PM plan. Think of the PM plan as a bucket into which all the other plans “drip” until it is full.             Page 221 Plan Scope Management Collect Requirements Define Scope Create WBS Plan Schedule Management Define Activities Sequence Activities Estimate Activity Resources Estimate Activity Durations Develop Schedule Plan Cost Management Estimate Costs            Determine Budget Plan Quality Management Plan Human Resource Management Plan Communications Management Plan Risk Management Identify Risks Perform Qualitative Risk Analysis Perform Quantitative Risk Analysis Plan Risk Responses Plan Procurement Management Plan Stakeholder Management PMP® Prep: PMBOK® 5th - 2013 4.3.2 Direct and Manage Project Work Tools and Techniques Expert Judgment Expertise is provided by the project manager and the PM team, and additional knowledge can be gained from a variety of sources inside and outside of the organization. PM Information System (PMIS) The PMIS provides access to tools: scheduling tool, work authorization system, configuration management system, information collection/distribution system, reporting on key performance indicators (KPI), and interfaces to online automated systems. Meetings Meetings can include information exchange, brainstorming, option evaluation, or decision making. Meetings are most effective when face-to-face. Virtual meetings (audio or video-conferencing) require additional preparation and organization to be as effective as face-to-face. Page 222 PMP® Prep: PMBOK® 5th - 2013 4.3.3 Direct and Manage Project Work Outputs Deliverables Any product, result or service identified in the PM Plan produced during project execution. Work Performance Information Status of project activities is routinely collected. It includes schedule progress, deliverable status, quality requirements met, costs incurred, estimates to complete, lessons learned, and resources used. Change Requests Changes are requested to expand or reduce scope, modify policies/procedures, costs, budgets, quality, or schedules. They also include corrective action, preventative action, defect repair, and document updates. PM Plan Updates Requirements, schedule, cost, quality, HR, communications, risk, procurement, and the project baselines. Project Document Updates: requirements, logs, risk register, and stakeholder register. Page 223 PMP® Prep: PMBOK® 5th - 2013 Executing: Quality Management PMBOK® Fifth Edition, Page 242 8.2 Perform Quality Assurance Inputs Quality management plan Process Improvement plan Quality metrics Quality control measurements Project documents Page 224 Tools & Techniques Quality management and Control tools Quality audits Process analysis Outputs Change requests Project management plan updates Project document updates Organizational process assets updates PMP® Prep: PMBOK® 5th - 2013 8.2 Perform Quality Assurance Perform Quality Assurance is the process of auditing the quality requirements and the results from quality control measurements to ensure appropriate quality standards and operational definitions are used Page 224 PMP® Prep: PMBOK® 5th - 2013 8.2.2 Perform Quality Assurance Tools and Techniques: Quality Management and Control Tools The Tools for Quality Planning should be used for Quality Assurance • • • • • • • Page 225 Benefit/Cost Analysis Cost of Quality (COQ) Control Charts Benchmarking Design of Experiments (DOE) Statistical Sampling Proprietary Methods • • • • • • Flowcharting Brainstorming Force Field Analysis Nominal Group Techniques Matrix Diagrams Priority Matrixes PMP® Prep: PMBOK® 5th - 2013 8.2.2 Perform Quality Assurance Tools and Techniques: Quality Management and Control Tools In Addition, Use the Seven Quality Management and Control Tools • Affinity Diagrams • Process Decision Program Charts (PDPC) • Interrelationship Digraphs • Tree Diagrams Page 225 • Prioritization Matrices • Activity Network Diagrams • Matrix Diagrams PMP® Prep: PMBOK® 5th - 2013 The Seven Quality Management and Control Tools PDPC Affinity Diagram No Tree Diagrams Yes No Yes Interrelationship Digraph No No Prioritization Matrices Network Diagrams PDM A B C Start Finish D ADM 2 Start E B F 3 C Finish 1 6 D 4 E 5 FF Matrix Diagrams Page 226 PMP® Prep: PMBOK® 5th - 2013 8.2.2 Perform Quality Assurance Tools and Techniques: Quality Audits Quality Assurance (QA): the process of auditing quality requirements, and the results from quality control (QC) measurements, to ensure quality standards and operational definitions are used.. Quality assurance involves Quality Audits, and is done in Execution Processes. Quality Control (QC): a process of monitoring and recording results (both product and project management) of executing quality activities to assess performance and to recommend necessary changes. Involves identifying ways to remove the causes of quality defects. Quality control involves inspection and requires an understanding of sampling strategies, tolerances, and the causes of variation in a process. It is done in the Monitoring and Controlling Processes. Pages 227 PMP® Prep: PMBOK® 5th - 2013 8.2.1 Perform Quality Assurance Tools and Techniques: Quality Audits . . a structured review (audit) of the project’s quality management activities to determine if they comply with organizational and project policies, processes, and procedures. • Quality audits may be random or scheduled • Quality audits may be performed internally or externally Quality audits  Identify best practices and gaps or shortcomings  Share good practices with similar projects in the organization  Proactively assist to improve processes and raise team productivity  Contribute audit results to lessons learned archives. Page 228 PMP® Prep: PMBOK® 5th - 2013 Practice Test #2 Turn to page 416 in the workbook There are 68 questions. You have 81 minutes to complete Answers are on page 433 Hint: Use scratch paper for answers, so you can reuse the questions for practice Page 416 PMP® Prep: PMBOK® 5th - 2013 Executing: Human Resource Management PMBOK® Fifth Edition, Page 267 9.2 Acquire Project Team Inputs Human resources management plan Enterprise environmental factors Organization process assets Page 230 Tools & Techniques Pre-assignment Negotiation Acquisition Virtual teams Multi-criteria decision analysis Outputs Project staff assignments Resource calendars Project management plan updates PMP® Prep: PMBOK® 5th - 2013 9.2 Acquire Project Team Acquire Project Team is the process of confirming human resource availability and obtaining the team necessary to complete project activities Page 230 PMP® Prep: PMBOK® 5th - 2013 9.2.1 Acquire Project Team Inputs: Project Management Plan, that includes: • Human Resource Management Plan  defining positions, skills, and competencies  project organization charts  when team members are needed • EEF and OPA Page 231 PMP® Prep: PMBOK® 5th - 2013 9.2.2 Acquire Project Team Tools and Techniques The project manager should effectively negotiate and influence others who are in a position to provide the required human resources for the project Pre-Assignment Project team members are selected in advance, perhaps where the project is part of a proposal Negotiation The project manager may need to negotiate with functional managers or other project managers to gain the staff required Acquisition Hiring or subcontracting team members from outside sources. This may involve outsourcing work to another organization Virtual Teams Teams where the members may not be able to meet face-to-face because of geographic or mobility limitations. Communication planning becomes increasingly important in a virtual team environment Pages 232-233 PMP® Prep: PMBOK® 5th - 2013 9.2.2 Acquire Project Team Tools and Techniques Multi-Criteria Decision Analysis Criteria are used to rate potential team members. The criteria are weighted by considering relative importance within the team. • • • • • Is the team member available to work in the time period needed? Is the team member’s cost within the budget constraints? Have the people done similar work before? Done it well? Does the team member have the required competence? Does the team member know the customer, worked on similar projects, understand PM? • Skills. Can they use project tools, or have appropriate training? • Attitude. Can the team member work with others in a cohesive team? • International Factors. What is the location of the team member, time zones, communication skills? Pages 233 Availability. Cost. Experience. Ability. Knowledge. PMP® Prep: PMBOK® 5th - 2013 Executing: Human Resource Management PMBOK® Fifth Edition, Page 273 9.3 Develop Project Team Inputs Human resource management plan Project staff assignments Resource calendars Page 235 Tools & Techniques Interpersonal skills Training Team-building activities Ground rules Co-location Recognition and rewards Personnel assessment tools Outputs Team performance assessments Enterprise environmental factors updates PMP® Prep: PMBOK® 5th - 2013 9.3 Develop Project Team Develop Project Team is the process of improving the competencies, team interaction and the overall team environment to enhance project performance. Teamwork is a critical factor for project success, and developing effective project teams is one of the primary responsibilities of the project manager Exam Tip Page 235 PMP® Prep: PMBOK® 5th - 2013 9.3.2 Develop Project Team Tools and Techniques: Interpersonal Skills: “soft skills” Training: activities designed to improve competencies of the project team members Team-Building Activities: should be designed to help individual team members work together effectively and establish good working relationships. Pages 236-237 PMP® Prep: PMBOK® 5th - 2013 9.3.2 Develop Project Team Tools and Techniques: Team Building Activities Bruce Tuckman: The Five Stages of Team Development • Forming: Team meets, learns about the project, understands roles, but is independent, not open • Storming: Team addresses project and methodology and must be open in this phase or it can become destructive. • Norming: Team works together, adjusts behaviors that are supportive, and trust develops • Performing: Team performs as well organized unit and works through issues smoothly and effectively • Adjourning: Team completes the work, celebrates their success, and moves on from the project. Page 238 PMP® Prep: PMBOK® 5th - 2013 9.3.2 Develop Project Team Tools and Techniques: Team Building Activities The proper use of most project management tools & techniques contribute to teambuilding, but PMI defines “Team Building Activities” as “actions taken specifically and primarily to improve team performance.” • Facilitated off-site workshops • Inter-personal skills development training and workshops • Communications training (including listening skills) • Conflict resolution • Psychological preference indicators such as Myers-Briggs • Physical challenge workshops • Planned team outings • Standing agenda item at review meetings • Shared space, publicity, and symbols to create a team identity Page 238 PMP® Prep: PMBOK® 5th - 2013 9.3.2 Develop Project Team Other Tools and Techniques Ground Rules: Discussing ground rules allows team members to discover values important to one another, to set clear expectation for team behavior, and to share their commitment to the rules Co-location: Physically locating team members in the same physical location enhances team communication and performance Recognition and Rewards: Promote and reinforce desired behaviors, and only desired behavior should be rewarded. “What gets measured, gets done” Page 239 PMP® Prep: PMBOK® 5th - 2013 9.3.2 Develop Project Team Tools and Techniques: Recognition and Rewards Exam Tip Herzberg’s Motivators 1. 2. 3. 4. 5. 6. Achievement Recognition Work Itself Responsibility Advancement Growth Self Actualization = Achievement Maslow’s Hierarchy of Needs Self Esteem = Recognition Social Safety Physiological Page 239 & 241 PMP® Prep: PMBOK® 5th - 2013 9.3.2 Develop Project Team Tools and Techniques: Recognition and Rewards A person’s motivation and effectiveness are influenced by three needs: Exam Tip Page 239 McClelland’s “Theory of Needs”  Achievement  Affiliation  Power PMP® Prep: PMBOK® 5th - 2013 9.3.2 Develop Project Team Tools and Techniques: Recognition and Rewards • • • • • prized assignments responsibility presentation opportunities training opportunities-growth flexible scheduling/days off • Recognition of achievement • better offices, new equipment • bonuses, trips • promotions, pay raises  Be sure the link between performance and reward is clear, explicit, timely, and achievable.  