Chapter-1 Important Terms and

Concepts
Process a package of inputs, tools and outputs, there are 47 processes defined by
PMI

Phases a group of logically related activities, produces one or more deliverables at

the end of the phase (maybe with exit gate/kill point [probably in a sequential
relationship])

Phase-to-Phase relationship: sequential -> finish-to-start; overlapping -> for schedule

compression (fast tracking); parallel

Project a temporary endeavor to create a unique product, service or result (or

enhancement of existing services/products (e.g v.2 development is a project) ) as
opposed to operation, may hand over the product to operation teams

Operation manages process in transforming resources into output

projects have more risks and uncertainties than operations and require more planning

Program a group of coordinated projects, taking operations into account, maybe

with common goals, achieving benefits not realized by running projects individually, if
only the client/technologies/resource are the same, then the projects should be
managed individually instead of a program

Portfolio group of programs/projects to achieve organizational strategic goals within

the organization/operation management, all investments of the organization, maximize
the value by examining the components of the portfolio and exclude non-optimal
components

Why projects: market demand, organizational need, customer request, technological

advance, legal requirements, to support organization strategic plan -> projects
bring values
Business Value is the total values (tangible and intangible) of the organization
 Organization Strategy may be expressed through mission and vision

Use of portfolio/program/project management to bridge the gap between organization

strategy and businessvalue realization

Progressive Elaboration (rolling wave planning is one of the methods used in

activity planning) analysis and estimation can be more accurate and elaborated as the
project goes (usually in phased projects) such that detailed planning can be made at
that point

Project Management
Project Management the application of (appropriate) knowledge, skills, tools &
techniques to project activities to meet the project requirements and achieve
customer satisfactions

The most important task is to align stakeholder expectations with the project
requirements, around 90% of the PMs work is related to communication with
stakeholders

PMBOK Guide is a framework/standard but not methodology (agile, scrum, PRINCE3,

etc.)

should be aligned with organization governance (through EEF and OPA)

Competing constraints: time, cost, scope, quality, risk, resources

Project Management Office (PMO) standardizes governance, provides training,

shares tools, templates, resources, etc. across all projects/programs/portfolios

3 forms: supportive, controlling and directing (lead the project as PM)

functions: training, resource coordination, methodology, document repository, project

management oversight, standards, career management of PMs

may function as a stakeholder / key decision maker (e.g. to terminate the projects)

align portfolios/programs/projects with business objectives and measurement systems

control shared resources / interdependence across projects at the enterprise level
 play a decisive role in project governance

Organizational Project Management (OPM)

o strategy execution framework utilizing portfolios, programs and projects and

organizational enabling practices (technology, culture, etc.) for achieving organizational
objectives

o linking management principles with strategy, advance capabilities

Management by Objectives (MBO) : is a process of defining objectives within an

organization so that management and employees agree to the objectives and
understand what they need to do in the organization in order to achieve them.
Organizational Project Management Maturity Model (OPM3) : provides a method for
organizations to understand their Organizational Project Management processes and
measure their capabilities in preparation for improvement.

Project Manager
Project Manager: knowledge, performance, personal general (organization, planning,
meeting, control) management, interpersonal (communication, leadership, motivation,
influence, negotiation, trust building, political and cultural awareness) skills

leader of the project irrespective of the authority

should consider every processes to determine if they are needed for individual projects

may report to the functional manager, program manager, PMO manager, operation
manager, senior management, etc., maybe part-time or devoted

identifies and documents conflicts of project objectives with organization strategy as

early as possible

skills: leadership, team building, motivation, influencing, coaching, trust building,

communication, political awareness, cultural awareness, decision making, conflict
management, negotiation
PM must balance the constraints and tradeoffs, effectively communicate the info
(including bad news) to the sponsor for informed decisions
 PM need to involve project team members in the planning process

Project Team includes PM, project management staff, project staff, PMO, SME (subject
matter experts can be outsourced), customer representative (with authority), sellers,
business partners, etc., maybe virtual or collocated

Senior management must be consulted for changes to high-level constraints

Organization Types
Organization Types: Projectized (project manager has the ultimate authority over the
project, team members are often collocated), Matrix (Strong, Balanced,
Week), Functional

Composite a combination of different types, depending on the actual need

Tight Matrix = co-location, nothing to do with the organization type (not necessarily a
matrix org.)

Functional organizations => the project manager has little authority, often called project
expeditor (no authority) or coordinator (little authority), project coordination among
functional managers

Matrix organization => multiple bosses and more complex

Project Based Organization (PBO) conduct the majority of their activities as projects
and/or privilege project over functional approaches, they can include: departments with
functional organizations; matrix organizations; projectized organizations and other forms
of organizations that privilege a project approach for conducting their activities, success
is measured by final results rather than position/politics

Project Lifecycle vs Project Management

Lifecycle vs Product Lifecycle
Project Lifecycle: initiating, planning and organizing, carrying out/executing work,
closing the project
 Predictive [plan driven/waterfall] scope, time and cost determined early in the
lifecycle, may also employ rolling wave planning

Iterative [incremental] repeat the phases as understanding of the project increases

until the exit criteria are met, similar to the rolling wave planning, high-level objectives,
either sequential / overlapping phases, scope/time/resources for each phase may be
different

Adaptive [change driven/agile] for projects with high levels of change, risk and/or
uncertainty, each iterative isvery short (2-4 weeks), work is decomposed into product
backlog, each with a production-level product, scrum is one of the most effective agile
methods, stakeholders are involved throughout the process, time and resources are
fixed, allow low change cost/keep stakeholder influence high

each project phase within the product lifecycle may include all the five project
management process groups

product lifecycle: development > production > adoption & growth > maturity > decline
> end of life

Other Terms
Organization Process Assets is a major input in all planning process, which may be
kept at PMO, directly related to project management, including Processess and
Procedures (including templates (e.g. WBS, schedule network diagrams,
etc.), procedures for issuing work authorizations, guidelines, performance
measurements) and Corporate Knowledge Base

The Configuration Management Knowledge Bases contain baselines of all

organization standards

Lessons Learned focus on the deviances from plan (baseline) to actual results

Enterprise Environment Factors (often are constraints) are influences not in the
immediate control of the project team that affect the project, intra-organization and
extra-organization, e.g. organizational culture, organization structure
 (functional/matrix/projectized structure), existing human resources, work authorization
system, PMIS

The work authorization system (WAS) is a system used during project integration
management to ensure that work gets done at the right time and in the right sequence

EEF are inputs for all initiating, most planning process, not much in the
executing/controlling process, none in closing process

Organization culture: process-oriented/results-oriented, job-oriented/employee-oriented,

professional-oriented/parochial-oriented, open system/closed system, tight control/loose
control, pragmatic/normative

Project Governance for the whole project lifecycle, fits in the organizations
governance model, define responsibilities and accountabilities, controlling the project
and making decisions for success, alignment of project with stakeholders
needs/objectives, provides a framework for PM and sponsors to make decisions to
satisfy both parties, should be described in the PM plan

Analytical Techniques: used to find the root cause or to forecast

PMIS includes configuration system and change control system

Never accept a change request to trim down one element of the triple constraint without
changing the rest.

Sponsor provides resources/support to project, lead the process through initiation

(charter/scope statement) through formally authorized, later involved in authorizing
scope/budget change/review

Customer NOT necessarily provide the financial resources, maybe external to the
organization, final acceptance of the product

Business Partners certification body, training, support, etc.

Organizational Groups internal stakeholders

Business Case : background, analysis of the business situation, costs and benefits
(cost-benefit analysis), to help in selection of project created by the initiator
 Project Statement of Work (SOW) : describes the business need, high level scope
of deliverables and strategic plan of the organization, created by the
sponsor/initiator/buyer

Project Charter : formally authorizes the project, includes all those from above plus
approval criteria, preliminary budget, primary stakeholders, the name of PM,
assumptions and decisions etc., usually created by PM (in develop project charter
process) and signed by the sponsor, remains fairly the same during project lifecycle,
except big changes like sponsor has resigned [the current sponsor should initiate the
change to the charter before he leaves]

Project Charter is not a contract

Project Management Plan : how the project will be performed and managed -
documents assumptions & decisions, helps communication between
stakeholders, goals, costs & time scheduling (milestones), project management system
and subsidiary management plans and documents

Project Management Plan is NOT a project schedule

Project Management System: includes a list of project management processes, level of

implementation (what actions to take in the management processes), description of
tools and techniques, resources, procedures,change control system [forms with
tracking systems, approval levels]

Requirement Traceability Matrix (RTM) a matrix connecting deliverables to

requirements and their sources(for managing scope)

Work Breakdown Structure (WBS) a hierarchal chart of decomposing deliverables

into work packages

Activity List a full list of all activities with indication of relationship to the work
packages

Activity Attributes further information (duration, start date, end date, etc.) of all the
activities in the list (for scheduling)
 Roles and Responsibilities (RAR) a document listing all the roles and description of
their responsibilities in the project (often by category)

Responsibility Assignment Matrix (RAM) a matrix connecting people to work

packages/activities, e.g. the RACI matrix (responsible, accountable, consult, inform),
usually only one person is accountable for each activity

Resources Breakdown Structure (RBS) a hierarchical chart listing all the resources
by categories, e.g. marketing, design, etc.

Risk Breakdown Structure (RBS) a hierarchical chart listing all risks by categories

Project Information
o Work Performance Data - raw data collected

o Work Performance Info - analyzed in context and integrated data, e.g. some forecasts

o Work Performance Reports - work performance information compiled in report format

Sunk costs - money already spent, not to be considered whether to terminate a

project, similar to committed cost (often through contracts)

Direct costs, indirect (shared) costs, Fixed costs, Variable costs

Law of diminishing returns beyond a point, the more input, the less return

Working capital assets minus liability, what the company has to invest in the projects

Payback period a time to earn back capital investment

Benefit-cost ratio (BCR) - an indicator, used in the formal discipline of cost-benefit

analysis, that attempts to summarize the overall value for money of a project

Depreciation - straight-line depreciation vs accelerated depreciation (the amount of

depreciation taken each year is higher during the earlier years of an assets life)

Under double declining balance, the asset is depreciated twice as fast as under
straight line. Using the example above, 10% of the cost is depreciated each year using
straight line. Doubling the rate would mean that 20% would be depreciated each year,
so the asset would be fully depreciated in 5 years, rather than 10.
 Under sum-of-the-years-digits, the asset is depreciated faster than straight line but not
as fast as declining balance. As an example of how this method works, lets say an
assets useful life is 5 years. Adding up the digits would be 5+4+3+2+1 or a total of 15.
The first year, 5/15 is expensed; the next year 4/15 is expensed, and so on. So if the
assets cost is $1000, 5/15, or $333.34 would be expensed the first year, $266.67 the
second year, and so on.

