GAF PMP Prep Participant Manual
The goal of this participant manual is to support your preparation for the PMP exam while you follow the training.
The goal of this participant manual is to support your preparation for the PMP exam while you follow the training.
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PMP® PREPARATION
A blended approach to successfully passing the PMP® Exam
For Burckhardt Compression
Sept./Oct. 2021
BY: GAF SWISS MANAGEMENT TRAINING
©2021 Max Langosco PMP®
Table of Contents
Focus on Value and on the Business ....................................................................................................... 3
Life Cycles ............................................................................................................................................ 4
Business Value .................................................................................................................................... 6
Economic Project Selection Methods ............................................................................................. 8
Building the Team ................................................................................................................................. 10
Stakeholder Management ................................................................................................................ 11
Resource Management ..................................................................................................................... 17
From Kick-Off to Closing ....................................................................................................................... 24
PMBOK® Overview ............................................................................................................................ 25
PMBOK ® Process Summary Table: ............................................................................................... 28
The Competing Constraints: ......................................................................................................... 29
Managing the Project Integration ..................................................................................................... 30
Choosing the right Methodology ...................................................................................................... 39
Planning Scope, Schedule and Cost .................................................................................................. 44
Planning Scope .............................................................................................................................. 44
Planning Schedule ......................................................................................................................... 56
Schedule Compression Methods .................................................................................................. 64
Planning Cost ................................................................................................................................ 66
Running the Show ................................................................................................................................. 70
Risk management .............................................................................................................................. 70
Quality Management ......................................................................................................................... 80
Procurement Management ............................................................................................................... 95
Keeping it all in line ............................................................................................................................. 110
Monitoring and Controlling ............................................................................................................. 110
Earned Value Management ............................................................................................................. 117
Managing Conflict ........................................................................................................................... 132
Managing Communications ............................................................................................................. 136
The Communication Management Plan ...................................................................................... 137
Managing Change ............................................................................................................................ 140
Afterword: In closing ........................................................................................................................... 143
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Welcome Note
Welcome to this preparation course for your PMP® Certification. Contributing to your success is our
aim and our goal.
This material is meant to support your step-by-step preparation to make it as smooth as possible. This
is however an important certification, the amount of effort to be invested is therefore very
relevant. Preparing for the PMP® exam is challenging, demanding and will need commitment
both on your part and on part of your management. For this reason, we highly recommend
following these basic preparatory ground rules to maximize the likelihood of your success.
• Participation to all the sessions is mandatory for receiving the 35-contact hour (these
are necessary to apply for the PMP® exam).
• In addition to the time spent in the seminar sessions, you will need to add about 60 to
100 hours of self-study. Would your manager agree for you to take some hours per week
from your worktime? Try asking!
• Pre-reading the relevant chapters of the Workbook before class is highly recommended,
and enables a better focus in class on the more challenging aspects of the PMI®
methodology,
• The exam itself should be taken as soon as possible after the last session. If studying
diligently during the preparation period, knowledge will peak directly after the class.
• The exam simulator should be used regularly for preparation. Just a few questions at the
beginning of your preparation, and then progressively more. Towards the end of the
preparation all work should be done through the question simulator while the texts
should be used as reference.
• Towards the end of the preparation, you should run at least two full exams on the
simulator (these are beyond the smaller “pulse check” tests).
We wish you success! Of course, you may count on your trainer to have your back and to help you
with any questions you may have. You may reach out to your trainer via email or other dedicated
channel we have set up for this specific purpose!
All the best!
Max Langosco, MSC PMP
PS.:
Updates and corrections of this material can be found at: www.crowrider.com/PMP-errata
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Focus on Value and on the Business
Focus on Value and on the Business
PMP Preparation
Focus on Value and on the Business
1. Life Cycles
2. Business Value
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Life Cycles
Life Cycle
• Product Life Cycle: A series of phases that
represent the evolution of a product, from
concept through delivery, growth, maturity, and
to retirement.
• Project Life Cycle: The series of phases that a
project passes through from its start to its
completion.
The definitions are taken from the PMBOK Glossary
Product and Project Life cycles
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Ability to
change /
uncertainty
Progress of
effort, cost /
knowledge
Initiation Planning Execution Closing
The Project Life Cycle (PLC)
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Business Value
Business Value
• Business Value: The net quantifiable benefit
derived from a business endeavor that may be
tangible, intangible, or both.
• Business Case: A value proposition for a
proposed project that may include financial and
nonfinancial benefits.
The definitions are taken from the PMBOK Glossary
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A business case should
contain key business
information to justify the
project such as:
Why should we be doing the project?
The alternative business options which were considered,
The Business
Case
Cost Benefit Analysis
a Rough Order of Magnitude estimate of the Project (and
operational) costs;
Project timescales
Major risks and constraints
Key Stakeholders
A business case is compiled in the early Business Analysis phase when define alternative
concepts to meeting the business/customer need. It describes the information necessary to
determine whether the project is worth the investment.
It may be created in response to a:
• Market demand,
• Organizational need,
• Customer request,
• Technological advance,
• Legal requirement,
• Ecological impacts, or
• Social need.
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Economic Project Selection Methods
What’s a
Break-even
Analysis?
Payback Period
Payback Period
Pay Back
Period
Pay Back
Period
NOW Period 1 Period 2 Period 3 Period 4 Period 5 Period 6
NOW Period 1 Period 2 Period 3 Period 4 Period 5 Period 6
Net Cash Flow -500 100 50 200 150 100 200
Net Cash Flow -500 100 50 200 150 100 200
Cumulative: 100 150 350 500 600 800
Cumulative: 100 150 350 500 600 800
In period 4, the cumulative net cash flow reaches the value invested up-front (500);
In period 4, the cumulative net cash flow reaches the value invested up-front (500);
Therefore, the Payback Period = 4 years
Therefore, the Payback Period = 4 years
This value does NOT take the time value of money in consideration.
This value does NOT take the time value of money in consideration.
Net Present
Value
NOW Period 1 Period 2 Period 3 Period 4 Period 5 Period 6
Net Cash Flow -500 100 50 200 150 100 200
Present Value 90,91 41,32 150,26 102,45 62,09 112,89
Net Present
Value (P6)
59,93
(example is is using a discount rate i i of of 10%)
PV = FV / (1+i) p
NPV is the sum of all PV vs. the initial investment.
NPV(n) = PV(1) + PV(2) + ...PV(n) – (Initial Inv.)
When i i is is chosen as as to to create NPV = 0, 0, i i is is the Internal Rate of of Return (IRR)
Net Present Value
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Projects often include elements of their product or process which
are subject to legal and/or regulatory constraints. Examples of
such requirements:
• privacy laws,
• handling of sensitive information,
• technical and/or safety related, and many more.
Compliance
Requirements
These compliance related requirements must be identified,
tracked, and managed throughout the project.
Common Compliance Categories are:
• Environmental Risk
• Workplace Health and Safety
• Corrupt Practices
• Social Responsibility
• Quality
• Process Risks
Types of compliance categories vary based on industry and solution scope. The appropriate
categories will vary for each project based on the unique legal and regulatory exposure.
Threats to compliance, or compliance related risks may be:
• Identification of new vulnerabilities.
• Changes in legal or regulatory requirements.
• Errors in testing and validation to confirm compliance.
• Errors or bugs in deliverables.
• Lack of awareness of compliance requirements.
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Building the Team
Building the Team
PMP® Preparation
Building the Team
1. Stakeholder Management
2. Resource Management
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Stakeholder Management
Stakeholder
Management
• Stakeholder: an individual, group, or
organization that may affect, be affected by, or
perceive itself to be affected by a decision,
activity, or outcome of a project, programs, or
portfolio.
The definitions are taken from the PMBOK
Glossary
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Steps of Stakeholder Analysis
1. “Identify all
potential
stakeholders”
2. “Analize the
potential
impact or
support each
stakeholder
could
generate”
3. “Assess how
key
stakeholders
are likely to
react or
respond in
various
situation.”
HINT:
• Be generous! Be inclusive! Most changes during execution
come from stakeholders initially excluded.
• Once you have them all... prioritize, prioritize, prioritize!
Step 1: Identify potential stakeholders and associated information (e.g., role, department,
interests, knowledge level, expectations, influence.
Step 2: Identify potential impact or support stakeholders could generate and classify them to
help define an approach strategy.
Step 3: Assess potential stakeholder reactions to use in developing a plan for influencing
them and eliciting their support.
The information needs of the various stakeholders should be analyzed to develop a
methodical and logical view of their information needs and sources to meet those needs.
The analysis should consider methods and technologies suited to the project that will
provide the information needed. Care should be taken to avoid wasting resources on
unnecessary information.
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The
Power/Interest
Grid:
POWER: the potential to create an impact,
INTEREST: the likelihood that the stakeholder will use their power (may be positive or
negative).
• Identifying stakeholders tends to start as the project charter is being developed.
• List of identified stakeholders should be reviewed and modified as changes occur
throughout the project.
• The project plans that are developed should describe stakeholders and the planned
engagement model.
• As the project progresses, documents such as change logs, issue logs, or requirement
documents can reveal additional stakeholders.
• The stakeholder list may be affected by organizational environment factors.
• Referring to stakeholder lists from previous projects might be useful.
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The Salience
Model:
• Mitchell, R., Agle, B.,
Wood, D: Toward a Theory
of Stakeholder
Identification and Salience:
Defining The Principle of
Who and What Really
Counts, Academy of
Management Review 1997,
Vol. 22, No. 4, pp.853-886.
1 - Dormant Stakeholder
2 - Discretionary Stakeholder
3 - Demanding Stakeholder
4 - Dominant Stakeholder
5 - Dangerous Stakeholder
6 - Dependent Stakeholder
7 - Definitive Stakeholder
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The Stakeholder Management Plan describes:
how stakeholders will be managed,
What strategies will be adopted in order to increase the
chances of project success,
How new stakeholders will be identified,
An actionable plan to interact with project success.
Stakeholder Unaware Resistant Neutral Supportive Leading
Stakeholder 1 C D
Stakeholder 2 C D
Stakeholder 3
D C
• C: C: Current attitude
• D: D: Desired attitude
Stakeholder Engagement Assessment Matrix
Social Styles of Stakeholders
Task-Directed Responsiveness
ANALYTICAL
DRIVER
Ask-Directed
Assertiveness
Tell-Directed
Assertiveness
AMIABLE
EXPRESSIVE
People-Directed Responsiveness
Adapted Adapted from from The The Social Social Styles Styles Handbook Handbook by by Wilson Wilson Learning Learning Corporation, Corporation, p. p. 88
GAF by GAF Swiss Management Training - ©2021 Max Langosco PMP® Page | 15
Design Construct Hand-Over
Work
Package 1
Work
Package 2
Work
Package 3
WP
1
WP
2
WP
3
WP
1
WP
2
WP
3
Delivery Insta lation Commiss.
WP
1
WP
2
WP
3
WP
1
WP
2
WP
3
WP
1
WP
2
WP
3
Managing Stakeholders:
Building a tailored communication stream (1)
Stakeholder
Assessment Grid
Power
Gathering key
requirements
Interest
Managing Stakeholders:
Building a tailored communication stream (2)
WBS
Stakeholders
Requirements
Level 1
Project
Level 2
Building A Building B Access Road Equipment Hand-Over
Level 3
Level 4
= Topics of a tailored
communication stream
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Resource Management
Resource
Management
• Project team: a set of individuals who support
the project manager in performing the work of
the project to achieve its objectives.
The definitions are taken from the PMBOK
Glossary
Project Resource Management includes:
• Estimate, acquire, and manage teams of people.
• Estimate the other resources those team members will need to carry out the work.
• Obtain the people.
• Develop the team, improve their competencies, facilitate interactions, and create an
effective teaming environment.
