PMP

Project Management
Professional Study Guide
Fifth Edition
ABOUT THE AUTHORS

Joseph Phillips, PMP, PMI-ACP, ITIL, Project+, CTT+, is the Director of Education for
Instructing.com, LLC. He has managed and consulted on projects for industries including
technical, pharmaceutical, manufacturing, and architectural, among others. Joseph has
served as a project management consultant for organizations creating project offices,
maturity models, and best-practice standardization.
As a leader in adult education, Joseph has taught organizations how to successfully
implement project management methodologies, adaptive project management, information
technology project management, risk management, and other courses. He has taught at
Columbia College, University of Chicago, Ball State University, and for corporate clients
like IU Health, the State of Indiana, and Berkeley Laboratories. A Certified Technical
Trainer, Joseph has taught more than 50,000 professionals and has contributed as an
author or editor to more than 35 books on technology, careers, and project management.
Joseph is a member of the Project Management Institute and is active in local project
management chapters. He has spoken on project management, project management
certifications, and project methodologies at numerous trade shows, PMI chapter meetings,
and employee conferences in the United States and in Europe. When not writing, teaching,
or consulting, Joseph can be found behind a camera or on the working end of a fly rod.
You can contact him through www.instructing.com.

About the Technical Editor

Todd C. Williams is a consultant, author, expert witness, and educator who helps
companies build a comprehensive strategic foundation coupled with execution excellence
to help them thrive. He has published two books. Filling Execution Gaps: How
Executives And Project Managers Turn Corporate Strategy Into Successful Projects (De
Gruyter, 2017) describes how to fill six critical gaps that prevent organizations from
turning strategy into successful projects—common understanding, executive sponsorship,
effective governance, change management, corporate goal to project alignment, and
leadership. Rescue the Problem Project:
A Complete Guide to Identifying, Preventing, and Recovering from Project Failure
(AMACOM, 2011) defines a project audit and recovery process for rescuing red projects
that focuses on root-cause correction and prevention.
He also writes for The CEO Magazine, American Management Association, and his
own Back From Red blog, and he contributes to numerous other publications, including
Fortune/ CNN Money, CIO Magazine, CIO Update, ZDNet, Enterprising CIO, and IT
Business Edge. He is also an internationally acclaimed speaker and educator who makes
more than
40 presentations a year throughout the United States, Canada, United Kingdom, and
European Union.
PMP ®
Project Management
Professional Study Guide
Fifth Edition

Joseph Phillips
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PMP® Project Management Professional Study Guide, Fifth Edition
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Sponsoring Editor Technical Editor Composition

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For the love of my life, Natalie…thank you for the encouragement,
laughs, friendship, and time to write.
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CONTENTS AT A
GLANCE

Part I
Project Initiation

1 Introducing Project Management ................................................ 3

2 Managing Projects in Different Environments..................................................63

3 Serving as a Project Manager.................................................................................103

Part II
PMP Exam Essentials: Knowledge Areas

4 Implementing Project Integration Management..............................................147

5 Managing the Project Scope............................................................................225

6 Introducing Project Schedule Management.....................................................279

7 Introducing Project Cost Management............................................................355

8 Introducing Project Quality Management.......................................................409

9 Introducing Project Resource Management.....................................................459

10 Introducing Project Communications Management........................................515

11 Introducing Project Risk Management............................................................555

12 Introducing Project Procurement Management...............................................623

13 Introducing Project Stakeholder Management.................................................675

14 The PMI Code of Ethics and Professional Conduct........................................719

vii
8 PMP Project Management Professional Study Guide

Part III
Appendices

A Critical Exam Information ......................................................... 745

B About the CD-ROM ................................................................ 761

Glossary ............................................................................... 765

Index ................................................................................... 807

CONTENTS

Preface....................................................................................................................xxv
Acknowledgments...........................................................................................xxix
Introduction....................................................................................................xxxi
Exam Readiness Checklist....................................................................................xxxii

Part I
Project Initiation

1 Introducing Project Management..........................................3

The PMBOK Guide, This Book, and the PMP Exam ......................... 4
All About the PMBOK Guide .......................................... 4
All About This Book ..................................................... 5
All About the PMP Exam ............................................... 6
Code of Ethics (đạo đức) and Professional Conduct (quản lý).............10
Defining What a Project Is—and Is Not..................................................................10
Projects Create Unique Products, Services, or Results........................11
Projects Are Temporary.......................................................................11
Projects Change Things and Environments.........................................12
Projects Create Business Value..................................................................13
Consider the Project Initiation Context................................................13
Defining Project Management...........................................................................13
Tailoring the Project Process...............................................................18
Examining Related Areas of Project Management...................................................19
Exploring Program Management.........................................................19
Consider Project Portfolio Management..............................................20
Implementing Subprojects...................................................................22
Projects vs. Operations........................................................................23
Projects and Business Value......................................................................25
Revving Through the Project Life Cycle...........................................................25
Working with a Project Life Cycle......................................................26
Project Phase Deliverables.........................................................................33
Defining Project Management Data and Information........................................38
Understanding Data and Information...................................................38
Reviewing a Project Business Case...........................................................39
Creating a Project Benefits Management Plan.....................................40

ix
10 PMP Project Management Professional Study Guide

Certification Summary......................................................................................40
Key Terms...........................................................................................41
✓ Two-Minute Drill.......................................................................................45
Q&A Self Test.....................................................................................................48
Self Test Answers......................................................................................53

2 Managing Projects in Different Environments . . . . . . . . . . . . . . . 63

Utilizing Enterprise Environmental Factors .................................... 64
Reviewing Internal Enterprise Environmental Factors ............ 64
Reviewing External Enterprise Environmental Factors ........... 65
Leveraging Organizational Process Assets ..................................... 66
Recognizing Common Organizational Process Assets ........... 67
Utilizing Organizational Knowledge Repositories ................. 68
Working with Organizational Systems .......................................... 68
Examine Organizational Governance Frameworks ................ 69
Consider Portfolio, Programs, and Project Governance .......... 70
Relying on General Management Skills .............................. 70
Considering Organizational Culture .................................. 72
Completing Projects in Different Organizational Structures ............... 73
Working in an Organic, or a Simple, Structure ..................... 74
Managing Projects in Functional Organizations ................... 74
Dealing with Multidivisional Structures ............................. 75
Managing in Matrix Structures ........................................ 76
Serving in a Virtual Organization ..................................... 77
Managing Projects in Hybrid Organizations ........................ 78
Operating Under Project Management Offices .................... 78
Certification Summary ............................................................. 82
Key Terms .................................................................. 82
✓ Two-Minute Drill ......................................................... 86
Q&A Self Test ..................................................................... 88
Self Test Answers ......................................................... 93

3 Serving as a Project Manager 103

.Defining
. . . . . . . .the
. . . Project
. . . . . . . Management
. . . . . . . . . . . . Role
... .
......................................... 104
Leading the Project Team ............................................... 105
Communicating Project Information ................................. 105
Negotiating Project Terms and Conditions ......................... 107
Active Problem Solving ................................................. 107
Exploring the Project Manager Influence ...................................... 108
Influencing the Project .................................................. 110
Influencing the Organization .......................................... 111
 Contents xi

Managing Social, Economic,

and Environmental Project Influences..........................................111
Considering International Influences.................................................112
Reviewing Cultural and Industry Influences.....................................112
Building the Project Management Competencies............................................113
Considering Your Skills and Competencies......................................113
Exploring the PMI Talent Triangle....................................................114
Recognizing Politics in Project Management....................................116
Leading and Managing the Project..................................................................118
Exploring Leadership Styles....................................................................118
Applying a Leadership Personality..........................................................119
Performing Project Integration........................................................................121
Examining Process-Level Integration......................................................121
Examining Cognitive-Level Integration..................................................122
Examining Context-Level Integration................................................123
Certification Summary....................................................................................123
Key Terms................................................................................................124
✓ Two-Minute Drill.....................................................................................127
Q&A Self Test...................................................................................................129
Self Test Answers....................................................................................135

Part II
PMP Exam Essentials: Knowledge Areas

4 Implementing Project Integration Management................147

Exploring Project Integration Management.....................................................149
Considering Trends for Project Integration Management..................150
Tailoring Project Integration Management........................................151
Considering Project Integration Management
in Agile Environments..................................................................152
Developing the Project Charter.......................................................................153
Creating the Project Charter..............................................................154
Examining Benefit Measurement Methods.......................................158
Examining Constrained Optimization Methods................................162
Developing the Project Management Plan......................................................163
Understanding the Project Plan’s Purpose.........................................164
Preparing to Develop the Project Plan...............................................164
Applying Tools and Techniques for
Project Plan Development.............................................................165
Examining the Typical Project Plan.........................................................167
12 PMP Project Management Professional Study Guide

Directing and Managing the Project Work......................................................173

Applying Corrective Action.....................................................................174
Considering Preventive Actions.........................................................174
Managing Defect Repair..........................................................................174
Managing Change Requests.....................................................................174
Implementing Tools and Techniques for Project Execution..............175
Examining the Outputs of Project Plan Execution............................176
Managing Project Knowledge................................................................................179
Preparing to Manage Knowledge......................................................180
Reviewing Knowledge Management Tools and Techniques.............181
Reviewing the Results of Knowledge Management................................182
Monitoring and Controlling the Project Work.................................................183
Preparing for Monitoring and Controlling Processes.........................183
Creating Work Performance Information...........................................184
Reviewing the Final Inputs for Monitoring and Controlling..............184
Using Monitoring and Controlling Tools and Techniques.................185
Examining the Results of Project Work...................................................187
Performing Integrated Change Control...........................................................188
Implementing Tools and Techniques
for Integrated Change Control.......................................................190
Deciding on Project Changes............................................................193
Revisiting Planning Processes.................................................................193
Evaluating the Outputs of Integrated Change Control.......................194
Closing the Project or Phase...........................................................................194
Preparing to Close the Project or Phase.............................................194
Closing the Project or Phase..............................................................196
Reviewing the Results of Project Closure...............................................197
Certification Summary....................................................................................198
Key Terms................................................................................................200
✓ Two-Minute Drill.....................................................................................207
Q&A Self Test...................................................................................................209
Self Test Answers....................................................................................215

