Framework

This is a very important chapter. Yes, we could say that about every chapter in this book, as they
all will add to your understanding of project management.

But this chapter is especially important because it provides key terms and concepts you'll need to
know to understand the other chapters in this book and to pass the PMP exam. Understanding
what is presented here will make the rest of your studying easier. Look for gaps in your
knowledge as you read on.

QUICKTEST
• Definition of a project
• Stakeholders
• Project management
1. Predictive
2. Agile
3. Hybrid
• Program management
• Portfolio management
• Organizational project management (OPM)
• Project management office (PMO)
1. Supportive
2. Controlling
3. Directive
• Operational work
• Governance
• Organizational structure
1. Functional
2. Project-oriented
3. Matrix
• Organizational process assets
1. Processes, procedures, and policies
2. Organizational knowledge repositories
3. Enterprise environmental factors
• Assumption log
• Constraints
• Data gathering
• Data analysis
• Decision making
• Communication
• Interpersonal &team skills
• Estimating
• PMIS
• Expert judgment
• Meetings
• Work performance data, information, and reports
• Project selection
1. Economic measures
• Project roles
1. Project manager
2. Sponsor/initiator
3. Product manager
4. Project team
5. Stakeholders
6. Functional/resource manager
7. Program manager
8. Portfolio manager
• Environmental factors
• Organizational culture
• Change
1. Project change
2. Transitional change
3. Environmental change

Fundamental Project Management Concepts

The basic knowledge and the key concepts in this chapter will serve as a foundation for your
understanding of project management as a whole, project selection, project roles, and an
organization's business environment. Together, these components make up the framework for
project management.

Definition of a Project
Many people call their work a project when it is not. On the exam, a project is assumed to have
the following characteristics:
• It is a temporary endeavor-with a beginning and an end.
• It creates a unique product, service, or result.

Does the exam ask, "What is a project?" No, but it will describe situations, and in your analysis
of those situations, you will need to ask questions such as, "Is this a project being described?"

So, what is a project? If your manager walked into your office today and said, "The system is
broken. Can you figure out what is wrong with it and fix it?" Would
this be a project?

Are you reading on before you have thought through the question? If so, read it again, and think about your answer.
This is an important concept, both for the exam and in the real-world.

You must first take what you are given and organize the work into appropriate projects and for each project, a life
cycle. The project planning process will produce schedules and budgets. Can you schedule "fix it" if you do not! Now
what is wrong? You can't in fact, there may be two or more projects in the previous scenario. The "Processes and
Domains" chapter goes into more detail about dividing work into projects and life cycle phases.

Stakeholders
Stakeholders are any people or organizations whose interests may be positively or negatively impacted by the
project 01; the product of the project. They include the project manager and team, customer and sponsor, but can also
include individuals and groups you may not have thought about before, such as the project management office,
portfolio managers, program managers, functional or operational managers, business analysts, or other departments
or groups within the organization (marketing, legal, or customer service, for example).

Stakeholders may be actively involved in the project work or may fill an advisory role_ Stakeholders may also be
external to the organization, including government regulators, consultants, sellers, end users, customers, taxpayers,
banks, and other financial institutions.

Although the "Stakeholders" chapter includes an in-depth discussion of stakeholder management, stakeholders are
discussed throughout this book because a project manager should analyze and manage the needs and Levels of
influence of stakeholders throughout a project and in balance with project constraints.

Project Management
Project management is both a science and an art 'The science is the systematic process of managing project work
efficiently and effectively to deliver planned results. This includes tailoring efforts to meet the needs of the project
and using the appropriate processes and tools to accomplish the work. The art of project management relates to how
a project manager uses skills such as influencing, organizing1 strategizing, and other interpersonal and team skills.

This systematic process of managing project work takes many forms that exist along a continuum, from predictive
approaches to agile and hybrid approaches, as described below:

• Predictive
A predictive approach to project management relies on a planning process during which requirements and scope
maybe defined in detail early in the project. Detailed plans are created for the other project constraints as well (for
example, cost, schedule, and risk).
Then, the team strives to adhere to the approved plan as closely as possible and protect the project from changes.
This approach may also be called plan-driven, traditional, or waterfall.
• Agile
An agile approach to project management works best for projects where the definition of project cope is emerging.
Since it cannot be defined up front, planning, executing, and managing the project happens in much smaller
increments so that changes can be easily made as information about the product and project's needs changes. This
approach is also known as change-driven or adaptive.
• Hybrid
A hybrid approach to project management uses aspects of both predictive and agile approaches and the approach
varies with the needs of the project and the organizational environment.
There is a big difference between managing small and large projects, and between those with predictive approaches
and those that use agile or hybrid methods.