Be sure to reward desired behaviors more than recovery from the results of undesired behaviors. A  Consider cultural factors such as individualism vs. collectivism in choosing rewards and giving recognition (team vs. personal). Page 240 PMP® Prep: PMBOK® 5th - 2013 9.3.3 Develop Project Team Outputs: Team Performance Assessments Position Descriptions show team member responsibilities, authority, competencies, and qualifications outlined in a text document. Performance Assessments  improvements in individual skills  Improvements in team behaviors  improvements in project performance  reduced staff turnover rate. Page 240 PMP® Prep: PMBOK® 5th - 2013 Executing: Human Resource Management PMBOK® Fifth Edition, Page 279 9.4 Manage Project Team Inputs Human resource management plan Project staff assignments Team performance assessments Issue log Work performance reports Organizational process assets Page 242 Tools & Techniques Observation and conversation Project performance appraisals Conflict management Interpersonal skills Outputs Change requests Project management plan updates Project documents updates Enterprise environmental factors updates Organizational process assets updates PMP® Prep: PMBOK® 5th - 2013 9.4 Manage Project Team Manage Project Team is the process of tracking team member performance, providing feedback, resolving issues and managing team changes to optimize project performance Team members are accountable both to their functional manager and to their project manager. Exam Tip Page 242 Effective Management of the dual reporting relationship is the responsibility of the Project Manager PMP® Prep: PMBOK® 5th - 2013 9.4.1 Manage Project Team Inputs: • Human Resource Management Plan responsibilities, project organization, staffing management plan. • • • • Project Staff Assignments Team Performance Assessments Issue Log Work Performance Reports project status, project forecasts, schedule/cost/quality control, scope validation, future HR requirements • Scope Baseline (scope statement, WBS, WBS dictionary) • OPA Page 242-243 PMP® Prep: PMBOK® 5th - 2013 9.4.2 Manage Project Team Tools and Techniques: Project Performance Appraisals, Roles and Responsibilities Exercise Fill in the last column with PM (Project Manager), T (Team member) or SM (Senior/Functional Management) as to who is most appropriate to solve the problem listed under the “situation” column. Understanding of these questions will help with your with your Situation Questions: Situation Page 245 1 Two project team members are having a disagreement - 2 There is a change to the overall project deliverables – 3 A boss is trying to pull a team member off the project to do other work – 4 The project manager does not have the authority to get things done – 5 There are not enough resources to complete the project – 6 The team is unsure of what needs to happen when – 7 A task needs more time and will cause the project to be delayed – 8 A tasks needs more time without causing the project to be delayed – Who Solves the Problem (PM/T/SM)? T SM T SM SM PM SM PM PMP® Prep: PMBOK® 5th - 2013 9.4.2 Manage Project Team Tools and Techniques: Project Performance Appraisals, Roles and Responsibilities Exercise Page 245 9 A team member is not performing - SM 10 The team is not sure who is in charge of the project – SM 11 There is a talk that the project may be no longer needed – 12 Senior management provides an unrealistic schedule requirement – 13 The team is in conflict over priorities between tasks – 14 The project is behind schedule – 15 A team member determines that another method is needed to complete the task within its scope of work - SM SM PM PM T PMP® Prep: PMBOK® 5th - 2013 9.4.2 Manage Project Team Tools and Techniques: Powers of a Project Manager Expert: Reward: Formal: Referent: Penalty: Powers of the P.M. How Earned? recognition by others giving rewards to others power based on the position refer to authority of management ability to penalize team members On your own PM’s Position PM’s Position Other’s Position PM’s Position Exam Tip Principles of Project Management, PMI, ISBN: 1-880410-30-3 Page 246 PMP® Prep: PMBOK® 5th - 2013 9.4.2 Manage Project Team Tools and Techniques: Conflict Management Conflict Resolution Best to Worst 1. 2. 3. 4. 5. Collaborate/Problem Solving: Compromise/Reconcile: Withdraw/Avoid: Smooth/Accommodate: Force/Direct: solving the real problem solutions that satisfy all parties retreating or postponing a decision emphasis on agreement rather than differences one viewpoint at the expense of another Exam Tip Principles of Project Management, PMI, ISBN: 1-880410-30-3 Page 246 PMP® Prep: PMBOK® 5th - 2013 9.4.2 Manage Project Team Tools and Techniques: Conflict Management Factors for Conflict Resolution • Importance and intensity of conflict • Time pressure to resolve • Position taken by persons involved • Motivation to resolve, long and short term Exam Tip Page 246 PMP® Prep: PMBOK® 5th - 2013 9.4.2 Manage Project Team Tools and Techniques: Conflict Management Sources of Conflict (order of priority) Exam Tip 1. Schedules 2. Project priorities 3. Resources 4. Technical opinions 5. Admin. Procedures 6. Cost 7. Personality Principles of Project Management, PMI, ISBN: 1-880410-30-3 Page 247 PMP® Prep: PMBOK® 5th - 2013 9.4.2 Manage Project Team Tools and Techniques: Interpersonal Skills The Fourth Edition was the first time the “soft skills” have been given special recognition by PMI in the guidebook. Exam Tip Page 247 Please refer to Appendix X3 in the Fifth Edition for a listing of interpersonal skills important to project management. PMI said these skills were too large to cover in-depth in the PMBOK. This makes it a ripe source for questions on the fifth edition test. PMP® Prep: PMBOK® 5th - 2013 9.4.2 Manage Project Team Tools and Techniques: Leadership Leadership focuses team efforts toward a common goal. Leaders get things done through other people. They develop trust and respect, not fear and submission. Page 248 PMP® Prep: PMBOK® 5th - 2013 9.4.2 Manage Project Team Performance Impact Tools and Techniques: Leadership, the Team Performance Curve High-Performance Team Real Team Working Group Potential Team PseudoTeam Team Effectiveness Katzenbach and Smith “The Wisdom of Teams” Page 249 PMP® Prep: PMBOK® 5th - 2013 9.3.2 Develop Project Team Tools and Techniques: Team Building Activities A high performing team is: • A small group of people • with complimentary skills • committed to a common purpose, performance goals and methods • for which they hold themselves accountable • and take the risk of conflict Page 236 and 249 PMP® Prep: PMBOK® 5th - 2013 9.4.2 Manage Project Team Tools and Techniques: Communication and Influencing Communication Communication is one of the biggest contributors to project success or failure. Exam Tip • • • • Geert Hofstede: Cultural Dimensions (national cultural differences) Myers Briggs: “Personality Test” The “Sender-Receiver Model” (mentioned earlier) Conflict resolution is part of communication (mentioned earlier) Influencing • • • • Lead by example, follow through with commitments Clarify how decisions will be made Use a flexible style, adjust to the situation (Situational Leadership) Apply your power skillfully and cautiously “Influence: What you think you have until your try to use it” Joan Welsh Page 250 PMP® Prep: PMBOK® 5th - 2013 9.4.2 Manage Project Team Tools and Techniques: Decision Making Decision Making Styles Factors Affecting Style • • • • • • • • Command Consultation Consensus Random (coin flip) Time constraints Trust Quality Acceptance Exam Tip Six-Phase Problem Solving Model 1. 2. 3. 4. 5. 6. Page 251 Problem Definition: explore, clarify, and define the problem Solution Generation: brainstorm solutions and discourage early decisions Ideas to Actions: define evaluation criteria, rate pros/cons, select one Solution Plan: involve team for acceptance and commitment Evaluation Plan: implement, analyze, evaluate, lessons learned Evaluation Outcome: was the problem solved? Goals achieved? PMP® Prep: PMBOK® 5th - 2013 9.4.2 Manage Project Team Tools and Techniques: Negotiation Negotiating Skills and Behaviors 1. 2. 3. 4. 5. 6. 7. Page 250-251 Exam Tip Analyze the situation Differentiate between wants and needs by both parties Focus on interests and issues, not positions Ask high and offer low (but be realistic). Do you have a BAFO? When making a concession, act like you are yielding something of value. Don’t just give in. Both parties should feel like they won (win-win). Never let the other party leave feeling they have lost. Do a good job of active listening and articulating PMP® Prep: PMBOK® 5th - 2013 9.4.2 Manage Project Team Tools and Techniques: Appendix X3, Covey, Dinsmore, Levin, Verma Seven Habits of Highly Effective People Stephen R. Covey, 2004 Exam Tip Habit 1: Be Proactive: Principles of Personal Choice Habit 2: Begin with the End in Mind: Principles of Personal Vision Habit 3: Put First Things First: Principles of Integrity & Execution Habit 4: Think Win/Win: Principles of Mutual Benefit Habit 5: Seek First to Understand, Then to be Understood Habit 6: Synergize: Principles of Creative Cooperation Habit 7: Sharpen the Saw: Principles of Balanced Self-Renewal (The Eighth Habit: “From Effectiveness to Greatness”; Find your voice and inspire others to find theirs) Page 252 PMP® Prep: PMBOK® 5th - 2013 9.4.2 Manage Project Team Tools and Techniques: Trust Building Trust Building • Open and direct communications to resolve problems • Inform all stakeholders when commitments are at risk • Engage directly with the team, ask a lot of questions • Be direct and explicit about what you need or expect • Do not withhold information • Be receptive to innovation • Look beyond your own interests • Demonstrate true concern for others Page 253 Exam Tip PMP® Prep: PMBOK® 5th - 2013 Executing: Communications Management PMBOK® Fifth Edition, Page 297 10.2 Manage Communications Inputs Communications management plan Work performance reports Enterprise environmental factors Organizational process assets Page 255 Tools & Techniques Communication technology Communication models Communication methods Information management systems Performance reporting Outputs Project communications PM plan updates Project documents updates Organizational process assets updates PMP® Prep: PMBOK® 5th - 2013 10.2 Manage Communications Manage Communications is the process of creating, collecting, distributing, storing, retrieving, and the ultimate disposition of project information in accordance with the Communications Management Plan. Page 255 PMP® Prep: PMBOK® 5th - 2013 10.2.1 Manage Communications Inputs: Includes the Communications Management Plan Communication Management Plan describes how communications will be planned, structured, monitored and controlled.  Stakeholder communication requirements  Which information flows from whom, when, via which media, and in what format.  Schedule and frequency for information collection and distribution.  Methods to convey information (memos, e-mail, press releases, etc.)  Resources for communication activities, including time and budget  Problem escalation procedure  Method for updating the communication plan  Flow charts of information flow  List of reports and meetings planned (schedule and attendees)  Communications constraints  “Communications infrastructure” for the project (who may talk to whom) Performance Reports • Organizes and summarizes information on project status and progress • May have different reports for different stakeholders, each to the level of detail and in the format and frequency appropriate to the stakeholder • Includes cost, schedule, quality and scope accomplishment and variance information • Reports the results of variance analysis, trend analysis, and earned value analysis. Generally involves charts such as bar charts (e.g., Gantt charts) and S-curves (e.g., earned value charts) to summarize data and facilitate reporting by exception. Caution: Ensure a consistent “data date”, ideally from a common set of data Performance Reports Purpose of Performance Reports: • to detect problems in time to take corrective or preventive action • to reduce customer and management anxiety • to share project information within the project team Guidelines for Performance Reports: • keep the report short, matching its length to the projects’ complexity and the audience’s needs • use a consistent template and format • use visual elements such as charts and graphs Criteria for Performance Reporting: • gives timely, complete, and accurate information • doesn’t add more administrative overhead than it’s worth • is acceptable and useful to all participants • gives warning of problems in time for preventive or corrective actions • is easily understood by those who have a need to know More on these reports later . . . Page 256 PMP® Prep: PMBOK® 5th - 2013 10.2.2 Manage Communications Tools and Techniques Communication Technology Technology can vary from project-to-project and throughout the life cycle of the same project. The team must ensure that the technology is appropriate for the information being communicated. Communication Models The choice of communication model must be appropriate for the project and any barriers (noise) are identified and managed. Communications Methods Methods to communicate can take place through many media. Effective and efficient use of each requires appropriate communication skills:  Written and oral, listening and speaking  Internal (in the project) and external (client, public)  Formal (reports) and informal (memos, e-mail, IM, telecon)  Vertical (up/down the org.) and horizontal (with peers) Page 257 PMP® Prep: PMBOK® 5th - 2013 10.2.2 Manage Communications Tools and Techniques Information Management Systems A variety of tools are available for managing and distributing information: • Hard copy documents: letters, memos, reports, and press releases • Electronic communication media: e-mail, fax, IM, voice mail, telephone, video, web conferencing, web sites, web publishing, FTP sites, intranet • Electronic PM tools: web interfaces for scheduling , PM software, Skype, meeting software, virtual office software, portals, and collaborative work management tools. Performance Reporting This is collecting and distributing performance information (status reports, progress measurements, and forecasts). It includes periodic analysis of baseline versus actual data to communicate progress and to forecast project results. Simple reports show percent complete or status dashboards (scope, schedule, cost, quality). More elaborate reports may include: • Analysis of past performance • Analysis of forecasts (including time and cost) • Status of risks and issues • Work completed during the period • Work to be completed during the next period • Summary of changes approved, etc. Page 258 PMP® Prep: PMBOK® 5th - 2013 Executing: Procurement Management 12.2 Conduct Procurements Inputs Project management plan Procurement documents Source selection criteria Seller proposals Project documents Make-or-buy decisions Procurement statement of work Organizational process assets Page 260 Tools & Techniques Bidder conferences Proposal evaluation techniques Independent estimates Expert judgment Advertising Analytical techniques Procurement negotiations Outputs Selected sellers Agreements Resource calendars Change requests Project management plan updates Project documents updates PMP® Prep: PMBOK® 5th - 2013 12.2 Conduct Procurements Conduct Procurements is the process of obtaining seller responses, selecting a seller and awarding a contract. It may involve developing a short list of qualified sellers which are then subject to further information Page 260 PMP® Prep: PMBOK® 5th - 2013 12.2.1 Conduct Procurements Inputs Understand the following Inputs for the test: Procurement Management Plan: How procurement processes will be