5 Managing the Project Scope 225

.Exploring
. . . . . . . . .Project
. . . . . . .Scope
. . . . . .Management
. . . . . . . . . . . . . .......................................... 226
Tailoring Project Scope Management ................................ 227
Planning Project Scope Management ........................................... 228
Project Scope vs. Product Scope ...................................... 229
Creating the Scope Management Plan ............................... 230
 Contents 13

Using Scope Planning Tools and Techniques....................................230

Creating the Scope Management Plan...............................................231
Collecting and Eliciting Requirements...........................................................232
Interview the Stakeholders.................................................................234
Leading a Focus Group............................................................................234
Relying on Surveys..................................................................................234
Leveraging Data Analysis........................................................................235
Making Group Decisions on Requirements.......................................235
Using Group Decisions............................................................................237
Hosting a Requirements Workshop...................................................238
Utilizing a Context Diagram....................................................................238
Creating Prototypes...........................................................................239
Observing Stakeholders...........................................................................239
Benchmarking the Requirements.......................................................240
Managing the Requirements..............................................................240
Defining the Project Scope.....................................................................................241
Examining the Inputs to Scope Definition.........................................242
Consulting with Experts....................................................................242
Finding Alternatives.................................................................................243
Facilitating Meetings and Workshops................................................243
Using Product Analysis............................................................................243
Examining the Project Scope Statement............................................244
Reviewing the Project Document Updates........................................245
Creating the Work Breakdown Structure.........................................................246
Using a Work Breakdown Structure Template...................................247
Decomposing the Project Deliverables..............................................248
Defining the Scope Baseline....................................................................249
Validating the Scope...............................................................................................250
Examining the Inputs to Scope Validation.........................................251
Inspecting the Project Work..............................................................251
Formally Accepting the Project Deliverables...........................................252
Controlling the Scope......................................................................................252
Examining the Inputs to Scope Control.............................................253
Considering the Results of Controlling Scope...................................255
Certification Summary....................................................................................257
Key Terms................................................................................................257
✓ Two-Minute Drill.....................................................................................261
Q&A Self Test...................................................................................................263
Self Test Answers....................................................................................269
14 PMP Project Management Professional Study Guide

6 Introducing Project Schedule Management.......................279

Exploring Project Schedule Management.......................................................280
Tailoring Project Schedule Management...........................................281
Considerations for Agile and Adaptive Environments.......................281
Creating the Schedule Management Plan........................................................283
Building the Schedule Management Plan..........................................283
Exploring the Schedule Management Plan........................................284
Defining the Activities...........................................................................................285
Getting to Work: Defining the Activities...........................................286
Relying on Templates........................................................................287
Decomposing the Project Work Packages.........................................287
Using Rolling Wave Planning..................................................................287
Using Planning Components.............................................................288
Compiling the Activity List.....................................................................288
Documenting the Activity Attributes.................................................289
Finalizing Activity Definition..................................................................290
Sequencing Activities.............................................................................................291
Considering the Inputs to Activity Sequencing.................................292
Creating Network Diagrams..............................................................292
Using the Precedence Diagramming Method....................................292
Determining the Activity Dependencies............................................294
Considering Leads and Lags.............................................................295
Utilizing Network Templates.............................................................296
Examining the Sequencing Outputs...................................................296
Using a Project Network Diagram...........................................................297
Updating the Project Documents.......................................................297
Estimating Activity Durations................................................................................298
Considering the Activity Duration Estimates Inputs.........................298
Estimating the Project Work Considerations.....................................300
Considering Resource Availability..........................................................301
Considering the Calendars.................................................................302
Creating a Resource Breakdown Structure........................................302
Updating the Activity List.................................................................303
Applying Expert Judgment......................................................................303
Creating an Analogy..........................................................................304
Applying Parametric Estimates................................................................304
Creating a Three-Point Estimate........................................................305
Creating a Bottom-Up Estimate.........................................................306
Using the Delphi Technique..............................................................306
 Contents 15

Using the Fist-to-Five Approach........................................................307

Factoring in Reserve Time.................................................................307
Evaluating the Estimates....................................................................308
Developing the Schedule........................................................................................310
Revisiting the Project Network Diagram...........................................310
Relying on Activity Duration Estimates............................................311
Evaluating the Project Constraints.....................................................311
Reevaluating the Assumptions..........................................................313
Evaluating the Risk Management Register..............................................313
Examining the Activity Attributes.....................................................313
Defining the Project Timeline............................................................313
Performing Schedule Network Analysis..................................................314
Calculating Float in a PND................................................................315
Encountering Scheduling on the PMP Exam.....................................318
Optimizing Resource Utilization.......................................................318
Applying Duration Compression.......................................................320
Using a Project Simulation.......................................................................321
Using Project Management Software.......................................................322
Relying on a Project Coding Structure..............................................322
Examining the Project Schedule........................................................323
Utilizing the Schedule Management Plan..........................................324
Updating the Resource Requirements................................................324
Planning the Schedule in Agile Environments...................................324
Reviewing the Results of Developing the Schedule................................324
Controlling the Schedule.................................................................................325
Managing the Inputs to Schedule Control.........................................326
Measuring Project Performance........................................................327
Examining the Schedule Variance...........................................................327
Updating the Project Schedule...........................................................328
Applying Corrective Action.....................................................................328
Writing the Lessons Learned.............................................................328
Certification Summary....................................................................................329
Key Terms................................................................................................330
✓ Two-Minute Drill.....................................................................................334
Q&A Self Test...................................................................................................337
Self Test Answers....................................................................................343

7 Introducing Project Cost Management . . . . . . . . . . . . . . . . . . . . . . . . 355

Exploring Project Cost Management ............................................ 356
Tailoring the Project Cost Management Approach ................ 356
16 PMP Project Management Professional Study Guide

Planning the Project Costs...............................................................................357

Considering the Cost Planning Inputs...............................................358
Creating the Cost Management Plan..................................................358
Estimating the Project Costs...........................................................................359
Considering the Cost Estimating Inputs............................................360
Estimating Project Costs....................................................................364
Using Analogous Estimating...................................................................365
Using Parametric Estimating...................................................................365
Using Bottom-Up Estimating...................................................................367
Creating a Three-Point Cost Estimate................................................367
Analyzing Data for Cost Estimating..................................................368
Using Computer Software........................................................................369
Making Decisions in Cost Estimating...............................................369
Analyzing Cost Estimating Results.........................................................369
Refining the Cost Estimates...............................................................370
Considering the Supporting Detail....................................................370
Creating a Project Budget...............................................................................371
Developing the Project Budget................................................................372
Creating the Cost Baseline.................................................................373
Establishing Project Funding Requirements......................................373
Implementing Cost Control.............................................................................374
Considering Cost Control Inputs.......................................................375
Managing Changes to Costs..............................................................375
Measuring Project Performance......................................................................376
Finding the Variances........................................................................377
Calculating the Cost Performance Index...........................................378
Finding the Schedule Performance Index..........................................378
Preparing for the Estimate at Completion..........................................378
Calculating the To-Complete Performance Index..............................380
Finding the Estimate to Complete......................................................380
Finding the Variance at Completion..................................................382
The Five EVM Formula Rules.................................................................382
Additional Planning.................................................................................383
Using Computers...............................................................................384
Considering the Cost Control Results................................................384
Creating Change Requests.................................................................384
Updating Lessons Learned.......................................................................385
Certification Summary....................................................................................386
Key Terms................................................................................................387
 Contents 17

✓ Two-Minute Drill.....................................................................................391
Q&A Self Test...................................................................................................394
Self Test Answers....................................................................................400

8 Introducing Project Quality Management . . . . . . . . . . . . . . . . . . . . 409

Looking at the Big Quality Picture ............................................... 410
Accepting the Quality Management Approach ..................... 410
Quality vs. Grade ......................................................... 411
Implementing Quality Project Management ........................ 412
Tailoring Quality in Project Management ........................... 413
Considering Quality in Agile Environments ........................ 413
Preparing for Quality ............................................................... 414
Determining the Quality Policy ....................................... 415
Reviewing the Scope Baseline .......................................... 415
Consider Schedule and Costs .......................................... 416
Reviewing the Standards and Regulations ........................... 417
Planning for Quality Management ............................................... 417
Applying Benchmarking Practices .................................... 418
Brainstorming and Interviews ......................................... 419
Using a Benefit/Cost Analysis .......................................... 419
Considering the Cost of Quality ....................................... 420
Utilizing Multicriteria Decision Analysis Tools .................... 420
Representing Data in Quality Management Planning ............. 421
Planning for Testing and Inspection .................................. 421
Creating the Quality Management Plan ............................. 421
Identifying the Quality Metrics ........................................ 422
Managing Quality ................................................................... 422
Preparing to Manage Quality .......................................... 423
Managing Quality for a Project ........................................ 423
Completing a Quality Audit ............................................ 424
Utilizing the Design for X Approach ................................. 425
Implementing Problem-Solving Techniques ........................ 425
Reviewing the Results of Managing Quality ........................ 425
Implementing Control Quality ................................................... 426
Preparing for Quality Control ......................................... 427
Inspecting Results ........................................................ 427
Data Representation Tools .............................................. 428
Creating a Control Chart ............................................... 430
Creating Pareto Diagrams .............................................. 432
18 PMP Project Management Professional Study Guide

Creating a Histogram.........................................................................432
Creating a Run Chart.........................................................................433
Creating a Scatter Diagram................................................................434
Completing a Statistical Sampling...........................................................434
Revisiting Flowcharting...........................................................................434
Applying Trend Analysis.........................................................................434
The Results of Quality Control..........................................................435
Certification Summary....................................................................................436
Key Terms................................................................................................437
✓ Two-Minute Drill.....................................................................................440
Q&A Self Test...................................................................................................442
Self Test Answers....................................................................................448