Economic value added the value of the project brought minus the cost of project
(including opportunity costs) e.g. for a project cost of $100, the estimated return for 1st
year is $5, assuming the same money can be invested to gain 8% per year, then the
EVA is $5 $100 * 8% = -$3

Net present value (NPV) - the sum of the present values (PVs) of the individual cash
flows of the same entity

Present value (PV) or called present discounted value, is a future amount of money
that has been discounted to reflect its current value, as if it existed today (i.e. with
inflation, etc.)

Future value (FV) - is the value of an asset at a specific date

Internal Rate of Return (IRR) - The inherent discount rate or investment yield rate
produced by the projects deliverables over a pre-defined period of time.

Forecast (future) vs Status Report (current status) vs Progress Report (what have
been done/delivered)

Journey to Abilene (Abilenes Paradox) - committee decisions can have a paradox

outcome, the joint decision is not welcome by either party (because of fear of raising
objections)

when something unusual happens, always refer to the PM Plan/Charter for instruction
on how to proceed; if not found, ask for direction from the management

unresolved issues will lead to conflicts Project Management

1. Emphasis is placed on the planning rather than putting out the fire day in day out. Work
should begin after the proper planning is finished.

2. The Project Management Plan is approved by all designated stakeholders and is

believe to be achievable.

3. All activities, issues and risks should be assigned to designated project members for
handling.

4. Competing constraints are time, cost, scope, quality, risk and resources. Change in
one constrain will affect at least one other constraints non-linearly, e.g. a reduction in
10% of cost may affect 90% of the quality.

5. Risk Management is a almost a must for all projects, project schedule and budget must
take risks into consideration.

6. Always follow the plan-do-check-act cycle.

7. All changes must be handled through the Integrated Change Control Process, proper
approvals must be sought and changes documented before work begins (except in the
case of implementing workarounds during emergency in which approval may be sought
after the change has been carried out).

8. Quality is an important consideration which needs constant improvement (through the

control quality / process improvement).

Others
1. Meetings are used for idea generation, discussion, problem solving or decision
making, not status reporting.

2. Gold-plating is derogatory to PMI.

3. The Project Management Office (PMO) is assumed in most case.

4. Work performed by resources (including overtime work) must be compensated. It is

NOT recommended to ask resources to work overtime by sacrificing work-life balance.
5. The goal of negotiation is to create a win-win result (problem-solving).

6. Sunk cost is not to be considered when deciding when to terminate a project.

7. Never tolerate sexual discrimination, even if it is customary in other cultures.

The Project Management Process

Groups (IPECC)
1. Initiating

2. Planning

3. Executing

4. Monitoring and Controlling

5. Closing

Planning and Executing are iterative. Monitoring and Controlling is exercised over
Planning and Executing.

A phase is not a process group. The 5 processes can happen in 1 phase.

The process groups is not in sequence

The PM should tailor the choices of processes to fit in individual processes (tailoring)
deliverables are often incremental in nature

Initiating
align project purposes with stakeholders expectations

assign a project manager

identify stakeholders and develop project charter

document business case (created by initiator, maybe well before the initiating process
group) and cost-benfit analysis, identify high-level risks, identify project selection criteria
 early in the process, the staffing, costs and chance of success are low, risk and
stakeholder influence are high

may be performed at portfolio/program level (i.e. outside the projects level of control)

Planning
create Project Management Plan [why the project? what to deliver? who do what?
when accepted? how
executed?], subsidiary documents (schedule baseline, cost baseline, performance
management baseline,scope baseline (scope statement, WBS, WBS dictionary)
and subsidiary management plans (scope, schedule, budget, quality, human
resources [roles & responsibility, organization chart and staffing management
plan include the staff need, rewards, safety and training need] , stakeholder,
requirements, process improvement, communication, change, risk and procurement)
all are not finalized until a thorough risk management has been performed, need to
be approved before work begins

all plan and documents can be formal or informal, generalized or detailed, depending
on needs

Project Management Plan maybe continually updated during the project with rolling
wave planning / progressive elaboration

obtain approval of plan from designated stakeholders, changes to the project

management plan and subsidiary documents/plans need formal procedures described
in the change control system

hold kick-off meeting

planning process group is MOST important, with over 1/2 of all the 47 process in this
group

may need re-planning when significant changes to the baseline is observed in the
executing/monitoring processes
 Executing
to satisfy project specifications

coordinating human/infrastructure resources in accordance with the project

management plan

updates and re-baselining the project management plan and subsidiary management
plans

normal execution, manage contracts, acquire, develop & manager project

team, perform quality assurance and manage stakeholder expectation/communication

direct and manage project work

continuous improvement process (quality assurance)

use up the largest share of resources

Monitoring and Controlling

measure performance, address change requests, recommend corrective/preventive
measures and rectify defects

usually performed at regular intervals

control the quality, inspection and reporting, problem solving, identify new risks

reassess control process

should there be any internal deviance from the stated plan, the PM should make
correction (use contingency reserve if necessary)

monitor and control project work and integrate change control

make sure only approved changes (through integrated change control) are incorporated

Closing
either project finished or cancelled

final product verification, contract closure, produce final report (closeout

documentation), obtain formal acceptance, archive, release resources, close project
 feedback, review and lessons learned (about the process), transition of deliverables to
operation

procurement closure and administrative closure

Product-oriented Processes
initiating

planning and organizing

executing

closing

PMI Knowledge Areas

1. Project Integration Management assemble and combine all parts into a coherent
whole

2. Project Scope Management

3. Project Time Management

4. Project Cost Management

5. Project Quality Management

6. Project Human Resource Management

7. Project Communications Management

8. Project Risk Management

9. Project Procurement Management

10. Project Stakeholder Management

 integration management is needed when processes interacts

to identify,combine, unify and coordinate various processes/activities and manage the

interdependencies

communication is most important

a PM Plan not meeting requirements is a defect

Project Integration Management ITTOs

Develop Project Project SOW Expert Project Charter
Charter Business Case Judgements
Agreements Facilitation
Enterprise Techniques
Environmental Factors
Organization Process
Assets

Develop Project Project Charter Expert Project Management Plan

Management Plan Outputs from Planning Judgements
Processes Facilitation
Enterprise Environment Techniques
Factors
Organization Process
Assets

Direct and Manage Project Management Expert Deliverables

Project Work Plan Judgements Work Performance Data
Approved Change PMISMeetings Change Requests
Requests PM Plan Updates
Enterprise Environment Project Document Updates
Factors
Organization Process
Assets

Monitor and Control Project Management Expert Work Performance Reports

Project Work Plan Judgements Change Requests
Schedule Forecasts Analytical PM Plan Updates
Cost Forecasts Techniques Project Document Updates
Validated Changes PMISMeetings
Work Performance Info
Enterprise Environment
Factors
Organization Process
Assets
 Perform Integrated Project Management Expert Approved Change
Change Control Plan Judgements Requests
Work Meetings Change Log
Performance Reports Change PM Plan Updates
Change Requests Control Tools Project Document Updates
Enterprise Environment
Factors
Organization Process
Assets

Close Project or Project Management Expert Final

Phase Plan Judgements Product/Service/Result
Accepted Deliverables Analytical Transition
Organization Process Techniques Organization Process
Assets Meetings Assets Update

Develop Project Charter

formally authorize the project and allow the PM to apply organizational resources

well-defined project start and project boundaries

project charter is a several page document including high level information of the
project: project background, business case, goals (S.M.A.R.T. specific, measurable,
attainable, realistic, time-bound), who is and the authority of the project manager,
budget, risk, stakeholders, deliverables, approval criteria, etc.

can link the project to other works in the organization through portfolio/program
management

signed off by the sponsor (the one who supply the money/resources)

agreements: either a contract (for external parties), letter of intent, service level
agreement, etc. (can be legally binding or NOT)

a charter is NOT a contract because there is no consideration

PMO may provide the expert judgement

Facilitation techniques includes brainstorming, conflict resolution, problem solving,

meeting, etc.

Develop Project Management Plan

 the project management plan is a formal written document on how the project is
executed, monitored and closed, including all subsidiary management plans
(scope, requirements, change, configuration, schedule, cost, quality, process
improvement, human resource, communication, risk, procurement) and documents
(cost baseline, schedule baseline, scope baseline, performance
measurement baseline, cost estimate, schedule, responsibility for each deliverable,
staff requirements) and some additional documents/plans (selected PM processes and
level of implementation)

the contents to be tailored by the PM (tailoring) to suit each project

created by PM, signed off by destined KEY stakeholders (e.g. project sponsor, project
team, project manager)

may be progressively elaborated in iterative phases (outputs from other processes), this
must be the finalprocess/iteration to consolidate the PM Plan

when the project management plan is baselined (i.e. validated and then signed off by
key stakeholders), it is subject to formal change control and is used as a basis for
comparison to the actual plan

after baselining, the senior management must be consulted if these high level
constraints are to be altered (whether to use the management reserves)

can be re-baselined if significant changes are seen (scope change, internal

changes/variances (for the project execution), external factors) <- needed to be
approved by sponsors/stakeholders/senior management, must understand the
underlying reasons first (built-in costs is not usually a legitimate reason)

cost baseline (specific time-phased budget), schedule baseline (-> knows when to
spend money), scopebaseline (includes scope statement, WBS, WBS dictionary):
whether preventive/corrective/defect repair actions are needed

the performance measurement baseline (PMB) is an approved scope-schedule-cost

plan for the project work (to use in earned value management), it includes
contingency reserve but excludes management reserves
 configuration management (works with change control management plan), document
all change versions of project deliverables and completed project components, PMIS
includes: Configuration Management System (contains the updated
deliverable/project specifications and processes) and Change Control System
(contains formal documents for tracking changes)

configuration management system contains the most updated version of project

documents

other project documents NOT included in the project management plan:

Kick-off Meeting: at beginning of the project/phase, participants including project

team+stakeholders, element including project review, responsibility assignment matrix,
participation of stakeholders, escalation path, frequency of meetings

Microsoft Project is considered by PMI as close to a bar chart, not an PMIS

Direct and Manage Project Work

create project deliverables, acquire/assign/train staff, manage vendors, collect data for
reports, document lessons learned

implement approved process improvement plans and changes, change requests

include corrective actions,preventive actions, defect repair and updates (all
considered to be change requests)

if the PM discovers a defect, he/she should instruct the team to make defect repair
during this process (need change request but may be approved by the PM only (if
stipulated in PM Plan for minor change))

approved change requests approved in the perform integrated change control, may
include preventive, corrective and defect repair actions

change requests may arise as a result of implementing approved change requests

PM should be of service to the team, not a boss

 a work authorization system (part of EEF) defines approval levels needed to issue
work authorization (to allocate the work) and is used to prevent scope creep as formal
approval must be sought before work begins