managed Procurement Documents: Used to request proposals from sellers, audit trail Source Selection Criteria: Used to rate and scope proposals Seller Proposals: Evaluated to select the successful seller Project Documents: Risk Register and contract decisions on risk Make-or-Buy Decisions: Will the work be done internally or be acquired? Procurement Statement of Work: Clearly stated goals and requirements OPA: Company supplier lists Pages 260-261 PMP® Prep: PMBOK® 5th - 2013 12.2.2 Conduct Procurements Tools and Techniques Bidder Conferences – Assembling all prospective vendors in a single meeting, with information disseminated and individual bids later received Proposal Evaluation Techniques – Comparison of alternative proposals on the basis of vendor responses. Weighted Scoring is a commonly used technique Independent Estimates – Use of an outside professional to provide a benchmark estimate of costs in advance of receiving proposals Expert Judgment – Experts from various disciplines may be used to evaluate and advise on proposals Pages 262-263 Weighting System Removes personal bias, is more objective, and considers relative importance of different evaluation factors 1) determines the evaluation factors 2) assigns a numerical weight to each factor 3) rates the prospective sellers on each criterion 4) multiplies each rating by its weighting 5) totals the ratings to compute an overall score • Typical factors include technical, management, and cost factors • Avoid overly complicated rating models PMP® Prep: PMBOK® 5th - 2013 12.2.2 Conduct Procurements Tools and Techniques Advertising – Advertising in selected newspapers or trade publications. Government may require advertising of certain kinds of contracts. Analytical Techniques– evaluate readiness of a seller, examine past performance for risks. Procurement Negotiations – The project manager may not be the lead negotiator in many cases, but will provide technical and project clarification. Pages 263-264 PMP® Prep: PMBOK® 5th - 2013 12.2.2 Conduct Procurements Tools and Techniques: Procurement Negotiations … undertaken to clarify structure, requirements, and contract terms so that mutual agreement on contract terms can be reached prior to signing. • • • • • • • responsibilities and authorities (Who Will Negotiate?) pricing, payments, and payment schedules penalty terms deliverables -- specifications, quantities, quality, timing applicable laws, standards, regulations, and other requirements technical and management approaches copyright and ownership issues; data rights Ethical Negotiations: each party is honest with the other, regardless of expectations related to future work. Page 264 PMP® Prep: PMBOK® 5th - 2013 12.2.3 Conduct Procurements Outputs Selected Sellers: Sellers who are competitive and have negotiated a draft contract Agreements: A legal agreement between Buyer and Seller, mutually binding. It includes many requirements and terms that you should remember, including Incoterms and ADR. Read this section carefully. Page 265 PMP® Prep: PMBOK® 5th - 2013 12.2.3 Conduct Procurements Outputs: Types of Contracts Fixed Price (or Lump Sum) Type Contracts: Used on well specified projects for which costs can be accurately estimated. Cost risk is on the supplier. (includes FFP, FPIF, FP-EPA) Cost Reimbursable Type Contracts: Exam Tip Used on development projects for flexibility. Cost risk is on the buyer, so establish administrative & reporting systems to allow both buyer and seller visibility into costs. (Includes CPFF, CPIF, CPAF) Time & Materials Type Contracts: Used on projects where the deliverables are well defined, repetitive units but the quantities are not yet known (e.g., identical pieces of equipment, or labor hours and associated material costs – includes overhead and burden) Page 266 PMP® Prep: PMBOK® 5th - 2013 Executing: Stakeholder Management PMBOK® Fifth Edition, Page 404 13.3 Manage Stakeholder Engagement Inputs Stakeholder management plan Communications management plan Change log Organizational process assets Page 268 Tools & Techniques Communication methods Interpersonal skills Management skills Outputs Issue log Change requests Project management plan updates Project documents updates Organizational process assets updates PMP® Prep: PMBOK® 5th - 2013 13.3 Manage Stakeholder Engagement Manage Stakeholder Engagement is the process of communicating and working with stakeholders to meet their needs, address issues as they occur, and foster stakeholder engagement in project activities throughout the project life cycle. Managing stakeholders increases the likelihood of project success by ensuring they clearly understand project goals, objectives, benefits, and risk. Test items in this process are Inputs/Tools and Techniques/Outputs, and understanding the issues and change logs. The Project Manager (PM) is responsible for engaging and managing stakeholders. Pages 268 PMP® Prep: PMBOK® 5th - 2013 Monitoring & Controlling Process Group PMBOK® Fifth Edition, Page 86 Page 273 PMP® Prep: PMBOK® 5th - 2013 PMBOK® Fifth Edition, Page 61 Process Groups Knowledge Areas 4. Project Integration Management Initiating 4.4 7. Project Cost Management 8. Project Quality Management 9. Project Human Resource Management 10. Project Communications Management 11. Project Risk Management 4.5 5.5 5.6 6.7 7.4 8.3 10.3 11.6 12.3 13.4 12. Project Procurement Management 13. Project Stakeholder Management Page 28 Executing Monitoring and Controlling 4.1 Develop Project Charter 5. Project Scope Management 6. Project Time Management Planning 13.1 Identify Stakeholders 4.2 Develop Project Management Plan 5.1 5.2 5.3 5.4 4.3 Direct & Manage Project Work Plan Scope Mgt. Collect Requirements Define Scope Create WBS 4.4 Mon/Ctrl Proj Work 4.5 Perform Integrated Change Control Closing 4.6 Close Project or Phase 5.5 Validate Scope 5.6 Control Scope Manage and Control Mgt. 6.1 Plan Schedule Project Work 6.2 Define Activities Activities 6.3 Sequence Perform Integrated 6.4 Est. Activity Resources 6.5 Est. Activity Durations Change Control 6.6 Dev. Schedule Validate Scope 7.1 Plan Cost Mgt. 7.2 Estimate Costs Control Scope 7.3 Determine Budget 8.2 Perform Quality 8.1 Plan Quality Mgt. Control Schedule Assurance 9.1 Plan Human 9.2 Acquire Project Team Control Costs Resource Mgt. 9.3 Develop Project Team Control Quality 9.4 Manage Project Team 10.1 Plan Communications 10.2 Manage Communications Management Control Communications 11.1 Plan Risk Management Control Risks 11.2 Identify Risks 11.3 Perform Qualitative Control Procurements Risk Analysis 11.4 Perform Quantitative Control Stakeholder Risk Analysis 11.5 Plan Risk Response Engagement 12.1 Plan Procurement Mgt. 12.2 Conduct Procurements 13.2 Plan Stakeholder Management Monitoring & Controlling 13.3 Manage Stakeholder Engagement 6.7 Control Schedule 7.4 Control Costs 8.3 Control Quality 10.3 Control Communications 11.6 Control Risks 12.3 Control Procurements 12.4 Close Procurements 13.4 Control Stakeholder Engagement PMP® Prep: PMBOK® 5th - 2013 M&C: Integration Management PMBOK® Fifth Edition, Page 86 4.4 Monitor and Control Project Work Inputs Project management plan Schedule forecasts Cost forecasts Validated changes Work performance information Enterprise environmental factors Organizational process assets Page 274 Tools & Techniques Expert judgment Analytical techniques Project management information system Meetings Outputs Change requests Work performance reports Project management plan updates Project documents updates PMP® Prep: PMBOK® 5th - 2013 4.4 Monitor and Control Project Work Monitor and Control Project Work is the process of tracking, reviewing and reporting the progress to meet the performance objectives defined in the project management plan. Control includes determining corrective action, preventative action or defect repair and following up on actions taken to resolve performance issues Page 274 PMP® Prep: PMBOK® 5th - 2013 4.4 Monitor and Control Project Work Taken together, the controlling processes monitor project progress and performance against the plan and provide the appropriate response to deviations from plan. These responses frequently require changes to the project plan; hence, project planning, project execution, and project control form a triad of process groups that are repeated throughout the project life cycle at each phase gate. Project monitoring and control is more than earned value Many project management technicians and some inexperienced project managers equate project control with earned value. While earned value is an essential part of project control, it is only a part. Fully integrated project control draws from several knowledge areas and calls upon all of the leadership, communication, and negotiation skills of the project manager. Project monitoring and control is more than data collection Another common, practical problem is confusing data collection with project control. Project control is more than just collecting data about project performance; it also requires analyzing the data, evaluating the meaning of the data and any variances, taking appropriate corrective actions, and related record keeping. Page 273 PMP® Prep: PMBOK® 5th - 2013 4.4 Monitor and Control Project Work This process is part of Project Integration Management knowledge area, along with Integrated Change Control. This process involves monitoring all processes: initiating, planning, executing, and closing. Monitoring & Controlling Processes Planning Processes Closing Processes Initiating Processes Executing Processes Page 274 PMP® Prep: PMBOK® 5th - 2013 4.4.1 Monitor and Control Project Work Inputs: The Project Management Plan (Another Reminder) The other 23 planning processes are integrated to create the project management plan. Updates to any plans require an update to the PM plan. Think of the PM plan as a bucket into which all the other plans “drip” until it is full.             Page 275 Plan Scope Management Collect Requirements Define Scope Create WBS Plan Schedule Management Define Activities Sequence Activities Estimate Activity Resources Estimate Activity Durations Develop Schedule Plan Cost Management Estimate Costs            Determine Budget Plan Quality Management Plan Human Resource Management Plan Communications Management Plan Risk Management Identify Risks Perform Qualitative Risk Analysis Perform Quantitative Risk Analysis Plan Risk Response Plan Procurement Management Plan Stakeholder Management PMP® Prep: PMBOK® 5th - 2013 4.4.1 Monitor and Control Project Work Other Inputs: • Schedule Forecasts using schedule variance (SV) and schedule performance index (SPI) to compute estimate to complete (ETC) • Cost Forecasts using cost variance (CV) and cost performance index (CPI) to compute estimate at completion (EAC) • Validated Changes • Work Performance Information collected data is analyzed and transformed into work performance information • EEF and OPA Page 275-276 PMP® Prep: PMBOK® 5th - 2013 Work Performance Information • Status of deliverables • Implementation of change requests • Forecasts: variance, trend, and earned value information, estimates at completion (EAC), schedule forecasts, index information (SPI, CPI, TCPI). • Generally involves Gantt charts and S-curves. • Includes cost, schedule, quality and scope accomplishment and variance information Page 276 PMP® Prep: PMBOK® 5th - 2013 4.4.1 Monitor and Control Project Work Tools and Techniques: • Expert Judgment • Analytical Techniques regression analysis, grouping methods causal analysis root cause, FMEA, trends, etc. • Validated Changes • PMIS and Meetings Page 277 PMP® Prep: PMBOK® 5th - 2013 M&C: Integration Management PMBOK® Fifth Edition, Page 94 4.5 Perform Integrated Change Control Inputs Project management plan Work performance reports Change requests Enterprise environmental factors Organizational process assets Page 279 Tools & Techniques Expert judgment Meetings Change control tools Outputs Approved change requests Change log Project management plan updates Project documents updates PMP® Prep: PMBOK® 5th - 2013 4.5 Perform Integrated Change Control Perform Integrated Change Control is the process of reviewing all change requests, approving changes and managing changes to deliverables, organizational process assets, project documents and the project management plan; and communicating their disposition. Sometimes a Change Control Board (CCB) is responsible for approving or rejecting changes, as approved by the customer or sponsor. Configuration Control focuses on the specification of deliverables and processes. Change Control focuses on changes to project documents, deliverables or baselines. Page 279-280 PMP® Prep: PMBOK® 5th - 2013 4.5 Perform Integrated Change Control Change Control System A set of procedures that describes how modifications to the project deliverables and documentation are managed and controlled, including: • • • • • Page 280 requesting changes reviewing the implications of changes requests approving or rejecting changes communicating changes maintaining a change log - comprehensive list of changes PMP® Prep: PMBOK® 5th - 2013 4.5.2 Perform Integrated Change Control Tools and Techniques: Configuration Management A set of processes and procedures to ensure that the documentation of the product and the actual product remain consistent with each other: Exam Tip Glossary Definition: The configuration management system is a collection of procedures used to identify and document the functional and physical characteristics of a product or component. It: • controls changes to these characteristics, • records/reports each change, • audits the products to verify conformance to requirements. • documentation, tracking, and approval levels • validates the impact, and • communicates them to stakeholders. Page 281 PMP® Prep: PMBOK® 5th - 2013 4.5.1 Perform Integrated Change Control Inputs: Work Performance Reports Reports of interest include: • resource availability, • schedule/cost data, • earned value management (EVM) reports, and • Burnup or burndown charts. A burnup chart tracks how much work is done. Page 281 A burndown chart tracks how much work remains on your project and whether or not you will hit the deadline. PMP® Prep: PMBOK® 5th - 2013 