1.

Project, Program & Portfolio

Projects: A temporary endeavor undertaken to create a unique product,
service or result. Project Management focuses on a specific, singular project.
Integration of HR system with Oracle apps is an example.

Program: A group of related projects managed in a coordinated way to

obtain benefits and control not available from managing them individually.
Programs may include elements of related work outside of the scope of
discrete projects in the program. Program Management is the management
and oversight of multiple interrelated projects.
IT Transformation program is an example.

Portfolio: A collection of projects or programs and other work that are

grouped together to facilitate effective management of that work to meet
strategic business objectives. The projects or programs of the portfolio may
not necessarily be interdependent or directly related. Portfolio Management
focuses on the evaluation, scoping, prioritization, capacity planning, financial
management and reporting of its affiliated projects/programs.
NASAs space program is an example.

2. Project Charter:
A project charter (PC) is a document that states a project exists and provides
the project manager with written authority to begin work.
The document helps the project manager to communicate his authority and
explain to project participants and stakeholders why the project is needed,
who it involves, how long the project will take to complete, how much it will
cost, what resources are needed and how successful completion of the
project will help the organization. Once created, the document is rarely (if
ever) amended.
Depending on a company's culture and management style, a charter may
serve the same purpose as a business case. In a large corporation, the
charter may be a multi-page document written up by mid-level management
after a business case has been approved but before the project scope has

been defined. In a small startup company, however, the charter might just
be a few paragraphs with bulleted items and the company presidents
signature.
Project charter templates often include the following components:

Project goal - documents the reasons for undertaking the project in

clear, concise language.

Project participants - identifies what people need to be involved in

the project and clearly states their roles.

Stakeholders - identifies other people who will be directly affected by

the project and need to know about the project's progress.

Requirements - identifies what resources are required for the

project's objectives to be achieved.

Constraints - documents potential roadblocks or bottlenecks.

Milestones - identifies start date and completion dates as well as

dates for other important checkpoints.

Communication

specifies

how

the

project

manager

will

communicate with project owners, participants and stakeholders through

the project.

Deliverables - documents what specific products, processes or

services the project will provide upon completion.

3. Organizational Structure:
The success of any project depends on factors such as the skill level of
project managers, motivated teams and supporting sponsors. However, it
also depends upon factors such as the project context or the organizational
environment where the project is carried out. A large part of the project
context is determined by the organizational structure, which PMI refers to as
the type of the organization. The organizational structure influences factors

such as who the project manager goes to help with resources, how
communication must be handled, and many other aspects of project.
The PMP practice exam has several questions where a project description or
a situation is given; and it requires us to identify the type of organization that
is involved. This also has other questions on the topic such as who has the
power in each type of organization, what are the advantages and
disadvantages in each type of organization. In this article, therefore, we will
take a look at some essential information regarding these three types of
organizations.

Functional:
Description: This type of organization is grouped by different areas of
specialization within different functional areas such as accounting,
marketing, purchase, etc. Projects in these type of organizations are usually
taken up in a single department and the team members may be loaned to
these projects from time to time. Team members are expected to take up
departmental work in addition to their project work. Each department in a
functional organization will do its project work independently of other
departments. If any information is needed from another department, request
is sent by the head of the department which is implementing the project to
the head of the department from whom the information is needed.
Who is in charge? In a functional organization the functional or
departmental manager is in charge. The project budget is usually
managed by the functional manager. The project manager has low
influence or power or he could even be a part time employee.
Advantages: Some of the advantages of a functional type of organization are

Well defined career paths for the team members in their areas of
specialization.

Deeper company expertise by function.

Team members usually report to one single supervisor.

Similar resources are centralized as the company is grouped by

specialties.

Disadvantages: Some
organization are

of

the

disadvantages

of

functional

type

of

The project manager has very little or no authority.

Functional organizations lack career paths in project management.

Priority on the projects are lower and people place more emphasis
on their functional specialty to the detriment of their project.

Resources are usually not dedicated to the project.

Projectized:
Description: In a Projectized organization, the entire company is structured
according to projects instead of functional departments. Team members are
often collocated and most of the company's resources are allocated to
project work. In these types of organizations, the project manager is highly
empowered. These are mostly found in consulting environments. People are
assigned and report to a project manager. Once the projects are over, the
team members are assigned to another project or they need to find work
with a different employer. All the communication occurs within the project.
Who is in charge? In a Projectized environment, the project manager has
the highest level of control.
Advantages: Some of the advantages of a Projectized organization are:

In a Projectized organization, the project manager has complete

authority.
Loyalty is strong, to both the team and the project.
Since everyone is on a single team, project communications are
easier and they are more efficient in comparison to functional
organizations.