On a small project, you may walk over to someone you need to speak to about an issue. On a large project you may
have spent weeks planning communications. You have to figure out who should be involved in solving an issue,
their locations, and contact information and communication preferences.

You will need to answer exam questions based on the information given in the question. A large project requires you
to use the full breadth of project management processes and tools, and also requires you to consider using an agile or
hybrid approach to project management to fit the needs of the project, when necessary.

Effective project management ensures that the organization is focused on the most important work and that the right
work is done correctly and in the most time- and cost-effective manner.

Risks are identified and planned for before they occur, communication is managed effectively, and specific quality
metrics are achieved. These efforts result in satisfied stakeholders and achievement of business objectives.
Program Management
Grouping related projects into a program allows an organization to coordinate their management of those projects, as
shown in figure 2.1. This approach focuses on the interdependencies between projects, works to ensure benefits for
which the projects were initiated, may help decrease risk, and improves overall management.

In addition to the work required to complete each individual project, the program also includes a program manager's
coordination and management activities.

So, when you discover that your work involves more than one project, you can manage the projects as a program if
the program approach adds value. Or, you may collaborate with a program manager if your project is part of an
existing program.

Portfolio Management
A portfolio includes programs, projects, and related operational work that are prioritized and implemented to
achieve a specific strategic business goal (see figure 2.2).
Programs and projects that make up a portfolio may not be related, other than by their relationship to this common
strategic goal.
Combining programs, projects, and operations into one or more portfolios helps optimize the use of resources,
enhances the benefits to the organization, and reduces risk. The work of an organization can comprise one or
multiple portfolios. A project is included in a portfolio based on potential return on investment, strategic benefits,
alignment with corporate strategy, and other factors critical to organizational success.

A key point to understand is that all efforts in the organization-whether they are part of project, program, portfolio,
or operational work-should be guided by the organization and support its strategic goals.
This means that any changes to the organizational strategy will necessitate changes to the organization's portfolios,
programs, projects, and operational work-both ongoing efforts and future initiatives.
For example, if a project no longer aligns with the organizational strategy, the project may be changed midcourse
to bring it into alignment, or it may be terminated.

Project Management Office (PM0)3

The PMO is a department within an organization that provides or ensures compliance with project governance. The
PMO oversees and standardizes the management of projects. It can take one of several forms, including the
following:
• Supportive
A supportive PMO provides the policies, methodologies, templates, and lessons learned for managing projects
within the organization. It typically exercises a low level of control over projects.
• Controlling
A controlling PMO provides support and guidance on how to manage projects, trains others in project management
and project management software, assists with specific project management tools, and ensures compliance with
organizational policies. It typically has a moderate level of control over projects.
• Directive
A directive PMO provides project managers for different projects, and is responsible for the results of those projects;
all projects, or projects of a certain size, type, or influence, are managed by this office. A directive PMO has a high
level of control over projects.

The PMO may:

• Manage the interdependencies among projects, programs, and portfolios
• Analyze information from projects to assess whether the organization is achieving its strategic objectives
• Help provide resources
• Recommend the termination of projects when appropriate
• Monitor compliance with organizational processes
• Help gather lessons learned into a repository and make them available to other projects
• Provide templates for documents such as work breakdown structures, user stories, or communications management
plans
• Provide guidance and project governance
• Provide centralized communication about projects
• Be more heavily involved during project initiating than later in the project
• Have representation on the change control board
• Be a stakeholder
• Prioritize projects.

2.1 Exercise
Test yourself! Read the description of the PMO, and determine whether it is likely to be supportive, controlling, or
directive, or a combination of the three. Write the answers in your Exercise Notebook.
Description
1. Manages all projects throughout the organization (Directive).
2. Provides support and guidance; requires all projects within the organization to use designated project management
software and templates, but doesn't otherwise exert control over the project (Controlling).
3. Coordinates all projects within the organization (Controlling or Directive).
4. Recommends common terminology, templates, reporting, and procedures to be used on projects throughout the
organization to promote consistency and streamline efforts (Supportive).
5. Appoints project manager (Directive).
6. Prioritizes projects (Controlling or Directive).
7. Has the highest level of control over projects (Directive).