4.5.1 Perform Integrated Change Control Inputs: Change Requests are NOT Change Orders Change Requests: oral or written, formal or informal, may or may not be implemented Change Orders: formal request for change to approved project plan; typically used for projects performed under contract Exam Tip Beware of the “Constructive Change Order” -- an oral or written communication from a perceived authority that the project team may (possibly legally) respond to as equivalent to a written change order. “A Functional Manager wants to make a change in the project. What is the first thing a PM should do?” “A Senior Manager decides the scope of work should be changed. What is best to do?” Answer: Evaluate the impact on the project. Meet with the team to discuss alternatives, before deciding to use reserves and meet with management. The Exam lists incorrect choices, like: “meet with the customer first” or “meet with management first” The correct answer is evaluate first Page 282 PMP® Prep: PMBOK® 5th - 2013 4.5.2 Perform Integrated Change Control Tools and Techniques: Change Control Meeting Approved or Rejected Change Requests In some projects, changes are controlled by a Change Control Board (CCB), And implemented by the Project Team A Change Control Board (CCB) is: A formally chartered group responsible for reviewing, evaluating, approving, delaying, or rejecting changes to the project, and for recording and communicating such decisions. • • • Page 283 Reviews and approves or rejects change requests May also be responsible for defining the change request process, communicating change decisions, and managing the implementation of approved changes. Power and responsibilities should be reviewed and agreed to by stakeholders PMP® Prep: PMBOK® 5th - 2013 M&C: Scope Management 5.5 Validate Scope Inputs Project management plan Requirements documentation Requirements traceability matrix Verified deliverables Work performance data Page 285 Tools & Techniques Inspection Group decision-making techniques Outputs Accepted deliverables Change requests Work performance information Project documents updates PMP® Prep: PMBOK® 5th - 2013 5.5 Validate Scope PMBOK® Fourth Edition, Page 123 Validate Scope is the process of formalizing acceptance of the completed project deliverables. Scope validation is different from quality control in that validate scope is primarily concerned with the acceptance of the deliverables Page 285 PMP® Prep: PMBOK® 5th - 2013 5.5.3 Validate Scope Outputs: Accepted Deliverables These have all been answers on the test:  Customer feedback on a more detailed basis  Done at the end of each Project Phase  Results in formal acceptance Exam Tip The questions on the exam are vague on Scope Validation. Read them carefully. One question asks for: “the key aspect of scope validation” Answer: “customer acceptance of project efforts”. The answer does not involve correctness of the work. Page 287 PMP® Prep: PMBOK® 5th - 2013 M&C: Scope Management PMBOK® Fifth Edition, Page 136 5.6 Control Scope Inputs Project management plan Requirements documentation Requirements traceability matrix Work performance data Organizational process assets Page 288 Tools & Techniques Variance analysis Outputs Work performance information Change requests Project management plan updates Project documents updates Organizational process assets updates PMP® Prep: PMBOK® 5th - 2013 5.6 Control Scope Control Scope is the process of monitoring the status of the project and product scope and managing changes to the scope baseline Uncontrolled changes are often referred to as Scope Creep. Page 288 PMP® Prep: PMBOK® 5th - 2013 5.6.1 Control Scope Inputs The primary inputs to Control Scope are:      Project management plan Requirements documentation Requirements traceability matrix Work performance data Organizational process assets The project management plan includes the following to control scope:      Page 288 The scope baseline Scope management plan Change management plan Configuration management plan Requirements management plan PMP® Prep: PMBOK® 5th - 2013 5.5.2 Control Scope Tools and Techniques: Variance Analysis … a comparison of actual results to planned results for the purpose of early problem detection ... • Cost, schedule, scope, and quality variances are most typical – but they can also include resources and risk variances. • Both positive and negative variances need analysis • Should involve an evaluation of cause and impact • Becomes an input to change control process for generating corrective actions Pages 290 PMP® Prep: PMBOK® 5th - 2013 5.5.2 Control Scope Outputs: Work Performance Information Pages 291 PMP® Prep: PMBOK® 5th - 2013 M&C: Time Management PMBOK® Fifth Edition, Page 185 6.7 Control Schedule Inputs Project management plan Project schedule Work performance data Project calendars Schedule data Organizational process assets Page 292 Tools & Techniques Performance reviews Project management software Resource optimization techniques Modeling techniques Leads and lags Schedule compression Scheduling tool Outputs Work performance information Schedule forecasts Change requests Project management plan updates Project documents updates Organizational process assets updates PMP® Prep: PMBOK® 5th - 2013 6.7 Control Schedule Control Schedule is the process of monitoring the status of project activities to update project progress and manage changes to the schedule baseline to achieve the plan Page 292 PMP® Prep: PMBOK® 5th - 2013 6.7.1 Control Schedule Inputs The inputs to Control Schedule are:       Project management plan Project schedule Work performance data Project calendars Schedule data OPA To control schedule, the project management plan includes:  The schedule management plan  The schedule baseline Page 292 PMP® Prep: PMBOK® 5th - 2013 6.7.2 Control Schedule Tools and Techniques: Performance Reviews PV = Planned Value (was BCWS) (1) EV = Earned Value (was BCWP) (2) AC = Actual Cost (was ACWP) (3) (1) (2) (3) requires a performance baseline requires a way to measure value of work completed (earned value) requires a way to collect actual costs at work package level AC Actual Cost Cost, Hours, or Work Products PV Planned Value SV Schedule Variance CV Cost Variance EV Work Performed (Earned Value) Time t When Planned t Actual Pages 294-295 PMP® Prep: PMBOK® 5th - 2013 6.7.2 Control Schedule Tools and Techniques: Variance Analysis … a comparison of actual results to planned results for the purpose of early problem detection ... • Cost, schedule, scope, and quality variances are most typical – but they can also include resources and risk variances. • Both positive and negative variances need analysis • Should involve an evaluation of cause and impact • Becomes an input to change control process for generating corrective actions Pages 294-295 PMP® Prep: PMBOK® 5th - 2013 6.7.2 Control Schedule Tools and Techniques: Corrective Action Changes to align future project performance with the project plan. Corrective actions should be based on what-if evaluations and may be the result of formal replanning. Corrective actions complete the loop between project control and project execution: * Taking action to expedite schedules, such as assigning more or different resources or overlapping tasks * Delaying a purchase to protect cash flow * Invoking planned risk responses when risk events occur Page 294 PMP® Prep: PMBOK® 5th - 2013 6.7.2 Control Schedule Tools and Techniques: Trend Analysis • a tool that uses mathematical techniques to forecast future outcomes based on past results • may be used to monitor quality (product), cost and schedule performance of a project • provides a high-level overview that indicates whether or not more detailed information is needed Page 295 The Rule of Seven: 7 data points all above or below the mean, or all increasing or decreasing, indicate a trend PMP® Prep: PMBOK® 5th - 2013 6.7.2 Control Schedule Tools and Techniques: Project Management Software Page 206 PMP® Prep: PMBOK® 5th - 2013 6.7.2 Control Schedule Tools and Techniques: Resource Optimization Techniques The resource histogram is a time-phased display of the amount of project work assigned to each resource (PMBOK Fifth Edition, Page 189-190) Resource plans are best when resource requirements increase and decrease without variations Month 1 Month 2 Month 3 Month 4 1.5 1.0 0.5 Product Manager Page 296 PMP® Prep: PMBOK® 5th - 2013 6.7.2 Control Schedule Tools and Techniques: Modeling Techniques Page 297 PMP® Prep: PMBOK® 5th - 2013 6.7.2 Control Schedule Tools and Techniques: Schedule Compression Activity A B C Normal Normal Time Cost 4 wks 3 wks 2 wks 12,000 6,000 4,000 Crash Time Crash Cost Crash (wks) 2 wks 2 wks 1 wks 15,000 7,000 5,500 2 wks 1wks 1 wks Crash Cost Total Crash Cost per week 3,000 1,000 1,500 1,500 1,000 1,500 Fast Tracking Paralleling - Activities or phases normally be done in sequence are performed in parallel for at least a portion of their duration. fast tracking can result in rework and increased risk. Exam Tip Crashing A technique to shorten the schedule duration for the least incremental cost by adding resources. Works only for activities on the critical path. May result in increased risk and/or cost. Page 298 PMP® Prep: PMBOK® 5th - 2013 M&C: Cost Management PMBOK® Fifth Edition, Page 215 7.4 Control Costs Inputs Project management plan Project funding requirements Work performance data Organizational process assets Page 300 Tools & Techniques Earned Value Management Forecasting To-complete performance index (TCPI) Performance reviews Project management software Reserve analysis Outputs Work performance information Cost forecasts Change requests Project management plan updates Project documents updates Organizational process assets updates PMP® Prep: PMBOK® 5th - 2013 7.4 Control Costs Control Costs is the process of monitoring the status of the project to update the project costs and managing changes to the cost baseline Page 300 PMP® Prep: PMBOK® 5th - 2013 7.4.1 Control Costs Inputs: Project Management Plan (Cost Management Plan & Cost Baseline) A time-phased budget (either by performance period or summed cumulatively over the life of the project) used to monitor and control project costs. Cost Cost Performance Baseline Exam Tip BAC Cumulative Planned Value (PV) Spending Plans and Cash Flow Plans are special types of Cost Baselines Monthly Planned Value (PV) Time Page 301 PMP® Prep: PMBOK® 5th - 2013 7.4.1 Control Costs Inputs: Project Funding Requirements and Management Reserve Project Budget Cost EAC (forecasted cost) Cost Baseline Cumulative Planned Value (PV) BAC } Management Reserve Exam Tip Cash Flow Funding Expenditures Time Page 302 PMP® Prep: PMBOK® 5th - 2013 7.4.1 Control Costs Inputs: Work Performance Data • Organizes and summarizes information on project status and progress • It includes data on activities that have started , their progress, and which deliverables have been finished • Includes cost, schedule, scope accomplishment and variance information • Includes data on costs authorized and costs incurred Caution: Ensure a consistent “data date”, ideally from a common set of data Page 302 PMP® Prep: PMBOK® 5th - 2013 7.4.2 Control Costs Tools and Techniques: Earned Value Management (EVM) Exam Tip Earned value management (EVM), also known as earned value technique (EVT) compares Earned Value (EV or BCWP) to both Planned Value (PV or BCWS) and Actual Cost (AC or ACWP) to analyze cost control, resource management, and production. Cost control determines the cause of a variance, its magnitude, and if corrective action is needed. CV at the end of a project is BAC minus total actual cost. SV at the end of a project is zero, because all of the planned values will have been earned. CPI and SPI are efficiency indicators. Page 303 & 305 PMP® Prep: PMBOK® 5th - 2013 7.4.2 Control Costs Tools and Techniques: Earned Value Management (EVM) Definition of Terms PV Planned Value Value of work planned to be done at any point in time. AC Actual Cost How much did we spend to get the work done at a point in time? EV Earned Value Planned value of the work we completed at any point in time. BAC Budget at Completion How much did we budget for the whole project? EAC Estimate at Completion Given our progress, what is our forecast of the total project cost? ETC Estimate to Complete How much more do we estimate the job will cost? VAC Variance at Completion How much over/under budget will we be? Page 304 PMP® Prep: PMBOK® 5th - 2013 Tools and Techniques: Earned Value Management (EVM) - Equations CV Cost Variance CV = EV – AC Negative = Over budget, Positive = Under budget SV Schedule Variance SV = EV – PV Negative = Behind schedule, Positive = Ahead of schedule CPI Cost Performance Index CPI = SPI Schedule Performance Index SPI = EV PV EAC Estimate at Completion (4 formulas) EAC = Definition: At this time in the project, what is the forecast of total project cost? Page 304 EV AC BAC CPI Less than 1.0 = Over budget Greater than 1.0 = Under budget Less than 1.0 = Behind schedule Greater than 1.0 = Ahead of schedule Used when EV trend is typical (CPI will be the same for the rest of the project) EAC = AC + (BAC-EV) Used when EV trend is atypical (CPI will change to follow the planned rate, or PV line) EAC = AC + ETC Actual cost plus bottom-up estimate to complete by the team. (plan is no longer valid, re-estimate the plan) EAC = AC + (BAC-EV) (CPI x SPI) Used when both CPI and SPI influence the remaining work. Assumes negative cost performance and need for firm schedule. PMP® Prep: PMBOK® 5th - 2013 7.4.2 Control Costs Tools and Techniques: Earned Value Management (EVM) - Equations ETC Estimate to Complete ETC = EAC - AC The expected cost to finish all the remaining work. If work is proceeding on plan, use this this to calculate the work remaining ETC= Re-estimate Bottom up re-estimate by the team TCPI = BAC-EV BAC-AC Less than 1.0 = Easier to complete Greater than 1.0 = Harder to complete (Value of work remaining divided by the value of the budget remaining) TCPI Based on BAC Based on EAC Cost efficiency that must be maintained to complete the project on plan (BAC). TCPI = BAC-EV EAC-AC Cost efficiency that must be maintained to complete the current EAC. VAC Page 305 VAC = BAC-EAC Variance at Completion Less than 1.0 = Easier to complete Greater than 1.0 = Harder to complete (Value of work remaining divided by calculated estimate to complete, ETC) At the end, how much more or less than plan will we have spent? PMP® Prep: PMBOK® 5th - 2013 7.4.2 Control Costs Tools and Techniques: Earned Value Management (EVM) Work Products Money $3,000 Hours 300 EAC Deliverables. 