Disadvantages: Some of the disadvantages of a Projectized organization

are:

Project 'team members ' work themselves out of a job and may have
no 'home' when the project is completed.
Professional growth could be difficult in a Projectized organization.
In a Projectized organization, team members only belong to a project - not
to a functional area.

Matrix:
Description: In a matrix type of an organization, individuals report to both the
functional manager for human resources and a project manager for projects.
Team members are required to perform project work in addition to

departmental work. Matrix organizations are classified as weak, balanced

and strong depending upon the relative level of power and influence
between
functional
managers
and
project
managers.
Weak Matrix In a weak matrix, the functional manager has more authority. In
such a type of organization, the project managers role is more of a project
expeditor or a project coordinator. The project expeditor acts primarily as a
staff assistant and communications coordinator. The expeditor cannot
personally make or enforce decisions. The project coordinator is similar to
the project expeditor except that the project coordinator has some power to
make decisions and reports to a higher level manager.
Balanced Matrix In a balanced matrix, power is shared evenly between
functional and project managers.
Strong Matrix In a strong matrix, power rests with the project manager.
Who is in charge? In a matrix organization, the power is shared between
project managers and functional managers.
Advantages: Some of the advantages of a matrix type of an organization
are:

In Matrix type of organizations, project managers could gain deep

expertise of a functional organization, while still being empowered to
manage the resources on a project.
In a Matrix type of organizations, you could have maximum utilization
of scarce resources.

Disadvantages: Some
organization are:

of

the

disadvantages

of

matrix

type

of

Since team members in matrix type of organizations have two

bosses, it could sometimes cause conflicts and confusion.
In these types of organizations, overheads could be more due to
duplication of many tasks.

Projects in these type of organizations are tougher to monitor and control

Conclusion: One of the factors that could influence the success of any project
is the type of the organization where the project is carried out. In the PMP
exam, there are several questions which are based on the topic. Therefore

aspirants of PMP course must develop a concrete understanding of the topic

while preparing for the exam.

4. Definitions
Projects vs Operations:
Project is a temporary endeavor undertaken to create a unique product,
service or result. Temporary means having a definite beginning and end. The
end is reached when the projects objectives have been achieved, or if the
project is terminated for any reason.
An ongoing work effort is generally a repetitive process because it follows an
organizations existing procedures. The ongoing execution of activities that
produce the same result or product repetitively is what Operations is all
about. Production operations, accounting operations, manufacturing a
product are all Operational activities.

Project Management Plan:

A project management plan is a formal approved document that defines how
the project is executed, monitored and controlled. It may be a summary or a
detailed document and may be a compendium of baselines,
subsidiary management plans and other planning documents.

Scope Management Plan:

Scope Management is the collection of processes used to ensure that the
project includes all the tasks required to complete the project while excluding
all work which is out of scope. The Scope Management Plan details how the
project scope will be defined, developed, and verified.

RACI Chart:

A RACI chart is a matrix of all the activities or decision making authorities

undertaken in an organization set against all the people or roles. At each
intersection of activity and role it is possible to assign somebody responsible,
accountable, consulted or informed for that activity or decision.

5. Project Management Knowledge Areas:

Integration Management:
Comprising of a plan development, plan execution and an integrated change
control process, integration management is the range of processes required
to ensure all elements of a project are successfully coordinated.
As scope changes, integration management means assessing objectives and
offering alternatives in order to meet the expectations of the project
stakeholders.

Scope Management:
Scope includes collating all the information required to begin a project and
any features this project requires to meet stakeholder requirements.
Successful projects must meet strict deadlines and resource allowances, and
scope creep always has a detrimental effect if not managed correctly.

Time Management:
11% of the CAPM exam questions originate from this knowledge area.
Time restrictions vary depending on the nature of the project, but a wellstructured plan and schedule plays an essential part.

Time management includes the development of a timeline, decisions of

project milestones and the structuring of schedules and activities.

Cost Management:
Including four process areas, a key technique to manage costs is Earned
Value Management EVM.
A project manager must practice effective cost management by estimating,
budgeting, funding, managing and controlling costs so that they remain
within the pre-approved project budget.