• Track team performance, create and execute improvements based on feedback, resolve
issues, and manage team personnel changes
Main Organizational Structures:
Funct iona l
Pr oj ect iz ed
Mat r ix
IT HR F&C
Prj.1 Prj.2 Prj.3 PMO IT Bus.
Project team members
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Stages of Team Building
Guarded
Confront
St or mi ng
Resolve
Trust
Regret
For mi ng
Nor mi ng
PM role:
High
Direction
High Direction
High Support
Less Direction
High Support
Per f or mi ng
Self Direction
Less Support
Adj our ni ng
High Direction
High Support
Adapted from Tuckman/Jensen Model
Emotional
Intelligence
(EQ)
(adapted from: Goleman, Emotional intelligence)
«Know Thyself, Control Thyself, Give Thyself»
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Cultural
Intelligence
(CQ)
• "Within any culture,
intelligence can be defined
as the possession of key
valued skills and behaviors
in the eyes of the members
of that culture. [...]
• cultural intelligence is
what allows us to
transcend our cultural
programming and function
effectively in cross-cultural
situations.“
(Klenke)
CQ is based on EQ and makes EQ possible across cultural boundaries (i.e.: CQ is necessary for
EQ to be useful in a cross-cultural context).
Key CQ skills:
Cognitive: The actual knowledge about cultural differences. This is the "head" of CQ.
Physical: Skills at using the right gestures, the right body language, adopting the right habits
and mannerisms.
Emotional/Motivational: The self confidence that will bring success.
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Diversity and Inclusion
Cultural
backgrounds
Industry
experiences
Spoken language
What else?
Project teams are becoming more global and therefore more diverse because of reasons
such as:
• Cultural backgrounds
• Industry experiences
• Spoken language
Therefore, creating an environment that takes advantage of the diversity and builds climate
of mutual trust is more and more relevant.
Team development objectives might include:
• Improving team knowledge and skills to reduce cost and time and improve quality.
• Improving trust to raise team morale, reduce conflict, and improve teamwork.
• Creating a collaborative culture to improve individual and team performance and
facilitate cross-training and mentoring.
• Empowering the team to participate in decision making and own the solutions
they create.
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Maslow’s Hierarchy of Needs
Common
organizational
theories
McGregor’s Theory X and Theory Y
McClelland’s Achievement Theory
Herzberg’s Motivation Theory
Maslow:
Hierarchy of
needs
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Herzberg: Motivation Theory
Hygene
Factors
Motivating
factors
McGregor: Theory X and Theory Y
Theory X:
employee style
proactive
Theory Y:
employee style
reactive
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McClelland:
Achievement
Theory
Dominant Motivator:
Achievement
Affiliation
Power
Dominant Motivator: Achievement
Individual’s Characteristics:
• Has a strong need to set and accomplish challenging goals.
• Takes calculated risks to accomplish their goals.
• Likes to receive regular feedback on their progress and achievements.
• Often likes to work alone.
Dominant Motivator: Affiliation
Individual’s Characteristics:
• Wants to belong to the group.
• Wants to be liked and will often go along with whatever the rest of the group wants to
do.
• Favours collaboration over competition.
• Doesn't like high risk or uncertainty.
Dominant Motivator: Power
Individual’s Characteristics:
• Wants to control and influence others.
• Likes to win arguments.
• Enjoys competition and winning.
• Enjoys status and recognition.
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From Kick-Off to Closing
PMBOK® Overview,
Managing the project integration
PMP® Preparation
From Kick-Off to Closing
1. PMBOK® Overview
2. Managing the Project Integration
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PMBOK® Overview
PMBOK® Guide
• PMBOK® Guide: A Guide to the Project
Management Body of Knowledge is PMI’s
flagship publication and is a fundamental
resource for effective project management in
any industry.
• Includes The Standard for Project Management.
The standard is the foundation upon which the
vast body of knowledge builds, and the guide
serves to capture and summarize that
knowledge
This definition is taken from: https://www.pmi.org/pmbok-guide-standards/foundational/pmbok
What is the PMBOK ® Guide?
The PMBOK ® Guide identifies that subset of the project management body of knowledge
that is generally recognized as good practice. It is an essential component of your
preparation for the PMP® Certification Exam.
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A common vocabulary?
Let’s start with the basics
•Project – A temporary endeavor undertaken to create a
unique product, service or result.
•Project Management (PM) – The application of knowledge,
skills, tools, and techniques to project activities to meet the
project requirements.
•Program – A group of related projects, subprograms, and
program activities managed in a coordinated way to obtain
benefits not available from managing them individually.
•Project Life Cycle – The series of phases that a project
passes through from its initiation to its closure.
The 5 Process Groups
PMBOK ® Guide
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Process Group
interaction
throughout the
PLC
PMBOK ® Guide
Remember!
The 10
Knowledge
Areas:
The 10 project management knowledge areas are:
1. Project Integration Management
2. Project Scope Management
3. Project Time Management
4. Project Cost Management
5. Project Quality Management
6. Project Human Resources Management
7. Project Communications Management
8. Project Risk Management
9. Project Procurement Management
10.Project Stakeholder Management
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PMBOK ® Process Summary Table:
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The Competing Constraints:
Balancing the
Competing project Constraints
Scope Quality Schedule
Budget Resources Risk
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Managing the Project Integration
Provides a systematic approach
Project
Integration
Management
Ensures common focus to project needs
Defines and manages the product and project scope in a
coordinated manner
Aligns resources with project needs and priorities
Ensures work on the project is blended into ongoing operations
or work within a phase is blended into work in subsequent
phases
Project Integration Management entails:
• Making choices about resource allocation, making trade-offs among competing objectives
and alternatives, and managing the interdependencies among the project management
Knowledge Areas.
• Assessment and coordination of all plans and activities that are built, maintained, and
executed throughout a project.
• It is a holistic, integrated view which ties plans together, aligns efforts, and highlights how
they depend on each other.
• It is an integrated view of all plans. It helps to identify and correct gaps or conflicts.
• It consolidates plans and encapsulates the overall project plan and its intended business
value.
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Organizational
Process Assets
(OPA)
OPA: Plans, processes,
policies, procedures, and
knowledge bases specific to
and used by the performing
organization. These assets
influence the management of
the project.
Organizational Process Assets need to be considered, as well and enterprise environmental
factors when developing a project charter. These assets are comprised of Processes and
Procedures and Corporate Knowledge Base. The process related assets are from all
organizations that are involved in the project that can and are being used to impact the
project’s success. The process assets include:
• Formal and informal plans
• Policies
• Procedures
• Guidelines
• Knowledge bases
• Lessons Learned database
• Other historical information
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Enterprise
Environmental
Factors (EEF)
EEF: Conditions (internal or
external) not under the
control of the project team,
that influence, constrain, or
direct the project at
organizational, portfolio,
program, or project level.
Enterprise Environmental Factors need to be considered when developing a project charter.
These are comprised of both the internal and external environmental factors that influence a
project’s success and may come from any or all the enterprises involved in the project. These
factors may enhance or constrain project management options and may have positive or
negative impacts, and include but are limited to:
• Organizational culture, structure and processes
• Government or industry standards
• Infrastructure
• Existing Human Resources
• Work Authorization Systems
• Stakeholder risk tolerance
• Political Climate
• Project management information system
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The Integration
Management
Knowledge
area:
Authorizes a project or phase
Documents initial requirements
The Project
Charter
Establishes a partnership between the performing
organization and the requesting organization or customer
Initiates the project
Provides the project manager with authority to apply
organizational resources to project activities
Creates or documents delegation by project initiator or
sponsor
When a need is identified, and an idea for a project emerges, a project request is prepared
for approval by the governance board.
The information about the project must address the following questions:
• What is the driving need for the project?
• What is the connection to the corporate strategy?
• What problem will it solve?
• What benefits will be realized?
The project charter is the instrument that documents the decision to proceed and kick off
the project and empowers the project manager.
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The Project Plan and its components
Subsidiary Plans
Project Baselines
Project
Management
Plan
The project management plan integrates and consolidates all the subsidiary management
plans and baselines from the planning processes. Project baselines include, but are not
limited to:
• Schedule baseline
• Cost performance baseline
• Scope baseline
Subsidiary plans include but are not limited to:
• Scope management plan
• Schedule management plan
• Cost management plan
• Quality management plan
• Process improvement plan
• Human resource plan
• Stakeholder Engagement Plan
• Communications management plan
• Risk management plan
• Procurement management plan
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Integrated Change Control
Influence
Influence factors so that only approved changes are implemented
Receive
Receive change requests from project and from external sources (customer, steering committee…)
Identify
Review, analyze,
and approve
Update
Identify the Change Control Board (CCB) correctly
Review, analyze, and approve change request promptly
Update all relevant documentation according to the approved change,
Disseminate
Disseminate change related information appropriately.
The desired outcome of Integrated Change Control is to appropriately process change
requests and to maintain the project baseline.
Change Control Board (CCB): the designated responsible(s) to review and approve or reject
a change. A change control board is responsible for meeting and reviewing the changes
requests and approving or rejecting those change requests. The roles and responsibilities of
these boards are clearly defined and are agreed upon by appropriate stakeholders. All
change control board decisions are documented and communicated to the stakeholders for
information and follow-up actions.
The Change Management Plan: Provides direction for managing the change control process
and documents the roles and responsibilities of the change control board (CCB). It answers
the following questions:
• Who can propose a change?
• What exactly constitutes a change?
• What is the impact of the change on project objectives?
• What are steps to evaluate a change request before approving or rejecting it?
• When a change request is approved, what project documents will record the next
steps (actions)?
• How will you monitor these actions to confirm completion and quality?
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Think: VERSION CONTROL
Configuration
Management
Establishes an evolutionary method that
results in consistency in change management
Provides opportunities for continuous
validation of impacts and improvement of
assessing impacts
Provides the mechanism to consistently
communicate changes.
A configuration management system with integrated change control provides a
standardized, effective, and efficient way to centrally manage approved changes and
baselines. Configuration management is focused on the specification of both the
deliverables and the process (to identify and account for project artifacts, and to record and
report changes to them).
Configuration identification selects and identifies the configuration item provided, which is
the basis for the product configuration, definition and verification, labeling of products and
documents, management of changes, and maintaining accountability
Configuration status accounting records and reports on when appropriate data about the
configuration item should be provided. The information that is recorded and reported
includes the approved configuration identifications, the statuses of proposed changes to
configuration items, and the implementation statuses of approved changes.
Configuration verification and audit ensures correctness of the composition of
configuration items and that corresponding changes are documented, assessed, approved,
tracked, and correctly implemented. This enhances the certainty that the functional
requirements defined in the configuration documentation are satisfied.
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The Project Management Information Systems
(PMIS)
Communications Plan
Stakeholder Analysis
Project Baselines
The Project
Management
Information
Systems
(PMIS)
Change Control
• Change requests
• Approved changes
• Rejected changes
Actual
Results
Re-Plan
Forecasting
Status
Progress
Analysis
• Performance Reviews
• EVM, Trend, Variance
Performance
Reporting
Contract
Closure
Admin.
Closure
The PMIS is comprised of many automated tools, such as a scheduling software,
configuration management system, information collection and distribution system, or web
interfaces to other online systems.
The project manager and project team will leverage the PMIS in to:
• Produce deliverables
• Collect and distribute work performance information
• Manage change
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Project Closing
Hand-Over to
production,
Product Final
Acceptance,
Administrative
closure,
Financial
closure,
Lessons
learned,
Releasing
resources
Project Closure objectives:
• Satisfy completion or exit criteria for the phase or project
• Transfer the project’s products, services or results to the next phase or to production
and/or operations
• Collect project or phase records, audit project success or failure, gather lessons learned.
Key questions are:
• What did we do right? What did we do wrong?