30 Projected Overrun $2,000 200 20 Cost Variance (CV) $1,000 100 BAC AC PV (Baseline) Schedule Variance (SV) 10 EV 0 1 2 3 Weeks Page 307 PMP® Prep: PMBOK® 5th - 2013 7.4.2 Control Costs Tools and Techniques: EVM, The Easy Way to Remember It Page 307 • EV (BCWP) comes first in every formula. • If it is a variance - it is EV minus something • If it is an index - it is EV divided by something • If the question relates to cost - use AC • If the question refers to schedule - use PV • Negative is either behind schedule or over budget ( For example: CV = -30% = over budget) • Positive is either ahead of schedule or under budget PMP® Prep: PMBOK® 5th - 2013 Exercise Project Status at the end of Week 2 Task A Task B Task C 100% complete 25% complete 0% complete Dimensions of Project Performance AC = 140 hours AC = 80 hours AC = 0 hours Try It: Schedule Variance -50 hours ____________ Cost Variance -70 hours ____________ Cost at Completion (Typical) Cost at Completion (Atypical) PV = Planned Value AC = Actual Cost EV = Earned Value Schedule Variance = EV - PV Cost Variance = EV - AC = EVc/ACc CPIc Estimated (Cost) at Completion (EAC): Typical 733 hours ____________ 570 hours ___________ = ACc Estimated (Cost) at Completion = + (BAC-EVc)] CPIc ACc + (BAC-EVc) (EAC): Atypical WBS Cum. Hrs. 500 EVc = 150 hours 200 hours SV = - 50 hours PVc = EVc = 150 hours ACc = 220 hours CV = - 70 hours 50 400 50 A 100 300 Task A Task B Task C 100 Hrs 200 Hrs 200 Hrs PV BCWS 100 B 200 100 Cost at Completion (Atypical) 100 C 100 Cost at Completion (Typical) 1 Page 308 = 220 + (500 -150) = 570 hours 2 3 Time, weeks = 220 + [(500-150)/(150/220)] = 733 hours = BAC/CPI 4 PMP® Prep: PMBOK® 5th - 2013 7.4.2 Control Costs Tools and Techniques: Forecasting • EAC Based on ETC by the Team EAC = AC + Bottom-Up ETC • EAC Forecast where Future Work is at Same Rate of Work Shown in the Baseline Budget Past costs were atypical, and future work will be at the same rate of expenditure as in the baseline budget. EAC = AC + (BAC - EV) • EAC Forecast where Future Work will not Change from Actual Past costs were typical of what will happen in the future. EAC = BAC/CPI Same as: EAC = AC + [(BAC – EV)]/CPI] • EAC Forecast where Future Work be Modified by both CPI and SPI Future work will be at the same rate of expenditure as in the original baseline budget, but is modified by both of the indexes. It assumes the project is in a cost overrun situation and there is a requirement to meet a firm schedule commitment. It is useful when schedule is a factor affecting future work. The weighting of CPI and SPI can be varied according to the PM’s judgment (80/20, 50/50, etc.) EAC = AC + [(BAC – EV)/(CPI x SPI)] Page 309 PMP® Prep: PMBOK® 5th - 2013 7.4.2 Control Costs Tools and Techniques: To-Complete Performance Index (TCPI) TCPI is used to determine if the BAC or the EAC can be reasonably achieved It measures future cost performance needed achieve either a target BAC or target EAC. Calculate the reasonableness of BAC first. If it is obvious that the BAC is no longer viable, the project manager should consider the reasonableness of achieving the forecasted EAC. To Achieve a Target EAC To Achieve a Target BAC TCPI (BAC) = TCPI (BAC) = Page 310 Work Remaining Funds Remaining TCPI (EAC) = BAC - EV EAC - AC BAC - EV BAC - AC PMP® Prep: PMBOK® 5th - 2013 7.4.2 Control Costs Tools and Techniques: To-Complete Performance Index (TCPI) The TCPI is compared to the cumulative CPI to determine if a target EAC is reasonable, e.g., within plus/minus 0.05 of the cumulative CPI (some management groups allow plus/minus 0.10). If a TCPI delta exceeds 0.05, the target EAC may be overly optimistic. If a TCPI delta is lower than 0.05, the target EAC may be overly conservative. Given a TCPI of 1.1, the simple definition is: for every dollar spent from here to the end of the contract, a dollar and ten cents worth of budgeted work must be completed (or earned) to achieve the target EAC. Likewise a TCPI of 0.95 means: for every dollar spent from here to the end of the contract, only 95 cents worth of budgeted work must be completed or earned. Page 310 PMP® Prep: PMBOK® 5th - 2013 7.4.2 Control Costs Tools and Techniques: To-Complete Performance Index (TCPI) To-CompletePerformance Performance Index Index To-Complete Status Date + TCPI (BAC) Baseline Plan 1.00 TCPI (EAC) - Pages 310 Cumulative CPI PMP® Prep: PMBOK® 5th - 2013 M&C: Quality Management PMBOK® Fifth Edition, Page 248 8.3 Control Quality Inputs Project management plan Quality metrics Quality checklists Work performance data Approved change requests Deliverables Project documents Organizational process assets Page 315 Tools & Techniques Seven basic quality tools Statistical sampling Inspection Approved change requests review Outputs Quality control measurements Validated changes Verified deliverables Work performance information Change requests Project management plan updates Project documents updates Organizational process assets updates PMP® Prep: PMBOK® 5th - 2013 8.3 Control Quality Perform Quality Control is the process of monitoring and recording results of executing the quality activities to assess performance and recommend necessary changes Page 315 PMP® Prep: PMBOK® 5th - 2013 8.3.1 Control Quality Inputs: Are straight forward, read them, but remember: Quality Assurance (QA): the process of auditing quality requirements, and the results from quality control (QC) measurements, to ensure quality standards and operational definitions are used.. Quality assurance involves Quality Audits, and is done in Execution Process. Quality Control (QC): a process of monitoring and recording results (both product and project management) of executing quality activities to assess performance and to recommend necessary changes. Involves identifying ways to remove the causes of quality defects. Quality control involves inspection and requires an understanding of sampling strategies, tolerances, and the causes of variation in a process. It is done in the Monitoring and Controlling Process. Pages 316 PMP® Prep: PMBOK® 5th - 2013 8.3.2 Control Quality Tools and Techniques The first seven (7) Tools & Techniques in this section are called the Seven Basic Tools of Quality - know these for the test! Exam Tip Page 319        Cause and Effect Diagram Control Charts Flowcharting Histograms Pareto Diagrams Checksheets Scatter Diagram PMP® Prep: PMBOK® 5th - 2013 8.3.2 Control Quality Tools and Techniques: Cause and Effect Diagram Cause & Effect, Ishikawa or Fishbone Diagrams People Not Following Procedures Material Methods Lack of Training CAUSES Transport Page 319 IT System EFFECT Procedure PMP® Prep: PMBOK® 5th - 2013 8.3.2 Control Quality Tools and Techniques: Control Charts A chart of process performance over time used to determine if the process is in control or out of control UCL ±3 99.7% . . . . . . .. . . . . .. . . . . .. . .. . . .. . . . . . .. . . ±2 95.5% Expected Variation Out of Control (Assignable Cause) ±1 68% Normal Distribution Curve Mean LCL in control  normal distribution of outcomes  due to common causes of variation inherent in the process Page 320 out of control  rule of seven, trends, and cycles  due to special causes of variation external to the process PMP® Prep: PMBOK® 5th - 2013 8.3.2 Control Quality Tools and Techniques: Control Charts Hours recorded for this project started on plan, but if the trend continues, hours spent will drift out of control. Upper Spec. Limit UCL Plan or Mean LCL Lower Spec. Limit Actual Page 321 PMP® Prep: PMBOK® 5th - 2013 8.3.2 Control Quality Tools and Techniques: Flowcharting Process Flowchart Yes Design Review Proceed OK? No Revise Page 321 PMP® Prep: PMBOK® 5th - 2013 8.3.2 Control Quality % contribution (or frequency of occurrence) Tools and Techniques: Pareto Charts Pareto Diagram: 80%? a histogram, ordered by frequency of occurrence, that shows the percent contribution of each category of identified cause to the overall quality defects in a product or process. Pareto Analysis: Pareto diagrams help project teams identify the vital few factors that account for most quality problems from the more numerous trivial many factors. Pareto’s Law: Design of Experiments: 80/20 Rule Which variables have influence over the outcome. “What If” Analysis source Pages 321-322 PMP® Prep: PMBOK® 5th - 2013 8.3.2 Control Quality Tools and Techniques: Run Chart … a tool that uses mathematical techniques to forecast future outcomes based on past results … may be used to monitor quality (product), cost and schedule performance of a project … provides a high-level overview that indicates whether or not more detailed information is needed Page 322 The Rule of Seven: 7 data points all above or below the mean, or all increasing or decreasing, indicate a trend PMP® Prep: PMBOK® 5th - 2013 8.3.2 Control Quality Tools and Techniques: Scatter Diagram Page 323 PMP® Prep: PMBOK® 5th - 2013 8.3.2 Control Quality Tools and Techniques: Statistical Sampling …a technique for accepting or rejecting a larger population by choosing a part of the population for inspection ... • Statistical sampling can reduce the cost of QC on a project. • The validity of statistical sampling depends on an appropriate choice of sample items and sample size. • Sample size increases exponentially as the level of desired certainty increases and the acceptable level of error decreases. • Sampling strategies include single samples from a lot, multiple small samples from a lot, and double sampling methods where the size of the second sample depends on the results of the first sample. • All sampling strategies involve some risk of producer error (type I error) where acceptable lots are rejected based on a non-representative sample or consumer error (type II error) where unacceptable lots are accepted based on a non-representative sample. Page 324 PMP® Prep: PMBOK® 5th - 2013 8.3.2 Control Quality Tools and Techniques: Inspection Techniques … An evaluation of whether or not the project results conform to the latest specifications and requirements ... Types of Inspection : • • • • • • • measuring examining auditing testing acceptance testing reviewing walk-throughs Inspection generally takes place throughout the project’s lifecycle. Be sure to plan for it accordingly and to include it in the WBS. Page 325 PMP® Prep: PMBOK® 5th - 2013 M&C: Communications Management PMBOK® Fifth Edition, Page 303 10.3 Control Communications Inputs Project management plan Project communications Issue log Work performance data Organizational process assets Page 328 Tools & Techniques Information management systems Expert judgment Meetings Outputs Work Performance information Change requests Project management plan updates Project documents updates Organizational process assets updates PMP® Prep: PMBOK® 5th - 2013 10.3 Control Communications Control Communications is the process of monitoring and controlling communications throughout the entire project life cycle to insure the information needs of the project stakeholders are met. Page 328 PMP® Prep: PMBOK® 5th - 2013 10.3.1 Control Communications Inputs: Work Performance Data Earned Value Management: Test Yourself • How much work is done so far? • How much work did we plan to have done so far? • When do we now estimate the project will be done? • How much have we spent for what we’ve achieved? • How much did we plan to spend for what we’ve achieved? ? • How much do we now estimate the project will cost to complete? Page 329 PMP® Prep: PMBOK® 5th - 2013 10.3.3 Control Communications Outputs: Work Performance Information Earned Value Management: The Data Variance Analysis PV = Planned Value (was BCWS) (1) EV = Earned Value (was BCWP) (2) AC = Actual Cost (was ACWP) (3) … a comparison of actual results to planned results for the purpose of early problem detection ... (1) requires a performance baseline (2) (3) requires a way to measure value of work completed (earned value) requires a way to collect actual costs at work package level AC Actual Cost • Cost, schedule, scope, and quality variances are most typical – but they can also include resources and risk variances. • Both positive and negative variances need analysis • Should involve an evaluation of cause and impact • Becomes an input to change control process for generating corrective actions Cost, Hours, or Work Products Total Variance PV Planned Value SV Schedule Variance CV Cost Variance EV Work Performed (Earned Value) Time t When Planned t Actual Trend Analysis Page 332 • a tool that uses mathematical techniques to forecast future outcomes based on past results • may be used to monitor quality (product), cost and schedule performance of a project • provides a high-level overview that indicates whether or not more detailed information is needed The Rule of Seven: 7 data points all above or below the mean, or all increasing or decreasing, indicate a trend PMP® Prep: PMBOK® 5th - 2013 M&C: Risk Management PMBOK® Fifth Edition, Page 349 11.6 Control Risks Inputs Project management plan Risk register Work performance data Work performance reports Page 335 Tools & Techniques Risk reassessment Risk audits Variance and trend analysis Technical performance measurement Reserve analysis Meetings Outputs Work performance information Change requests Project management plan updates Project documents updates Organizational process assets updates PMP® Prep: PMBOK® 5th - 2013 11.6 Control Risks Control Risks is the process of implementing risk response plans, tracking identified risks, monitoring residual risks, identifying new risks and evaluating risk process effectiveness throughout the project Page 335 PMP® Prep: PMBOK® 5th - 2013 11.6.1 Control Risks Inputs The Risk Management Plan Includes: • Methodology: Approaches, tools and data sources. • Roles and Responsibilities: Team member ownership for