9 Introducing Project Resource Management . . . . . . . . . . . . . . . . . . 459

Exploring Project Resource Management ...................................... 460
Reviewing Project Resource Management Foundations .......... 461
Exploring Trends in Managing Resources ........................... 462
Preparing for Resource Planning ................................................. 463
Identifying the Resource Requirements .............................. 464
Completing Organizational Planning ................................ 465
Charting the Project Resources ........................................ 465
Creating the Role and Responsibility Assignments ................ 466
Relying on Templates .................................................... 466
Applying Resource Practices ........................................... 467
Relating to Organizational Theories .................................. 467
Creating a Resource Management Plan .............................. 471
Creating a Team Charter ................................................ 472
Estimating Project Activity Resources .......................................... 473
Preparing to Estimate Activity Resources ........................... 474
Estimating the Resources for Activities .............................. 474
Reviewing the Results of Estimating Activity Resources ......... 475
Acquiring the Project Resources ................................................. 475
Preparing to Acquire Project Resources ............................ 476
Acquiring the Resources ................................................ 476
Negotiating for Resources .............................................. 477
Recruiting Project Team Members ................................... 477
Working with Preassigned Staff ....................................... 478
Acquiring Human Resources ........................................... 478
Working with Virtual Teams ........................................... 478
Reviewing the Outputs of Acquiring Resources .................... 479
 Contents 19

Developing the Project Team..........................................................................480

Preparing to Develop the Project Team.............................................480
Dealing with Team Locales.....................................................................481
Creating Team-Building Activities..........................................................481
Naturally Developing Project Teams.................................................482
Relying on General Management Skills............................................482
Rewarding the Project Team.............................................................483
Training the Project Team..................................................................483
Completing Project Performance Appraisals.....................................483
Examining the Results of Team Development..................................484
Managing the Project Team............................................................................484
Dealing with Team Disagreements....................................................485
Controlling Resources............................................................................................488
Preparing to Control Resources.........................................................489
Reviewing the Tools and Techniques to Control Resources..............489
Reviewing the Results of Controlling Resources.....................................490
Certification Summary....................................................................................491
Key Terms................................................................................................492
✓ Two-Minute Drill.....................................................................................496
Q&A Self Test...................................................................................................498
Self Test Answers....................................................................................504

10 Introducing Project Communications Management...........515

Communicating in Projects.............................................................................516
Consider Communication Activities..................................................517
Tailoring Communications in Project Management...........................518
Communicating in Agile Environments.............................................519
Planning Communications...............................................................................519
Considering the Project Management Plan and Charter....................520
Leveraging Enterprise Environmental Factors.........................................521
Identifying Communication Requirements........................................522
Exploring Communication Technologies...........................................523
Examining Communication Skills.....................................................524
Creating Successful Communications................................................525
Creating the Communications Management Plan..............................526
Managing Project Communications................................................................527
Exploring Communication Technology and Methods.......................528
Distributing Information....................................................................529
Examining the Results of Communication Management...................530
20 PMP Project Management Professional Study Guide

Monitoring Project Communications..............................................................530

Preparing for Communications Monitoring.......................................531
Reviewing the Monitoring Communications
Tools and Techniques....................................................................532
Reporting Project Performance.......................................................................532
Reviewing Project Performance..............................................................533
Completing Trend Analysis...............................................................533
Examining the Results of Performance Reporting.............................533
Certification Summary....................................................................................535
Key Terms................................................................................................536
✓ Two-Minute Drill.....................................................................................538
Q&A Self Test...................................................................................................539
Self Test Answers....................................................................................545

11 Introducing Project Risk Management...............................555

Building a Strong Risk Understanding............................................................556
Reviewing Project Risk Considerations...................................................557
Tailoring Risk Management in Projects.............................................558
Planning for Risk Management.......................................................................559
Examining Stakeholder Tolerance............................................................559
Relying on Risk Management Policies..............................................561
Creating the Risk Management Plan..................................................561
Examining the Risk Management Plan..............................................562
Creating Risk Categories.........................................................................564
Using a Risk Management Plan Template.........................................564
Identifying Risks....................................................................................................565
Preparing for Risk Identification.......................................................565
Identifying the Project Risks....................................................................566
Reviewing Project Documents................................................................567
Testing the Assumptions....................................................................567
Brainstorming the Project..................................................................567
Using Checklists......................................................................................568
Identifying Risks Through Interviews.....................................................568
Analyzing SWOT.....................................................................................569
Utilizing Diagramming Techniques.........................................................569
Using Prompt Lists...................................................................................570
Creating a Risk Register..........................................................................570
Creating a Risk Report......................................................................571
Using Qualitative Risk Analysis............................................................................572
Preparing for Qualitative Risk Analysis..................................................572
Completing Qualitative Analysis.............................................................573
 Contents 21

Applying Probability and Impact.......................................................575

Creating a Probability-Impact Matrix................................................575
Building a Hierarchical Chart............................................................577
Examining the Results of Qualitative Risk Analysis...............................577
Preparing for Quantitative Risk Analysis........................................................578
Considering the Inputs for Quantitative Analysis..............................579
Interviewing Stakeholders and Experts.............................................580
Applying Sensitivity Analysis.................................................................581
Finding the Expected Monetary Value..............................................581
Using a Decision Tree..............................................................................582
Using a Project Simulation.......................................................................583
Examining the Results of Quantitative Risk Analysis.............................583
Planning for Risk Responses..................................................................................584
Preparing for Risk Response....................................................................584
Creating Risk Responses..........................................................................585
Escalating the Risk Event.........................................................................585
Avoiding the Negative Risk and Threats.................................................586
Transferring the Negative Risk..........................................................586
Mitigating the Negative Risk.............................................................586
Managing the Positive Risks and Opportunities................................588
Accepting a Risk......................................................................................589
Creating a Project Contingency Response.........................................589
Examining the Results of Risk Response Planning.................................590
Working with Residual Risks...................................................................591
Accounting for Secondary Risks..............................................................591
Creating Contracts for Risk Response...............................................591
Justifying Risk Reduction........................................................................592
Updating the Project Plan..................................................................592
Implementing Risk Responses...............................................................................593
Preparing to Implement Risk Responses..................................................593
Reviewing the Tools and Techniques
for Implementing Risk Responses.................................................593
Examining the Results of Implementing Risk Responses..................594
Monitoring Risks....................................................................................................594
Preparing for Risk Monitoring...........................................................595
Completing Risk Monitoring.............................................................595
Completing Risk Response Audits...........................................................595
Completing Periodic Risk Reviews.........................................................596
Using Earned Value Analysis..................................................................596
Measuring Technical Performance....................................................596
Completing Additional Risk Planning...............................................596
Examining the Results of Risk Monitoring..............................................597
22 PMP Project Management Professional Study Guide

Certification Summary....................................................................................598
Key Terms................................................................................................598
✓ Two-Minute Drill.....................................................................................602
Q&A Self Test...................................................................................................605
Self Test Answers....................................................................................611

12 Introducing Project Procurement Management . . . . . . . . . . . . . 623

Building the Project Procurement Foundation ................................ 624
Considering Procurement Practices for Projects ................... 625
Tailoring the Procurement Processes ................................. 626
Planning for Purchases ............................................................. 627
Evaluating the Market Conditions .................................... 628
Referring to the Scope Baseline ........................................ 628
Relying on the Project Management Plan ........................... 629
Teaming with Other Organizations ................................... 629
Planning for the Project Requirements .............................. 630
Completing Procurement Planning ................................... 630
Determining to Make or Buy ........................................... 630
Using Expert Judgment .................................................. 632
Determining the Contract Type ....................................... 632
Summary of Contract Types ........................................... 636
Using the Statement of Work .......................................... 636
Determining the Source Selection Criteria .......................... 638
Reviewing the Procurement Management Plan .................... 639
Creating the Procurement Documents .............................. 640
Conducting Procurements ........................................................ 641
Procuring Goods and Services ......................................... 642
Examining the Results of Contracting ................................ 642
Selecting the Seller ....................................................... 643
Preparing for Source Selection ........................................ 643
Completing the Seller Selection Process ............................. 644
Examining the Results of Conducting Procurement .............. 645
Controlling Procurements ......................................................... 647
Preparing for Contract Administration .............................. 647
Completing Contract Administration ................................ 650
Inspecting and Auditing the Procurement Process ................ 651
Reviewing the Results of Procurement Control .................... 651
Certification Summary ............................................................. 652
Key Terms .................................................................. 653
 Contents 23

✓ Two-Minute Drill.....................................................................................657
Q&A Self Test...................................................................................................658
Self Test Answers....................................................................................664

13 Introducing Project Stakeholder Management . . . . . . . . . . . . . . 675

Building a Strong Stakeholder Management Foundation .................... 676
Leading Stakeholder Management .................................... 677
Tailoring the Stakeholder Management Processes ................. 677
Identifying the Project Stakeholders ............................................. 678
Preparing for Stakeholder Identification ............................. 679
Performing Stakeholder Identification ............................... 680
Visualizing Stakeholder Influence ..................................... 681
Reviewing the Results of Stakeholder Identification .............. 682
Planning for Stakeholder Management ......................................... 683
Organizing the Planning ................................................ 684
Analyzing Stakeholder Engagement .................................. 685
Building the Stakeholder Management Plan ........................ 686
Managing Stakeholder Engagement ............................................. 687
Engaging Stakeholders .................................................. 688
Examining Results of Stakeholder Engagement .................... 690
Monitoring Stakeholder Engagement ........................................... 690
Taking Action for Stakeholder Engagement ......................... 691
Completing Stakeholder Engagement Monitoring ................ 693
Reviewing the Results of Monitoring
Stakeholder Engagement ............................................ 694
Certification Summary ............................................................. 695
Key Terms .................................................................. 696
✓ Two-Minute Drill ......................................................... 698
Q&A Self Test ..................................................................... 700
Self Test Answers ......................................................... 706

14 The PMI Code of Ethics and Professional Conduct.............719

Responsibilities to the Profession....................................................................720
Complying with Rules and Policies.........................................................720
Applying Honesty to the Profession...................................................721
Advancing the Profession..................................................................721
Responsibilities to the Customer and to the Public.........................................722
Enforcing Project Management Truth and Honesty...........................723
Eliminating Inappropriate Actions.....................................................723
Respecting Others..............................................................................724
24 PMP Project Management Professional Study Guide

Certification Summary....................................................................................724
Key Terms................................................................................................724
✓ Two-Minute Drill...................................................................................725
Q&A Self Test...................................................................................................726
Self Test Answers....................................................................................732

Part III
Appendices

A Critical Exam Information.................................................745

Exam Test-Passing Tips..........................................................................................745
Days Before the Exam.............................................................................746
Practice the Testing Process...............................................................746
Testing Tips.......................................................................................746
Answer Every Question—Once...............................................................747
Use the Process of Elimination..........................................................748
Everything You Must Know..................................................................................748
The 49 Project Management Processes..............................................748
Magic PMP Formulas..............................................................................750
Earned Value Management Formulas......................................................750
Quick PMP Facts.....................................................................................750

B About the CD-ROM................................................................761

System Requirements.............................................................................................761
Total Tester Premium Practice Exam Software...............................................762
Installing and Running Total Tester
Premium Practice Exam Software.....................................................................762
Video Training from the Author......................................................................763
Secure PDF Copy of the Book...............................................................................763
Technical Support............................................................................................763
Total Seminars Technical Support.....................................................763
McGraw-Hill Education Content Support..........................................764

Glossary...........................................................................765

Index................................................................................807
PREFACE

T his book is organized in such a way as to serve as an in-depth review for the PMP
Project Management Professional exam for those with a strong foundation in project
management, as well as for those who are new PMP candidates. Each chapter covers
a major aspect of the exam, with an emphasis on the “why” as well as the “how to” of project
management.