Stakeholder risk tolerance is part of EEF

Face-to-face meeting is considered to be most effective

The PM Plan can be considered as a deliverable

most of the time of project spends here

Monitor and Control Project Work

validated changes actions taken as a result of the approved change requests are
validated against the original change requests, to ensure correct implementation

corrective and preventive actions usually dont affect the baseline, only affect the
performance against the baseline

defect repair: considered as rework, deliverable not accepted, either rework or scrap,
strongly advise defect prevention to defect repair

the work performance info is fed from all other control processes (e.g. control schedule,
control stakeholder engagement, control communications, control costs, control quality,
etc.)
variance analysis is NOT a forecast method

Perform Integrated Change Control

the PM should influence the factors that cause project change

changes arises as a result of: missed requirements, views of stakeholders, poorly

designed WBS, misunderstanding, inadequate risk assessment

all the process is documented in the change log

tracked using a change management system, also affect configuration

management system
 configuration control: changes to deliverables and processes

change control: identify/document/approve changes

configuration management activities: configuration identification, configuration status

accounting, configuration verification / audit to ensure the latest configuration is adopted
and delivered

for a change request: 1) identify need, 2) assess the impact, response and
alternatives, 3) create CR, 4) Meet with stakeholders, 5) obtain approval from CCB
(change control board) or PM as defined in roles and responsibility document/PM Plan,
6) request more funding if needed

customers/sponsors may need to approve certain decisions by CCB (if they are not
part of CCB)

communicate the resolutions (approve or reject) to change requests to stakeholders

Burnup chart vs Burndown chart

Close Project or Phase

ensure all procurements are closed (in the Close Procurements Process) before formal
closure of the project/phase

create the project closure documents

formal sign off by designated stakeholders/customer

obtain formal approval to close out the project/phase (administrative closure)

obtain approval and deliver the deliverables (maybe with training)

finish and archive documentations, lessons learnt and update to organizational process
asset

if the contract comes with a warranty, make sure that changes during the project are
evaluated against the origin clauses, ensure alignment of the warranty and changes

to close a project as neatly and permanently possible

 for multi-phase projects, this process will be performed once for every phase end
and once for the whole project (5 times for project with 4 phases)

litigation can be further pursued after the closure

ensure the inclusion of all and only the work required to complete the project
successfully

Product Scope requirements needed to be fulfilled to create the product, assessed

against the product requirements and WBS

Project Scope activities and processes needed to be performed to deliver the

product scope, assessed against the scope baseline (scope statement, WBS and WBS
dictionary), e.g. including testing & quality assurance, assessed against the PM plan

scope management to prevent scope creep (additional requirements added without

any proper control)

The completion of project scope is measured against the project management plan
whereas the completion of product scope is measured against the product
requirements/WBS

gold plating additional requirements initiated by the team members to exceed

expectation, considered a subset of scope creep

Scope Baseline: scope statement + WBS + WBS dictionary

WBS includes only the deliverables/outcomes/results (not actions)

Project Scope Management ITTOs

Plan Scope Project Management Plan Expert Scope Management Plan
Management Project Charter Judgements Requirements Management
Enterprise Environment Meetings Plan
Factors
Organization Process
Assets

Collect Scope Management Plan Interviews Requirements

Requirements Requirements Management Focus Groups Documentation
Plan Facilitated Requirements Traceability
Stakeholder Management Workshops Matrix
Plan Group Creativity
Stakeholder Register Techniques
Project Charter Group Decision-
making
Techniques
Questionnaire
and Surveys
Observations
Prototypes
Benchmarking
Context Diagram
Document
Analysis

Define Scope Scope Management Plan Expert Project Scope Statement

Project Charter Judgements Project Document Updates
Requirements Product
Documentation Analysis
Organization Process Alternatives
Assets Identification
Facilitated
Workshops

Create WBS Scope Management Plan Decomposition Scope Baseline

Project Scope Statement Expert Project Document Updates
Requirements Judgements
Documentation
Enterprise Environment
Factors
Organization Process
Assets

Validate Scope Project Management Plan Inspection Accepted Deliverables

Requirements Group Decision Change Requests
Documentation Making Work Performance Info
Requirements Traceability Techniques Project Document Updates
Matrix
Verified Deliverables
Work Performance Data

Control Scope Project Management Plan Variance Work Performance Info

Requirements Analysis Change Requests
Documentation Project Management Plan
Requirements Traceability Updates
Matrix Project Document Updates
 Work Performance Data Organization Process Assets
Organization Process Updates
Assets

Plan Scope Management

Scope Management Plan: how the scope will be defined, validated and controlled

including how to prevent scope creep, how to handle change requests, escalation
path for disagreement on scope elements between stakeholders, process for creating
scope statement, WBS, processing CR, how the deliverables will be accepted

Requirements Management Plan: how the requirements will be managed, documented

and analyzed,

including how to process requirements, address missed requirements, configuration

management, prioritizerequirements, metrics (and rationale) for defining the product,
define the traceability structure (in RTM), authorization level for approving new
requirements

important: primary means to understand and manage stakeholder expectations

Collect Requirements
Requirement: a condition/capability that must be met /possessed by a deliverable to
satisfy a contract/standard/etc., including quantified/documented needs, wants,
expectation of the sponsor/stakeholder/customer

o Business requirements support business objectives of the company

o Stakeholder requirements

o Solution requirements - functional (product behavior)

and nonfunctional requirements (reliability, security, performance, safety, etc.)

o Transitional requirements : temporary capability including data

conversion/tracking/training
o Project requirements : actions/processes/conditions the project needs to met

o Quality requirements : quality criteria defined by stakeholders

 Requirements Collection Tools

o interviewing (expert interviewing)

o focus groups (with SME and pre-qualified stakeholders)

o facilitated workshops (QFD (Quality Function Deployment) capture VOC voice of

customer, translate customer needs into requirements; JAD (Joint Application Design)
facilitated workshop for IT and knowledge workers)

o questionnaires and surveys

o observation (shadowing or Gemba)

o prototypes

o context diagrams (diagrams showing input/source and output, to show how

people interact with the system)

o document analysis

Product analysis includes techniques such as product breakdown, systems analysis,

requirements analysis, systems engineering, value engineering, and value analysis

Group Creativity Techniques: brainstorming, nominal group technique (to rank

brainstormed ideas by voting anonymously), mind-mapping, affinity diagram (KJ
method group ideas into larger categories based on their similarity and give titles to
each group), Delphi technique (for experts with widely varying opinions, all participants
are anonymous, evaluation of ideas funneled by a facilitator), Multi-criteria Decision
Analysis (with a decision matrix)

Group Decisions-making Techniques: Analytic Hierarchy Process (AHP, for

complex decisions, give different weighs to factors to build an hierarchy), Voting
(unanimous, majority >50%, plurality, dictatorship)

Requirements Traceability Matrix tracks requirements from origins to deliverables,

including source of requirements and completion status, effective to prevent gold plating
(also work with work authorization system)
 requirement documentation needs to be unambiguous, traceable, compete,
consistent and acceptable to key stakeholders and is approved by the customer and
other stakeholders

Define Scope
project & product scope, outlines what will be and what will NOT be included in the
deliverables, including details of risks, constraints and assumptions

vs project charter which includes high-level descriptions

provides alternatives if the budget and schedule could not meet managements
expectations

value engineering is a part of the product analysis technique (Value

Engineering (value analysis, value management, value methodology) finding
alternatives to constraints to improve product/reduce cost without sacrificing the scope)

project scope statement includes objectives, (project and product) scope,

requirements, boundaries, deliverables, acceptance criteria, constraints,
assumptions, milestones, cost estimation, specifications, configuration management
requirements, approval requirements, etc.

The scope statement is progressively elaborated

Create WBS
the WBS must be created (if take on a running project without WBS, stop the project
and prepare the WBS first)

WBS is a structured hierarchy created by the organization/stakeholders, can be in an

organization chart or table form, based on the project deliverables (not tasks
needed)

can be a template in OPA

 a higher level above a work package is control account (control point where scope,
cost and schedule are compared to earn value for performance measurement), a work
package can have only ONE control account

WBS includes 100% of scope (100% rule)

code of accounts: a numbering system to identify WBS components

chart of accounts: a list of all account names and numbers

1.1 for the 2nd level, 1.1.1 for the 3rd level

WBS is a decomposition tool to break down work into lowest level manageable (time
and cost can be estimated, work package can be assigned to a team member) work
packages, e.g. by phase or major deliverables

different work packages can be at different levels of decompositions

WBS does not show dependencies between work packages, but a WBS dictionary does
(WBS dictionary clarifies WBS by adding additional information)

the major deliverables should always be defined in terms of how the project will actually
be organized, for a project with phases, the decomposition should begin with the phase
first

scope baseline, an output from Create WBS, is created by the project team

the work packages are broken down enough to delegate to a staff, usu. 8 80 hours
work

Validate Scope
gain formal acceptance of deliverables from customer/stakeholders (e.g. obtain
customer sign off, requirements validations, etc.) near the end of project/phase/each
deliverable, e.g. user acceptance test

work performance data tells how the deliverables were created, work performance
data includes non-conformance and compliance data
change requests may be an output
 if no formal sign off is received as stipulated, follow the pre-defined process in PM plan,
e.g. escalation to management

often preceded by Control Quality Process to give the verified deliverable as input to
this process, verifieddeliverables is fed from the control quality process

vs Control Quality: the process of monitoring/recording results of

executing quality activities to assess performance and recommend necessary changes,
e.g. unit testing -> high quality vs low quality

need to perform even in case of early termination/cancellation of the project to save

any usable deliverables for other projects

Control Scope
assessing additional requirements by the customer or proactively overlooking the
project scope

measure the work product against the scope baseline to ensure the project stays on
track proactively, may need preventive, corrective actions or defect repair

to prevent unnecessary changes (either internally or externally requested) to the

project

a documented and enforced change control process

the customer has the ultimate authority to change scope while the senior management
can make use of management reserves

variance analysis method to compare planned (baseline) and actual work and
determine the causes/actions e.g. update baseline (keep the variance) or
preventive/corrective actions, both need CR

work performance info scope variance, causes, recommended action

may update the inputs requirements documentation & requirement traceability matrix
& lessons learnt in OPA
in general, disagreement should be resolved in favor of the customer
Project Time Management ITTOs
Plan Schedule Project Management Expert Judgement Schedule
Management Plan Analytical Techniques Management Plan
Project Charter Meetings
Enterprise
Environment Factors
Organization
Process Assets