Quality Management:
A project is no good if it fails to meet sponsor requirements and expected
deliverables.
An organization must determine quality policies, responsibilities and project
objectives so it meets original needs and specifications.

Human Resource Management:

A team must be put together and managed so they perform well and can
satisfy the demands of a project.

The size of project teams can vary, but all team members must be
organized, managed and led effectively.

Communications Management:
For a project to be successful, the correct people must receive the right
information at the appropriate time.
Communication management entails identifying what information should be
communicated with the team and who it should be told to who will use the
information effectively.
Communication includes the planning, creation, distribution, retrieval,
management and monitoring of how information is relayed.

Risk Management:
A project manager must be competent in risk management.
The practice is crucial in projects to identify, plan for, analyze, respond, and
control any factors that might dangerously affect a project and put the
project team or end users at risk.
Effective risk management maximizes the realization of opportunities.

Procurement Management:
Procurement of resources means purchasing or acquiring materials, services
or results required from an outside source.
Outside specialists are often needed on more complex and large scale
projects and outsourcing is commonplace.
Suppliers are invited to bid for the project work and, once chosen, there will
be a legally binding contract drawn up.

Stakeholder Management:
Added in the fifth edition of the PMBOK, stakeholder management entails the
identification of participants groups, people, organizations - involved and
affected by a project.
This process includes analyzing stakeholder expectations and the impact
these might have on the project, and engaging and communicating with
stakeholders in decisions and the execution of tasks.

The process groups divide up the processes by function. The knowledge

areas divide up the same processes by subject matter. Think of the process
group as being about the actions you take on your project, and the
knowledge areas as the things you need to understand.

6. Triple Constraints:
All projects are carried out under certain constraints traditionally, they are
cost, time and scope. These three factors (commonly called 'the triple
constraint') are represented as a triangle (see Figure 1). Each constraint
forms the vertices, with quality as the central theme:

Projects
Projects
Projects
Projects

must
must
must
must

be delivered within cost

be delivered on time
meet the agreed scope no more, no less
also meet customer quality requirements

Fig
ure 1. The Triple Constraint
More recently, the triangle has given way to a project management diamond:
cost, time, scope, and quality are now the four vertices, with customer
expectations as a central theme (see Figure 2). No two customer
expectations are the same, so you must ask specific questions about the
customer's expectations:

Fig
ure 2. The Project Management Diamond

Cost: All projects have a finite budget; the customer is willing to spend a
certain amount of money for delivery of a new product or service. If you
reduce the project's cost, you will either have to reduce its scope or increase
its time.

Time (Schedule): As the saying goes, 'time is money', a commodity that

slips away too easily. Projects have a deadline date for delivery. When you
reduce the project's time, you will either have to increase its cost or reduce
its scope.

Scope: Many projects fail on this constraint because the scope of the project
is either not fully defined or understood from the start. When you increase a
project's scope, you will either have to increase its cost or time.
Once a customer asks you to complete a project, the person will state what
is important; for example, the project must cost no more than 50k, be
delivered by a particular date, or contain certain features.

The triple constraint is about balancing each constraint to reach a successful

conclusion. As the project progresses, the project manager may find that any
changes impact one or more of the constraints. What might happen? Here
are some examples:
1. During an automotive engineering project, an unexpected budget cut is
imposed on your project after the company posts poorer than expected 4th
quarter financial results.
Impact: Scope is cut, quality is reduced, and the schedule is pushed back so
that cheaper resources can be found. The most significant constraint, in this
case, is the cost (the money the company is willing to spend).
2. During a project to create a new mobile phone handset, your customer
asks that the launch date is brought forward two weeks to coincide with a
major industry show.
Impact: Costs increase as more people are added to meet the new deadline.
Some features of the product are removed and put into a phase two release
to reduce delivery time and meet the new launch date. The most significant
constraint, in this case, is time (project schedule).
3. During a software development project, your customer increases the
scope. The client asks that new features be added to the software after
learning that a competitor's product will be in direct competition with their
own. It is important the product includes these new features if it is to
compete successfully.
Impact: The budget and schedule increase as a result of pushing up the final
delivery date. More people are added to minimize disruption to the project
schedule, thereby increasing the project's overall cost. The most significant
constraint, in this case, is scope (features of the product).
In each of these examples, it is the project manager who needs to rebalance
the project to meet new constraints and deliver success for the customer.
The adage, Fast cheap good: You can have any two, has more than a
grain of truth. Rarely do project managers find that they have the budget to
deliver top quality on time. More often, a project manager needs to weigh
one constraint against another to reach the best result.
As a project manager, you need to educate your customers about project
management's triple constraint, create the best balance, and be aware of all
changes that will impact cost, time, and scope.
The triple constraint represents key elements of a project that, when
balanced well, lead to success.