Digital Content
For more information regarding the digital content and how to access it, see Appendix B.
■ Author videos, provided by the Joseph Phillips, give you in-depth instruction to
supplement the book. Be sure to watch the videos when you see the video icon in
the book’s margin. The video instruction aligns with the content of the chapter in
which it appears.
■ Worksheets and exercises are available in Excel and PDF formats. The Time Value
of Money and Earned Value worksheets help you double-check your math when
calculating these formulas. The PDF Float Exercises provide additional practice to
help you calculate Project Float in Chapter 6.

Exam Readiness Checklist

At the end of the “Introduction” section coming up, you will find an Exam Readiness
Checklist. This table has been constructed to enable you to cross-reference the official
exam objectives with the objectives as they are presented and covered in this book. Use
the checklist to gauge your level of expertise on each objective at the outset of your
studies.
Then check your progress and make sure you spend the time you need on more difficult or
unfamiliar sections. References have been provided for the objective exactly as the Project
Management Institute presents it and related chapter references.

xxv
26 PMP Project Management Professional Study Guide

In Every Chapter
We’ve created a set of chapter components that call your attention to important items,
reinforce important points, and provide helpful exam-taking hints. Take a look at
what you’ll find in every chapter:
■ Every chapter begins with Certification Objectives—what you need to know to
pass the section on the exam dealing with the chapter topic. The objective headings
identify the objectives within the chapter, so you’ll always know an objective when
you see it!
■ Exam Watch notes call attention to information about, and potential pitfalls in, the
exam. These helpful hints are written by the author, who has taken the exams and
received his certification—who better to tell you what to worry about? He knows
what you’re about to go through!

Don’t forget that resourcesfacilities, and materials are resources, and are more than just people. Equipment,these c

■ On the Job notes describe the issues that come up most often in real-world settings.
They provide a valuable perspective on certification and product-related
topics. They point out common mistakes and address questions that have
arisen from on-the-job discussions and experience.
■ Inside the Exam sidebars highlight some of the most common and confusing
problems that students encounter when taking a live exam. Designed to anticipate
what the exam will emphasize, getting inside the exam will help you make sure that
you know what you need to know to pass it. You can get a leg up on how to
respond to those difficult-to-understand questions by focusing extra attention on
these sidebars.
■ The PMP Coach is there to encourage you. It’s the author’s way of saying, “Keep
going
PMP and don’t give up!”
c oac h ■ The Certification Summary is a succinct review of the chapter and a restatement of
salient points regarding the exam.
■ The Key Terms you will need to know for the exam, as well as their definitions, are
listed after each Certification Summary.
 Preface xxvii

■ The Two-Minute Drill at the end of every chapter is a checklist of the main
✓ points of the chapter. It can be used for last-minute review.
■ The Self Test offers questions similar to those found on the certification exams.
Q&A The answers to these questions, as well as explanations of the answers, can be
found at the end of each chapter. By taking the Self Test after reading each chapter,
you’ll reinforce what you’ve learned from that chapter while becoming familiar
with the structure of the exam questions.

Some Pointers
Once you’ve finished reading this book, set aside some time to do a thorough review. You
might want to return to the book several times and make use of all the methods it offers for
reviewing the material.
Reread all the Two-Minute Drills, or have someone quiz you. You also can use the
drills as a way to do a quick cram before the exam. You might want to make some
flashcards out of 3×5 index cards that have the Two-Minute Drill material on them.
Reread all the Exam Watch notes and Inside the Exam elements. Remember that
these notes are written by authors who have taken the exam and passed. They know what
you should expect—and what you should be on the lookout for.
Retake the Self Tests. Taking the tests right after you’ve read the chapter is a good idea,
because the questions help reinforce what you’ve just learned. However, it’s an even better
idea to also go back later and run through all the questions in the book in one sitting.
Pretend that you’re taking the live exam. When you work through the questions, mark your
answers on a separate piece of paper. That way, you can run through the questions as
many times as you need to until you feel comfortable with the material.
Study Appendix A: Critical Exam Information. Appendix A should become your
best friend. It contains everything you must know to pass the PMP. We’ve taken the
absolutely critical information from the book and condensed it down to just one chunk of
information. Appendix A doesn’t really explain the concepts (that’s what the chapters are
for), but it does zoom in on just the most important elements of the entire book.
This page is intentionally left blank to match the printed book.
ACKNOWLEDGMENTS

B ooks, like projects, are never done alone.

Thank you to Wendy Rinaldi for all of your help, great conversations, and guidance on
this book and others. Thank you, Claire Yee, for your management and organization of
this
book—you are fantastic. Thank you to Jody McKenzie for your keen eye, attention to
detail, and for all your hours and help. Lisa Theobald, thank you for helping me be a better
writer. Thank you to Production Supervisor Jim Kussow for his work on this book. Thanks
also to the production teams at McGraw-Hill Professional and Cenveo Publisher Services
for your hard work in making this book a success.
I would also like to thank the hundreds of folks who have attended my PMP Boot Camps
over the past couple of years. Your questions, conversations, and recommendations have
helped me write a better book. A big thank you to my friends Greg and Mary Huebner,
Jonathan Acosta, Brett and Julie Barnett, Don “Just Publish It Already” Kuhnle, Greg
Kirkland,
Beatrice Best, my Sarasota pals, Monica Morgan, and all my clients. Thank you also to
my friends and in-laws Bernie and Alice Morgan. Finally, thanks to my parents, Don
and Virginia Phillips, and my old, old brothers, Steve, Mark, Sam, and Ben.
xxix
ACKNOWLEDGMENTS

This page is intentionally left blank to match the printed book.

 T his book is divided into two major parts. Part I, which consists of Chapters 1, 2, and 3,
discusses the broad overview of project management and how it pertains to the PMP
examination. Part II contains Chapters 4 through 14, which detail each of the ten
knowledge areas and the PMI Code of Ethics and Professional Conduct.

If you are just beginning your PMP quest, you should read Part I immediately,
because it’ll help you build a strong foundation for the PMP exam. If you find,
however, that you already have a strong foundation in project management and need
specific information on the knowledge areas, move on to Part II. PMP candidates who
have years of project management experience can move on to Part II.
The book is designed so that you can read the chapters in any order you’d like.
However, if you examine A Guide to the Project Management Body of Knowledge,
you’ll notice that the order of information presented there is the same as the order of
information presented in this book. In other words, you can read a chapter of the
PMBOK Guide and then read
a more detailed explanation in this book. This book is a guide to the guide. In
addition, practically every question in this book stems directly from the PMBOK
Guide—so it’s a good idea to have the PMBOK Guide handy as you read.
The following Exam Readiness Checklist includes all of the exam domains and tasks a
project manager will do in each domain. This information is current as of this book’s print
date. However, it’s always a good idea to visit www.pmi.org to see if PMI has made any
changes to these exam objectives. Chances are, if history is any indicator, PMI will reorder
these topics.

xxxi
xxxii PMP Project Management Professional Study Guide

INTRODUCTION
Exam Readiness Checklist

ermedia
n

Expert
Begin
Chapter No.

Int
Exam Domain and Exam Percentage

Initiating the Project . . . . . . 13%

Conduct project selection methods 1, 3, 4, 13
Define scope 1, 3, 4, 5, 13, 14
Document project risks, assumptions, and constraints 1, 3, 5, 11, 14
Identify and perform stakeholder analysis 1, 2, 3, 4, 5, 10, 13
Develop project charter 1, 3, 4, 13, 14
Obtain project charter approval 1, 3, 4, 13
Planning the Project . . . . . . 24%
Define and record requirements, constraints, and 1, 2, 3, 5, 6, 7, 13
assumptions
Identify project team and define roles and responsibilities 1, 3, 9, 13, 14
Create the WBS 1, 5
Develop change management plan 5
Identify risks and define risk strategies 11, 14
Obtain plan approval 1, 4, 13
Conduct kick-off meeting 4, 5
Executing the Project . . . . . . 31%
Execute tasks defined in project plan 1, 4, 5, 6, 7, 14
Ensure common understanding and set expectations 1, 4, 5, 8, 13
Implement the procurement of project resources 1, 4, 5, 6, 7, 12, 14
Manage resource allocation 5, 6, 7, 9, 12, 13, 14
Implement quality management plan 4, 5, 8
Implement approved changes 4, 5, 6, 7, 8, 10, 11, 12
Implement approved actions and workarounds 4, 5, 6, 7, 8, 11
Improve team performance 4, 9, 13
 Introduction xxxiii

Exam Readiness Checklist

ermedia
n

Expert
Begin
Chapter No.