risk activities. Risk Register • Budgeting: Funds needed for contingency reserves and management reserves. • Timing: When processes will be done, reserves applied, and how risk appears in schedule. • Sources of risk, potential risk event, and risk symptoms • Categories: Risk groupings. The RBS looks at sources of risk, IDs and categorizes them. • Opportunities to pursue, opportunities to ignore • Thresholds: What is the trigger? Stakeholders have different thresholds of risk tolerance, define them, and the must be agreed by all. • Threats to respond to, threats to accept • Planned risk responses and how contingencies will be implemented • Define P/I Levels: Qualitative (low to high) or probabilities. • Risk reserves • Risk Matrix: Likelihood-Severity, or Probability-Impact. • Responsibilities for risk management • Stakeholder Risk Tolerances: Progressively elaborated. • Plan for ongoing risk identification, quantification, and response development • Reporting Formats and Tracking: Document risk, auditing, defines content of risk register. Work Performance Reports Purpose of Performance Reports: • to detect problems in time to take corrective or preventive action • to reduce customer and management anxiety • to share project information within the project team Guidelines for Performance Reports: • keep the report short, matching its length to the projects’ complexity and the audience’s needs • use a consistent template and format • use visual elements such as charts and graphs Page 335-236 Criteria for Performance Reporting: • gives timely, complete, and accurate information • doesn’t add more administrative overhead than it’s worth • is acceptable and useful to all participants • gives warning of problems in time for preventive or corrective actions • is easily understood by those who have a need to know PMP® Prep: PMBOK® 5th - 2013 11.6.2 Control Risks Tools and Techniques: Variance and Trend Analysis Variance Analysis … a comparison of actual results to planned results for the purpose of early problem detection ... • Cost, schedule, scope, and quality variances are most typical – but they can also include resources and risk variances. • Both positive and negative variances need analysis • Should involve an evaluation of cause and impact • Becomes an input to change control process for generating corrective actions Page 338 Trend Analysis • a tool that uses mathematical techniques to forecast future outcomes based on past results • may be used to monitor quality (product), cost and schedule performance of a project • provides a high-level overview that indicates whether or not more detailed information is needed The Rule of Seven: 7 data points all above or below the mean, or all increasing or decreasing, indicate a trend PMP® Prep: PMBOK® 5th - 2013 11.6.2 Control Risks Tools and Techniques: Reserve Analysis A provision in the project plan to mitigate cost and/or schedule risk May be calculated as a percent of baseline to allow for overruns May be established as a separate fund for unforeseen problems May have many different (and application area specific) names: • management reserve • contingency May be assigned to any level of the WBS, or RBS cause. Exam Tip PMI recommends a minimum total reserve of 10% Pages 339 PMP® Prep: PMBOK® 5th - 2013 11.6.3 Control Risks Outputs: Updates and Change Requests Implementing contingency plans or workarounds requires change to the project plan. Workaround is defined as a response to a threat that has occurred, for which a prior response had not been planned or was not effective. Change requests can include corrective and preventive actions. Change Control System A set of procedures that describes how modifications to the project deliverables and documentation are managed and controlled, including: • • • • • requesting changes reviewing the implications of changes requests approving or rejecting changes communicating changes maintaining a change log - comprehensive list of changes Exam Tip Was on my test Contingency = Pre-Planned Pages 339 PMP® Prep: PMBOK® 5th - 2013 Exam Tip Exercise Risk Monitoring and Control The exam often asks questions such as: •What do you do with non-critical risks? Answer: Document and revisit frequently •Would you select only one risk response strategy? Answer: No, a combination of choices •What risk activities would you do during Execution? . Answer: Watch for non-critical risks that become more important •What is most important to address in team meetings? Answer: Risk •How would risk be addressed in team meetings? Answer: “Status of risks?”, “Any new risks?”, “Any change to the order of importance?” •Which are more frequent, contingency plans or workarounds? Answer: With proper risk management Workarounds become less frequent than contingency plans. PMP® Prep: PMBOK® 5th - 2013 M&C: Procurement Management PMBOK® Fifth Edition, Page 379 12.3 Control Procurements Inputs Project management plan Procurement documents Agreements Approved change requests Work performance reports Work performance data Page 341 Tools & Techniques Contract change control system Procurement performance reviews Inspections and audits Performance reporting Payment systems Claims administration Records management system Outputs Work performance information Change requests Project management plan updates Project documents updates Organizational process assets updates PMP® Prep: PMBOK® 5th - 2013 12.3 Control Procurements Control Procurements is the process of managing procurement relationships, monitoring contract performance and making changes and corrections to contracts as appropriate Page 341 PMP® Prep: PMBOK® 5th - 2013 12.3.1 Control Procurements Inputs Procurement Statement of Work Match Contract Type to the Project A narrative description of products or services to be supplied under contract. • Provides the basis of agreement between buyer and supplier • Sufficient detail to allow prospective suppliers to determine whether or not they can comply • Sufficient latitude for creative solutions only if appropriate • Each procurement requires a separate SOW. But one SOW may cover many items in a single procurement • May be revised as the procurement progresses • Should be clear, concise, and unambiguous • May be developed by the project team or supporting offices (or even the seller) depending on policy and ability • Your best defense against procurement scope creep! Pages 342-343 Fixed Price (or Lump Sum) Type Contracts: Used on well specified projects for which costs can be accurately estimated. Cost risk is on the supplier. (includes FFP, FPIF, FP-EPA) Cost Reimbursable Type Contracts: Exam Tip Used on development projects for flexibility. Cost risk is on the buyer, so establish administrative & reporting systems to allow both buyer and seller visibility into costs. (Includes CPFF, CPIF, CPAF) Time & Materials Type Contracts: Used on projects where the deliverables are well defined, repetitive units but the quantities are not yet known (e.g., identical pieces of equipment, or labor hours and associated material costs – includes overhead and burden) PMP® Prep: PMBOK® 5th - 2013 12.3.1 Control Procurements Inputs: Approved Change Requests  Change Requests/ Change Orders / Constructive Change Orders -know the differences  Use the Change Control System and Change Control Board  Approved / Unapproved -- document all “changes”  Re-plan and update the documentation (including risk)  Contractors may use change orders to “get well” Page 343 PMP® Prep: PMBOK® 5th - 2013 12.3.2 Control Procurements Tools and Techniques: Contract Change Control System Contract Change Control System Defines the process by which the contract can be modified. It is part of the Integrated Change Control system, and includes paperwork, tracking systems, dispute resolution conditions, and approval levels for authorization. If the buyer terminates the contract for cause, convenience, or default, it is done in accordance with the termination and change control sections of the contract. Contract changes usually also involve changes in either contract pricing or schedule or both. Disputed changes may require mediation or legal resolution. Page 345 PMP® Prep: PMBOK® 5th - 2013 12.3.3 Control Procurements Tools and Techniques: Contract Change Control System Example Contract Change Control System modifying the contract” • Note: • Exam questions - “How is project control different in a contracted environment?” Answers may include: When working under a contract, the PM’s success depends not solely on success of team members, but on the culture and procedures of the buyer’s company. • • • • Page 348 : “A Process for (PMBOK® Fourth Edition, Page 338) You need to deal with a different company’s set of procedures It is not as easy to “see” the problems A greater reliance on reports to determine if a problem exists A greater reliance on relationships between Buyer and Seller’s PMs. PMP® Prep: PMBOK® 5th - 2013 12.3.2 Control Procurements Tools and Techniques: Claims Administration Claims Administration Contested changes and constructive changes are those where the buyer and seller cannot agree on payment for the change, or cannot agree that the change even occurred. These become claims, disputes, or appeals. If not settled by the parties, it may be subject to dispute resolution procedures in the contract, e.g., arbitration dispute resolution (ADR), and can be started either before or after contract closure. The preferred method of settlement is negotiation. Page 345 PMP® Prep: PMBOK® 5th - 2013 12.3 Control Procurements EXERCISE CONTRACT INTERPRETATION – “WHICH WINS” In each line, circle the item that would “win” in a dispute over contract interpretation ! Contract Language OR A memo describing changes after the contract is signed Contract Language OR A memo signed by both parties before the contract is signed that describes what was agreed to during negotiations Contract terms and conditions OR Scope of work Common definition OR The intended meaning (without supplying a definition) Industry use of the term OR Common use of term Special provisions OR General provisions Typed over wording on contract OR A handwritten comment on the contract that is also initialed Numbers OR Words Detailed terms OR General terms It depends on the Order of Precedence Clause in the contract ! Page 350 PMP® Prep: PMBOK® 5th - 2013 M&C: Project Stakeholder Management PMBOK® Fifth Edition, Page 409 13.4 Control Stakeholder Engagement Inputs Project management plan Issue log Work performance data Project documents Page 351 Tools & Techniques Information management systems Expert judgment Meetings Outputs Work performance information Change requests Project management plan updates Project documents updates Organizational process assets updates PMP® Prep: PMBOK® 5th - 2013 13.4 Control Stakeholder Engagement Control Stakeholder Engagement is the process of monitoring overall project stakeholder relationships and adjusting strategies and plans for engaging stakeholders. This process will increase the efficiency and effectiveness of engaging stakeholders as the project evolves. The Project Manager (PM) is responsible for engaging and managing stakeholders. Page 351 PMP® Prep: PMBOK® 5th - 2013 13.4.2 Control Stakeholder Engagement Tools and Techniques: Information Management Systems Information Management Systems A variety of tools are available to the PM for capturing and distributing information on cost schedule and performance. Reports can be consolidated from several systems for distribution. Examples are table reporting, spreadsheet analysis, and presentations. Dashboard graphics can be used for visual presentation of project performance Page 352 PMP® Prep: PMBOK® 5th - 2013 Closing Process Group Page 355 PMP® Prep: PMBOK® 5th - 2013 PMBOK® Fifth Edition, Page 61 Process Groups Knowledge Areas 4. Project Integration Management Initiating 4.1 Develop Project Charter 5. Project Scope Management Planning 4.2 Develop Project Management Plan 5.1 5.2 5.3 5.4 Executing Closing 4.3 Direct & Manage Project Work Plan Scope Mgt. Collect Requirements Define Scope Create WBS Monitoring & Controlling 4.4 Mon/Ctrl Proj Work 4.5 Perform Integrated Change Control 5.5 Validate Scope 5.6 Control Scope 6.2 6.3 6.4 6.5 6.6 Define Activities Sequence Activities Est. Activity Resources Est. Activity Durations Dev. Schedule 7. Project Cost Management 7.1 Plan Cost Mgt. 7.2 Estimate Costs 7.3 Determine Budget 8. Project Quality Management 8.1 Plan Quality Mgt. 8.2 Perform Quality Assurance 9. Project Human Resource Management 9.1 Plan Human Resource Mgt. 9.2 Acquire Project Team 9.3 Develop Project Team 9.4 Manage Project Team 7.4 Control Costs 8.3 Control Quality 10. Project Communications Management 10.1 Plan Communications Management 11. Project Risk Management 11.1 Plan Risk Management 11.2 Identify Risks 11.3 Perform Qualitative Risk Analysis 11.4 Perform Quantitative Risk Analysis 11.5 Plan Risk Response 12. Project Procurement Management 12.1 Plan Procurement Mgt. 12.2 Conduct Procurements 12.3 Control Procurements 13.2 Plan Stakeholder Management 13.3 Manage Stakeholder Engagement 13.4 Control Stakeholder Engagement Page 28 4.6 Close Project or Phase 4.6 Close Project or Phase Mgt. 6.1 Plan Schedule 6.7 Control Schedule 12.4 Close Procurements 6. Project Time Management 13. Project Stakeholder Management Closing 13.1 Identify Stakeholders 10.2 Manage Communications 10.3 Control Communications 11.6 Control Risks 12.4 Close Procurements PMP® Prep: PMBOK® 5th - 2013 Closing: Integration Management PMBOK® Fifth Edition, Page 100 4.6 Close Project or Phase Inputs Project management plan Accepted deliverables Organizational process assets Page 355 Tools & Techniques Expert judgment Analytical techniques Meetings Outputs Final product, service or result transition Organizational process assets updates PMP® Prep: PMBOK® 5th - 2013 4.6 Close Project or Phase Close Project or Phase is the process of finalizing all activities across all of the Project Management Process Groups to formally complete the project or phase Page 355 PMP® Prep: PMBOK® 5th - 2013 4.6 Close Project or Phase The PM reviews all information from previous phase closures to ensure that all work has been done and objectives have been met. The scope baseline (scope, WBS and WBS dictionary) is reviewed to ensure completion. If a project is terminated before completion, procedures are established to investigate and document why the action was taken. Stakeholders are engaged in the process. Page 355 PMP® Prep: PMBOK® 5th - 2013 4.6.1 Close Project or Phase Inputs: The Project Management Plan (Another Reminder) The other 23 planning processes are integrated to create the project management plan. Updates to any plans require an update to the PM plan. Think of the PM plan as a bucket into which all the other plans “drip” until it is full.             