Project Management's Organizational Context

Successful projects provide business value and deliver benefits defined in a business case and a benefits
management plan.5 Projects are designed to bring a positive change to an organization, usually to add or improve
products or services, and in some cases to satisfy legal or other regulatory requirements.
They are selected, initiated1 and exist within an organizational context that influences their desired outputs and what
is needed (inputs) to achieve these outcomes (outputs). Organizational context includes an understanding of an
organization's operations and projects, governance, and its organizational structure.
This context also includes what the PMBO Guide calls influences: enterprise environmental factors (EEFs) and
organizational process assets (OPA).

Since EEFs and OPAs contribute to and are influenced by the organizational context in which projects exist, they are
essential to understanding domain ill (Business Environment) in the Examination Content Outline (ECO).
For a complete view of the project environment, you should also understand that these factors influence and are
influenced by a set of frequently used tools and techniques available within the organization and developed through
individual experience.

Operations and Projects

Most work done in organizations can be described as either operational or project work. Operational work.is ongoing
work to support the business and systems of the organization, whereas project work ends when the project is closed.
Understand the difference for the exam. You may see instances where the real problem in the question is that
someone is attempting to manage ongoing (operational) work, such as manufacturing, as a project.

Although these are two distinct areas of work, they are closely connected. When a project is finished, the
deliverables are transitioned to ongoing business operations so the benefits of the project work can be incorporated
into the organization. A successful transition may require employee training or adjustments to operational processes.

For example, when an insurance company's internal project to develop a new caseload tracking system is completed,
employees will need to learn how to use the system and adjust their processes to incorporate it into their daily work
of the benefits can be realized.

And this relationship goes both ways. While a project may develop a product or service to be used in operational
work, the need to change or improve operational work may prompt the initiation of a project.
For example, the need to develop a new caseload tracking system may have arisen from problem occurring
in the organization's business operations.
As another example1 imagine the caseload tracking system has moved into operations and users have started working
with it, but some bugs have been identified.

Fixing these bugs would likely be addressed as the operational work of maintaining business systems rather than
as a new project. If the organization decides new features or functions must be added to the caseload tracking system after it is in
operation, however, this may prompt a new project.

It is important to note that the approach to new projects within an organization is not dependent on a chosen approach used in the
past. For instance, the initial caseload tracking system may have been a large project with well-defined requirements that took
months or years to complete and had been managed using a predictive approach.

Adding new features would be a much smaller project and an adaptive approach could be the best choice for this new project,
depending on several factors, including project uncertainty, magnitude, and predictability of outcomes.

Governance
Every organization is different, and governance is designed to support the specific culture and attributes of the organization.
Organizational governance affects and is affected by project governance, the organization's culture and structure, and the business
environment.

Organizational Governance
Organizational governance refers to the overall structure of an organization. It involves setting the policies and procedures for
how work will be performed to meet strategic goals and to support organizational operations and decision-making. There may be
multiple levels of governance within an organization, although this can vary. Generally, a board of directors is responsible to
ensure that work throughout the organization conforms to external (government or regulatory) and internal standards
and requirements. Internal requirements include policies and procedures regarding portfolio, program, project, and operations
work, which help to ensure that these endeavors are within the strategic plan ofthe
organization and that they contribute to the delivery of specific benefits or value.

Project Governance The ECO task 14 in the Process domain (establish project governance structure)
requires project managers to determine their project governance so that the project is in agreement with
organizational governance. Do you establish project governance structure on your projects? How does
governance differ between predictive and adaptive projects? Predictive governance typically involves
formal documentation and upfront analysis and agreement. Agile governance, in contrast, is generally less
structured but still aligns with the necessary policies and procedures of the organization. It's important to
keep in mind both predictive and adaptive approaches as you may see exam questions that will test your
knowledge ofboth project environments.

Project governance can be established and administered by a PMO. It may involve defining a project
manager's authority and the creation or enforcement of processes and policies regarding areas such as risk,
resources, communications, and change management.

Governance may also involve planning and managing project compliance in regulations, security, and
safety. The awareness of these requirements helps shape the best approach for a project. For instance,
potential regulatory restrictions on a new energy project might lead you down the path of an agile hybrid
approach, but there are multiple agile methodologies you could choose.

Organizational Structure
One of the primary forms of influence on projects is how the company is
organized. The organizational structure will dictate who the project manager goes to for help with resources,
how communications must be handled, and many other aspects of project management. This influence is
so important that an answer to a question on the exam can change depending on the structure of the
organization being discussed.

Questions on the exam are often phrased in terms ofthe project manager's level of authority and how
the form of organization impacts their management of projects. For example, exam questions may deal
with who has the power in each type of organization (the project manager or the functional manager), or
they may require you to understand the advantages and disadvantages to the project manager in each type
of organization