• What were the KPIs and CSFs
• What future recommendations can be made?
• How, when, and to whom should the information be disseminated?
• Archive project information for future use by organization: the organizational process
assets that need updated are:
• Project files
• Project or phase closure documents
• Historical information
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Choosing the right Methodology
Choosing the right methodology,
Planning Scope, Schedule & Cost
PMP® Preparation
Choosing the right methodology
1. Predictive,
2. Agile,
3. Hybrid
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The Product
Life Cycle:
selecting the project
methodology
Where is the
value?
Project success
defined
Fixed
Traditional
Scope
Plan
Driven
Schedule
Adaptive
Value
Driven
Budget
Estimated
Schedule
Budget
Scope
Source: Dynamic System Development Method
PM methods and methodologies
Predictive
Plan based
Change is
managed by
exception
Agile
Iteration based
Change is
embedded into
the process
Hybrid
Plan based and
iteration based
approaches are
combined to fit
specific project
needs.
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Predictive Life Cycle
Iterative Life Cycle
Life Cycles:
Incremental Life Cycle
Agile Life Cycles
Progressive elaboration
Predictive Life Cycle* A form of project life cycle in which the project scope, time, and cost
are determined in the early phases of the life cycle.
Iterative Life Cycle* A project life cycle where the project scope is generally determined
early in the project life cycle, but time and cost estimates are routinely modified as the
project team's understanding of the product increases.
Incremental Life Cycle* An adaptive project life cycle in which the deliverable is produced
through a series of iterations that successively add functionality within a predetermined
time frame. The deliverable contains the necessary and sufficient capability to be considered
complete only after the final iteration.
Agile Life Cycles* A project life cycle that is iterative or incremental. Also referred to as
change-driven or adaptive.
Progressive elaboration* The iterative process of increasing the level of detail in a project
management plan as greater amounts of information and more accurate estimates become
available.
* The definitions are taken from the PMBOK® Guide Glossary.
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How are
the results
delivered?
Deliverables may be
delivered all at once at
the end of the project.
Project outputs may be
delivered throughout
the project.
The Project
Implementation
Plan.
When delivering
outputs,
consider:
• Will the outputs be implemented in a new business
environment?
• Will the outputs be implemented in an existing business
environment?
• Will the outputs be transitioned into a live environment?
• Will you be decommissioning or removing old systems,
processes, or materials?
• Will you need to ensure training and knowledge transfer is
complete or satisfactory?
• All stakeholders, schedules, risks, budgets, and quality
standards should be considered in the Project
Implementation Plan.
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Business case:
Business
needs:
• Documented economic feasibility study
• Used to establish the benefits of project
components
• Provides a basis for authorization of
further project activities
Business needs documents:
• Provides the high-level deliverables
• Written prior to the formal business case
• Describes what needs to be created and
what needs to be performed
Assessment of Project Needs, Complexity, and Magnitude
Methodology Best Suited When Examples
Agile
• Changes are relatively easy, and waste is not costly.
• Complex environment where end product is not fully known
and user feedback is very valuable.
Software projects or projects based on
intellectual property and research.
Predictive /
Plan Driven
• Changes are expensive due to scrap and waste.
• Predictability and coordinated timing is important.
Construction projects or projects that have many
physical assets or have similar projects that been
completed in the past.
Iterative
• Dynamic requirements and activities are repeated until they
are deemed correct.
Projects where learning and correction is
expected to eventually get to the ideal solution.
Incremental
• Dynamic requirements, as well as frequent small deliveries.
• Speed to deliver small increments is a major goal.
Projects where customers or business is wanting
or expecting to see outputs or partial outputs
early and often.
Hybrid
• There are some costs to changes.
• Stakeholders are interested in another method, but not
comfortable to fully adopt one method.
Projects with a mix of resources and experience
levels or projects seeking or willing to learn new
methods or techniques.
69
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Planning Scope, Schedule and Cost
Planning Scope, Schedule & Cost
1. Scope Management
2. Schedule Management
3. Cost Management
Planning Scope
Scope
Management
• Scope: The sum of the products, services and
results to be provided as a projects.
• Scope management plan* A component of the
project management plan or program
management plan that describes how the scope
will be defined, developed, monitored,
controlled, and validated.
The definitions are taken from the PMBOK
Glossary
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Product Scope to Project Scope
PRODUCT SCOPE
Project Charter
Stakeholder analysis
Collecting Requirements
Scope Definintion
WBS
PROJECT SCOPE
Stakeholder
Assessment Grid
Power
Gathering key
requirements
Interest
Collecting Requirements
Project requirements: The agreed-upon conditions or capabilities of a product, service, or
outcome that the project is designed to satisfy.
High-level requirements might be documented in the project charter.
Project manager must verify all requirements are determined and documented.
Provide the foundation for building the WBS.
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Requirements elicitation:
Document
analysis
Focus groups Questionnaires Benchmarking
Interview
Observation
Facilitated
workshops
Prototype
Storyboarding
Document analysis: A technique used to gain project requirements from current
documentation evaluation.
Focus groups* An elicitation technique that brings together prequalified stakeholders and
subject matter experts to learn about their expectations and attitudes about a proposed
product, service, or result.
Questionnaires* Written sets of questions designed to quickly accumulate information from
many respondents.
Benchmarking* The comparison of actual or planned products, processes, and practices to
those of comparable organizations to identify best practices, generate ideas for
improvement, and provide a basis for measuring performance.
Interview* A formal or informal approach to elicit information from stakeholders by talking
with them directly.
Observation: A technique used to gain knowledge of a specific job role, task, or function in
order to understand and determine project requirements.
Facilitated workshops: Organized working sessions held by project managers to determine
what a project's requirements are and to get all stakeholders together to agree on the
project's outcomes.
Prototype* A method of obtaining early feedback on requirements by providing a working
model of the expected product before actually building it.
Storyboarding* A prototyping method that can use visuals or images to illustrate a process
or represent a project outcome.
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Unanimity
Decision
making
approaches
Majority
Plurality
Autocratic
Documentation:
Business
requirements
Stakeholder
requirements
Solution
requirements
Project
requirements
Transition
requirements
Assumptions lists,
dependencies, and
constraints
The Requirements
Management Plan
The Requirements
Traceability
Matrix
Requirements management plan* A component of the project or program management
plan that describes how requirements will be analyzed, documented, and managed.
Components of the Requirements Management Plan include:
• How requirements activities will be planned, tracked, and reported
• Configuration management activities such as how version control of project documents
and changes to the product will be initiated, how impacts will be analyzed, how they
will be traced, tracked, and reported, and what authorization level is required to
approve these changes
• Requirement prioritization process, which defines how project requirements will be
analyzed and prioritized
• Product metrics that will be used and the rationale for using them
• Traceability structure stating which requirement attributes will be captured on the
traceability matrix
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Product Scope description
Define Scope:
The Project Scope
Statement, key
elements
Acceptance Criteria
Deliverable
Project exclusion
Constraints
Assumptions
Project Scope Statement* The description of the project scope, major deliverables,
assumptions, and constraints.
Product analysis* A tool to define scope that generally means asking questions about a
product and forming answers to describe the use, characteristics, and other relevant aspects
of what is going to be manufactured.
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The Scope Baseline
The Scope Baseline includes:
✓ WBS
✓ WBS dictionary
✓ Project Scope Statement
Scope baseline* is the approved version of a scope statement, WBS, and its associated WBS
dictionary, that can be changed using formal change control procedures and is used as a
basis for comparison to actual results.
WBS* A hierarchical decomposition of the total scope of work to be carried out by the
project team to accomplish the project objectives and create the required deliverables.
WBS dictionary* A document that provides detailed deliverable, activity, and scheduling
information about each component in the work breakdown structure.
The WBS dictionary might include the following:
• Code of account identifier
• Description of work
• Assumptions and constraints
• Responsible organization
• Schedule milestones
• Associated schedule activities
• Resources required to complete the work
• Cost estimations
• Quality requirements
• Acceptance criteria
• Technical references
• Agreement information
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WBS based on the PLC:
Level 1
Project
Level 2
Design Construction Installation Commissioning Hand-Over
Level 3
Step1 Step2 Step3 StepA StepB StepC
Work
Package 1
WP 1
WP 1
WP 1
WP 1
WP 1
Level 4
Work
Package 2
WP 2
WP 2
WP 2
WP 2
WP 2
Work
Package 3
WP 3
WP 3
WP 3
WP 3
WP 3
WBS based on the Project deliverables:
Level 1
Project
Level 2
Building A Building B Access Road Equipment Hand-Over
Level 3
Design Construct Hand-Over Delivery Installation Commiss.
Work
Package 1
WP 1
WP 1
WP 1
WP 1
WP 1
Level 4
Work
Package 2
WP 2
WP 2
WP 2
WP 2
WP 2
Work
Package 3
WP 3
WP 3
WP 3
WP 3
WP 3
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Design Construct Hand-Over
Work Package 1
Work Package 2
Work Package 3
WP 1
WP 2
WP 3
WP 1
WP 2
WP 3
Delivery Insta lation Commiss.
WP 1
WP 2
WP 3
WP 1
WP 2
WP 3
WP 1
WP 2
WP 3
Decomposition
WBS
definitions:
Control account
Planning package
Code of accounts
Decomposition* A technique used for dividing and subdividing the project scope and project
deliverables into smaller, more manageable parts.
Control account* A management control point where scope, budget, actual cost, and
schedule are integrated and compared to earned value for performance measurement.
Planning package* A WBS component below the control account with known work content
but without detailed schedule activities.
Code of accounts* A numbering system used to uniquely identify each component of the
WBS.
Control Accounts:
• Control Accounts enable the
overview and tracking by
transversal cost aggregators
(often known as cost centres)
Level 1
Level 2
Project
Building A Building B Access Road Equipment Hand-Over
Level 3
Level 4
Control Account A
Control Account B
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Agile: The
Product
Backlog
A product backlog is essentially a list of the expected work to deliver the product which
changes throughout the project.
Grooming and refining the product backlog is an ongoing exercise, typically scheduled in
weekly or monthly intervals.
Product backlog items (PBI) drop off when work is completed. They are edited and clarified
as more becomes known or as product requirements change and are continually added as
necessary when more work must be done.
The iteration backlog (i.e.: the Sprint Backlog, in Scrum) includes items from the product
backlog that can be completed within the iteration (i.e.: Sprint) based on the team’s capacity
(i.e.: Velocity).
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User Stories
A user story is written in three parts:
1. Role – the user role for the story
2. Goal – what the user is trying to accomplish
3. Benefit – why the user wants to accomplish it
User Request: Something that benefits the user directly or enables a future benefit.
User Stories: help teams focus on that value provided to the user. User stories frame who is
to benefit from the work of the team. Framing the user’s desire as a story instead of a
detailed requirement or specification enables the team to focus on the user and what they
value.
Other types of Stories:
• Spike/Enabler: Research, prototype, risk reduction, knowledge acquisition
• Technical Debt: Things we should have done correctly the first time, but likely took a
shortcut to meet a deadline
• Defect: Something that is causing an impact and needs to be fixed
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Definition of Ready
Definition of Done
Definition of Done* A team's checklist of all the criteria required to be met so that a
deliverable can be considered ready for customer use.
Definition of Ready* A team's checklist for a user-centric requirement that has all the
information the team needs to be able to begin working on it.
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Other Scope Definitions:
Acceptance
Criteria
Validate
Scope
Iteration
Reviews
Variance
Analysis
Trend
Analysis
Acceptance Criteria* A set of conditions that is required to be met before deliverables are
accepted.
Validate Scope* The process of formalizing acceptance of the completed project
deliverables.
Iteration Reviews At or near the conclusion of a timeboxed iteration, the project team
shares and demonstrates all the work produced during the iteration with the business and
other stakeholders.