Define Activities Schedule Expert Judgement Activity List

Management Plan Decomposition Activity Attributes
Scope Baseline Rolling Wave Planning Milestone List
Enterprise
Environment Factors
Organization
Process Assets

Sequence Schedule PDM Project Schedule

Activities Management Plan Dependency Determination Network Diagram
Activity List Applying Leads and Lags Project Document
Activity Attributes Updates
Milestone List
Project Scope
Statement
Enterprise
Environment Factors
Organization
Process Assets

Estimate Activity Schedule Expert Judgement Activity Resource

Resources Management Plan Alternatives Analysis Requirements
Activity List Published Estimating Data Resource Breakdown
Activity Attributes Bottom-up Estimating Structure
Resource PM Software Project Document
Calendars Updates
Activity Cost
Estimates
Risk Register
Enterprise
Environment Factors
Organization
Process Assets

Estimate Activity Schedule Expert Judgement Activity Duration

Durations Management Plan Analogous Estimating Estimates
Activity List Parametric Estimating Project Document
 Activity Attributes Three Point Estimates Updates
Activity Resource Group Decision Making
Requirements Technique
Resource Reserve Analysis
Breakdown Structure
Resource Calendars
Project Scope
Statement
Risk Register
Enterprise
Environment Factors
Organization
Process Assets

Develop Schedule Schedule Network Analysis Schedule Baseline

Schedule Management Plan Critical Path Method Project Schedule
Activity List Critical Chain Method Schedule Data
Activity Attributes Resource Project Calendars
Activity Resource Optimization Techniques PM Plan Updates
Requirements Modeling Techniques
Activity Duration Leads and Lags
Estimates Schedule Compression
Project Schedule Scheduling Tools
Network Diagram
Resource
Breakdown Structure
Resource Calendars
Project Scope
Statement
Risk Register
Project Staff
Assignments
Enterprise
Environment Factors
Organization
Process Assets

Control Schedule Project Management Performance Reviews Schedule Forecasts

Plan Project Management Work Performance
Project Schedule Software Info
Work Performance Resource Optimization Change Requests
Data Technique PM Plan Update
Project Calendars Modeling Techniques Project Document
Schedule Data Leads and Lags Update
Organization Schedule Compression Organization Process
Process Assets Scheduling Tools Assets Update
 Plan Schedule Management
define policies, procedures and documentation for managing and controlling project
schedule

including scheduling methodology, tools, level of accuracy, control thresholds (limit

beyond which preventive/corrective actions needed), rules of performance
measurement (e.g. earned value)

lead and lags are NOT schedule constraints

Define Activities
the scope baseline is used here as it represents the approved (stable) scope

further decompose work packages into activities for more detailed and accurate
estimations

activities is the PMI terminology for tasks and work efforts

activity is more related to the actual work/process to produce the deliverables

activity types: level of efforts (support, measured in time period), discrete efforts or
apportioned effort (in direct proportion to another discrete effort)

activities have durations while milestones do not (zero duration)

Sequence Activities
WBS is no longer needed, so the Project Scope Statement is the input rather than
scope baseline

Precedence Diagramming Method (PDM) to diagram dependencies

Network Diagramming Tools are software tools that graphically represent activity
sequences

network diagrams: shows dependencies, duration, workflow, helps identifying critical

paths
 precedence relationships (also known as activity on node (AON) approach): finish-
to-start (~95%), start-to-start, finish-to-finish, start-to-finish (least)

Activity on Arrow (AOA) or Arrow Diagramming Method (ADM) activities are

represented as arrows, dashed arrows represent dummy activities (duration: 0) that
shows dependencies

Graphical Evaluation and Review Technique (GERT) allows for conditional branching
and loops

Network Dependency Types (to be determined during Sequence Activities Process):

o Mandatory Dependency (hard logic): A must be completed before B begins/ technical

dependencies may not be hard

o Discretionary Dependency (preferred, soft logic): sequence preferred by the

organization, may be removed should fast-tracking is required

o External Dependency: dependency required by external organization

o Internal Dependency: precedence relationship usually within the project teams control

Milestones: the completion of a key deliverable/a phase in the project, as

checkpoints/summary for progress, often used in funding vendor activities

Milestone list is part of i) project plan, ii) project scope statement, iii) WBS dictionary

Leads: begin successor activity before end of predecessor, for schedule compression
(fast tracking) (negative lags)

Lags: imposed delay to successor activity, e.g. wait 2 weeks for concrete to cure (FS
+14 days)

Network Diagram Setup : 7-box method, usually using software tools or 5-box method

if the ES and LS are identical, the activity is on the critical path

Estimate Activity Resources

closely related to Estimate Cost Process (in Cost Management)
 resource calendar spells out the availability of resources (internal/external) during the
project period

matches human resources to activities (as human resources will affect duration)

effort (man day, work week, etc.) vs duration vs time lapsed (total time needed,
including holidays, time off)

alternative analysis includes make-or-buy decisions, different tools, different skills, etc.

Activity Resource Requirements may include the basis of estimation

Estimate Activity Durations

consults SME (subject matter experts, i.e. the one carrying out the actual work) to come
with with the estimation, not on the PMs own

Analogous Estimating: based on previous activity with similar nature (a form of expert
judgement), used when little is known or very similar scope, works well when project
is small, NOT ACCURATE

Parametric Estimating: based on some parameters, e.g. the time for producing 1000
component based on that for 1 component * 1000, use an algorithm based on historical
data, accuracy depends on the parameters selected, can be used on [a portion of / the
entire] project

One-Point Estimating: based on expert judgement, but highly unreliable

Three-Point Estimating: best (optimistic), most likely (realistic), worst

(pessimistic) cases, TriangularDistribution vs PERT (Project Evaluation and Review
Techniques, Beta Distribution, weighted average using statistical methods [most likely *
4 - 95% confidence level with 2 sigma]), triangular distribution (non-weighted average
of three data points), uncertainties are accounted for

In real world applications, the PERT estimate is processed using Monte Carlo analysis,
tie specific confidence factors to the PERT estimate

Bottom-Up Estimating: a detailed estimate by decomposing the tasks and derive the
estimates based on reliable historical values, most accurate but time-consuming
 Heuristics: use rule of thumb for estimating

standard deviation (sigma value, deviation from mean, to specify the precision of
measurement):

1 sigma: 68%,

2 sigma 95%,

3 sigma 99.7%,

6 sigma 99.99%

accuracy is the conformance to target value

contingency reserve: for known unknowns, owned by PM, may be updated, part of
schedule baseline

management reserve: for unknown unknowns, owned by management, included in

overall schedule requirements

update to documents: basis of estimates, assumptions and contingencies

activity duration estimate may be in a range, dont include lags

Develop Schedule
the schedule baseline is the approved and signed version of project schedule that is
incorporated into the PM plan

the schedule is calendar-based taking into accounts holidays/resource

availability/vacations

vs the time estimate (work effort/level of effort) just describes the man hours / man
days

Slack/Float: activities that can be delayed without impacting the schedule

Free slack/float: time an activity can be delayed without delaying the Early Start of the
successor
 Total slack/float: time an activity can be delayed from early start without delaying
the project end date (scheduling flexibility), can be negative, 0 (on the critical path)
or positive

Project Float: without affecting another project

Negative float: problem with schedule, need schedule rework

Project slack/float: time the project can be delayed without delaying another project

o Early Start (ES) earliest time to start the activity

o Late Start (LS) latest time to start without impacting the late finish
o Early Finish (EF) earliest time to end the activity

o Late Finish (LF) latest time to finish without impacting successor activity

o Slack/Float = LS ES or LF EF

o The float is the highest single value along the critical path, NOT the sum of them

Critical Path: the longest path that amount to shortest possible completion time
(usually zero float, activities with mandatory dependency with finish-to-start
relationship), can have more than 1 critical paths (more risks), critical paths may
change (keep an eye on near-critical paths)

activities on the critical path are called critical activities

Path with negative float = behind schedule, need compression to eliminate negative
float

Forward Pass : compute the early start

Backward Pass : compute the late start

Fast Tracking : allow overlapping of activities or activities in parallel, included

risks/resource overloading

Crashing : shorten the activities by adding resources, may result in team burnout

Scheduling Techniques

Critical Path Method (CPM) compute the forward and backward pass to determine
the critical path and float
 Critical Chain Method (CCM) deal with scarce resources and uncertainties, keep the
resources levelly loaded by chaining all activities and grouping the contingency and put
at the end as project buffer, for activities running in parallel, the contingency is
called feeding buffer (expect 50% of activities to overrun)

Buffer is determined by assessing the amount of uncertainties, human factors, etc.

Parkinsons Law: Work expands so as to fill the time available for its completion.

Resource Optimization Techniques

Resource leveling is used to adjust the variation in resource loading to stabilize the
number of resources working each time and to avoid burnout, may need to extend the
schedule in CPM

Resource smoothing is to adjust resource requirements so as not to exceed

predetermined resource limits, but only optimized within the float boundaries

Modeling Techniques

What if analysis: to address feasibility/possibility of meeting project schedule, useful in

creating contingency plan

Monte Carlo: run thousand of times to obtain the distribution using a set of random
variables (stochasticvariables), use a combination of PERT estimate and triangular
distributions as end point estimates to create the model to eliminate schedule
risks, the graph is a S curve

Network Diagram: bar charts with logical connections

Hammock activities: higher-level summary activities between milestones

Milestone Charts: show only major deliverables/events on the timeline

data date (status date, as-of date): the date on which the data is recorded

the Schedule Data includes schedule milestones, schedule activities, activities

attributes, and documentation of all assumptions and constraints, alternative schedules
and scheduling of contingency reserves
the Project Calendars identify working days
 Control Schedule
measure result, make adjustments, adjust metrics

Performance Review includes: Trend Analysis, CPM, CCM, Earned Value Management

Change Requests generated are to be assessed in the Perform Integrated Control

Process

sunk cost cost already incurred in the past and cannot be recovered, do not
consider anymore

opportunity cost difference in value between one path vs alternative (= 100% of value
of next best alternative)

value analysis/ engineering cost reduction without affecting the scope

Benefit Cost Analysis (BCA) / Cost Benefit Analysis (CBA) determine feasibility,
bigger benefit/cost ratio (BCR)