7. Risk Management:
Any time there is anything that might occur on your project and change the
outcome of a project activity, we call that a risk. A risk can be an event like a fire, or
it can be a condition like an important part being unavailable.

Some events like finding an easier way to do an activity or conditions like lower
prices for certain materials can help your project. When this happens, we call it an
opportunity. But it's still handles just like a risk

Project Risk Management is processes for identifying, analyzing, and responding to

project risk. It includes maximizing the probability and the results of positive events
(opportunities) and minimizing the probability and consequences of adverse events
(risks).

Planning Processes
Plan Risk Management
Identify Risk
Perform Qualitative Risk analysis
Perform Quantitative Risk analysis
Plan Risk Responses

Monitoring & Controlling Processes

Monitor and Control Risk

Life Cycle:
1.
2.
3.
4.
5.

Risk Identification
Risk Analyses
Risk Response Planning
Risk Response Execution & Monitoring
Execution Verification

10 Golden Rules:
1.
2.
3.
4.

Make Risk Management Part of Project Management

Identify Risk earlier in Projects
Communication about Risk
Consider both Threats and Opportunities

5. Clarify Ownership Issues

6. Prioritize Risk
7. Analyze Risk
8. Plan and Implement Risk Response
9. Register Project Risks
10.Track Risk and Associated Tasks

Ways to Manage Risk (Treatment):

1. Accept the Risk:
Accepting the risk means that while you have identified it and logged it in your risk
management software, you take no action. You simply accept that it might happen
and decide to deal with it if it does.
This is a good strategy to use for very small risks risks that wont have much of an
impact on your project if they happen and could be easily dealt with if or when they
arise. It could take a lot of time to put together an alternative risk management
strategy or take action to deal with the risk, so its often a better use of your
resources to do nothing for small risks.

2. Avoid the Risk:

You can also change your plans completely to avoid the risk. This is a good strategy
for when a risk has a potentially large impact on your project. For example, if
January is when your company Finance team is busy doing the corporate accounts,
putting them all through a training course in January to learn a new process isnt
going to be a great idea. Theres a risk that the accounts wouldnt get done. Its
more likely, though, that theres a big risk to their ability to use the new process,
since they will all be too busy in January to attend the training or to take it in even if
they do go along to the workshops. Instead, it would be better to avoid January for
training completely. Change the project plan and schedule the training for February
when the bulk of the accounting work is over.

3. Transfer the Risk:

Transference is a risk management strategy that isnt used very often and tends to
be more common in projects where there are several parties. Essentially, you
transfer the impact and management of the risk to someone else. For example, if
you have a third party contracted to write your software code, you could transfer
the risk that there will be errors in the code over to them. They will then be
responsible for managing this risk, perhaps through additional training.
Normally transference arrangements are written up into project contracts. Insurance
is another good example. If you are transporting equipment as part of your project
and the van is in an accident, the insurance company will be liable for providing
new equipment to replace any that was damaged. The project team acknowledges
that the accident might happen, but they wont be responsible for dealing with

sourcing replacement kit, moving it to the right location or paying for it as that is
now the responsibility of the insurance company.

4. Mitigate the Risk:

Mitigating against a risk is probably the most commonly mitigation of risk used risk
management technique. Its also the easiest to understand and the easiest to
implement. What mitigation means is that you limit the impact of a risk, so that if it
does occur, the problem it creates is smaller and easier to fix.
For example, if you are launching a new washing machine and the Sales team then
have to demonstrate it to customers, there is a risk that the Sales team dont
understand the product and cant give good demonstrations. As a result, they will
make fewer sales and there will be less revenue for the company.
A mitigation strategy for this situation would be to provide good training to the
Sales team. There could still be a chance that some team members dont
understand the product, or they miss the training session, or they just arent
experts in washing machines and never will be, but the impact of the risk will be far
reduced as the majority of the team will be able to demonstrate the new machine
effectively.
You can mitigate against the impact, like in this example, and you can also mitigate
against the likelihood of it happening. Sometimes the actions will be broadly the
same; sometimes youll have to have some tasks to reduce the chance that the risk
happens and some separate tasks to make the impact of the risk smaller if it
happens.