Int
Exam Domain and Exam Percentage

Monitoring and Controlling the Project . . . . . . 25%

Measure project performance 5, 6, 7, 8, 10, 11
Verify and manage changes to the project 4, 5, 6, 7, 8, 9, 10, 11, 12, 13
Ensure project deliverables conform to quality standards 4, 5, 8
Monitor all risks 4, 5, 11, 14
Closing the Project . . . . . . 7%
Obtain final acceptance for the project 4, 5, 10, 13
Obtain financial, legal, and administrative closure 4, 5, 7, 10, 13
Release project resources 3, 4, 5, 9, 13, 14
Identify, document, and communicate lessons learned 4, 5, 6, 7, 8, 9, 10
Create and distribute final project report 4, 5, 10
Archive and retain project records 10, 13
Measure customer satisfaction 1, 3, 4, 8, 9, 10, 13, 14
This page is intentionally left blank to match the printed book.
 Part I
Project Initiation

CHAPTERS

1 Introducing Project Management

2 Managing Projects in Different Environments
3 Serving as a Project Manager
This page is intentionally left blank to match the printed book.
Chapter 1
Introducing Project Management

CERTIFICATION OBJECTIVES

1.1 The PMBOK Guide, This Book, and 1.5 Revving Through the Project Life Cycle
the PMP Exam
1.6 Defining Project Management Data
1.2 Defining What a Project Is—and Is Not and Information
1.3 Defining Project Management ✓ Two-Minute Drill
1.4 Examining Related Areas of Project Q&A Self Test
Management

H ow you’ll do on your PMP examination depends on your experience, your ability

to problem-solve, and your foundation in project management. This to
A Guide
to explain how both this book and the sixth edition of PMI’s
chapter aims
the Project

Management Body of Knowledge (referred to the PMBOK Guide in this book) can help you grasp
what you must know to pass the exam.
 4 Chapter 1 Introducing Project Management

In addition to learning about the PMBOK (pronounced pim-bok) Guide and the exam,
you’ll learn what a project is, how project management works, what the exam process
itself looks like, and how project management and projects operate in different
environments. We’ll also take a “big picture” look at the project charter and the project
management plan. We’ve lots to do, so let’s go!

CERTIFICATION OBJECTIVE 1.01

The PMBOK Guide, This Book, and the PMP Exam

If you’ve sat down to read the PMBOK Guide, you’ve obviously had a lot of time on your
hands, you were really curious about it, or someone told you it was required reading for
passing the Project Management Professional (PMP) examination. Here’s the truth about
the PMBOK Guide: It’s boring. My apologies to all my friends at Project Management
Institute (PMI), but it’s true. The PMBOK Guide is, however, concise, organized, and an
excellent reference manual. I use it all the time. But it wasn’t written to be a thriller. The
PMBOK Guide is an excellent book to use as a reference throughout your project
management career.
The PMBOK Guide isn’t just made-up stuff from some project management theorists.
It’s written by project management professionals from a variety of disciplines. The
PMBOK Guide is considered a standard for project management—the terms, processes,
and approaches
are applicable to nearly all projects nearly all of the time. Sure, you may have projects in
which you’ll need to do something different from what the PMBOK Guide advises, but
those moments will probably be rare. The PMBOK Guide is written in very broad terms
—it’s not a mandate, but a documentation of what’s most likely to happen in most
projects.
The sixth edition of the PMBOK Guide will be referenced throughout this book. Why?
Well, your PMP exam is largely based on the facts, figures, and subtleties of the current
PMBOK Guide. The good news is that unlike the PMBOK Guide—fine book that it is—the
book you have in your hands is written in plain language. This book, unlike the PMBOK
Guide, focuses on how to pass the PMP exam. It will also help you be a better project
manager and explain some mysterious formulas and concepts, but its main goal is to get
you over the hump toward those three glorious letters: PMP.

All About the PMBOK Guide

The PMBOK Guide is, as its abbreviated name suggests, a guide, not the end-all-be-all of
project management. It’s based on what’s generally recognized as good practice on most
projects most of the time. It’s not specific to IT, construction, software development,
manufacturing, or any other discipline, but it is applicable to any industry, any project, and
any project manager.
 The PMBOK Guide, This Book, and the PMP Exam 5

For the most part, if you follow the PMBOK Guide, you’ll increase your odds of project
success. That means you’ll be more likely to complete the project scope, reach the cost
objectives of your project’s budget, and achieve those schedule commitments to which
your project must adhere. But there’s no guarantee.

PMP
Throughout this book, you’ll see little tips like this one. These tips are here to
c oac h cheer you on, get you moving, and remind you that you can do this. Create a
strategy to study this book and the PMBOK Guide, and keep working toward
your goal of earning the PMP.

The PMBOK Guide readily admits that not everything in it should be applied to every
conceivable project. That just wouldn’t make sense. Consider a small project to swap out
all of the workstation lights in an office building versus a project to build a skyscraper.
Guess which one needs more detail and will likely implement more of the practices the
PMBOK Guide defines? The skyscraper project, of course.
In the PMBOK Guide, sixth edition, PMI tells us that the PMBOK Guide is based on
The Standard for Project Management, another PMI publication that walks through the
five process groups of project management (Initiating, Planning, Executing, Monitoring
and Controlling, and Closing). In the PMBOK Guide, sixth edition, you’ll see that The
Standard for Project Management is now included as part of the PMBOK Guide—
something new in this edition of the PMBOK Guide.
So, what’s the difference between the PMBOK Guide and The Standard for Project
Management? There is much overlap between the two publications, but the PMBOK Guide
offers much more detail on project management concepts, trends, tailoring the processes,
and insight to the tools and techniques of project management. The Standard for Project
Management is a foundational publication that describes, not prescribes, the most
common, best practices of project management. This book, and your PMP exam, will
focus on the contents of the PMBOK Guide, not The Standard for Project Management.

All About This Book

Your PMP examination is based largely on the PMBOK Guide. As mentioned, the
PMBOK Guide is not a study guide; this book is. The following explains what this book
will do for you:
■ Cover all of the objectives as set by PMI for the PMP examination
■ Focus only on exam objectives
■ Prep you to pass the PMP exam, not just take it
■ Encapsulate exam essentials for each exam objective
6 Chapter 1 Introducing Project Management

■ Offer 950 PMP total practice questions

■ Serve as a handy project management reference guide
■ Not be boring

Every chapter in this book correlates to a chapter in the PMBOK Guide. If you have a
copy of the PMBOK Guide, blow the dust off it and flip through its 13 chapters. Now flip
through this book, and you’ll see that it covers the same 13 chapters in the same order.
And there’s
a magical Chapter 14. Okay, it’s not magical, but it explains in detail the Code of Ethics
and Professional Conduct, which is a major exam objective. Chapter 14 covers leadership,
motivation, and how to balance stakeholder interests. Chapter 14 also introduces the
concept of project priorities and dealing with cultural issues.
Each chapter is full of exciting, action-packed, and riveting information. Well, that’s
true if you find the PMP exam exciting, action-packed, and riveting. Anyway, each
chapter covers a specific topic relevant to the PMP exam. The first 3 chapters of this
book offer a big-picture view of project management, while the remaining 11 chapters
are most specific to the PMP exam.
In each chapter, you’ll find an “Inside the Exam” sidebar. This is what I consider to be
the most important message from the chapter. At the end of the chapter, you’ll find a
quick summary, key terms, and a two-minute drill that recaps all the major points of the
chapter. Then you’ll be given a 25-question exam that’s specific to that chapter.

The questions in this bookwrong. The questions are part of the learning will give you some idea of what to expectpro
on the actual PMP exam. Though not theon its accompanying CD are tricky, pesky actual exam questions, the questio
why your answer to a question was right or

All About the PMP Exam

Not everyone can take the PMP exam—you have to qualify to take it. And this is good.
The project management community should want the PMP exam to be tough, the
application process to be rigorous, and the audits to be thorough. All of this will help
elevate the status of the PMP and ensure that it doesn’t fall prey to the “paper
certifications” other professions have seen.
There are two paths to earn the PMP: with a degree or without a degree, as shown in
Figure 1-1. With a degree, you’ll need 36 non-overlapping months of project management
 The PMBOK Guide, This Book, and the PMP Exam 7

FIGURE 1-1 PMP Candidate: Choose the appropriate path to your certification:

There are two High school diploma,

Education Bachelor’s degree, or
paths to qualify Requirements Global equivalent
Associate’s degree, or Global equivalent
for the PMP
examination.
Within the last eight years:

36 non-overlapping months of 60 non-overlapping months of

Experience project management experience project management experience
Requirements
4500 hours leading project7500 hours leading project
management tasksmanagement tasks

Exam 35 contact hours of project management education

Requirements 4-hour exam–PMI doesn’t release the passing score

experience and 4500 hours leading project management tasks within the last eight years.
Without a degree, you’ll need 60 non-overlapping months of project management
experience and 7500 hours of project management tasks within the last eight years. Note
that non- overlapping months of project management experience means that if you’re
managing
two projects at the same time for 6 months, that’s just 6 months of project management
experience—not 12 months of experience.
In addition to these requirements, you’ll need 35 contact hours of project management
education. (My company, Instructing.com, is a PMI Registered Education Provider, and
I teach a qualified PMP Exam Prep course online that’s accepted by PMI. Check out the
course at www.instructing.com.) Finally, you’ll have to pass the 4-hour exam and then
maintain your PMP credential with ongoing education.
Here are the major details of the 2018 PMP examination as of this writing. Always
check on PMI’s web site to confirm the exam particulars:
■ PMI doesn’t tell us what the passing score is for the exam—it’s a secret—but
the longstanding traditional score is 61 percent. The exam has 200 multiple-
choice questions, 25 of which don’t actually count toward your passing score.
These
25 questions are scattered throughout your exam and are used to collect statistics
regarding student responses to see if they should be incorporated into future
examinations. So this means you’ll actually have to answer 106 correct questions
out of 175 live questions.
■ Clear and factual evidence of project management experience must be shown in each
process group. On your PMP exam application, you’ll have to provide specifics on
tasks you’ve completed in a process group. (See Table 1-1 for specific examples
from PMI.)
8 Chapter 1 Introducing Project Management

■ Each application is given an extended review period. If your application needs an

audit, you’ll be notified via e-mail. Audits are completely random, and there’s
nothing you can do to avoid an audit. Audits confirm your work experience and
education.
■ Applicants must provide contact information for supervisors on all projects listed on
their PMP exam application. In the past, applicants did not have to provide project
contact information unless their application was audited. Now each applicant must
give project contact information as part of the exam application.
■ Once the application has been approved, candidates have one year to pass the exam.
If you procrastinate in taking the exam by more than a year, you’ll have to start
the process over.
■ PMP candidates are limited to three exam attempts within one year. If they fail each
time during that period, they’ll have to wait one year before resubmitting their
exam application.