Variance Analysis* A technique for determining the cause and degree of difference between
the baseline and actual performance.
Trend Analysis* An analytical technique that uses mathematical models to forecast future
outcomes based on historical results.
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Planning Schedule
Planning Scope, Schedule & Cost
1. Scope Management
2.Schedule Management
3. Cost Management
The Schedule Management
Plan describes how
activities will be defined
and progressively
elaborated. It identifies a
scheduling method and
scheduling tool to be used,
determines the format of
the schedule, and
establishes criteria for
developing and controlling
the project schedule.
Schedule
Management
Schedule
Management
• Project schedule* An output of a schedule
model that presents linked activities with
planned dates, durations, milestones, and
resources
• Schedule management plan* A component of
the project or program management plan that
establishes the criteria and the activities for
developing, monitoring, and controlling the
schedule.
• Project schedule* An output of a schedule
model that presents linked activities with
planned dates, durations, milestones, and
resources
• Schedule management plan* A component of
the project or program management plan that
establishes the criteria and the activities for
developing, monitoring, and controlling the
schedule.
The definitions are taken from the PMBOK
Glossary
The definitions are taken from the PMBOK
Glossary
Possible elements of the
Schedule Management Plan are:
• Project schedule model used
• Accuracy of activity duration estimates
• Units of measure to be used
• Organizational procedure links used with the WBS
• Control thresholds to be used for monitoring schedule performance
• Rules of performance measurements to be used
• Reporting formats to be used
• Process descriptions to explain how schedule management processes are to be
documented throughout the project.
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Level 1
Project
Level 2
1.
Design
2.
Construction
3.
Installation
4.
Commissioning
5.
Hand-Over
Further
decomposition:
the activities
Work
Package
Level
3.1.
Equipment
Delivery
3.2.
Installation
3.3.
Integration
3.1.1.Release from Warehouse
3.1.2.Delivery to site,
3.1.3.Acceptance at site
< End of WBS
Activity
List
Work Packages are
broken down into
the composing
activities
3.2.1.First Site visit
3.2.2.Equipment installations
3.2.3.Bar code reading of single units
3.3.1.Installation of cable trays
3.3.2.Laying fiber
3.3.3.Material Integration
Activity* A distinct, scheduled portion of work performed during the course of a project.
While the terms activities, work packages, and tasks might be used interchangeably in
different industries, in the PMI methodology each has the following distinct meaning:
• A work package is the lowest level of the WBS.
• An activity is a smaller component of a decomposed work package.
• A task is used when referring to project management software.
Milestone* A significant point or event in a project, program, or portfolio.
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Dependency types:
Finish-to-Start
Start-to-
Start
Start-to-Finish
Finish-to-
Finish
LAG
LEAD
• Mandatory vs. Discretionary dependency,
• External vs. Internal dependency.
An activity dependency is a logical relationship that exists between two project activities.
Relationship indicates whether the start of an activity is contingent on an event or input
from outside the activity. Activity dependencies determine the precedence relationships.
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Margin of Error
Main estimating approaches:
Parametric
Estimating
50%
Initiation
+/- 50% or more
Analogous
Estimating
Three-point
Estimating
40%
30%
20%
10%
Requirements Definition
+/- 30% to 50%
High-Level Design
+/- 15% to 25%
Project Life Cycle
Functional Design
+/- 10%
Margin of error varies with project type
Parametric estimating: Based on creating a parameter which is the multiplied by the
number of times it is estimated to be needed (ex.: price/sqm, or time/km of cable)
Analogous estimating: Based on analogy with values from past projects. Used frequently
when there is a limited amount of information available.
Three Point Estimating: Based on averaging most likely (M), Optimistic (O) and pessimistic
(P) estimates.
Examples:
• Triangular distribution (3 point average): Estimate = (M+O+P)/3
• Beta distribution (PERT): Estimate =(4M+O+P)/6
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Example: a 10-day work package
Duration: 10 days
10 days
Activities:
3 days 4 days 3 days
Effort: 6 person/days 1 person 0 person 1 person
Effort: 18 person/days 3 person 0 person 3 person
Effort: 3 person/days 0.5 person 0 person 0.5 person
Duration vs. Effort
Activity duration estimate* The quantitative assessment of the likely number of time
periods that are required to complete an activity.
Elapsed time: The actual calendar time required for an activity from start to finish.
Effort* The number of labor units required to complete a scheduled activity or WBS
component, often expressed in hours, days, or weeks. Contrast with duration.
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Scheduling techniques
Start Reviewed Approved
Start Reviewed Approved
Milestone
Chart
Complete
Gantt
Chart
Start
A
C G H Finish
B
D
F
E
Precedence
Network
Diagram
Milestone Chart: Provides the summary level view of a project’s milestones.
Uses icons or symbols.
Useful for upper management, who are not interested in fine details.
Gantt chart* A bar chart of schedule information where activities are listed on the vertical
axis, dates are shown on the horizontal axis, and the activity durations are shown as
horizontal bars placed according to start and finish dates.
Shows start and end dates, duration, and order.
Shows precedence relationships.
Shows percentage completion and actual progress.
Used to present project status to the project team and management.
Precedence relationship* A logical dependency used in the precedence diagramming
methods.
Assigns start and finish dates to activities.
Communicates the project status in terms of activity precedence relationships.
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How long will this project take?
A-7
B-6
C-8
D-6
E-8
F-7
J-2
G-3
H-6
I-4
K-3
(the letters are the task name and the numbers the task duration)…
Precedence relationship* A logical dependency used in the precedence diagramming
methods.
Forward and backward pass (with 0):
0 -- 7 7 -- 13
A-7
B-6
9 9
9 -- 16
16 -- 22
(the letters are the
task name and the
numbers the task
duration)…
0 -- 8 8 -- 14
14 -- 22 22 -- 29
C-8
D-6
E-8
F-7
0 0 0 0
0 -- 8
8-- 14
14 -- 22 22 -- 29
H-6
I-4
14 -- 16
J-2
0 -- 6 6 – 10 27 -- 29 10 -- 13
16
K-3
16 -- 22
22 -- 26
26 -- 29
16
13
16
29 -- 32
G-3
29 -- 32
0
Critical path* The sequence of activities that represents the longest path through a project,
which determines the shortest possible duration.
Float on the critical path is zero.
Critical path activity* Any activity on the critical path in a project schedule.
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Forward and backward pass (with 1):
1 -- 7 8 -- 13
A-7
C-8
D-6
B-6
9 9
10 -- 16
17 -- 22
1 -- 8 9 -- 14
15 -- 22 23 -- 29
E-8
F-7
0 0 0 0
1 -- 8
9 -- 14
15 -- 22 23 -- 29
(the letters are the
task name and the
numbers the task
duration)…
15 -- 16
J-2
1 -- 6 7 – 10 28 -- 29 11 -- 13
13
30 -- 32
G-3
30 -- 32
0
H-6
16
I-4
16
K-3
16
17 -- 22
23 -- 26
27 -- 29
Total Float and Free Float:
ES
0
4.2.1
EF
10
ES
10
4.2.2
EF
15
LS
0
Activity A
DU
10
LF
10
LS
10
Activity B
DU
5
LF
15
Total Float (A) = LF(A) – EF(A)
Free Float (A) = ES(B) – EF(A)
Total float* The amount of time that a schedule activity can be delayed or extended from its
early start date without delaying the project finish date or violating a schedule constraint.
Free float* The amount of time that a schedule activity can be delayed without delaying the
early start date of any successor or violating a schedule constraint.
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Schedule Compression Methods
Fast Tracking:
By “cutting out” a dependency,
the activities are done in parallel,
reducing schedule.
This can only be done with
discretionary dependencies.
Remember: What are you going to
PAY for it???
Crashing:
5 resources x 20 20 days:
Duration: 20 20 days
10 10 resources x 10 10 days:
Duration: 10 10 days
By By adding resources to to a task (including
simple overtime), some activities can be be
done faster, reducing schedule.
Remember: What are you going to to PAY for for
it???
Prioritization:
If If there is is nothing else possible. Scope reduction may be be the option.
What is is priorty vs. vs. what may be be moved to to a next phase?
Remember: What are you going to to PAY for for it???
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Scheduling in Agile, two main approaches:
Iterative scheduling
with backlog
(ex.: Scrum)
On-demand
scheduling
(ex.: Kanban)
Iterative Scheduling with a Backlog (example: Scrum)
Progressive elaboration (rolling wave) techniques used to schedule activities
Uses a specific time window (often two weeks)
Requirements defined in user stories & Stories prioritized, selected based on priority
Remaining stories added to backlog, constructed later based on their priority
Delivers business value early and incrementally
Allows changes/adaptations during entire project
Does not work well when there are complex dependency relationships
On-Demand Scheduling (Example: Kanban)
Does not use traditional schedules
Team members “pull” work from a queue when available
Based on Kanban and Lean methodologies
Provides incremental business value
Levels out work of team members
Does not work well when there are complex dependency relationships
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Planning Cost
Planning Scope, Schedule & Cost
1. Scope Management
2. Schedule Management
3.Cost Management
Cost
Management
• Cost baseline* The approved version of the
time-phased project budget, excluding any
management reserves, which can be changed
only through formal change control procedures
and is used as a basis for comparison to actual
results.
The definitions are taken from the PMBOK Glossary
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Cost Activities
Building the baseline: activity cost aggregation
buffer
Reserve
time
The Cost Baseline is a time-phased budget unique to the project. It monitors and measures
cost performance and it includes a budget contingency.
Budget Estimation: Estimating the project budget consists of aggregating the estimated
costs of individual activities or work packages to establish an authorized cost baseline.
This budget contains all the funding needed to complete the project as defined in the scope
baseline and the project schedule.
The project cost performance is then measured against this cost baseline.
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Cost Baseline
• Time-phased budget
• Monitors and measures
cost performance
• Includes a budget
contingency
• Varies from project to
project
A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Sixth Edition, Project Management Institute,
Inc., 2017, Page 255.
Funding limit reconciliation* The process of comparing the planned expenditure of project
funds against any limits on the commitment of funds for the project to identify any variances
between the funding limits and the planned expenditures.
Most budgets assume steady incoming and outgoing flows. Large, sporadic expenditures are
usually incompatible with organizational operations. Funding limits help regulate the
outgoing capital flow to protect against overspending.
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Project
Budgeting
Components
• A Guide to the Project Management Body
of Knowledge (PMBOK® Guide) – Sixth
Edition, Project Management Institute, Inc.,
2017, Page 255.
106
Budget Challenges:
Ideally, budget is set during project planning and does not change. Projects do not exist in a
perfect world and the following can pose a challenge to the project manager:
• New or changed project requirements.
• New risks, or changes to the probabilities or impacts of existing risks.
• Changes to cost estimates resulting from economic factors, procurement contract
modifications, resource costs, etc.
When any of these things occur, one or more of the following must change: The project
budget, the project cost, the project schedule, or the scope
If the budget remains fixed and additional funds are not available, then the project must
change.
Anticipate Future Budget Challenges
1
2
3
4
Keep the the stakeholder
register current and and be be
aware of of changes to to
project requirements if if
new stakeholders are are
added to to the the project.
Monitor risks frequently
to to look for for new risks
and changes to to existing
ones.
Monitor the the
performance of of
suppliers and and vendors.
Monitor all all changes to to
the the project and and follow
the the Change
Management System to to
try try to to keep them within
budget.
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Running the Show
Risk management
PMP Preparation
Risk management
Risk Management
1. Risk management Planning
2. Risk Identification
3. Risk Analysis (qualitative and quantitative)
4. Risk response planning
5. Risk response implementation
6. Risk Monitoring and Controlling
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Risk
Management
• Risk: an uncertain event or condition that, if it
occurs, has a positive or negative effect on one
or more project objectives.