Page 356 Plan Scope Management Collect Requirements Define Scope Create WBS Plan Schedule Management Define Activities Sequence Activities Estimate Activity Resources Estimate Activity Durations Develop Schedule Plan Cost Management Estimate Costs            Determine Budget Plan Quality Management Plan Human Resource Management Plan Communications Management Plan Risk Management Identify Risks Perform Qualitative Risk Analysis Perform Quantitative Risk Analysis Plan Risk Response Plan Procurement Management Plan Stakeholder Management PMP® Prep: PMBOK® 5th - 2013 4.61 Close Project or Phase Inputs: Accepted Deliverables These have all been answers on the test: • Customer feedback on a more detailed basis • Done at the end of each Project Phase (not PM phase) • Results in formal acceptance Exam Tip The questions on the exam are vague on Scope Validation. Read them carefully. One question asks for: “the key aspect of scope validation” Answer: “customer acceptance of project efforts”. The answer does not involve correctness of the work. Page 357 PMP® Prep: PMBOK® 5th - 2013 4.63 Close Project or Phase Outputs: Final Product, Service, or Result Transition Final Product, Service, or Result Transition The output of Close Project or Phase is the transition of what the project was authorized to produce. If it is a phase closure, it is the intermediate product, service or result of that phase. Formal acceptance includes receiving a formal statement that the requirements of the project or phase have been met. Pages 358 PMP® Prep: PMBOK® 5th - 2013 4.63 Close Project or Phase Outputs: Organizational Process Assets Updates Organizational Process Assets Updates Closure will include storage of project documentation using the configuration management system. OPA updated during closure include: Project Files Assemble a complete set of project records from all processes for archiving, and updating historical databases. Examples include: the PM plan, scope, cost, schedule, calendars, risk registers, change documents, risk responses, and risk impact. Project or Phase Closure Documents Documentation showing project completion (or termination) and transfer of deliverables. During closure, the PM reviews closure documents from all prior phases, acceptance documents from Validate Scope and the contract to ensure that all requirements are completed. Historical Information Lessons learned are transferred to archives for future use. This can be information on issues and risks as well as techniques that worked well and can be applied to future projects. Pages 359 PMP® Prep: PMBOK® 5th - 2013 Closing: Project Procurement Management PMBOK® Fifth Edition, Page 386 12.4 Close Procurements Inputs Project management plan Procurement documents Page 360 Tools & Techniques Procurement audits Procurement negotiations Records management system Outputs Closed procurements Organizational process assets updates PMP® Prep: PMBOK® 5th - 2013 12.4 Close Procurements Close Procurements is the process of completing each procurement. Contract closure involves verification that all the work and deliverables produced under contract were acceptable. In multi-phase contracts, the term of the contract may only apply to the end of each phase, and this process would close phase-end contracts. Page 360 PMP® Prep: PMBOK® 5th - 2013 12.4 Close Procurements Contract closure involves verification that all the work and deliverables produced under contract were acceptable. It also involves updating records to as-built and archiving this information for future use. In multi-phase contracts, this process closes phaseend contracts. Early termination of a contract (or a portion) can result from mutual agreement of the parties or from default of one of the parties, or for convenience of the buyer. Rights and responsibilities of the parties are controlled by the terminations clause. Buyer may have the right to terminate all or part of a contract for cause or convenience at any time, but buyer may have to compensate seller for preparations, partial completions, and completed/accepted work Page 360 PMP® Prep: PMBOK® 5th - 2013 12.4.2 Close Procurements Tools and Techniques: Procurement Negotiations  Negotiation is the primary goal for settling disputes  If this cannot be achieved, use Alternative Dispute Resolution (ADR) – Mediation or Arbitration  Litigation is the LEAST desirable option. Page 327 PMP® Prep: PMBOK® 5th - 2013 4.6 and 12.4 Close Project/Phases and Close Procurements Be prepared for as many as sixteen questions on these topics: • Inputs and Outputs • How Close Project is similar/different from Close Contract (Close Procurements has similar work to Close Project, but with more attention on documentation, completion of files and verification/acceptance.) PMP® Prep: PMBOK® 5th - 2013 10.2 Plan Communications One More Time: It was on my examination twice Plan Communications is the process of determining the project stakeholder information needs and defining a communication approach The formula: Channels = N(N – 1) 2 Reveals the number of possible channels of communication in a group, where N is the number of people in the group Page 166-167 PMP® Prep: PMBOK® 5th - 2013 Professional Responsibility Page 365 PMP® Prep: PMBOK® 5th - 2013 Professional Responsibility Professional Responsibility was introduced into the PMBOK in version in it’s third edition. It requires project managers to consider legal and ethical issues, and at all times to focus on professionalism and advancement of the profession of project management Page 365 PMP® Prep: PMBOK® 5th - 2013 Professional Responsibility • Think about Legal, ethical and professional behavior when answering exam questions • You will be challenged with multiple situational questions • Read PMI Member Ethical Standards: Member Code of Ethics and Member Standards of Conduct, PMP Code of Professional Conduct • Follow the law, follow bylaws and cooperate on ethics investigations • The PMI prefers that ethics be handled through infractions without resorting to formal procedures • Focus on professionalism, integrity, responsibility, selfimprovement, fairness, honesty and communication • Balance stakeholders’ interests PMP® Prep: PMBOK® 5th - 2013 Professional Responsibility Read Pages 365-366 Carefully Clarifying Information Pages 365-66 PMP® Prep: PMBOK® 5th - 2013 Professional Responsibility Code of Professional Conduct 2006 CHAPTER 1. VISION AND APPLICABILITY 1.1 Vision and Purpose As practitioners of project management, we are committed to doing what is right and honorable. We set high standards for ourselves and we aspire to meet these standards in all aspects of our lives—at work, at home, and in service to our profession. This Code of Ethics and Professional Conduct describes the expectations that we have of ourselves and our fellow practitioners in the global project management community. It articulates the ideals to which we aspire as well as the behaviors that are mandatory in our professional and volunteer roles. The purpose of this Code is to instill confidence in the project management profession and to help an individual become a better practitioner. We do this by establishing a profession-wide understanding of appropriate behavior. We believe that the credibility and reputation of the project management profession is shaped by the collective conduct of individual practitioners. We believe that we can advance our profession, both individually and collectively, by embracing this Code of Ethics and Professional Conduct. We also believe that this Code will assist us in making wise decisions, particularly when faced with difficult situations where we may be asked to compromise our integrity or our values. Our hope that this Code of Ethics and Professional Conduct will serve as a catalyst for others to study, deliberate, and write about ethics and values. Further, we hope that this Code will ultimately be used to build upon and evolve our profession. 1.2 Persons to Whom the Code Applies The Code of Ethics and Professional Conduct applies to: 1.2.1 All PMI members 1.2.2 Individuals who are not members of PMI but meet one or more of the following criteria: .1 Non-members who hold a PMI certification .2 Non-members who apply to commence a PMI certification process . .3 Non-members who serve PMI in a volunteer capacity. Page 367 PMP® Prep: PMBOK® 5th - 2013 Professional Responsibility Code of Professional Conduct 2006 CHAPTER 2. RESPONSIBILITY 2.1 Description of Responsibility Responsibility is our duty to take ownership for the decisions we make or fail to make, the actions we take or fail to take, and the consequences that result. 2.2 Responsibility: Aspirational Standards As practitioners in the global project management community: 2.2.1 We make decisions and take actions based on the best interests of society, public safety, and the environment. 2.2.2 We accept only those assignments that are consistent with our background, experience, skills, and qualifications. 2.2.3 We fulfill the commitments that we undertake – we do what we say we will do. 2.2.4 When we make errors or omissions, we take ownership and make corrections promptly. When we discover errors or omissions caused by others, we communicate them to the appropriate body as soon they are discovered. We accept accountability for any issues resulting from our errors or omissions and any resulting consequences. 2.2.5 We protect proprietary or confidential information that has been entrusted to us. 2.2.6 We uphold this Code and hold each other accountable to it. Page 369 PMP® Prep: PMBOK® 5th - 2013 Professional Responsibility Code of Professional Conduct 2006 2.3 Responsibility: Mandatory Standards As practitioners in the global project management community, we require the following of ourselves and our fellow practitioners: Regulations and Legal Requirements 2.3.1 We inform ourselves and uphold the policies, rules, regulations and laws that govern our work, professional, and volunteer activities. 2.3.2 We report unethical or illegal conduct to appropriate management and, if necessary, to those affected by the conduct. Ethics Complaints 2.3.3 We bring violations of this Code to the attention of the appropriate body for resolution. 2.3.4 We only file ethics complaints when they are substantiated by facts. 2.3.5 We pursue disciplinary action against an individual who retaliates against a person raising ethics concerns. Page 370 PMP® Prep: PMBOK® 5th - 2013 Professional Responsibility Code of Professional Conduct 2006 CHAPTER 3. RESPECT 3.1 Description of Respect Respect is our duty to show a high regard for ourselves, others, and the resources entrusted to us. Resources entrusted to us may include people, money, reputation, the safety of others, and natural or environmental resources. An environment of respect engenders trust, confidence, and performance excellence by fostering mutual cooperation. 3.2 Respect: Aspirational Standards As practitioners in the global project management community: 3.2.1 We inform ourselves about the norms and customs of others and avoid engaging in behaviors they might consider disrespectful. 3.2.2 We listen to others’ points of view, seeking to understand them. 3.2.3 We approach directly those persons with whom we have a conflict or disagreement. 3.2.4 We conduct ourselves in a professional manner, even when it is not reciprocated. 3.3 Respect: Mandatory Standards As practitioners in the global project management community, we require the following of ourselves and our fellow practitioners: 3.3.1 We negotiate in good faith. 3.3.2 We do not exercise the power of our expertise or position to influence the decisions or actions of others in order to benefit personally at their expense. 3.3.3 We do not act in an abusive manner toward others. 3.3.4 We respect the property rights of others. Page 371 PMP® Prep: PMBOK® 5th - 2013 Professional Responsibility Code of Professional Conduct 2006 CHAPTER 4. FAIRNESS 4.1 Description of Fairness Fairness is our duty to make decisions and act impartially and objectively. Our conduct must be free from competing self interest, prejudice, and favoritism. 4.2 Fairness: Aspirational Standards As practitioners in the global project management community: 4.2.1 We demonstrate transparency in our decision-making process. 4.2.2 We constantly reexamine our impartiality and objectivity, taking corrective action as appropriate. 4.2.3 We provide equal access to information to those who are authorized to have that information. 4.2.4 We make opportunities equally available to qualified candidates. 4.3 Fairness: Mandatory Standards As practitioners in the global project management community, we require the following of ourselves and our fellow practitioners: Conflict of Interest Situations 4.3.1 We proactively and fully disclose any real or potential conflicts of interest to the appropriate 4.3.2 Page 372 stakeholders. When we realize that we have a real or potential conflict of interest, we refrain from engaging in the decision-making process or otherwise attempting to influence outcomes, unless or until: we have made full disclosure to the affected stakeholders; we have an approved mitigation plan; and we have obtained the consent of the stakeholders to proceed. PMP® Prep: PMBOK® 5th - 2013 Professional Responsibility Code of Professional Conduct 2006 Favoritism and Discrimination 4.3.3 We do not hire or fire, reward or punish, or award or deny contracts based on personal considerations, including but not limited to, favoritism, nepotism, or bribery. 