Payback Period the length of time to recover the investment

Return on Investment (ROI) the efficiency of investment = (Gain-Cost)/Cost

Time Value of Money Present Value (PV) = value / (1+interest rate)*year, Future
Value (FV) = value * (1+interest rate)*year

Net Present Value (NPV) = PV of cash inflows PV of cash outflows (cost)

funding for project: self-fund, funding with equity, funding with debts

discount rate - rate used to calculate present value of expected yearly benefits and
costs

Project Cost Management ITTOs

Plan Cost Project Management Expert Judgement Cost Management
Management Plan Analytical Techniques Plan
Project Charter Meetings
Enterprise
Environment Factors
 Organization Process
Assets

Estimate Costs Cost Management Expert Judgement Activity Cost

Plan Analogous Estimating Estimates
Human Resource Parametric Estimating Basis of Estimates
Management Plan Three Point Estimates Project Document
Scope Baseline Reserve Analysis Updates
Project Schedule Cost of Quality
Risk Register Project Management
Enterprise Software
Environment Factors Vendor Bid Analysis
Organization Process Group Decision Making
Assets Techniques

Determine Cost Management Cost Aggregation Cost Baseline

Budget Plan Reserve Analysis Project Funding
Scope Baseline Historical Relationships Requirements
Activity Cost Estimates Funding Limit Reconciliation Project Document
Basis of Estimates Expert Judgement Updates
Project Schedule
Resource Calendars
Risk Register
Agreements
Organization Process
Assets

Control Costs Project Management Earned Value Management Cost Forecasts

Plan Forecasting Change Requests
Project Funding To Complete Performance Work Performance
Requirements Index (TCPI) Info
Work Performance Performance Reviews Organization Process
Data Project Management Assets Updates
Organization Process Software PM Plan Updates
Assets Reserve Analysis Project Document
Updates

Plan Cost Management

The Cost Management Plan establishes: i) level of accuracy and level of precision, ii)
unit of measurement, iii) WBS procedure links (to control account (CA)), iv) control
threshold, v) earned value rules of performance, reporting, funding and processes

Life cycle costing = total cost of ownership : production cost, running and
maintenance cost, etc.
 Estimate Costs
similar to Estimate Activity Resources

look for ways to reduce cost

ensure the SME to deliver the estimates (more accurate)

based on WBS

Cost Types

o Variable costs - costs change with the amount of work, e.g. hourly consultants

o Fixed costs - costs that are constant, e.g. equipment leases

o Direct costs directly attributed to the project

o Indirect costs shared costs like AC, lighting, etc.

Cost Estimate Tools

o Analogous Estimating (Top Down Estimate) compare to a similar project in the past
(an estimating heuristic/rule of thumb)

o Parametric Estimating use a parameter and repetitive units of identical work

o Bottom-up Estimating detailed estimates of each individual activity from historical

data, more accurate and time-consuming

Activity Cost Estimates may include indirect cost and contingency reserves

usually in a range of values

Basis of Estimates - detailed analysis on how the cost estimate was derived
(assumptions, constraints, possible range (+/-15%), confidence level of final estimate)

Determine Budget
Budget is more about when to spend money

Historical Relationships - analogous/parametric estimation

Reserve Analysis addresses Management Reserve (unknown unknowns)

and Contingency Reserve (known risks) [not included in calculation of earned value
managment]
 Funding Limit Reconciliation addresses variance between funding limit (e.g.
monthly or yearly limit) and planned expenditure, may require rescheduling of work to
level of the rate of expenditure

Value Engineering to improve quality/shorten schedule without affecting the scope

Project Budget = Cost baseline (the approved time-phased budget) + Management

Reserve

when management reserve is used during project execution, the amount is added to
the cost baseline

S-curve : total project expenditure over project lifecycle

Control Costs
Check against the Project Funding Requirements

including informing stakeholders of all approved changes and their costs

Earned Value Calculation

o Index > 1: under budget/ahead of schedule

o Index < 1: over budget/behind schedule

Estimate at Complete: 1) new estimate required (original flawed), 2) no BAC variance,

3) CPI will continue, 4) sub-standard cost/schedule will continue

TCPI: >1 not enough funding remain (over budget), <1 more fund available than
needed (under budget)

Earned Value Accrual

o Discrete Efforts describes activities that can be planned/measured for output,

including Fixed Formula(activity given a % of budget of work package at start and earn
the remaining when completed, e.g. 50/50, 20/80 or 0/100), Weighted Milestone (earn
value for milestones of deliverables of the work package),Percentage
Complete, Physical Measurement
o Apportioned Efforts describes work that has a direct/supporting relationship to
discrete work, e.g. testing, pm activities, calculated as % of the discrete work

o Level of Efforts (LOE) describes activities without deliverables, e.g. troubleshooting,

assigned the earned value as scheduled, without schedule variance but may have
cost variance

e.g. perform Control Cost weekly during execution where money is spent fastest

Variance Analysis to check against the baseline for any variance

SPI at end of project must be 1

SPI is NOT telling much information to whether the project is on schedule as the
Critical Path must also be investigated to get a meaningful picture

everyone in the organization is responsible for the quality (project team for destined
parts while PM for project quality), PM is ultimately responsible for the project
quality

prevention over inspection

outliers are singular measurements outside the control limits

continuous improvement to ensure quality (quality assurance)

some costs of quality will be borne by the organization (organization quality policy, e.g.
quality audit, ISO accreditation)

Quality: the degree to which a set of inherent characteristics fulfills requirements,

decrease rework/costs, increase productivity/stakeholder satisfaction

under control: the process is predictable and repeatable

PM: perform continuous improvement activities (quality assurance), verify quality before
completion of deliverables (control quality)

Grade (fit for use or not) vs Quality (conformance to stated requirements)

 Accuracy (correctness) vs Precision (consistence, how closely conforms to target,
standard deviation is a measure of precision, smaller standard deviation higher
precision)

Quality Management Concepts

o Crosby Zero Defects: identify processes to remove defects, quality is built in to the
processes

o Juran Fitness for Use: does the product/service meet customers need? i) Grade, ii)
Quality conformance, iii) Reliability/maintainability, iv) Safety, v) Actual Use

o W. Edwards Deming: 85% of quality problem is managers responsibility, develop

System of Profound Knowledge [system = components working together to achieve an
aim] i) Appreciation for system, ii) Knowledge about variation (special cause vs common
cause) , iii) Theory of Knowledge (built up by prediction/observation/adjustment) , iv)
Psychology

o Six Sigma: achieve 3.4/1 mil defect level (99.999%) using DMAIC (Define, Measure,
Analyze, Implement, Control) or [Design for Six Sigma] DMADV (Define, Measure,
Analyze, Design, Validate) approach, refine the process to get rid of human error and
outside influences with precise measurements, variations are random in nature

o Just In Time: eliminate build up of inventory

o Total Quality Management (TQM): ISO 8402 all members to center on quality to drive
customersatisfaction , refine the process of producing the product
o Kaizen: implement consistent and incremental improvement, to reduce costs, cycle
time, drive customer satisfaction using PDCA (Plan Do Check Act)

o The Plan-Do-Check-Act cycle is a way of making small improvements and testing their
impact before you make a change to the process as a whole. It comes from W. Edwards
Demings work in process improvement, which popularized the cycle that was originally
invented by Walter Shewhart in the 1930s.

o Capability Maturity Model Integration (CMMI): improve overall software quality

(design, development and deployment)
o ISO9000: ensures the defined processes are performed in accordance to the plan

Quality Management processes are so focused on reviewing EVERY deliverable not

just the final product, but all of the components, designs and specifications too.

Project Quality Management ITTOs

Plan Quality Project Management Cost-benefit Analysis Quality Management Plan
Management Plan Cost of Quality Process Improvement
Stakeholder Register Seven Basic Quality Plan
Risk Register Tools Quality Metrics
Requirements Benchmarking Quality Checklists
Documentation Design of Project Document Updates
Enterprise Experiments
Environment Factors Statistical Sampling
Organization Process Additional Quality
Assets Planning Tools
Meetings

Perform Quality Quality Management Quality Management Change Requests

Assurance Plan and Control Tools PM Plan Updates
Process Quality Audits Project Document Updates
Improvement Plan Process Analysis Organization Process
Quality Metrics Assets Updates
Quality Control
Measurements
Project Documents

Control Quality Quality Management Seven Basic Quality Verified Deliverables

Plan Tools Change Requests
Quality Metrics Statistical Sampling Validated Change
Quality Checklists Inspection Quality Control
Work Performance Approved Change Measurements
Data Requests Review Work Performance Info
Approved Change PM Plan Updates
Requests Project Document Updates
Deliverables Organization Process
Project Documents Assets Updates
Organization Process
Assets

Plan Quality Management

 quality policy (either organizational or just for the project), methods and procedures to
meet the objectives and satisfy customers needs

identify the quality requirements and document how to achieve

Cost-benefit Analysis: cost of implementing quality requirements against benefits

Cost of Quality: lowest quality cost is prevention, highest quality cost (poor quality) is
rework and defect repair (as high as 5000 times the cost for carrying out unit testing),
lost reputation and sales, failure cost may be internal/external (found by customer)

Warranty claims are external cost of quality

Cost of Quality is the total cost of quality efforts throughout the products lifecycle

cost of conformance (prevention cost, appraisal cost) vs cost of non-conformance

(failure cost [internal/external])

internal/external is reference to the project (not the organization)

Poka Yoke (mistake proofing), Zero Quality Control (100% source inspection), Voice of
Customer and FEMA (Failure Modes of Effects Analysis) are planning tools for quality
management

Quality Metrics: function points, MTBF (mean time between failure), MTTR (mean time
to repair)

Marginal Analysis: ROI of quality measures

7 Basic Quality Tools

o Cause-and-effect / Ishikawa / Fishbone Diagram: for identifying the cause

o Flowchart: (e.g. SIPOC diagram) for identifying failing process steps and process
improvement opportunities

o Check Sheets (tally sheets): collecting data/documenting steps for defeat analysis

o Histograms: does not consider the influence of time on the variation that exits within a
distribution

o Pareto Chart: based on 80/20 principle, a prioritization tool to identify critical issues in
descending order of frequency, sort of a histogram
o Statistical Process Control (SPC) Chart: determine if a process is stable/predictable
using statistical sampling (assessed by accuracy[conformance]
and precision[standard deviation]), identity the internally computed control
limits (UCL/LCL) and specification limits (USL/LSL) by the customer/PM

o run chart is similar to control chart, but without the control

o usually +-3sigma i.e. a range of 6 sigma

o a form of time series

o if a process is within control limit but beyond specification limit, the process is
experiencing common cause variation (random) that cannot be corrected by the
system, management help is needed (special cause can be tackled but NOT common
cause)

o Stability Analysis / Zone Test: rule of seven (7 consecutive on either side of the mean
= out of control), rule of six (six consecutive with a trend = out of control), rule of ten (10
as a saw-tooth pattern around the mean), rule of one (1 point beyond control
limit) [signal in the noise]

o Scatter Diagram: for trending, a form of regression analysis

Benchmarking: compare to past activities/standard/competition

Design of Experiments (DOE): change several factors at a time for each

experiment, to determine testing approaches and their impact on cost of quality

Additional Quality Planning Tools

Loss Function: a financial measure of the users dissatisfaction with product

performance

Matrix Diagrams: House of Quality (HOQ) used in Quality Function

Deployment (QFD) (method to transform user demands [VOC] into design quality)