5. Exploitation the Risk:

Acceptance, avoidance, transference and mitigation are great to use when the risk
has a negative impact on the project. But what if the risk has a positive impact? For
example, the risk that the new washing machines are so popular that we dont have
enough Sales staff to do the demonstrations? Thats a positive risk something that
would have a benefit to the project and the company if it happened. In those cases,
we want to maximize the chance that the risk happens, not stop it from happening
or transfer the benefit to someone else!
Exploitation is the risk management strategy to use in these situations. Look for
ways to make the risk happen or for ways to increase the impact if it does. We could
train a few junior Sales admin people to also give washing machine demonstrations
and do lots of extra marketing, so that the chance that there is lots of interest in the
new machine is increased, and there are people to do the demos if needed.

Scope Creep vs Gold Plating:

Scope Creep:
Scope creep is also known as requirement creep, which refers to the uncontrolled
changes in the projects or products scope.
Scope creep happens in the project for following reasons:
Due to interference from the client.
Due to an incomplete scope statement.
Due to a poor change control system.
Due to miss-communication among the team members.
Due to reasons external to organizations; e.g. market conditions, regulatory
requirements, or technological advancements.
Scope creep is considered bad for the project health and it must be avoided in all
cases. Here, you make some changes without any proper review, and in later stages
it may create many problems. And then you will have to implement many other
changes just to cover up the changes made in earlier stages.

However, please bear in mind that if the scope is changed and schedule and budget
are also changed to reflect the change in scope, it cannot be called scope creep.
Scope creep happens when the scope of product is changed and the project budget
and schedule remain unchanged.
Consequences of scope creep may include delayed schedule and cost overrun. If
you do not control the scope creep, then you may have problems with successfully
completing your project, or in severe cases it may be terminated.

Example:
Suppose you are building a 100 foot wall for the client, and client comes to the team
and asks them to increase the length of wall by one foot. Team members think that
there is a lot of material lying around on the site, and it will make no difference to
them to build just one foot of the wall; therefore, they go ahead and build the extra
length of wall.

How to Avoid the Scope Creep:

Scope creep is not something that couldnt be avoided. Of course it can be. You can
avoid scope creep by following below given guidelines.

Never allow changes without proper review and approval.

Establish a communication channel between client and you. Dont let them
talk directly to your project team members.
Prepare a solid and complete scope statement.
Establish a robust change control system.

Establish and encourage good communication among the team members.

Keep proper checks on the projects progress

Gold Plating:
Gold plating means intentionally adding extra features or functions to the products
which were not included in the scope statement.
Usually gold plating is performed by either the project team or the project manager
with no additional cost to the client. Gold plating is done with good intentions and
most of the time is appreciated by the clients; however, there are many cases
where it is not liked and the gold plating is backfired because you are adding some
features to the product which were not demanded by the client. This might be
considered as an unauthorized change in the scope and the client can refuse to
accept the product.
Gold plating is very common in software programming and is done by team
members to show their abilities, or by the project manager to the make client
happy.
Following are a few causes of gold plating:

Team member may add extra functions to prove his abilities to the project
manager.
Project manager may add extra functions to earn credit from the client or the
top management.
Sometimes it is performed to divert the attention of the client from the
defects in the product.

Although, gold plating sounds good to everyone, it is bad for the project team and
the project manager in the long run. Gold plating increases the input cost (though,
in many cases it does not appear to be high), increases the risk, and the
expectation of the customer is elevated. If you do another project for the same
customer, he would again expect you to deliver a product with extra features. And if
you do not do so he will be dissatisfied.

Example:
Let us say that you are building a software program for the client. Your programmer
comes to you and says that he can add some extra features to the program with
almost no effort which will increase the functionality of the product, and the client
will like it. You also agree with him, and allow him to add this extra functionality.

How to Avoid Gold Plating:

Avoiding Gold Plating is easier than avoiding scope creep. Below are a few
guidelines to help you avoid gold plating:

You should never allow team member to add any extra function or features to
the product without approval.
As a project manager you should also avoid it.
You must establish proper communication lines within the project team.
As a project manager, it is your job to keep monitoring the activities of the
project and stop unwanted actions which may lead your project into troubles
such as scope creep and gold plating.