4.3.4 We do not discriminate against others based on, but not limited to, gender, race, age, religion, disability, nationality, or sexual orientation. 4.3.5 We apply the rules of the organization (employer, Project Management Institute, or other group) without favoritism or prejudice. Page 373 PMP® Prep: PMBOK® 5th - 2013 Professional Responsibility Code of Professional Conduct 2006 CHAPTER 5. HONESTY 5.1 Description of Honesty Honesty is our duty to understand the truth and act in a truthful manner both in our communications and in our conduct. 5.2 Honesty: Aspirational Standards As practitioners in the global project management community: 5.2.1 We earnestly seek to understand the truth. 5.2.2 We are truthful in our communications and in our conduct. 5.2.3 We provide accurate information in a timely manner. 5.3 Honesty: Mandatory Standards As practitioners in the global project management community, we require the following of ourselves and our fellow practitioners: 5.3.1 We do not engage in or condone behavior that is designed to deceive others, including but not limited to, making misleading or false statements, stating half-truths, providing information out of context or withholding information that, if known, would render our statements as misleading or incomplete. 5.3.2 We do not engage in dishonest behavior with the intention of personal gain or at the expense of another. Page 373-274 PMP® Prep: PMBOK® 5th - 2013 Professional Responsibility Read Pages 375-377 Carefully History of the Standard Glossary Pages 375-377 PMP® Prep: PMBOK® 5th - 2013 Professional Responsibility P.M.P ® Code of Professional Conduct I. Responsibilities to the Profession A. Compliance with all organizational rules and policies. 1. Responsibility to provide accurate and truthful representations concerning all information directly or indirectly related to all aspects of the PMI Certification Program, including and not limited to the following: examination applications, test item banks, examinations, answer sheets, candidate information, and professional development program reporting forms. 2. Upon a reasonable and clear factual basis, responsibility to report possible violations of the professional code of conduct by individuals in the field of project management. 3. Responsibility to cooperate with PMI concerning ethics violations and the collection of related information. 4. Responsibility to disclose to clients, customers, owners, or contractors, significant circumstances that could be construed as a conflict of interest, or an appearance of impropriety. B. Candidate/Certificant Professional Practice. 1. Responsibility to provide accurate, truthful advertising and representations concerning qualifications, experience, and performance of services. 2. Responsibility to comply with laws, regulations, and ethical standards governing professional practice in the state/province and/or country when providing project management services. C. Advancement of the Profession. 1. Responsibility to recognize and respect intellectual property developed or owned by others, and to otherwise act in an accurate, truthful, and complete manner, including, all activities related to professional work and research. 2. Responsibility to support and disseminate the professional code of conduct to other PMI certificants. Page 378 PMP® Prep: PMBOK® 5th - 2013 Professional Responsibility P.M.P ® Code of Professional Conduct I. Candidate/Certificant Responsibilities to Customers and the Public A. Qualifications, experience, and performance of professional services. 1. Responsibility to provide accurate and truthful representations to the public in advertising, public statements, and in the preparation of estimates concerning costs, services, and expected results. 2. Responsibility to maintain and satisfy the scope and objectives of professional services, unless otherwise directed by the customer. 3. Responsibility to maintain and respect the confidentiality of sensitive information obtained in the course of professional activities or otherwise where a clear obligation exists. B. Conflict of interest situations and other prohibited professional conduct. 1. Responsibility to ensure that a conflict of interest does not compromise legitimate interests of a client or customer, or influence/interfere with professional judgments. 2. Responsibility to refrain from offering or accepting inappropriate payments, gifts, or other forms of compensation for personal gain, unless in conformity with applicable laws or customs of the country where project management services are being provided. Page 378 PMP® Prep: PMBOK® 5th - 2013 Professional responsibility Types of Questions to Expect You are building a water treatment facility. Routine tests indicate that there are contaminants in the water but that they have an extremely low risk of causing sickness. As a project manager you should: A. Inform the public that a detailed examination has been ordered to determine the extent to which the problem exists B. Do nothing because there is an extremely low risk except for some effects on small children or the elderly C. Tell the public there is no problem, except for small children and the elderly who should boil their water before drinking it D. Educate the public about the advances in water treatment technology and the industry efficiency and safety record A. Inform the public … PMP® Prep: PMBOK® 5th - 2013 Professional responsibility Types of Questions to Expect A KEY activity to defining customer satisfaction is to define: A. Business Use B. Requirements C. Product Specificity D. Change Control B. Requirements PMP® Prep: PMBOK® 5th - 2013 Professional responsibility Types of Questions to Expect When it appears that a design error will interfere with technical performance objectives, the PREFERRED response is to: A. Decrease the performance value to equal the assessed value B. Develop alternative solutions to the problem C. Increase the specified value to set a new performance goal D. Reduce the overall technical complexity of the project B. Develop alternative solutions to the problem PMP® Prep: PMBOK® 5th - 2013 Professional responsibility Types of Questions to Expect What is the MOST effective practice to ensure that cultural and ethical differences do not impede the success of your multi-national project? A. Co-Locating B. Training C. Forming D. Teaming B. Training PMP® Prep: PMBOK® 5th - 2013 Professional responsibility Types of Questions to Expect Negotiating across international cultures involves mutual interdependence between parties. The negotiations MUST be conducted in an atmosphere of: A. Mutual trust and cooperation B. Generalities and vagueness C. Sincerity and compassion D. Uncertainty and caution A. Mutual trust and cooperation PMP® Prep: PMBOK® 5th - 2013 PMP® Certification Test Preparation PMP® Prep: PMBOK® 5th - 2013 New Test and New PMBOK® Edition The PMBOK® 5th Edition was released in January 2013. The test changed again on July 31, 2013. A new Knowledge Area was introduced: Stakeholder Management. Page 2 PMP® Prep: PMBOK® 5th - 2013 The T&T CD ID is E1091 and Awards 11 PDU’s Qualification Requirements PMTestOnline is C4070 and Awards 11 PDU’s Graduate, 4-Year Degree A minimum of 4500 hours PM experience within the past 8 years + Non-Graduate, or 2-Year Degree 35 contact hours (PDU’s) of PM education = Eligibility to take the PMP® examination A minimum of 7500 hours PM experience within the past 8 years This Course ID is E1078 and Awards 24 PDU’s Page 2 PMP® Prep: PMBOK® 5th - 2013 PMBOK Fifth Edition and the New Test  The PMBOK Fifth Edition was introduced in January 2013, and the new fifth edition test started on July 31, 2013.  The PMP examination consists of 200 questions, with a four hour time limit  That’s 72 seconds (or 1.2 minutes) per question This training course will give you everything you need, with a little self-study, to pass the PMP® examination  Visit www.pmi.org, download PMP Certification Handbook Page 2 PMP® Prep: PMBOK® 5th - 2013 PMBOK 5th Edition PMP Test Domain Content Project Initiation Project Planning Project Execution Project Monitoring & Control Project Closing 13% 24% 30% 25% 8% To pass, you need to get a minimum of 122 questions correct out of 200 questions (61%) Pass rate on the 4th Edition test is about 74% Page 2 PMP® Prep: PMBOK® 5th - 2013 Apply to PMI to take the test, Schedule a date with Prometric Submit your application to Project Management Institute (PMI) http://www.pmi.org/Certification/Project-Management-Professional-PMP.aspx Log in with your User Name and Password Follow the instructions Schedule a test date with Prometric http://www.prometric.com/PMI/default.htm Control is through audit (when you pay) http://www.pmi.org/info/PDC_PMPHandbook.pdf PMI ® may audit when you pay your exam fee to PMI. If you cancel or reschedule within 30 days of the test, there is a fee of $70; within 2 days, you forfeit the entire fee. Candidates have three (3) opportunities to pass the exam in one year. If they do not pass any, they must wait one (1) year from the date of the last attempt. Page 3 PMP® Prep: PMBOK® 5th - 2013 Taking the PMP® examination Ensure you have the required experience Ensure you have 35 PDU’s AND Join the PMI® (if you haven’t) Send in your application Schedule exam at Prometrics Study hard for about 2 weeks Take the exam and pass www.pmi.org Complete a PMP® Prep course PMP® Prep: PMBOK® 5th - 2013 Applying to Take The Exam • Apply using the PMI web site. http://www.pmi.org/Certification/Project-Management-ProfessionalPMP.aspx • Using the PMI® web site to complete the application is fast and easy. Turn around to approval is normally just a few days, but it may take a little longer. • Sometimes your test center may not have an opening for a few weeks. • On the computerized test, the questions are in English, but pop-up screens will aid you in understanding the question in your native language. This feature must be requested by you in your application. • In some countries, the test may be given on paper, in English, not in your native language. PMP® Prep: PMBOK® 5th - 2013 Taking the PMP® examination  Number of Questions: 200  Time for the Exam: 4 Hours  To Pass: you must get about 122 of 200 questions correct About 61%  Questions are randomly generated, 4-option, multiple choice.  Questions not answered are wrong - answer all questions.  Don’t be surprised if some long questions are early in the exam and you get behind on time.  Breaks are allowed, but extra time is NOT allotted for them.  In most test centers you must sign out and sign back in, which takes time Page 345 PMP® Prep: PMBOK® 5th - 2013 Reasons people fail the exam • They do not read all the questions correctly • They do not read all the choices in each question • They are too nervous • They have not studied enough or use source books other than the PMBOK® • They believe they can rely purely on experience • They have not taken a PMP® prep course like this one Page 346 PMP® Prep: PMBOK® 5th - 2013 Taking the PMP® examination • Go to the test center before the day of your test, find where it is, look at the testing room, talk to the administrator. • Bring your PMI® authorization e-mail or letter to the test site. • Bring a picture identification. • PMI has recently decided not to allow any personal calculators in the testing room. A pop-up calculator is available on the computer. If that is awkward for you to use, ask the administrator to provide a calculator for you. • You will be given scrap paper, pencils, and in some test centers, earplugs. • All personal items will be safely stored for you and cannot be taken into the test room. Page 346 PMP® Prep: PMBOK® 5th - 2013 Taking the PMP® examination • Upon entering the test room, you will be given 15 minutes to use the computer tutorial and to become familiar with the commands. You can mark questions on the computer and return to the marked questions later, or you can review every question. • Use the entire 15 minutes to write information you need to remember on the scratch paper. • You will see one question on the screen at a time. • Many people finish the exam ahead of the 4-hour limit and return to “marked” questions for review/correction. • When you finish the exam or when the time limit is expired, your answers are immediately graded. The computer tells you if you pass. A temporary certificate is printed at the test center, and you immediately become a PMP®. PMI® will post a formal certificate to you later. • If you do not pass, PMI® will be notified and will send you information about retaking the exam. See PMI®s website about the additional fee. Page 346 PMP® Prep: PMBOK® 5th - 2013 Hints on Test Questions  Choices like “A or B” and “never and always” have been removed.  Watch out for distractors - choices that are true, but not the best answer.  There are about 45 to 75 “what should you do in this situation” questions.  Most people feel unsure about 50 of the 200 questions.  You must be familiar with PMI®-specific definitions. A big trick to success on the exam is to try to use PMI®’s perspective, not your experience. If that does not work, then use your training and life experiences.  Read the last sentence of each question first. What is the question asking?  Read ALL FOUR answers, without making a choice.  Read the whole question. Understand the topic and descriptors. Read the last sentence AGAIN, then eliminate two of the four answers.  Read the last sentence AGAIN, then pick the best of the two remaining answers.  About 8 to 12 questions deal with PMBOK® step-by-step processes and the input/output to processes.  There have been less than 8 earned value questions on the exam in the last three years.  Use all the exam time; do not leave early unless you have reviewed each question twice. Page 347 PMP® Prep: PMBOK® 5th - 2013 Practice Test #3 CONGRATULATIONS !!! You have just completed more than the entire PMP Test! You have done 228 questions Turn to page 449 in the workbook There are 100 questions. You have 120 minutes to complete Answers are on page 475 Hint: Use scratch paper for answers, so you can reuse the questions for practice Page 403 PMP® Prep: PMBOK® 5th - 2013 Let us know when you pass, and Send us “surprises” you remember ! PMP® Prep: PMBOK® 5th - 2013