The definitions are taken from the PMBOK
Glossary
What
evolves
during the
PLC?
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What is included a Project Charter?
✓Project Purpose or justification,
✓Measurable project objectives and success criteria,
✓High-Level requirements,
✓Assumptions and constraints,
✓High-Level project description and boundaries,
✓High-Level Risks,
✓Summary Milestone Schedule,
✓Summary Budget,
✓Stakeholder list
✓Project Approval requirements,
✓Assigned Project Manager,
✓Name and authority of the sponsor approving the project Charter
Identify
risks
The risk
management
cycle
Risk
monitoring
&
controlling
Qualitative
analysis
Response
planning
Quantitative
analysis
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Identify Risks through brainstorming
Risk breakdown structure.
Checklists, historical lists of risks,
memory joggers.
Check your ASSUMPTIONS!!!
Focus on what has impact
on the project objectives.
Refer to contracts, plans, estimates...
…Review External Dependencies
Identify Risks using the WBS
Level 1
Project
Level 2
Design Construction Installation Commissioning Hand-Over
Level 3
Step1 Step2 Step3 StepA StepB StepC
Work
Package 1
WP 1
WP 1
WP 1
WP 1
WP 1
Level 4
Work
Package 2
WP 2
WP 2
WP 2
WP 2
WP 2
Work
Package 3
WP 3
WP 3
WP 3
WP 3
WP 3
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Identify Risks
through a
SWOT analysis
Internal Factors >
Strength
Weakness
External Factors >
Opportunity
Threat
Identify Risks through Cause-and-Effect analysis
Category 1 Category 2 Category 3
Effect
---
(impact on
project
objectives)
Category 4 Category 5 Category 6
Cause/Risk
Cause/Risk
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PROBABILITY
Qualitative risk analysis &
the Probability/Impact Matrix
IMPACT
Quantitative risk analysis techniques
MONTECARLO
SIMULATIONS
SENSITIVITY ANALYSIS
DECISION TREE (EXPECTED
MONETARY VALUE)
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Threats
Opportunities
Transfer
Mitigate
Avoid
Accept
Escalate
Share
Enhance
Expliot
Risk Response options
How do Risk Response options impact the budget?
Accept: will only impact CR
CONTINGENCY
RESERVE
Mitigate: will impact both cost and CR
Avoid: will only impact COST
COST
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Cost Activities
What are Reserves?
Contingence
Reserve
Management
Reserve
Determining the Baseline from the Schedule
buffer
Reserve
time
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Time
Balancing
Project
Constraints
is an art!
Customer
satisfaction
Risk
The
Project
Resources,
Team
Motivation
Quality
Scope
Cost
Variance Analysis
Sources of
Change
• Scope
• Time
• Cost
• Resources
• Quality
• Risk
Identify
Areas of
Variances
• Scope
• Time
• Cost
• Quality
• Resources
• Communication
• Risk
• Stakeholders
• Vendors
Gain
agreement
and replan
• Negotiate with
stakeholders
• Re-baseline and
update project plan
How often do you reassess risks?
REGULAR MONITORING
AND AND CONTROLLING OF OF
OPEN OPEN RISK. RISK.
HAVE HAVE THE THE ACTIONS
TAKEN TAKENMITIGATED THE THE
RISKS RISKS AS AS EXPECTED?
AUDITING FOR FOR NEW NEW
RISKS. RISKS.
MAKE MAKE IT IT PART PART OF OF
REGULAR STATUS
REVIEWS.
MANAGING RISKS, RISKS, IS IS
PART PART OF OF REGULAR
PROJECT WORK!
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Final take away 1:
Self confidence in dealing with risks
• Uncertainty is the defining element in all project work,
• Uncertainty means taking advantage of opportunities and dealing with threats by
integrating response actions into the project plan. This way the overall project is more
resilient.
Final take away 2:
Harness adversity
• Recontextualize failiure as a source of learning.
• Examine old norms, procedures that punish mistakes, eliminating the chance to take
advantage of the renewal content in the failiure.
• Ex.1: can you think of processes in your context which eliminate or reduce the chance of
taking advantage of failiure? (think of mistake avoidance, mistake hiding, finger pointing,
blaming, loss of bonuses,...)
• Ex.2: can you think of processes which enhance the habit of harnessing adversity?
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Quality Management
Quality management
PMP Preparation
Quality Management
1. Quality management Planning
2. Quality Management
3. Quality Control
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Quality
• Quality: The degree to which a set of inherent
characteristics fulfill requirements.
The definitions are taken from the PMBOK
Glossary
Key contributors to quality theory:
Contributor
Key-word description
W. Edwards Deming • Plan/Do/Check/Act Cycle
• Statistics and sampling
• Rule of 85: 85% of the cost of quality is the responsibility of management
Joseph M. Juran • Quality improvement, planning, and control, fitness for use, cost of quality
Philip B. Crosby • Conformance to requirements, prevention, zero defects, cost of nonconformance
Dr. Genichi Taguchi • Design of experiments; quality designed in, not inspected in; minimize deviations from target; measure cost of
quality from standard
Dr. Kaoru Ishikawa • Cause-and–effect, fishbone diagram
Dr. Armand V. Feigenbaum • Well-defined products, efficient distribution capability, Excellent marketing techniques
• Customer service, on-site support
Dr. Shigeo Shingo • Error proofing, mistake proofing, poka-yoke
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quality requirements
Quality
Management
Plan:
standards for the project and its deliverables
documenting how the project will demonstrate
compliance with requirements
Plan both quality assurance and quality control
processes,
Reference to a Quality Policy
Quality management applies to all projects, regardless of the nature of their product.
However, quality measures are specific to the type of product produced by the project (for
example, quality management of software vs. power plants).
The Quality management Plan describes which policies, procedures, and guidelines
will be implemented to achieve the quality objectives. It describes the activities and
resources necessary for the project management team to achieve the quality objectives. It
may be formal or informal, detailed or broad.
A quality policy is a statement by senior management as to the company’s attitude and
approach toward quality.
Standard: A document established by an authority, custom, or general consent as a model or
example (ISO 9000 Series: A quality system standard that can be applied to any product,
service, or process in the world).
Regulations: Requirements imposed by a governmental body. These requirements can
establish product, process, or service characteristics, including applicable administrative
provisions that have government-mandated compliance:
• De facto regulations: Regulations that are widely accepted and adopted through use.
• De jure regulations: Regulations that are mandated by law or have been approved by a
recognized body of experts.
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Review
Review the documents for quality language.
Identify
Identify a quality team and leader.
The Quality
Planning
Process
Define
Negotiate
Plan
Educate
Define plan components and owners.
Negotiate specific quality assurance (QA) requirements.
Plan the (QA and quality control (QC)) steps for the project.
Educate the project team on QA/QC guidelines.
Incorporate
Incorporate QA/QC tasks into the project plan.
Get
Get client sign-off.
Implement
Implement plans for QA/QC data
Plan to Assure the Process is Right: Understanding how quality of the deliverables will be
accepted in the acceptance process is key to making sure the plan reflects the requirements
and the criteria of stakeholders.
Quality metrics: A description of a project or product attribute and how to measure it.
Tolerance: The quantified description of acceptable variation for a quality requirement.
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Cost of Quality
A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Sixth Edition, Project Management Institute, Inc., 2017, Page 283.
Cost of Quality: All costs incurred over the life of the product by investment in preventing nonconformance to
requirements, appraisal of the product or service for conformance to requirements, and failure to meet requirements.
Prevention refers to designing quality in—allowing for project team member, end user or customer training and mapping
out a quality strategy before you jump in to keep you on course. Design reviews, training, and quality planning are
associated with the costs associate of prevention activities.
Appraisal refers to pre- and production inspections, tests, or sampling that is done to assure the final product will be
within the product specification levels. Inspections, lab tests, and in-process testing are costs associated with appraisal
activities.
Internal failures are those that occur before leaving the organization and include scrap, rework, repair, and defect
evaluation. This causes costs to rise and employees to get disgruntled about having their efforts wasted. The goal is to
design quality in, so there is little to catch at the inspection phase.
External failures are those discovered by the customer and include returns, complaints, corrective action, and field
maintenance. There is no way to know the true cost of external failures. Unhappy customers may complain, and you will
never know what the loss of that business might be. If loss of life occurs because of an unsafe product, the cost is
immeasurable (In the 1930s, Juran was one of the pioneers who first considered the idea that there were legal implications
associated with the lack of quality, such as civil or criminal liability, appropriate remedies in court and the notion of express
or implied warranties).
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Proactive
Quality Assurance
vs.
Quality Control
Reactive
Cause and
effect
diagrams
Flowcharts
Checklists /
sheets
Tools of
Quality
Control:
Pareto
diagrams
Scatter
diagrams
Histograms
Statistical
Sampling
Control charts
Design Of
Experiments
(DOE)
Performance
Reviews /
Benchmarking
Cost-Benefit
Analysis
Questionnaires
/ Surveys
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The process of translating the quality management
plan into executable quality activities that
incorporate the organization’s quality policies into
the project
PMBOK ® Guide – Sixth Edition, Glossary
Quality
Management
Quality management actions:
• Ensure that quality audits are conducted as
planned by qualified auditors,
• Use the quality tools to determine the causes of
quality problems,
• Identify and implement actions to ensure and
increase project success.
Objectives of a quality audit:
Identify where
you are
Identify good
practices
Do a gap analysis
Aid in improving
productivity
Planned project
quality is met
Products are safe
and fit for use
All laws and
regulations are
followed
Data systems are
accurate and
adequate
Proper corrective
action is taken
when required
Improvement
opportunities are
identified
Quality audit: A structured, independent process to determine if project activities comply
with organizational and project policies, processes, and procedures.
Audits may be performed by:
• a Quality Assurance Department,
• by the PMO,
• by an external organization or
• by selected individuals or teams within line organizations
A quality audit:
• Is a structured independent review of project activities
• It identifies lessons learned
• It may be scheduled or random
• It may be in-house or independent
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Quality
Control
The process of monitoring and recording
results of executing the quality
management activities to assess
performance and ensure the project
outputs are complete, correct, and meet
customer expectations
PMBOK ® Guide – Sixth Edition, Glossary
Inspection:
• Measuring, examining, and testing deliverables,
• Used to determine whether results conform to requirements
• Can be conducted at any level
• Approved change requests are also reviewed to verify they were done as approved
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Pareto
Diagram
Most quality problems result from a small number of causes. Quality experts often refer to
the principle as the 80/20 rule, which means that 80% of problems are caused by 20% of the
potential sources.
A Pareto diagram puts data in a hierarchical order from most occurrences to fewest
occurrences, suggesting that the highest number of occurrences, if resolved, would produce
the greatest improvement.
When seeking operational or process improvement project opportunities within an
organization, this can be a helpful tool in deciding what to fix first. While the Pareto diagram
will point to the biggest culprit of failed throughput, the other factor to consider is the cost
of correcting that error. Although it can summarize all types of data, the Pareto analysis
technique is used primarily to identify and evaluate nonconformities.
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Scatter
Diagrams &
Correlation:
Scatter diagrams organize date using two variables and the relationship or correlation is shown on a simple graph with X
and Y coordinates. The correlation can be negative, positive, or curvilinear, or the data might be represented as having no
correlation at all.
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Statistical Sampling
1
Attribute sampling: attributes
are discreet, result either
conforms or not
2
Variable sampling: attributes
are continuous, result rated on
a scale to measure the degree
of conformity
Statistics are a tool that can help us make sense of available data. While measuring if the
final product of the project will meet the customer’s critical to quality characteristics (CTQ),
we may choose to select only a portion of the final lot to confirm we met the mark.
Testing some, rather than all, can help substantially reduce the cost of conforming to quality,
if we get a valid representation of the whole in the sample size we select.