TABLE 1-1
The Five Domains of Experience Needed to Pass the PMP Exam (Continued)

Percentage
Exam Domain Domain Tasks of Exam
Initiating the Project 13 percent
Conduct project selection methods
Define the scope
Document project risks, assumptions, and constraints
Identify and perform stakeholder analysis
Develop the project charter
Obtain project charter approval
Planning the Project 24 percent
Define and record requirements, constraints, and assumptions
Create the Work Breakdown Structure (WBS)
Create a budget plan
Develop the project schedule and timeline
Create the human resource management plan
Create the communications plan
Develop the project’s procurement management plan
Establish the project’s quality management plan
 The PMBOK Guide, This Book, and the PMP Exam 9

TABLE 1-1 The Five Domains of Experience Needed to Pass the PMP Exam

Percentage
Exam Domain Domain Tasks of Exam
Define the change management plan
Create the project risk management plan
Present the project management plan to the key stakeholders
Host the project kickoff meeting
Executing the Project 30 percent
Manage project resources for project execution
Enforce the quality management plan
Implement approved changes as directed by the
change management plan
Execute the risk management plan to manage and respond to
risk events
Develop the project team through mentoring, coach, and
motivation
Monitoring and 25 percent
Controlling the
Project Measure project performance
Verify and manage changes to the project
Ensure project deliverables conform to quality standards
Monitor all risks and update the risk register
Review corrective actions and assess issues
Manage project communications to ensure stakeholder
engagement
Closing the Project 8 percent
Obtain final acceptance for the project
Perform operational transfer of the project deliverables
Ensure financial, legal, and administrative project closure
Create and distribute the final project report
Archive and retain project records
Measure customer satisfaction
TOTAL 100 percent
 10 Chapter 1 Introducing Project Management

Always check the exam details on PMI’s web site: www.pmi.org. They can change
PMP
this information whenever they like. You can, and should, download the PMP
Handbook from www.pmi.org to confirm your study efforts.
c oac h
The PMP exam will test you on your experience and knowledge in five different
areas, as Table 1-1 shows. You’ll have to provide specifics on tasks completed in each
knowledge
area of your PMP examination application. The preceding domain specifics and their
related exam percentages are taken directly from PMI’s web site regarding the PMP
examination.
Although this information is correct as of this writing, always hop out to www.pmi.org
and check the site for any updates as you prepare to pass the PMP exam.

Code of Ethics and Professional Conduct

Right at the beginning of the PMBOK Guide we’re introduced to the Code of Ethics and
Professional Conduct. This code is something that you must read and agree to adhere to
when submitting your PMP exam application. The Code of Ethics and Professional
Conduct address the values project managers should possess and address—responsibility,
respect, fairness, and honesty.
The Code of Ethics and Professional Conduct offers aspirational standards and mandatory
standards for all PMI members, volunteers, certificate applicants, and certificate holders, not
just PMPs. As a PMP candidate, the code will affect you in your exam application, in your
career as
a project manager, and in your dealings with vendors, stakeholders, and other project
managers. You will encounter ethical questions on the PMP exam, and you’ll always have
to choose the best answer, even if you don’t like the choices presented. I’ve included an
entire chapter in this book to walk through the particulars of the Code of Ethics and
Professional Conduct.

CERTIFICATION OBJECTIVE 1.02

Defining What a Project Is—and Is Not

Projects are endeavors. Projects are temporary. A project creates something, provides a
service, or brings about a result. I know, I know, it sounds like some marriages.
To define a project, you can simply think of some work that has a deadline associated
with it, that involves resources, that has a budget to satisfy the scope of the project work,
and for which you can state what the end result of the project should be. So, projects are
temporary work assignments with a budget, that require some amount of resources
(people, equipment, tools, and so on), that require some amount of time to complete, and
that create a definite deliverable—a service, result, or product.
Let’s look at project characteristics in more detail.
 Defining What a Project Is—and Is Not 11

Projects Create Unique Products, Services, or Results

This one isn’t tough to figure out. Projects have to create a thing, invent a service, or
change an environment. The deliverable of the project—a successful project, that is—
satisfies the scope that was created way, way back when the project got started. Projects
create the following deliverables:
■ Products Projects can create tangible products such as a skyscrapers or a design
for piece of electronics, which is the end of the project. Or projects can create
components that contribute to other tangible products, such as a project to design
and build a specialized engine for a ship or custom electronics for a prototype
device.
■ Services A project creating a service could establish a new call center, an order
fulfillment process, or a faster way to complete inventory audits.
■ Results Projects can be research driven. Consider a research-and-development
project with a pharmaceutical company to find a cure for the common cold.
■ Combination And, yes, projects can even be a combination of products, services,
and results. There’s no rule that your project can create a product and a service; for
example, you might be leading a project to develop a new drug. Developing the
drug is the tangible product, creating a lab test that you run for a doctor to diagnose
the illness is a service, and the clinical trials to get FDA certification are results.

Projects are unique. This means that every project you ever do is different from all the
other projects you’ve done in the past. Even if it’s the same basic approach to get to the
same end result, there are unique factors within each project, such as the time it takes, the
stakeholders involved, the environment in which the project takes place, and on and on. All
projects are unique, even if your company does the same type of project repeatedly. Lucky
you.

Projects Are Temporary

Regardless of what some projects may seem like, they must be temporary. If the work is
not temporary, it is operations. Like a good story, projects have a beginning, a middle,
and an end. Projects end when the scope of the project has been met—usually. Sometimes
projects end when the project runs out of time or cash or when it becomes clear that the
project won’t be able to complete the project objectives, so it’s scrapped. You might also
experience the end of the project when it becomes clear that the project is no longer
needed, such as when a new technology supersedes the project you’re managing.
The goal of a project will vary based on what the project’s deliverable is, but typically, the
result is to create something that’ll be around longer than the process it took to create it. For
example, if you’re managing a project to build a skyscraper, you expect the skyscraper to be
around much longer than the time it took to build it.
12 Chapter 1 Introducing Project Management

So temporary means that the project is temporary, and the deliverable may or may not
be temporary. You can have a project to host a giant picnic for your entire organization
and its customers. The project’s logistics, invitations, and coordination of chefs may take
months to complete, but the picnic will last only a few hours. However, you could argue
that although the picnic event was temporary, the memories and goodwill your picnic
created could last a lifetime. (That had better be one good picnic!)
Sometimes temporary describes the market window. We’ve all seen fads come and go
over the past years: pet rocks, the dot.com boom, streaking, and more. Projects can often
be created that capitalize on fads, which means projects have to deliver fast before the fad
fades away and the next craze begins. Fads and opportunities are temporary; projects that
feed off these are temporary as well.
When’s the last time you managed a project in which the entire project team stuck with
the project through the entire duration? It probably doesn’t happen often. Project teams are
often more temporary than the project itself, but, typically, project teams last only as long
as the project does. Once the project is complete, the team disbands and the project team
members move on to other projects within the organization.

PMP
Project teams don’t have to be big groups of people to complete a project. In fact,
c oac h the PMBOK Guide advises that projects can be completed by even a single person.

Projects Change Things and Environments

When you think about a project—any project—it’s all about change. Any project you’ve
ever worked on changed something. You added a server to your work environment?
Change.
You created a new product for your customers? Change. You led a project to develop a
new product? Change again. All projects drive change. In the business world, your
projects
move the organization from its current state to a desired future state, and projects
facilitate that change from now to then. As a general rule, projects can be mapped to a
MACD description:
■ Move A project moves something. You centralized all of your company’s
data centers into one location. That’s a move project.
■ Add A project adds something to the current environment. You lead a project to
build a new bridge in your city. That’s adding to the current city’s environment.
■ Change Projects can change the environment. You upgrade your workstations to
the latest and greatest operating systems. That’s a change project.
■ Delete Projects can remove things and services from the current environment.
You lead an effort to demolish derelict or abandoned houses as part of urban
revitalization program. That’s a delete project.
 Defining Project Management 13

Projects Create Business Value

Projects need to provide business value. Business value is the sum of the benefits that an
organization can quantify. Benefits can usually be defined in financial terms, but they may
also be intangible benefits, such as goodwill, brand recognition, benefits to the public,
strategic alignment, and even your organization’s reputation. Time savings, a common
business value, can be quantified. You’re looking for benefits for stakeholders in the form
of monetary assets, equity, utility, fixtures, tools, and market share.
Business value is almost always quantified in financial terms—something that helps set
the objectives of the project. You might be asked to predict the profitability of a project to
justify the organization’s investment in the project. As you know, projects cost money and
time, and you’ll have to justify that investment of resources up front. This is where we’ll
get into project selection, return on investment, and whether your project—or any project
— should move forward or not.

Consider the Project Initiation Context

In alignment with business value is the discussion of project initiation: Why choose a
project at all? For most project managers, this question is out of their scope of
responsibilities, but they may get called upon to contribute to the project selection and
initiation conversation. As a general practice, there are four reasons why projects get
initiated:
■ Satisfy stakeholder requests, needs, and opportunities
■ Meet regulatory requirements, legal requirements, or social requirements
■ Change business and/or technological strategies in the organization
■ Improve upon existing products, processes, or services or add new products,
processes, and services

CERTIFICATION OBJECTIVE 1.03

Defining Project Management

Project management is the supervision and control of the work required to complete the
project vision. The project team carries out the work needed to complete the project, while
the project manager schedules, monitors, and controls the various project tasks. Project
management requires that you apply your knowledge, skills, tools, and techniques, and do
whatever it takes, generally speaking, to achieve the project objectives. Project
management is about getting things done.
14 Chapter 1 Introducing Project Management

Projects, being the temporary and unique things that they are, require the project
manager to be actively involved with the project implementation. Projects are not self-
propelled. Project management is accomplished by using the correct project management
processes at the right time, to the correct depth, and with the correct technique. These
processes, which you’ll learn throughout this book, are logically organized in five process
groups:
■ Initiating
■ Planning
■ Executing
■ Monitoring and controlling
■ Closing

Although the information covered in this chapter is important, it is more of an

umbrella of the ten knowledge areas that you’ll want to focus on for your PMP exam.
You’ll see all of the 49 project management processes in detail in the upcoming chapters.
At the beginning of each chapter, we’ll highlight the processes that the knowledge area
deals with. Here’s a breakdown of the 49 processes that you’ll learn about throughout
this book.