Kano Model: differentiate features as satisfy, delight or dissatisfy

Marginal Analysis: cost-benefits analysis

 Force Field Analysis (FFA): reviews any proposed action with proactive and opposing
forces

Process Improvement Plan: process boundaries, configuration, process

metrics/efficiencies, targets for improved performance

Quality Checklists: checklist to verify a series of steps have been performed

The goal is to refine the process so that human errors and outside influences no longer
exist, and any remaining variations are completely random

Perform Quality Assurance

in the Executing Process Group

ensures the quality standards are being followed, to ensure unfinished works would
meet the quality requirements

by quality assurance department or sponsor/customer not actively involved in the

project

primarily concerned with overall process improvement for activities and processes
(rather than the deliverable)

utilize the data collected in Control Quality Process

Quality Management Tools

o Affinity Diagrams: like a mind-mapping diagram, organize thoughts on how to solve

problems

o Process Decision Program Charts (PDPC): defines a goal and the steps involved,
useful for contingency planning

o Interrelationship Digraphs: maps cause-and-effect relationships for problems with

multiple variables/outcomes

o Tree Diagrams

o Prioritization Matrices: define issues and alternatives that need to be prioritized for
decision, items are given a priority score through brainstorming
o Activity Network Diagrams

o Matrix Diagrams: e.g. house of quality in QFD

o Kaizen, Kanben: quality assurance methods developed by Japanese

Quality Audit: to verify quality of processes, to seek improvement, identify best

practices, reduce overall cost of quality, confirm implementation of approved changes,
need quality documentations

Quality Review: to review the quality management plan

change requests are mostly procedural changes

Control Quality
verify the deliverables against customers specifications to ensure customer
satisfaction

validate the changes against the original approved change requests

conditional probability (events somewhat related) vs statistical independence (events

not interrelated) vsmutual exclusivity

statistical sampling for control quality

variable (continuous) data: measurements, can do maths on e.g. average

attribute (discrete) data: yes/no, no.123, just an identifier, cant do maths on

QC includes the PM process (lesson learnt, budget, scope)

tolerance (spec limits, deliverables acceptable) vs control limits (process acceptable)

if within control limit but outside tolerance: rework the process to give better precision

all control and execution processes may generate lesson learned

Sexism, racism or other discrimination should never be tolerated, no matter what the
circumstances. You must separate your team from discriminatory practices, even if
those practices are normal in the country where youre working.
 Project Human Resource
Management ITTOs
Plan Human PM Plan Organization Charts and Human Resource
Resource Activity Resource Position Description Management Plan
Management Requirements Networking
Enterprise Environment Organization Theory
Factors Expert Judgement
Organization Process Meetings
Assets

Acquire Project Human Resource Pre-assignment Project Staff

Team Management Plan NegotiationAcquisition Assignments
Enterprise Environment Virtual Teams Resource
Factors Multi-criteria Decision Calendars
Organization Process Analysis PM Plan Updates
Assets

Develop Project Human Resource Interpersonal Skills Team

Team Management Plan Training Performance
Project Staff Team-building Activities Assessment
Assignments Ground Rules EEF updates
Resource Calendars Co-location
Recognition and Rewards
Personnel Assessment
Tools

Manage Project Human Observation and Change Requests

Team Resource Management Conversation PM Plan Updates
Plan Project Performance Project Document
Project Staff Appraisals Updates
Assignments Conflict Managements EEF Updates
Team Performance Interpersonal Skills OPA Updates
Assessments
Issue Log
Work
Performance Reports
Organization Process
Assets

Plan Human Resource Management

plan to organize and lead the project team
 include roles and responsibilities (identify resources that can take up the
responsibilities) as documented (ownership of deliverables) in RAM in the form of
RACI chart (matrix) or in a chart/text form, org charts - an organizational breakdown
structure (OBS) and staffing management plan staff acquisition, release, resource
calendar, resource histogram, training, rewards, compliance & safety requirements

The OBS displays organizational relationships and then uses them for assigning
work to resources in a project (WBS)

networking is useful in understanding skills of individuals and the political and

interpersonal factors within the organization
org chart indicated the reporting structure of the project

Acquire Project Team

to acquire the final project team

pre-assignment is the selection of certain team members in advance

acquisition is to acquire resources from outside through hiring consultants or

subcontracting

includes bringing on contractors / consultants

halo effect: a cognitive bias (if he is good at one thing, he will be good at everything)

Multi-criteria Decision Analysis: to select team members based on a no. of factors:

availability, cost, experience, ability, knowledge, skills, attitude, etc.

training is usually paid for by the organization, not project

Develop Project Team

enhancing and improving overall team performance

offer feedback, support, engage team members, manage conflicts, facilitate cooperation

cross-train people
team performance assessments : assess team performance as a whole vs project
performance appraisals: individual performance
 training cost can be set within the project budget or supported by the organization

PM Authority: legitimate (assigned in project charter), reward, penalty, expert (need to

be earned), referent (charisma and likable, or ally with people with higher power),
representative (elected as representative)

Expert > Reward are best forms of power. Penalty is worst.

Tuckman Model: Forming Stroming Norming Performing Adjourning

cultural difference should be considered when determining award and recognition

recognition should focus on win-win reward for the team (NOT competitive-based)
team building is important throughout the whole project period

Motivational Theories

o Maslows Hierarchy of Needs personal needs (psychological > Security > Social >
Esteem > Self Actualization)

o Herzbergs Hygiene Theory satisfaction (motivators) vs dissatisfaction (hygiene

factors to avoid dissatisfaction but do not provide satisfaction, also called KITA factors
e.g. incentives/punishments), hygiene factors include good working conditions, a
satisfying personal life, and good relations with the boss and coworkers

o Expectancy Theory Expectancy (extra work will be

rewarded) Instrumentality (good results will be rewarded) Valence (the individuals
expected reward), for a person to be motivated, efforts/performance/outcome must be
matched will only work hard for achievable goals

o Achievement Theory three motivation needs: achievement (nAch), power (nPow),

affiliation (nAff), best is a balanced style for the PM

o Contingency Theory task-oriented/relationship-oriented with stress level (high stress

-> task-oriented better)

Leadership Theory

o including: analytical (with expertise), autocratic (with power), bureaucratic, charismatic,

consultative, driver (micromanagement), influencing, laissez-faire (stay out)
o Theory X assumes employees are lazy and avoid work, need incentive/threats/close
supervising

o Theory Y assumes employees may be ambitious and self-motivated, will perform

given the right conditions

o Theory Z (japanese) increasing loyalty by providing job for life with focus on well-
being of employee (on and off job), produces high productivity and morale

o Situational Continuum Leadership directing/telling > coaching/selling (manager

define the work) > supporting/participating (subordinate define the work) > delegating
according to maturity/capability of the subordinate

Manage Project Team

track team member performance, provide feedback, resolve issues

when managed properly, differences of opinion can lead to increased creativity and
better decision making

issue log is fed from Manage Stakeholder Engagement used to understand who is
responsible for resolving specific issues

conflict management: conflicts force a search for alternatives, need openness, not
personal, focus on present and future

conflicts: schedule, project priority, resources, technical opinions, administrative

overhead (too much administration work), cost, personality

conflict resolution

o collaborate/problem solve[confrontation of problem] (best)

o compromise/reconcile (give-and-take, temporary/partially resolve)

o force/direct (worst/short-lived)

o smooth/accommodate (emphasis common grounds and avoid/touch lightly the

disagreements for harmony/relationship)
o withdraw/avoid (other leads to lose-lose)
 compromise is lose-lose

Forcing would only provide a temporary solution

Award decisions are made during the process of project performance appraisals

monitoring and controlling is typically performed by functional managers/HR for

functional org

assure the timely collection, generation, distribution, storage, retrieval and

ultimate disposition of project information

very important to the ultimate success of the project

message transmission: 7% in word, 38% in vocal pitch, 55% in body language (Albert
Mehrabian)

dont wait to communication good/bad news

the sender has the responsibility to ensure the receiver correctly understand the
message

if part of the project is procured, more formal written communication will be expected

Project Communication
Management ITTOs
Plan PM Plan Communications Communications
Communications Stakeholder Register Requirements Management Plan
Management Enterprise Analysis Project Document
Environment Factors Communications Updates
Organization Process Technology
Assets Communication
Models
Communication
Methods
Meetings

Manage Communications Communications Project

Communications Management Plan Technology Communications
Work Performance Communication PM Plan Updates
Reports Models Project Document
 Enterprise Communication Updates
Environment Factors Methods OPA Updates
Organization Process Information
Assets Management System
Performance
Reporting

Control PM Plan Information Change Requests

Communications Project Management System Work Performance Info
Communications Expert Judgement PM Plan Updates
Issue Log Meetings Project Documents
Work Updates
Performance Data OPA Updates
Organization Process
Assets

Plan Communications Management

identify the needs for stakeholder communication

the who, what, when (frequency), why, where and how of communications needs and
the persons responsible

time and budget for the resources, escalation path, flow charts, constraints, guideline
and templates

Communication Methods

o interactive (multidirectional communication, most effective)

o push (active, messages sent without validation of receipt)

o pull (passive, access directly by stakeholders)

low context vs high context (japan, more polite)

may need to limit who can communicate with whom and who will receive what
information

(Shannon-Weaver model)Sender-Receiver Model: i) encoded idea, ii) message and

feedback, iii) medium, iv) noise level, v) the decoded idea. The sender to ensure info
is clear, complete and the recipient correct understands. The recipient to ensure
complete message is received (to acknowledge) and provide feedback/response.
 Effective Listening: feedback, active listening and paralingual (voice expression,
nonverbal elements)