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Control Charts
Display of data over time and against established control limits,
which has a centerline that assists in detecting a trend.
Adapted from: PMBOK® Guide – Sixth Edition, Glossary
Overview:
the quality control chart contains a line in the center that represents the average of the data
(the upper control limit (UCL) and the lower control limit (LCL) are often located at +/-3 ).
These control limits determine whether the process is in or out control. If the points plotted
are within the control limits and the data points with the limits do not exhibit a “Rule of
Seven” or “Hugging”, the process is assumed to be in statistical control, and no action is
necessary. Otherwise, an investigation and corrective action is required to find and eliminate
the assignable, or special causes responsible for this result.
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Control chart with values out of the control limits
A process may be out of statistical control when the data points exceed either the upper or lower control limits.
Control chart breaking the “rule of seven” (1)
“If there is a continued rise of all in a series of points, this pattern is called a trend. In general, if seven
consecutive points continues to rise or fall, there is an abnormal condition.”
Project Management: A Systems Approach to Planning, Scheduling, and Controlling,
11th Edition, by Harold Kerzner, Ph.D., p. 1050
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Control chart breaking the “rule of seven” (2)
“When several successive points line up on one side of the central line, this pattern is called a run. The number
of points in that run is called the length of the run.”
There is abnormality in the process if the run has a length of seven points.
Project Management: A Systems Approach to Planning, Scheduling, and Controlling,
11th Edition, by Harold Kerzner, Ph.D., p. 1049
Control chart with a “hugging pattern”
“Hugging” the centre line
“Hugging” the UCL
A control chart displays a hugging
pattern when several points are near a
limit. “There is abnormality if 2 out of 3
points, 3 out of 7 points, or 4 out of 10
points lie within the outer one-third
zone.”
Project Management: A Systems Approach to
Planning, Scheduling, and Controlling,
11th Edition, by Harold Kerzner, Ph.D., p. 1051
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Quality management model
Strategy using statistical tools within a structured methodology to improve processes
Six standard deviations (99.999%) from the mean in normal distribution
3.4 defects per million opportunities (DPMO)
Traces defects to their causes and changes the process to eliminate the cause
Six Sigma
Six Sigma = six standard deviations (99.999%) from the mean in normal distribution, i.e.: 3.4
defects per million opportunities (DPMO).
The main goal when applying the Six Sigma approach, is to improve quality, in terms of
processes, customer experience, cost levels, and more, by deploying measurement-based
improvement projects. These focus on process improvement and on variation reduction by
tracing defects to their causes.
To do this, Six Sigma deploys two sub-methodologies: DMAIC and DMADV:
• The Six Sigma DMAIC process (define, measure, analyze, improve, control) is for
existing processes falling below specification.
• The Six Sigma DMADV process (define, measure, analyze, design, verify) is used to
develop new processes or products.
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Procurement Management
Procurement management
PMP Preparation
Procurement Management
1. Plan Procurements
2. Conduct Procurements
3. Control Procurements
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Procurement
Management
Plan
Procurement Management Plan: A component of the
project or program management plan that describes how
a project team will acquire goods and services from
outside of the performing organization.
• Summarizes make-or-buy decisions,
• Specifies the preferred contract types to be used,
• Describes the process for running and evaluating bids
• Identifies how and when to obtain independent
estimates
• Defines the procurement documents that must be used
• Describes how multiple providers will be evaluated and
managed
• Specifies Procurement related risks
The definitions are taken from the PMBOK Glossary
Procurement planning and source selection follow a logical, ordered process that begins
early in the overall project planning effort. When it has been determined that the project
would benefit from outside assistance, a contract statement of work is created in sufficient
terms to allow prospective sellers to determine whether they can provide the required
product, service, or result.
The project manager may use a scoring system based on weights assigned to the contract
drivers of the project in order to establish evaluation criteria.
Additional items that may be addressed in a procurement management plan:
• If standard procurement documents are needed, where can they be found?
• How will multiple providers be managed?
• How will procurement be coordinated for project?
• Handling lead times
• Handling make-or-buy decisions
• Setting the scheduled dates for contract deliverables
• Identifying performance bonds
• Identifying pre-qualified selected sellers
• Procurement metrics
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Make-or-Buy
decisions
Make-or-buy analysis: The process of
gathering and organizing data about product
requirements and analysing them against
available alternatives including the purchase
or internal manufacture of the product.
Make-or-buy decisions: Decisions made
regarding the external purchase or internal
manufacture of a product.
Make-or-buy decision considerations:
• What is the impact on cost, time, or quality?
• Is there an on-going need for the specific skill set?
• How steep is the learning curve?
• Are required resources readily available within the organization?
Understanding of need
Source
Selection
Criteria
Source selection criteria
are used to rate or score a
proposal.
These criteria must be
defined during the
procurement planning
phase, before the
negotiations start:
Examples of common
source selection criteria
are:
Overall or life-cycle costs
Production capacity and
interest
Technical capability
Management approach
Financial capacity
References & past
performance
Source selection criteria: A set of attributes desired by the buyer which a seller is required to meet or exceed to be
selected for a contract.
Source selection criteria help clarify what is important to the buyer. While many features may be of interest and nice to have, a weighting
system can help isolate those most critical to the purchaser. Weights and evaluation criteria should be clearly detailed in the request.
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Procurement
documents,
examples
RFI – request for information
RFP – request for proposal
RFQ – request for quote
IFB – invitation for bid
RFI: Often used to discover potential bidders by asking, “How would you solve our
problem?” Cost is usually not discussed in this format.
RFP: Would ask for suggested solution and pricing.
RFQ: Typically used to request pricing of goods and materials rather than services or
solutions.
IFB: Usually a sealed bid process that is looking for the best or lowest price from known
sources.
Qualified Vendor List
Is a list which includes all vendors approved to deliver the products, the services, or the results
needed by the project. They are selected according to the procurement requirements of the project.
The Qualified Vendor List may be created also through:
• Historical information and previous experience
• Market Research
• Trade journals
• Consultants in industry
• Professional and technical associations
• Industry groups
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Cost reimbursable
contracts
Contract Types
Fixed price (or lump sum)
contracts
Time and Materials
contracts
Contract: A mutually binding agreement that obligates the seller to provide the specified
project or service or result and obligates the buyer to pay for it.
Contracts may be bilateral, such as an agreement, or unilateral, such as a purchase order.
Different types of contracts are appropriate for different types of purchases. Contracts
generally fall into one of three broad categories:
• Cost reimbursable contracts – this category of contract involves payment
(reimbursement) to the seller for its actual costs, plus typically a fee representing seller
profit. Cost reimbursable contracts often include incentives for meeting or exceeding
selected project objectives, such as schedule targets or costs.
• Fixed price or lump sum contracts – this category of contracts involves a fixed total price
for a well-defined product. To the extent that the product is not well defined, both the
buyer and the seller are at risk. The buyer may not receive the desired product, or the
seller may need to incur additional costs to provide it. Fixed price or lump sum contracts
may also include incentives for meeting or exceeding selected project objectives, such as
schedule targets.
• Time and Materials contracts – these contracts are commonly used for contracting work.
They entail a fixed part paid per a fixed period (ex.: per day, per week, or per month), and
a variable part which is meant to reimburse costs incurred while performing the required
work.
A Letter Of Intent (LOI) is a form of contract which authorizes work to begin before the
definitive contract has been completely negotiated and finalized
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Risk allocation of contract types
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Capped Time and
Materials Contracts
Agile Contract
Types
Target Cost Contracts
Incremental Delivery
Contracts
Agility imposes a different collaboration style with between buyer and seller this creates
different challenges. For example, the buyer may be overexposed to risks such as scope
changes due to the increased flexibility towards change. New contract forms are therefore
emerging to deal with these issues. The following are examples:
Capped Time and Materials Contracts:
• Works like traditional Time and Materials contracts.
• However, an upper limit is set on customers’ payment.
• Customers pay up for the capped cost limit.
• Suppliers benefit in case of early time-frame changes.
Target Cost Contracts
• Supplier and customer agree on final price during project cost negotiation.
• Primarily for mutual cost savings if contract value runs below budget.
• These contracts may allow both parties to face additional costs if it exceeds
budget.
Incremental Delivery Contracts
• Customers review contracts during the contract life cycle at pre-negotiated
designated points of the contract lifecycle.
• Customers can make required changes, continue or terminate the project at
these points.
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Conduct
Procurement
1
Obtaining
responses
2
Selecting a
seller
3
Awarding
the contract
Meeting or conference with
all the bidders
Bidder
Conference
Conducted before the
responses to the bid are
compiled
Ensures a clear and common
understanding of the scope of
the bid
The Bidder Conferences are meetings conducted by the buyer prior to submissions of a bid
or proposal by the vendors. All bidders are present at the meeting at the same time. At the
meeting or conference, the buyer explains the requirements, proposed terms, and
conditions, and answers questions which the bidders have.
The objective of the bidder conference is to ensure that all prospective vendors have a clear
and common understanding of the technical and contractual requirements of the
procurement.
Bidder Conferences may also be known as vendor conferences, pre-bid conferences, preproposal
conferences, or contractor conferences.
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Selecting the short list
Screening:
Weighting:
• Binary, yes/no
criteria, either in or
out,
• Establishes
minimum
requirements
• Example:
certification
required, minimum
experience level,
minimum quality
grade…
• Assign numerical
weight per criteria,
• Rating sellers on
each criteria,
• Multiply weight by
rating to obtain an
overall score,
• Example: cost
levels, years of
experience,
meeting a KPI
range…
Negotiation
with the
shortlisted
parties
Negotiation is “the process of
discussing something with someone in
order to reach an agreement with
them”
From: Cambridge Dictionary
Before: Planning the Negotiation:
• Develop objectives – minimum, maximum, objective
• Evaluate opponent – what motivates?
• Define strategy and tactics
• Gather facts
• Complete price/cost analysis
• Arrange “hygiene” factors
During: Five Stages of the negotiation:
1. Protocol – 2. Probing – 3. Scratch bargaining – 4. Closure - 5. Agreement
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Control
Procurement
1
managing
the vendor
relationship
2
monitoring
contract
performance
3
managing
vendor
claims
4
making
changes to
the contract
as needed
5
closing the
vendor
agreement
Control Procurements process: The process of managing procurement
relationships, monitoring contract performance, making changes and
corrections as appropriate, and closing out contracts.
Should be continuous throughout the duration
of the procurement
Communication
with the vendors
Is particularly frequent when the work is
deployed using an Agile approach
Must be included into the communication
plan, and updated as needed
May reduce risks throughout the procurement
work
Critical component of the procurement process due to the people involved.
The Communication Plan should include provisions for working with vendors or suppliers,
such as:
• Periodic progress reports of supplier activities.
• Advance notification of potential supplier cost overruns or schedule delays, and
acknowledgement by the project manager to the supplier.
• Formal acceptance by the project manager of supplier’s contract deliverables.
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Performing:
Change management
Specifications interpretation
Adherence to quality
Subcontractor management
Production surveillance
Managing:
Waivers
Contract breach
Resolution of disputes
Project termination
Payment schedules
Project close-out
Contract Administration
While managing a contract, interpretation plays a key role. There are factors that influence
how a contract is interpreted, for example:
Patent ambiguity: Courts rule against the person who drafted the contract when it is not
clear.
Standard terms and conditions: Courts use the standard definitions in the construction
industry, for instance, when determining meaning.
Stated versus implied language: A contract should not imply. Courts assume everything is
stated (written) and give little weight to implied requirements.
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Is the system used to collect, track, adjudicate, and
communicate changes to a contract.
Contract change
control system:
The system used
to collect, track,
adjudicate, and
communicate
changes to a
contract.