Initiating the Project

There are just two processes to know for project initiation:
■ Develop the project charter.
■ Identify project stakeholders.

Planning the Project

There are 24 processes to know for project planning:
■ Develop the project management plan.
■ Plan scope management.
■ Collect project requirements.
■ Define the project scope.
■ Create the work breakdown structure.
■ Plan schedule management.
■ Define the project activities.
■ Sequence the project activities.
■ Estimate the activity duration.
■ Develop the project schedule.
■ Plan cost management.
 Defining Project Management 15

■ Estimate the project costs.

■ Establish the project budget.
■ Plan quality management.
■ Plan resource management.
■ Estimate activity resources
■ Plan communications management.
■ Plan risk management.
■ Identify the project risks.
■ Perform qualitative risk analysis.
■ Perform quantitative risk analysis.
■ Plan risk responses.
■ Plan procurement management.
■ Plan stakeholder engagement.

Executing the Project

There are ten executing processes:
■ Direct and manage project work.
■ Manage project knowledge.
■ Manage quality.
■ Acquire resources.
■ Perform team development.
■ Manage the team.
■ Manage communications.
■ Implement risk responses.
■ Conduct procurements.
■ Manage stakeholder engagement.

Monitoring and Controlling the Project

There are 12 monitoring and controlling processes:
■ Monitor and control the project work.
■ Perform integrated change control.
■ Complete scope validation.
■ Control the scope.
16 Chapter 1 Introducing Project Management

■ Perform schedule control.

■ Perform cost control.
■ Administer quality control.
■ Control resources.
■ Monitor communications.
■ Monitor risks.
■ Control procurements.
■ Monitor stakeholder engagements.

Closing the Project

There is only one closing process:
■ Close out the project or the project phase.

Process Group Interactions

As a project manager you’ll move between these five processes groups as appropriate in
the project. Most projects begin with an identification of a business or societal need.
Business needs generally focus on improving or maintaining profits, and societal needs
include improving living conditions with new roads or cleaner water. This process may
include some high-level requirements, costs, value statements, and timelines—what it’ll
take for the project to be complete and to be considered successful. Your ongoing concern
is to keep the stakeholders satisfied on the project’s progress by communicating the status
of the project, showing evidence of progression toward project completion, and keeping
the project constraints in balance. A constraint is any factor that limits the parameters of
the project.
The most common constraints in any project are time, cost, and scope, but you should also
consider quality, resources (people, equipment, tools, and the like), and risks. Projects that
are poorly managed are plagued by missed deadlines, blown budgets, quality issues,
rework, scope expansion, stakeholder turmoil, and overall failure in achieving the project
goals.
Keep the following in mind:
■ Process groups are collections of project processes to bring about a specific result.
■ Process groups are not project phases. The project may follow a workflow through the
process groups, but the phases of the project are specific to the actual project work.

Process groups are iterative. You can use the sequence of processes throughout the
entire project, in each phase of the project, or both. I’ll discuss these points throughout the
book, but for now this is a good foundation to understand why we all need effective,
controlled
 Defining Project Management 17

project management. We achieve that goal through the five process groups and the project
management processes. A project will also typically use ten project management
knowledge areas. What you do in one knowledge area has a direct effect on the other
knowledge areas. Chapters 4 through 13 will explore the following knowledge areas in
detail:
■ Project integration management This knowledge area focuses on creating the
project charter, the project scope statement, and a viable project plan. Once the
project is in motion, project integration management is all about monitoring and
controlling the work. If changes happen—and they will—you have to determine
how that change may affect all of the other knowledge areas.
■ Project scope management This knowledge area deals with the planning, creation,
protection, and fulfillment of the project scope. One of the most important activities
in all of project management happens in this knowledge area: creation of the work
breakdown structure. Oh, joy!
■ Project schedule management Schedule management is crucial to project success.
This knowledge area covers activities, their characteristics, and how they fit into the
project schedule. This is where you and the project team will define the activities,
plot out their sequence, and calculate how long the project will actually take.
■ Project cost management Cost is always a constraint in project management. This
knowledge area is concerned with planning, estimating, budgeting, and controlling
costs. Cost management is tied to time and quality management—screw up either of
these and the project costs will increase.
■ Project quality management What good is a project that’s done on time if the
scope isn’t complete, the work is faulty, or the deliverable is horrible? Well, it’s no
good. This knowledge area centers on quality planning, assurance, and control.
■ Project resource management This knowledge area focuses on organizational
planning, staff acquisition, and team development. You have to acquire your project
team, develop this team, and then lead the team to the project results.
■ Project communications management The majority of a project manager’s time
is spent communicating. This knowledge area details how communication happens,
outlines stakeholder management, and shows how to plan for communications
within any project.
■ Project risk management Every project has risks. This knowledge area focuses on
risk planning, analysis, monitoring, and control. You’ll have to complete qualitative
analysis and then quantitative analysis to prepare adequately for project risks. Once
the project moves forward, you’ll need to monitor and react to identified risks as
planned.
18 Chapter 1 Introducing Project Management

■ Project stakeholder management Stakeholders are the all people who are
affected positively or negatively, or perceived to be, by your project. They can
influence your project’s success, because a subset of them defines the projects
goals. This knowledge area requires that you and the project team
■ identify stakeholders,
■ plan how you’ll manage their concerns and requirements in the project,
■ plan how you’ll manage and control their engagement in the project, and
■ balance the needs, wants, threats, and concerns that stakeholders introduce to
the project with the identified project requirements.
■ Project procurement management Projects often need to procure products,
services, and results purchased from outside vendors in order to reach closing. This
knowledge area covers the business of project procurement, the processes to
acquire and select vendors, and contract negotiation. The contract between the
vendor and the project manager’s organization will guide all interaction between
the project manager and the vendor.

You will learn about each ofarea affects what happens in other knowledge these knowledge areas in detail throughou

Tailoring the Project Process

Chances are that you follow a prescribed methodology to manage projects where you
work. Your work environment uses names for some of these processes that differ slightly
from those presented here and in the PMBOK Guide, and that’s perfectly fine. The
methodology that your organization uses to manage projects is just that—a method. The
PMBOK Guide is not a methodology, but a guide to the best practices of project
management.
The flexibility of the PMBOK Guide and project management is beautiful, when you
think about it. Okay, maybe “beautiful” isn’t the best word, but the flexibility is important.
The processes and approaches that you utilize in your project management approach
involves tailoring of
the processes, and that’s what’s needed in every project. Tailoring enables you to choose
what processes should be used on a project and to what depth the processes should be
used.
You do not use every process on every project. The larger the project, the more
processes you will likely use. Consider a low-level project to swap out keyboards in an
organization.
Contrast that to a high-level project to construct a new headquarters for your company.
The construction project has more uncertainties and will require more project management
processes—and more tailoring of the processes to fit the uniqueness of the project.
 Examining Related Areas of Project Management 19

CERTIFICATION OBJECTIVE 1.04

Examining Related Areas of Project Management

Project management is the administration of activities to change the current state of
an organization into a desired future state. It manages a complex relationship
between
decision-making, planning, implementation, control, and documentation of the experience
from start to finish. In addition to traditional project management, you may encounter,
have encountered, or are actively participating in related areas. These related aspects often
are superior to individual project management, are part of project management, or equate
to less than the management of any given project.
Organizational project management (OPM) is an organizational approach to coordinate,
manage, and control projects, programs, and portfolio management in a uniform, consistent
effort. The philosophy of OPM is that by doing all work within projects, programs, and
portfolio management with the same type of processes, actions, and techniques, the
organization will consistently deliver better results than it would if the processes and
approach were independent of one another. While project, program, and portfolio each have
different skill sets, there is overlap in their approach, and these endeavors may utilize the
same resources—including you, the project manager—to accomplish their objectives.
This section dissects the related areas of project management to see how they tie
together to change a current state to a desired future state.

Exploring Program Management

Program management is the management of multiple projects all working in unison
toward a common goal. Programs achieve benefits by managing projects collectively,
rather than independently. Projects within a program can better share resources, improve
communications, manage interdependencies, resolve issues quickly, leverage resources,
and provide more benefits for the organization than they would if each project were
not managed collectively under a program. Projects within a program still have project
managers, but the project managers work with, and often report to, the program manager.
Consider all of the work that goes into building a skyscraper, for example. Within the
overall work, several projects may lead to the result. You could have a project for the
planning and design of the building. Another project could manage the legal, regulatory,
and project inspections that would be required for the work to continue. Another project
could be the physical construction of the building, and other projects might entail electrical
wiring, elevators, plumbing, interior design, and more. Could one project manager
effectively manage all of these areas of expertise? Possibly, but probably not.
20 Chapter 1 Introducing Project Management

A better solution could be to create a program that comprises multiple projects.

Project managers would manage each of the projects within the program and report to the
program manager. The program manager would ensure that all of the integrated projects
work together on schedule, on budget, and ultimately toward the completion of the
program.
Another example is a program within NASA. NASA could create a program within
the organization to explore space, and it comprises individual projects within that
program. Each project included in the program has its own goals, initiatives, and
objectives that are in alignment with the overall mission of the space program. Programs
are a collection of individual projects working in alignment toward a common end.
Basically, programs have much larger scopes than projects do. Project plans and
program plans differ in that project plans are often detail-oriented, while program plans
are often at a higher level, with the details left to the project teams within the program.
Although project managers are usually resistant to change, program managers expect
change to happen within the program. Because programs are made up of projects, project
managers can expect the program manager to interact regularly with their projects to
monitor and control the success of each project. Programs are deemed successful, just like
projects, based on their abilities to meet requirements, meet performance objectives, and
benefit delivery.