Communication channels: N (N -1) / 2 // N is the number of team members

meetings should facilitate problem solving

PM spends 90% of their time on COMMUNICATION activities, 50% of the time is spent
on communicating with the team

efficient communication: only the required messages

effective communication: right timing, right format, right medium

Manage Communications
create, collect, distribute, store, retrieve and dispose project information according to
the Communication Management Plan

ensures good communications, noises managed, stakeholders may feedback on how to

improve

Communication Barriers vs Communication Enhancers

55% message thru body language, 38% thru paralingual, 7% thru words used

Types of Communications: Formal Written, Formal Verbal, Information Written, Informal

Verbal

Performance Reporting: status, progress, variance, trend, earned value reports and
forecasts, summary of changes, risks and issues

PM Plan Update to show the latest performance (against Performance Measurement

Baseline)

Feedback from stakeholders are to be stored in OPA

Control Communications
to ensure optimal information flow for effective stakeholder expectation management
 issue log is to document the issues and monitor its resolutions (with person
responsible)

risk identification, management and response strategy impacts every area of the project
management life cycle

everyone is responsible for identifying risks

risk has one or more causes and has one or more impacts

risk = uncertainty; risk management: increase the probability of project success by

minimizing/eliminating negative risks (threats) and increasing positive events
(opportunities)

risk attitudes (EEF): risk appetite (willingness to take risks for rewards), tolerance for
risk (risk tolerant or risk averse), risk threshold (level beyond which the org refuses to
tolerate risks and may change its response)

pure (insurable) risk vs business risk (can be +ve or -ve)

known risks that cannot be dealt with proactively (active acceptance) should
be assigned a contingency reserve or if the known risks cannot be analyzed, just wait
for its happening and implement workaround (passive acceptance)

Project Risk Management ITTOs

Plan Risk Project Management Analytical Techniques Risk
Management Plan Expert Judgement Management
Project Charter Meetings Plan
Stakeholder Register
Enterprise Environment
Factors
Organization Process
Assets

Identify Risks Risk Management Plan Documentation Reviews Risk Register

Cost Management Plan Information Gathering
Schedule Management Techniques
Plan Checklist Analysis
 Quality Management Assumptions Analysis
Plan Diagramming Techniques
HR Management Plan SWOT Analysis
Scope Baseline Expert Judgement
Activity Cost Estimates
Activity Duration
Estimates
Stakeholder Register
Project Documents
Procurement
Documents
Enterprise Environment
Factors
Organization Process
Assets

Perform Risk Management Plan Risk Probability and Impact Project

Qualitative Risk Scope Statement Assessment Documents
Analysis Risk Register Probability and Impact Matrix Updates
Enterprise Environment Risk Data Quality
Factors Assessment
Organization Process Risk Categorization
Assets Risk Urgency Assessment
Expert Judgement

Perform Risk Management Plan Data Gathering and Project

Quantitative Risk Cost Management Plan Representation Techniques Documents
Analysis Schedule Management Quantitative Risk Analysis Updates
Plan and Modeling Techniques
Risk Register Expert Judgement
Enterprise Environment
Factors
Organization Process
Assets

Plan Risk Risk Management Plan Strategies for Negative Risk PM Plan Updates
Responses Risk Register (Threats) Project
Strategies for Positive Risk Documents
(Opportunities) Updates
Contingent Response
Strategies
Expert Judgement

Control Risks PM Plan Risk Reassessment Work

Risk Register Risk Audits Performance Info
Work Performance Data Variance and Trend Analysis Change
Work Technical Performance Requests
Performance Reports Measurement PM Plan Update
 Reserve Analysis Project
Meetings Document
Updates
OPA Updates

Plan Risk Management

define and provide resources and time to perform risk management, including:
methodology, roles and responsibilities, budget, timing (when and how often), risk
categories (e.g. RBS), definitions, stakeholder tolerances (a EEF), reporting and
tracking

performed at project initiation and early in the Planning process

failure to address risks early on can ultimately be more costly

analytical techniques include stakeholder risk profile analysis, strategic risk scoring
sheets

a risk breakdown structure (RBS) (included in the PM Plan) risks grouped by

categories and occurring areas

key risk categories: scope creep, inherent schedule flaws, employee turnover,
specification breakdown (conflicts in deliverable specifications), poor productivity

Identify Risks
determine all risks affecting the project

information-gathering techniques: brainstorming, delphi technique [a panel of

independent experts, maintainanonymity, use questionnaire, encourage open
critique], root cause analysis [performed after an event to gain understanding to
prevent similar events from occurring], expert interviewing, SWOT analysis

root cause analysis: safety-based (prevent accidents), production-based, process-

based (include business process), failure-based, systems-based (all above)

root cause analysis tools: FMEA, Pareto Analysis, Bayesian Inference (conditional
probability), Ishikawa Diagrams, Kepner-Tregoe
 Monte Carlo analysis can identify points of schedule risks

Influence Diagram - graphical representations of situations showing causal influences,

time ordering of events, and other relationships among variables and outcomes.

Risk Register (typically not including the risk reserve)

The Risk Register may include a risk statement

any risk with a probability of >70% is an issue (to be dealt with proactively and recorded
in the issue log)

Perform Qualitative Risk Analysis

prioritizing risks for further analysis/action and identify high priority risks

need to identify bias and correct it (e.g. risk attitude of the stakeholders)

qualitative risk assessment matrix (format described in the Risk Management Plan)

update to risk register and other related documents

risk register update are output of Perform Qualitative Risk Analysis, Perform
Quantitative Analysis, Plan Risk Responses and Monitor & Control Risks

the scope baseline is used to understand whether the project is a recurrent type or a
state-of-the-art type (more risks)

risks requiring near-term responses are more urgent to address

Perform Quantitative Risk Analysis

the cost, schedule and risk management plan contains guidelines on establishing and
managing risks

involves mathematical modeling for forecasts and trend analysis

data gathering and representation techniques: interviewing, probability

distributions [normal distribution (bell shaped curve)],

sensitivity analysis (using the tornado diagram as presentation) for determining the
risks that have the most impact on the project
 Failure Modes Effects Analysis (FMEA)

FMEA for manufactured product or where risk may be undetectable, Risk Priority
Number (RPN) = severity (1-10) x occurrence ([0.07%] 1-10 [20%]) X detectability (1-10
[undetectable]), also a non-proprietary approach for risk management

Expected Value / Expected Monetary Value (EMV), probability x impact (cost/effort

lost), opportunities (+ve values), threats (-ve values)

Monte Carlo Analysis by running simulations many times over in order to calculate
those same probabilities heuristically just like actually playing and recording your results
in a real casino situation, S curve (cumulative distribution) will result, may use
PERT/triangular distribution to model data, may use thousands of data points (a random
variable), for budget/schedule analysis

Decision Tree Analysis another form of EMV, branching: decision squares (decision
branch options), circles (uncertainty branch possible outcomes)

Plan Risk Responses

plan response to enhance opportunities and reduce threats

each risk is owned by a responsible person

the watch list is the list of low priority risks items in the risk register

a fallback plan will be used if 1) risk response not effective, 2) accepted risk occurs

risk strategies: 1) prevent risk, 2) response to risk, 3) reduce risk, 4) promote

opportunities, 5) fallback if risk response fails

negative risk strategies: eliminate/avoid (not to use, extend the schedule),

transfer (outsource, warranty, insurance), mitigate (reduce the risk by more
testing/precautionary actions/redundancy), accept (passive do nothing or active
contingency)

positive risk strategies: exploit (ensure opportunity by using internal resources e.g.
reduce cost/use of top talents/new tech), share (contractor with specialized skills, joint
 venture), enhance (increase likelihood / impact e.g. fast-tracking, add resources etc.),
accept

passive risk acceptance to be dealt with when the risk occurs

Contingency Plan (contingent response strategies) (plan A) are developed for

specific risk (when you have accepted a risk) with certain triggers vs Fallback Plan
(plan B)

Residual Risks risks remains after the risk response strategy was implemented, may
be identified in the planning process (may subject to contingency/fallback planning)
They dont need any further analysis because you have already planned the most
complete response strategy you know in dealing with the risk that came before them.

Secondary Risks risk arises when the risk response strategy was implemented

Contingency Reserve: known unknowns (determined risk), part of cost baseline

Management Reserve: unknown unknowns (discovery risk), part of project budget

The Risk Register is now completed with: risks and descriptions, triggers, response
strategy, persons responsible, results from qualitative and quantitative analysis, residual
and secondary risks, contingency and fallback, risk budget/time

Control Risks
when the above risk planning processes have been performed with due diligence, the
project is said to have a low risk profile

to check if assumptions are still valid, procedures are being followed and any deviance

to identify new risks and evaluate effectiveness of risk response plan

any need to adjust contingency and management reserves

risk reassessment is to re-assess the individual risk response strategies to see if they
are effective

risk audits are usually performed by experts outside project team for the whole risk
management process
 reserve analysis and fund for contingencies apply only to the specific risks on the
project for which they were set aside

workaround: when no contingency plan exists, executed on-the-fly to

address unplanned events still need to pass through normal change control if change
requests are needed

determine the workaround is performed in control risks

Procurement Statement of Work (SOW) is a legal document subject to legal reviews,

legal advise should be sought throughout the whole procurement process

sellers are external to the project team

need to go through all 4 processes for each and every procurement

contract elements: offer (seller offer buyer), acceptance (buyer

criteria), capacity (physical/financial capabilities), consideration (seller receive), legal
purpose (must be legal under law)

best if contract is signed after PM is assigned

PM needs to understand terms and conditions, identify risks, include procurement time
in schedule and involve in negotiations

Centralized contracting vs decentralized contracting

sole source, single source (preferred), oligopoly (very few sellers)

procurement categories: major complexity (high risk), minor complexity (low risk,
expensive), routine purchase (Commercial Off the Shelf Products COTS), goods and
services (to perform part of our product)

a contract is not required to be written, it can be verbal or handshake, for internal

projects, formal contract is best

procurement applies to actors (as a service)

immaterial breach is minor breach

point of total assumption (PTA) = Target Cost + (Ceiling Price Target Price) / % Share
of Cost Overrun
 contract change control system is defined in the procurement management plan
but not in the contract

Project Procurement Management

ITTOs
Plan Procurement PM Plan Make-or-buy Analysis Procurement
Management Requirements Expert Judgement Management Plan
Documentation Market Research Procurement SOW
Risk Register Meetings Procurement
Activity Resource Documents
Requirements Source Selection
Project Schedule Criteria
Activity Cost Make-or-buy
Estimates Decisions
Stakeholder Change Requests
Register Project Document
Enterprise Updates
Environment Factors
Organization
Process Assets

Conduct PM Plan Bidder Conferences Selected Sellers

Procurements Procurement Proposal Evaluation Agreements
Documents Techniques Resource Calendars
Procurement SOW Independent Estimates Change Requests
Source Selection Expert Judgement PM Plan Updates
Criteria Advertising Project Document
Seller Proposals Analytical Techniques Updates
Project Documents Procurement Negotiations
Make-or-buy
Decisions
Organization
Process Assets

Control PM Plan Contract Change Control Work Performance

Procurements Procurement System Info
Documents Procurement Performance Change Requests
Agreements Reviews PM Plan Updates
Approved Change Inspections and Audits Project Documents
Requests Performance Reporting Updates
Work Performance Payment Systems OPA Updates
Reports Claims Administration
Work Performance Records Management
 Data System

Close PM Plan Procurement Audits Closed

Procurements Procurement Procurement Procurements
Documents Negotiations OPA Updates
Records Management
System

Plan Procurement Management

determine whether to obtain products/services outside of organization

identify possible sellers and pre-meeting with them

identify explicitly what is needed

make-or-buy analysis is a compulsory process, needs to take risks into

considerations

carefully written terms and conditions can transfer/share risks

teaming agreements or joint ventures

procurement documents: request for proposal (RFP), invitation for bid (IFB), request for
quote (RFQ), request for information (RFI), tender notice, invitation for negotiation,
seller initial response

the procurement management plan specifies how a project will acquire goods/services
from outside, includes: contract type, risk management, constraints and assumptions,
insurance requirements, form and format, pre-qualified sellers, metrics used, etc.