It is integrated with overall project change control
It defines how contracts may be modified
• Dispute resolution procedures
• Approval levels for changes
Examples of types of changes:
• Change order
• Contract modification
• Supplemental agreement
The contract administrator is responsible for administering the following types of changes:
Change order: A written order, signed by the contracting officer, directing the contractor to make a change.
Contract modification: Any written change in the terms of the contract.
Supplemental agreement: A contract modification that is accompanied by the mutual action of both parties.
Other types of changes include:
Administrative change: A unilateral contractual change, in writing, that does not affect the substantive rights of the parties
(i.e., a change in a bank account number or in an address).
Constructive change: Any effective change to the contract caused by the actions or inaction of personnel in authority or by
circumstances that cause a contractor to perform work differently than required by written contract. The contractor may
file a claim for an equitable adjustment in the contract.
Typical cause of constructive changes include:
• Defective specification with impossibility of performance
• Late or unsuitable customer supplied equipment
• Acceleration of performance
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Changes: formal modification of contract
Specifications: minimum acceptable requirements
Useful legal
terms
Warranties: express or implied
Waivers: relinquish rights to which you are entitled
Bonds: bid, performance, payment
Confidentiality and patent rights
Termination
Warranties: Project contracts should address the duration of the warranty, when the
coverage begins, and what is covered by the warranty.
Warranties apply to owners (buyers) and sellers:
Owner’s implied warranty: An owner’s implied warranty exists when the project owner
extends an implied warranty to the general contractor that all documents relating to the
project are accurate, complete, and legal. If they are not, the contractor is entitled to
recovery of damages.
Contractor’s warranty: There are three contractor warranties:
• Materials/equipment will be of good quality and new unless otherwise permitted.
• Work will be free of defects not inherent in the quality permitted.
• Work will conform to requirements of the contract document.
Bonds: There are three different types of bonds that might be used, for example, in a
construction contract:
Bid bonds: Compensate the owner for the additional costs incurred because of the low
bidder’s failure to honour its bid. It is customary for public project owners to require bidders
to submit a bid bond with their bid. The bond is usually around 10% of the total bid amount.
Options to a bid bond include cash, a certified check, or an irrevocable letter of credit.
Performance bonds: Legal instruments in which a third party, usually a corporate surety,
guarantees the project contractor’s performance to the project owner. The surety’s
responsibility cannot exceed that owed by the principal to the obligee. The issues relative to
performance bonds have to do with understanding the owner’s role, the magnitude of the
bond, and when it is enforced.
Payment bonds: Offer security for unpaid subcontractors and suppliers. The purpose is to
avoid liens against the owner’s property. Issues related to payment bonds include
understanding who benefits from the payment bond, who furnishes the money for them,
and when they may be recovered.
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Closing the vendor agreement
COMPLETING THE PROJECT PROCUREMENT
PRODUCT VERIFICATION – WAS ALL WORK
COMPLETED CORRECTLY AND SATISFACTORILY?
ADMINISTRATIVE CLOSURE – UPDATING ALL
RECORDS AND ARCHIVING FOR FUTURE USE
Contract Termination:
A contract is terminated when it is closed before the work is completed. This may occur in two
ways:
Termination for Convenience: Termination at any time for any reason. Compensation due
seller for work completed and accepted to date.
Termination for Default (Breach): If seller fails to perform or make substantial progress.
Compensation due only for work accepted to date. The contractor liable for additional
procurement costs.
Termination for default is often caused by delays. Delays can be excusable, non-excusable, or
compensable:
Excusable delays occur due to factors beyond the control of any party involved in the project,
e.g., inclement weather. The contractor may be afforded extra time without penalty, but no
additional money.
Non-excusable delays occur due to the contractor failing to live up to contractual obligations.
For example, if materials are not obtained in time or if there is insufficient labour, the
contractor is due neither additional time nor money.
Compensable delays are caused by the owner’s failure to live up to their contractual
obligations. For example, the owner fails to provide access to a building. The contractor is due
additional time and money.
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Successes
Procurement
Audit
Failures
Information to share
with other projects
A procurement audit is a structured review of the procurement process:
• It may address any step from procurement planning through contract administration,
• It may be performed during or after the project
• It is different to the quality assurance related audits
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Keeping it all in line
Keeping it all in line
PMP Preparation
Monitoring and Controlling
Keeping it all in line
1. Monitoring and Controlling
2. Earned Value Management
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Monitoring &
Controlling
• Monitor: collect project performance data,
produce performance measures, and report and
disseminate performance information.
• Control: the process of comparing actual
performance with planned performance,
analyzing variances, assessing trends to effect
process improvements, evaluating possible
alternatives, and recommending appropriate
corrective action as needed.
The definitions are taken from the PMBOK
Glossary
It’s about the Variance! Actual vs. Plan
Actual
Plan
Project control is associated with any activity that will produce a result.
Desired results are identified during planning and then, during implementation, actual
results are reviewed to determine if they have satisfactorily met the specific need.
It is, therefore, necessary to ensure that project controlling processes are addressed early in
project planning and used repeatedly throughout the project life cycle.
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Comparing Actual to Planned performance, and…
Recommending and implementing corrective action
Project Control
is also about:
Recommending and implementing preventive action
Re-planning and following up on new action plans
Determining if implemented actions brought about
resolutions on performance issues
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Performance Tracking Tools:
Scrum/Agile/Kanban boards
Throughput Metrics
Cycle Time
Quality Metrics
Earned Value
Bar Charts (Gantt)
Velocity
Scrum/Agile/Kanban boards
Based on the Japanese management method of pulling cards to various stages as they are
worked on, physical or electronic boards can track work as it progresses across various stages
or categories.
Throughput Metrics
Measurement of the team’s work that has moved from one stage to another stage over a
certain time.
Cycle Time
Measurement of work that has progressed all the way from plan to completed or delivered.
Quality Metrics
Various measurements to track quality deliverables, defects, and acceptable output.
Earned Value
Tracking cost and effort performance against a planned value.
Bar Charts (Gantt)
Using the project schedule to track performance over time.
Velocity
Measurement of total output from an iteration to attempt to predict future iteration outputs.
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Information Radiators
Burndown Chart
Examples of
Performance
Reports
Burnup Chart
Earned Value Management Reports
Variance Analysis Reports
Work performance reports
Quality Reports
Dashboards
Task Boards
Information Radiators: Big visual boards to display in high traffic public locations about the
project and the advancement of the project. The aim is to radiate information to all about the
project work.
Burndown Chart: A graph to show the progress by plotting the burning down of work during
an iteration or other time period.
Burnup Chart: A graph to show the progress and gains made by the project team over time.
Earned Value Management Reports: Graphs and values based on the earned value
management (EVM) equations.
Variance Analysis Reports: Graphs and their analysis comparing actual results to planned or
expected results.
Work performance reports: The physical or electronic representation of work performance
information compiled in project documents, intended to generate decisions, actions, or
awareness.
Quality Reports: Charts and reports based on the quality metrics collected.
Dashboards: Physical or electronic summaries of the progress, usually with visuals or graphics
to represent the larger data set.
Task Boards: Physical or electronic depictions of the work that must be done and their current
state.
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KPI: A predefined metric used to evaluate
performance against the project objectives.
KPIs should be “SMART”.
Key
Performance
Indicators (KPI):
Specific
Achievable
Measurable
Relevant
Time-bound
Managing Schedule delays:
Crashing: Overtime
Fast-Tracking – “soft logic”
Crashing: Add resources
Reduction in scope – Prioritize
Accept the change – adjust the baseline
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Escalation
Escalate issues outside the project scope (outside the
authority of the PM):
• To Ensure project success,
• To Resolve issues around constraints, conflicts,
business issues
• When a project jeopardy condition is detected.
• Establish and present an escalation process/policy
• Escalation must be a proactive process
Establish and present an escalation process/policy:
Issues are prioritized > Required action is defined > Accountable person is identified >
Alternatives are identified > Date that action must be resolved is identified
Define the escalation policy in the Project Team Charter amongst the Ground Rules!
Escalation must be a proactive process: Identify issue, required action, and time it must be
resolved before it impacts the project.
Common items which may require escalation:
• Risks, project jeopardy,
• Lack of skilled resources / Requirement for additional funding,
• Incomplete scope definition,
• Failure of a vendor to complete an assignment / Customer dissatisfaction,
• Violation of a code of conduct principle
• Uncooperative functional manager
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Earned Value Management
Keeping it all in line
1. Monitoring and Controlling
2. Earned Value Management
Earned Value
• Earned Value (EV): the value of work performed
expressed in terms of the budget authorized for
that work.
• Earned Value Analysis (EVA): an analysis method
that uses a set of measures associated with scope,
schedule and cost to determine the cost and
schedule performance of a project.
• Earned Value Management (EVM): A methodology
that combines scope, schedule, and resource
measurements to assess project performance and
progress.
The definitions are taken from the PMBOK
Glossary
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Earned Value?
Project Baseline
We are here
Wk 1 2 3 4 5 ... 10
Vol: 10 20 30 40 50 100
Cost: 5 10 15 20 25 50
EVM Weekly Report
Week 5 Volumes Unit cost EVM Data
PLAN 50 0.5 PV=25
ACTUAL 45 0.6 AC=27
Imagine a project in which you repeat the same work package 100 times, or even better: imagine a project in which you
only have 1 work package of which you track the percentage of completion from 1% to 100%.
This project is to be run in 10 weeks and each week you are scheduled (i.e., you plan) to complete 10 work packages, or
10% of the project.
Each week you send a report to your management. This report includes two numbers: the planned value (PV) compared
against the actual costs (AC).
Objective of management is naturally to understand if the project is proceeding in line with the expected budget.
We are now in week 5 and as we prepare the report, we recall how many hours it took to explain the report to our sponsor
last week! We would like to avoid that going forward.
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Earned Value?
Vol. Unit cost EVM Data
PLAN 50 0.5 PV=25
Previous
Report
ACTUAL 45 0.6 AC=27
Earned Value 45 0.5 EV = 22.5
This report shows that by week 5 we have only produced 40 units (instead of the planned
50) and that each unit has cost us 0.6 (instead of 0.5), therefore the AC is 24: Without EV, PV
and AC are useless!!!
Our objective is to identify where the work actually performed is represented on the
baseline. In order to verify this, we multiply the work done (40 in this example) with the unit
cost used to estimate the baseline (0.5). The result is called the Earned Value.
A meaningful report to management would include EV alongside PV and AC. This will permit
a better understanding of the project status.
The correct way to read this simple earned value report is the following: “By week 5 we had
planned to produce 25 worth of work (PV). In reality we only produced 20 worth of work
(EV), therefore we are late; however, to produce 20 worth of work (EV), we actually spent 24
worth of real money (AC), we are therefore over budget!”
Now we can use these values to build schedule and volumes related metrics.
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PV, AC, and EV on a graph
€
BAC
27
AC
25
PV
22.5
EV
time
PV: The authorized budget assigned to scheduled work.
EV: The measure of work performed expressed in terms of the budget authorized for that
work.
AC: The realized cost incurred for the work performed on an activity during a specific time
period.
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EV metrics and KPIs
EV
-
PV
=
SV
EV
-
AC
=
CV
SV, CV: > 0 «good», < 0 «bad»
EV
/
PV
=
SPI
SPI,CPI: > 1 «good», < 1 «bad»
EV
/
AC
=
CPI
SV, CV:
If variances are zero, the project is on track, since EV will be equal to PV and/or to AC.
However, if a variance is positive, it will indicate either that the project is ahead of schedule
(a positive SV) or under budget (a positive CV).
SPI, CPI:
Similarly, if a Performance Index is equal to 1, it will indicate a project performance which is
on track. If the performance index is higher than one, the variance will be positive, while if
lower than one it will indicate a negative variance.