Procurement Statement of Work (SOW) performance (describe what can be

accomplished), functional(convey the end purpose or result), design (convey precisely
what are to be done), can be developed by the seller or buyer detail enough to allow
the potential sellers to decide whether they want/are qualified (at a minimum) to pursue
the work

Contract Types:

Firm Fixed Price (FFP) the price is fixed, specifications are well known, risk on the
seller
 Fixed Price Incentive Fee (FPIF) incentives for faster/better than contracted

Fixed Price with Economic Adjustment / Economic Price Adjustment (FPEA / FP-EPA)
inflation are taken into account

Purchase Order (PO) for off-the-shelf goods/services with published rates

Cost Reimbursable (CR) / Cost Plus buying the expertise (not the products),
outcome is not clear, risk on the buyer, little incentive to control costs on buyer, need
invoice audits

Cost Plus Fixed Fee (CPFF)

Cost Plus Incentive Fee (CPIF) incentive for performance, sharing of unused money if
under/over contracted amount

Cost Plus Award Fee (CPAF) award to be given based on agreed criteria, solely
decided by the customer on the degree of satisfaction

Cost Plus Percentage of Costs (CPPC) illegal for contracts with US Government

Cost Contract not profit, for NGO

Best Efforts obligates the seller to utilize best attempts, high uncertainty in meeting
the goal

Time and Materials (T&M) (hybrid type) when scope is not known, need constant
monitoring to control schedule and cost, simple, for short duration, good for proof-of-
concept type projects

Point of Total Assumption (in fixed-price (incentive fee) contracts) in budget

overrun, the point at which the seller assumes all additional costs for delivering the
product/service

PTA = (Ceiling Price Total Price) / Buyers Share Ratio + Target Cost

target cost = total cost = estimated cost, total price = total cost + total profit

Request for Proposal (RFP) cost reimbursable contract, functional/performance SOW

Invitation for Bid (IFB) / Request for Bid (RFB) fixed-price contract, design SOW
Request for Quote time and material, any type of SOW
 Cancellation for Convenience buyer can cancel and pay up to the point

Cancellation for Cause - default by either party, may result in legal actions

Escrow survivability of seller in doubt, put the product in escrow (esp. if seller not give
up intellectual properties)

Force Majeure standard disclaimer refers to Acts of God

Indemnification / Liability responsible party

LOI Letter of Intent not legally binding

Privity the contractor may use sub-contractor, no direct contractual relationship with
buyer

Retainage amount to be withheld to ensure delivery

Risk of Loss how the risk is shoulder by the parties

Time is of the Essence delay in delivery will cause cardinal breach of contract

Work Made for Hire - all work owned by the buyer

Sole Source vs Single Source (preferred vendor for long-term relationship)

Evaluation Criteria: risk, understanding of need, life-cycle cost, technical capability,

management approach, technical approach

Conduct Procurements
identify the sellers and award the contracts

PM may not be the lead negotiator on procurement, but may be present to assist

may need senior management approval before awarding the contracts

bidders conference is a Q&A session with bidders, all bidders receive the same
information (bidder are careful not to expose their technical approach during the session
=> may not have many questions)

NOT to have secret meetings or communications with individual vendors

may set up qualified sellers lists

 review seller proposals: weighting systems, independent estimates, screening systems
(screen out non-qualified vendors), seller ratings systems (for past performance), expert
judgement

Contract Negotiations and Tactics

Fait Accompli not negotiable terms

Deadline deadline for deliverables

Good Guy/ Bad Guy one friendly, one aggressive

Missing Man decision maker is missing

Limited Authority not given authority

Fair and Reasonable what is fair?

Unreasonable making unreasonable demands

Delay esp in critical moments

Attack force compliance

Agreement is legally binding and should include (PM should NOT attempt to write the
agreement):

Control Procurements
performed by both seller and buyer

manage procurement relationships, monitor contract performance, make change and

corrections

the procurement administrator may be external to the project team

may identify early signs and capture details for pre-mature termination of contract

the claims administration process deals with changes/disputes, disputes is best to be

settled throughnegotiation > ADR

may need Alternative Dispute Resolution (ADR) by 3rd parties in case disputes cannot
be settled
 For Fixed Price contracts, look out for Bait and Switch (replace with cheaper
materials), look out for excessive change requests

For Cost Reimbursable contracts, audit all invoices, look out for additional charges, tie
payment to milestones, make sure people with the required skill sets are doing the job

For Time and Materials contracts, ensure hours are not padded, follow the milestone
dates

Contract Change Control System: for handling change requests (define who has the
authority to approve changes (usually not the PM, but may be assigned the
authority))

Work performance data includes: the cost incurred and the invoice needs to be paid

OPA may include the sellers performance

Close Procurements
all work are completed, deliverables accepted, claims settled OR terminated by either
party

at completion / termination of contract

prior to administrative closure of Close Project or Phase

unresolved claims may be left for litigation after closure

settlement of claims/invoices, audit, archive, lessons learned

the contract is complete when all the specifications are satisfied, no matter the customer
is satisfied with the product or not

Procurement Audit is the structured review of the procurement process from Plan
Procurement Management through Control Procurements, is used to capture lessons
learned from the procurement exercise

once a procurement is cancelled, the next process will be the close procurements

takeholders are groups/individuals who may affect / be affected by the project

identify stakeholders is a continually process throughout the project lifecycle
 identify stakeholders, communicate and engage them, manage expectations and focus
on satisfaction

stakeholder satisfaction is a key project objective

the Project Manager is responsible for the engaging and managing the various
stakeholders in a project

Project Stakeholder Management

ITTOs
Identify Stakeholders Project Charter Stakeholder Analysis Stakeholder
Procurement Expert Judgement Register
Documents Meetings
Enterprise Environment
Factors
Organization Process
Assets

Plan Stakeholder PM PlanStakeholder Expert Judgement Stakeholder

Management Register Meetings Management Plan
Enterprise Environment Analytical Techniques Project Documents
Factors Updates
Organization Process
Assets

Manage Stakeholder Stakeholder Communication Issue Log

Engagement Management Plan Methods Change Requests
Communication Interpersonal Skills PM Plan Updates
Management Plan Management Skills Project Document
Change Log Updates
Organization Process OPA Updates
Assets

Control Stakeholder PM Plan Information Work Performance

Engagement Issue Log Management Systems Information
Work Performance Expert Judgement Change Requests
Data Meetings PM Plan Updates
Project Documents Project Document
Updates
OPA Updates

Identify Stakeholders
 identify stakeholders and document their importance/influence (=active involvement)
/impact/interest/involvement

3 Is: importance, interest, influence

stakeholders from operation process needed to be included

determine the stakeholders hot buttons (what response in specific situations) and
develop support strategies

procurement documents are used for determining external stakeholders such as the
seller

stakeholders have the greatest influence in the initial stage of the project

stakeholder analysis matrix is part of the stakeholder management strategy (output of

identify stakeholders)

Salience Model: describing stakeholders based on the power (influence), urgency

and legitimacy

document only influential stakeholders if there is a large number of stakeholders

document the impact using a power/influence grid, power/interest grid, influence/impact

grid, salience model

Plan Stakeholder Management

management strategies to engage stakeholders throughout project lifecycle

Stakeholder Management Plan contains: current/desired engagement levels, scope and

impact to stakeholders, interrelationships, communication requirements and forms, how
to update the plan

The distribution of this plan requires precautions as the engagement level of

stakeholders is a very sensitive information

Engagement Level

o Unaware
o Resistant: resistant to change
o Neutral

o Supportive: supportive of change

o Leading: actively engaged for project success

Stakeholder Engagement Assessment Matrix: (C-current level, D-desired level)

Manage Stakeholder Engagement

aim: increase support and minimize resistance from stakeholders by addressing
issues

the communication requirements of individual stakeholder are recorded in the Project

Communication Plan

PM may call upon sponsor for assistance

communicate and work with stakeholders to meet their needs/expectations and address
issues

build trust and resolve conflicts, negotiation skills, communication skills

need to communicate bad news/issues in a timely manner

feedback from stakeholders is stored in OPA

the Issue Log (Action Item Log): to identify issues/define impacts, owner (most
important element) and priority/with due date

Control Stakeholder Engagement

monitor overall stakeholder relationships and adjusting strategies

Responsibility
in the best interest of the society, public and environment

accept assignments consistent with skills and fulfill commitments

accept stretch assignment when the assigner is fully aware of the skill gaps
 own error and make corrections

uphold laws and regulations

report illegal/unethical activities substantiated with facts

ask for direction should the decision is beyond assigned authority

Respect
show respect to others

listen and understand others

conduct in a professional manner, even if not reciprocated

resolve conflicts directly

negotiate in good faith

do not influence others for personal benefits

respect others rights

Fairness
transparency in decision making

be objective

provide equal access to information, equal opportunities

disclose any conflict of interests and refrain from making decisions in case of conflict of
interest

do not deny opportunities base on personal considerations

do not discriminate

apply rules without favoritism or prejudice

Honesty
understand the truth and be truthful
 honour commitments

not to deceive others

not engage in dishonest behavior for personal gain / at the expense of others