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Examples:
EVM Metric Formula Value Status
SV EV – PV 22.5 – 25 = -2.5 Late
CV EV – AC 22.5 – 27 = -4.5 Over Budget
SPI EV / PV 22.5 / 25 = 0.90 Late
CPI EV / AC 22.5 / 27 = 0.83 Over Budget
SV, CV: > 0 «good», < 0 «bad»
SPI, CPI: > 1 «good», < 1 «bad»
Variances: positive is good; negative is bad
Performance Indexes: above 1 is good; below 1 is bad
Performance indices are easy to interpret because they are relative to the value of 1, being
right on plan. You can set up tables based on your stakeholder’s risk tolerance, to determine
thresholds for when corrective action needs to be taken, e.g.:
• > 0.85: acceptable performance
• > 0.75, and <= 0.85: requires corrective action
• <= 0.75: requires urgent corrective action
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PV, AC, and EV on a graph
€
BAC
27
AC
25
PV
CV
SV
22.5
EV
time
Schedule Variance: is a measure of schedule performance expressed as the difference
between the earned value and the planned value. (SV=EV-PV)
Cost Variance: is the amount of budget deficit or surplus at a given point in time, expressed
as the difference between the earned value and the actual cost. (CV=EV-AC)
Schedule Performance Index: is a measure of schedule efficiency expressed as the ratio of
earned value to planned value. (SPI=EV/PV)
Cost Performance Index: is a measure of the cost efficiency of budgeted resources
expressed as the ratio of earned value to actual cost. (CPI=EV/AC)
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€
EAC
EAC ?
BAC
27
AC
25
22.5
PV
EV
2 easy
Approaches
(beyond a new
bottom-up estimate)
time
EAC: The current projected final cost of the project.
ETC: The amount of money needed to complete the project.
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EAC 1… we can fix it!
EAC1 →
EAC = BAC + (AC - EV)
EAC 2… we cannot fix it!
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EAC 2… we cannot fix it!
EAC/BAC = AC/EV
EAC = BAC*(AC/EV)
EV/AC = CPI
EAC = BAC/CPI
oh,… and EAC 3
EAC1 can also be re-written in the following way:
EAC1 = BAC + (AC - EV) = AC + BAC - EV
Remember EAC2:
EAC 3:
EAC2 = BAC/CPI
Including both CPI and SPI creates a worst-case
schenario (if both are < 1):
EAC = AC + (BAC – EV)/(CPI*SPI)
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TCPI
To Complete Performance Index
TCPI
CPI
=
EV (work done) / AC (money spent)
TCPI
=
BAC-EV (work left to complete)/
BAC-AC (money left to spend)
TCPI
TCPI = BAC-EV / BAC-AC
But… If Ifan EAC has already been approved?...
TCPI = BAC-EV / EAC-AC
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EV with multiple Work Packages
WP1
90%
100%
Actual PoC
75%
Planned PoC
WP2
30%
WP3
40%
25%
Budget:
WP1: 20
time
now
WP2: 40
WP3: 100
EV with multiple Work Packages
PV
EV
WP1 20*100% 20 20*90% 18
WP2 40*75% 30 40*30% 12
WP3 100*25% 25 100*40% 40
Tot Project Sum= 75 Sum= 70
SV 70-75 -5
SPI 70/75 0.933
Negative SV,
or
SPI < 1
= Project is late
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EV with multiple Work Packages
Assuming the
following
actual costs
(AC) had
been
incurred:
EV
AC
WP1 20*90% 18 20
WP2 40*30% 12 10
WP3 100*40% 40 55
Tot Project Sum= 70 85
CV 70-85 -15
CPI 70/85 0.823
Negative CV,
or
CPI < 1
= Project is
over budget
It works the same way with cost. Assume these actual costs and calculate by aggregating the
values of each work package.
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The trouble with Estimating Work Percent Complete…
Has anyone ever told you: “the work is at 90%”....
And then it stayed that way for weeks?
Avoid subjective evaluation of PoC.
There are some guidelines which can help...
Estimating Work Percentage of Completion
Weighted Milestone: 40% 70%
100%
With predefined % allocations
Instal. comm. Accept.
Fixed Formula:
With predefined Start/End % allocations, for
example:
0%/100% also: 20%/80%
50%/100% or: 25%/75%
100%
50%
50%
0%
now
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EVM Formulas Summary Table
Description Result: Formula “positive” “negative”
Cost Variance CV = EV – AC +ve -ve
Schedule Variance SV = EV – PV +ve -ve
Cost Performance Index CPI = EV / AC >1 <1
Schedule Performance Index SPI = EV / PV >1 <1
Cost Variance Percentage CV% = CV / EV +ve -ve
Schedule Variance Percentage SV% = SV / PV +ve -ve
EAC if ETC will perform at Budgeted Rate EAC = AC + BAC - EV <BAC >BAC
EAC if ETC will perform at Current CPI EAC = BAC / cumulative CPI <BAC >BAC
EAC if ETC will perform at “worst case” EAC = AC+[(BAC-EV)/(CPI*SPI)] <BAC >BAC
Variance at Completion VAC = BAC – EAC +ve -ve
To-Complete Performance Index (against BAC) TCPI = (BAC-EV)/(BAC-AC) <1 >1
To-Complete Performance Index (against EAC) TCPI = (BAC-EV)/(EAC-AC) <1 >1
Interpret the following scenarios, are the projects ahead or behind schedule? Are
they under or over budget?
Scenario 1 - Project “A”, 10-week project life cycle, has a BAC of $225,000 and the
following cumulative performance results through the 5th week, at the report date:
❑ PV = $124,500
❑ EV = $142,000
❑ AC = $110,500
Scenario 2 - Project “B”, 20-week project life cycle, has a BAC of $450,000 and the
following cumulative performance results through the 12th week, at the report date:
❑ PV = $250,000
❑ EV = $315,000
❑ AC = $375,000
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Managing Conflict
Managing Conflict,
Managing Communications,
Managing Change,
PMP Preparation
Keeping it all in line
1. Managing Conflict,
2. Managing Communications,
3. Managing Change,
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Conflict
Management
• Conflict Management: Application of one or
more strategies to deal with disagreements
from the PMBOK Glossary
• Conflict management is the use of techniques
to resolve disagreements or control the level of
discord. Conflict resolution techniques include
facilitating meetings for the conflicting parties
to identify the problem, discuss resolutions and
create superordinate goals that require
cooperation from conflicting parties
Gartner Human Resources
Differing
objectives
Competing
priorities
Causes of
Conflict
Inefficient
communication
Different values
Competition
Unspoken goals
or priorities
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Who’s role is it?
In traditional projects, the project manager supports
the resolution of conflicts within the project team by:
• Influence the direction and handling of conflict
• Use interpersonal and team skills to ensure positive results
In Agile projects this role is typically assigned to an
Agile Coach (in Scrum this will be the Scrum Master):
• Facilitate resolution: remove roadblocks & empower the team,
• Key role of servant leadership.
In both Traditional and Agile the leader(s) will use key
skills such as:
• Emotional Intelligence
• Influencing/Leadership
• Decision-Making
• Negotiation
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Dictate / Force / Direct
Collaborate / Problem Solve
Conflict
Management
Approaches
Compromise
Avoid / Withdraw
Smooth / Accommodate
Withdraw/Avoid: Retreat from conflict situation - Postpone the issue
Smooth/Accommodate: Emphasize areas of agreement - Concede position to maintain
harmony and relationships
Compromise/Reconcile: Search for solutions that bring some degree of satisfaction to
everyone - Temporarily or partially resolve the conflict through compromise
Force/Direct: Pursue your viewpoint at the expense of others - Offer only win/lose solutions
Collaborate/Problem Solve: Incorporate multiple viewpoints - Enable cooperative attitudes
and open dialog to reach consensus and commitment
Conflict Resolution Diagram (CRD)
Conflict Resolution Diagram (CRD)
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Managing Communications
Keeping it all in line
1. Managing Conflict,
2. Managing Communications,
3. Managing Change,
Communication
Management
• Communication methods: A systematic procedure,
technique, or process used to transfer information
among project stakeholders.
• Communication Management Plan: A component
of the project, program, or portfolio management
plan that describes how, when, and by whom
information about the project will be administered
and disseminated.
The definitions are taken from the PMBOK Glossary
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The Communication Management Plan
What? When? How? Storage? Responsible? Stakeholders?
Project
Kick-off
Meeting
Project Team
Meetings
Project
Status
Reports
Steering
Committee
Updates
Project Plan
Updates
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Design Construct Hand-Over
Work
Package 1
Work
Package 2
Work
Package 3
WP
1
WP
2
WP
3
WP
1
WP
2
WP
3
Delivery Insta lation Commiss.
WP
1
WP
2
WP
3
WP
1
WP
2
WP
3
WP
1
WP
2
WP
3
Communication Requirement Analysis
Stakeholder
Assessment Grid
Power
Gathering key
requirements
Interest
Building a tailored communication stream
WBS
Stakeholders
Requirements
Level 1
Project
Level 2
Building A Building B Access Road Equipment Hand-Over
Level 3
Level 4
= Topics of a tailored
communication stream
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Communication
models:
A description, analogy, or
schematic used to represent
how the communication
process will be performed for
the project.
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Managing Change
Keeping it all in line
1. Managing Conflict,
2. Managing Communications,
3. Managing Change,
Change
Management
• Change Management Plan: A component of the
project management plan that establishes the
change control board, documents the extent of
its authority, and describes how the change
control system will be implemented.
The definitions are taken from the PMBOK Glossary
The Change Management Plan answers questions such as the following:
• Who can propose a change?
• What constitutes a change?
• What is the impact of the change on the project's objectives?
• How to evaluate the change request before approving or rejecting it?
• After a change request is approved, what project documents must be amended?
• How will these actions be monitored to confirm that they have been completed?
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Integrated Change
Control System
Customer or steering committee change the
products specifications,
Causes for
project
change
Vendor is not able to deploy as expected,
The original planning was inaccurate,
Stakeholders and/or their requirements were
initially missed,
External changes, such as a new regulation…
Receives all change requests
Defines how changes are approved
or rejected
Identifies the appropriate CCB to
analyse the change request
Deal with the configuration
management issues
Change control system: A set of procedures that describes how modifications to the project
deliverables and documentation are managed and controlled.
Change Control Board (CCB): A formally chartered group responsible for reviewing,
evaluating, approving, delaying, or rejecting changes to the project, and for recording and
communicating such decisions.
Approved change requests: Requests that have been received and approved in accordance
with the integrated change control plan and are ready to be scheduled for implementation.
Approved changes can include: Corrective or Preventive action, Defect repair, Update.
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Backlog Items
Backlog Re-prioritization
PRODUCT BACKLOG
Change in Agile:
• Shift priorities in the backlog
• Embedded into the standard
work process
• Product Owner allocates the
priorities
• Focus on business and
customer value.
In an Agile context, change to the scope is managed by shifting the priorities in the backlog.
This re-prioritization is embedded into the standard work process and is therefore not
managed as an exception.
The Product Owner allocates the priorities in the Backlog based on business and customer
value.
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Afterword: In closing
Congratulations! We have gone through a long journey together. The material
is long, and it has taken a lot of your effort and time in the past weeks to learn
it all. I trust you will take the exam soon, without letting too much time elapse,
risking your efforts.
Rather than as a point of arrival, I invite you to see the PMP® preparation and
the certification as the starting point of your next professional phase. You are
certifying that you have a solid knowledge of the whole of the project
management arena. It is now up to you to choose in which direction you wish
to develop yourself. Will it be in leadership, or in risk management? Will it be in
change management or in developing PMOs. Will it be all the above? It is only
up to you! In the words of Ralph Waldo Ellison: “the end is in the beginning and
lies far ahead” (Invisible Man).
I wish you all the best in your future growth and development!
Kind Regards!
Max Langosco
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