Consider Project Portfolio Management

Portfolios include projects, programs, and even operations that are managed and
coordinated and should link to the strategic objectives for the organization, as
demonstrated in Figure 1-2. Portfolios are created and controlled by upper-level
management and executives and include financial considerations of the investment, return
on investment, and distribution of risks
for the programs, projects, and operations included in the portfolio. A portfolio describes
the collection of investments in the form of projects and programs in which the
organization invests capital. Project managers and, if applicable, program managers report
to a portfolio review board on the performance of the projects and programs. The portfolio
review board may also direct the selection of projects and programs.

Information Technology Department Portfolio

FIGURE
1-2
Portfolios
can contain App Dev Project
Operations
operations,
Help Desk Project
programs, and Data Center
projects. Operations Program
Laptop Project

Server Farm Project

Operations Network Upgrade
Program
 Examining Related Areas of Project Management 21

The portfolio review board—or even the direct management of the organization—also
has a scope of projects and programs they’d like to invest in. This scope, however,
is at a higher level than the scope of projects and programs, because the endeavors
selected by the portfolio review board must fall within the strategic objectives of the
company. Investments are made in projects and programs when there is a viable, strategic
opportunity. Portfolio managers oversee the portfolio and monitor the organizational and
marketplace environments to ensure that the components of the portfolio make sense to
continue and to support the organizational objectives.
Consider these elements that may cause an organization to invest in a project or program
as part of its portfolio:
■ Legal requirement
■ Compliance needs
■ Advancement in technology
■ Change in the market demand
■ Efficiency improvements, business need, or productivity analysis
■ Changes in operational capability
■ Environmental opportunity
■ Social need

The investments the company makes in projects and programs should have, of
course, a positive return. These investments are monitored by the portfolio review
board and portfolio manager through communications with the program managers and
the project managers. The organization wants to see a return on investment through
profits, social or performance improvements, reduction in waste, or other key
performance indicators established at the selection of the projects and program
investment.
While the focus of this book, the PMBOK Guide, and your PMP exam is on project
management, it’s nearly impossible to avoid having a discussion on operations.
Operations are the day-to-day activities that move a business forward. Projects are unique
and temporary, while operations are not. Operations, programs, and projects overlap and
work with
one another, not opposed to one another. For your exam, you won’t need to know much
about operations, other than that operations are ongoing. Portfolios can include, to be
clear, operational activities, but our focus will be on the projects and programs within
the portfolios.
Portfolio projects could be interdependent, but they don’t have to be. A portfolio is not
the same as a program; it is a collection of projects, programs, and operations. The
projects in a portfolio could be within one line of business, could be based on the
strategies within an organization, or could follow the guidance of one director within an
organization. There is a balance of risk in the selection of projects and programs. It’s not
unusual to have some low-risk, high-risk, and moderate-risk selections to distribute the
risk exposure across the components.
22 Chapter 1 Introducing Project Management

Project selections may pass through a project selection committee or a project

steering committee, where executives will look at the return on investment,
the value of the project, risks associated with taking on the project, and other
attributes of the project. This is all part of project portfolio management.

Portfolios, programs, and projects obviously interact, but they each have a different
purpose. A term you might occasionally see is organizational project management (OPM).
OPM is the ideal model an organization uses when coordinating the efforts, goals,
strategies, and investments of time and resources into portfolios, programs, and projects. An
organizational strategic plan defines what investments should be made where, the expected
return on investment, the risk distribution of each investment, and how each investment
(the portfolio, program, or project) will contribute to the project’s achievement of benefits.

Implementing Subprojects
Subprojects are an alternative to programs. Some projects may not be wieldy enough to
require the creation of a full-blown program, yet they may be large enough that some of
the work can be delegated to a subproject. A subproject exists under the parent project, but
it follows its own schedule for completing one or more deliverables. Subprojects may be
outsourced, assigned to other project managers, or managed by the parent project manager
but with a different project team. The following illustration shows a project containing
multiple subprojects.

Parent Project Project Manager 1

Subproject A Subproject C
Outsourced to Vendor A Managed by Project Manager 3

Subproject B
Managed by Project Manager 2

Subprojects are often areas of a project that are outsourced to vendors. For example, if
you were managing a project to create a new sound system for home theaters, a
subproject
could be the development of the user manual included with the sound system. You would
thus hire writers and graphic designers to work with your project team. The writers and
designers would learn all about the sound system and then retreat to their own spaces to
create the user manual according to their project methodology. The deliverable of their
subproject would be included in your overall project plan, but the actual work done to
complete the manual would
 Examining Related Areas of Project Management 23

not be in your plan. You’d simply allot the funds and time required by the writers and
graphic designers to create the manual.
Subprojects do, however, follow the same quality guidelines and expectations of the
overall project. The project manager has to work with the subproject team regarding
supplying any needed materials, scheduling, value, and cost to ensure the deliverables and
activities of the subproject integrate smoothly with the “master” project.

Projects vs. Operations

Meet Jane. Jane is a project manager for her organization. Vice presidents, directors, and
managers with requests to investigate or to launch potential projects approach her daily—
or so it seems to Jane. Just this morning, the sales manager met with Jane because he
wants to implement a new direct-mail campaign to all of the customers in the sales
database. He wants this direct-mail campaign to invite customers to visit the company
web site to see the new line of products. Part of the project also requires that the company
web site be updated so that it’s in sync with the mailing. Sounds like a project, but is it
really? Could this actually be just a facet of an ongoing operation?
In some organizations, everything is a project. In other organizations, projects are rare
exercises in change. There’s a fine line between projects and operations, and often these
separate entities overlap in function. Consider the following points shared by projects and
operations:
■ Both involve employees.
■ Both typically have limited resources: people, money, or both.
■ Both are hopefully designed, executed, and managed by someone in charge.

Jane has been asked to manage a direct-mail campaign to all of the customers in the
sales database. Could this be a project? Sure—if this company has never completed a
similar task and there are no internal departments that do this type of work as part of their
regular activities. Often, projects are confused with general business duties: marketing,
sales, manufacturing, and so on. The tell-tale sign of a project is that it has an end date
and that it’s unique from other activities within the organization. Here are some
examples of projects:
■ Designing a new product or service
■ Converting from one computer application to another
■ Building a new warehouse
■ Moving from one building to another
■ Organizing a political campaign
■ Designing and certifying a new airplane
24 Chapter 1 Introducing Project Management

The end results of projects can result in operations. For example, imagine a company
creating a new airplane. This new airplane will be a small personal plane that would
enable people to fly to different destinations with the same freedom they use in driving
their cars. The project team will have to design an airplane from scratch that would be
similar to a car, so that consumers could easily adapt and fly to Sheboygan at a moment’s
notice. The project to create a personal plane is temporary, but not necessarily short-term.
It may take years
to go from concept to completion—but the project does have an end date. A project of this
magnitude may require hundreds of prototypes and years of certification before a working
model is ready for the marketplace. In addition, there are countless regulations, safety
issues, and quality control concerns that must be pacified before completion.
Once the initial plane is designed, built, and approved, the end result of the project is
business operations. As the company creates a new vehicle, they would follow through
with the design by manufacturing, marketing, selling, supporting, and improving the
product. The initial design of the airplane is the project—the business of manufacturing it,
supporting sold units, and marketing the product constitutes the ongoing operations part of
business.
In the creation of the plane, before the manufacturing of the actual plane begins, the
project manager would have to involve the operational stakeholders in the project. The
project manager needs the expertise of the people who’ll be doing the day-to-day
operations of the plane manufacturing. Although operations and projects are different,
they are also reliant on one another in most projects. The project deliverables often have a
direct impact on the day-to-day operations of the organization. Communication and
coordinated planning is needed between the project manager and the operational
stakeholders.
Operations are the day-to-day work that goes on in the organization. A manufacturer
manufactures things, scientists complete research and development, and businesses provide
goods and services. Operations are the heart of organizations. Projects, on the other hand, are
short-term endeavors that fall outside of the normal day-to-day operations an organization
offers.

Let’s be realistic. In some companies, nearly everything’s a project. This is

probably true if you work in an organization that completes projects for
other companies. That’s fine and acceptable, however, since you’re
participating in management by projects. There are still many operational
activities that exist in these companies, such as accounting, payroll and HR,
sales, marketing,
and the like.

Once the project is complete, the project team

moves along to other projects and activities. The
people who are actually building the airplanes
on the assembly line, however, have no end date
The customer is the most important person in any project. The project is created for and to suit the customer.
in sight and will continue to create airplanes as
long as there’s a demand for the product.
 Revving Through the Project Life Cycle 25

Projects and Business Value

Projects must support the corporate vision, mission, and objectives or they don’t bring
value to the organization. Business value is simply what the organization is worth; it is
the sum of the tangible and intangible components of an organization. Tangible elements
are easy to identify: cash, assets, equipment, real estate, and so on. Intangible elements
are things like reputation, the company brand, and trademarks. Projects must contribute to
the business value or they likely don’t fit within the strategic goals of the company.

CERTIFICATION OBJECTIVE 1.05

Revving Through the Project Life Cycle

Consider any project, and you’ll also have to consider any phases within the project.
Construction projects have definite phases. IT projects have definite phases. Marketing,
sales, and internal projects all have definite phases. Projects—all projects—comprise
phases. Phases make up the project life cycle, and they are unique to each project.
Furthermore, organizations, project managers, and even project frameworks such as Agile
or Scrum can define phases within a project life cycle. Just know this: The sum of a
project’s phases equates to the project’s life cycle.
In regard to the PMP exam, it’s rather
tough for the PMI to ask questions about
specific project life cycles. Why? Because every
organization may identify different phases
Phases are unique to each project. Phases are not the samewithinasall the different projects that exist. Bob
initiating, planning, executing, monitoring and controlling,
may and
comeclosing.
from These are
a construction background and
the process groups and are universal to all projects. Susan from IT, each one being familiar with
totally different disciplines and totally different
life cycles within their projects. However, all
PMP candidates should recognize that every
project has a life cycle—and all life cycles
comprise phases.
Because every project life cycle is made up of phases, it’s safe to assume that each
phase has a specific type of work that enables the project to move toward to the next
phase in the project. When we talk in high-level terms about a project, we might say
that a project is launched, planned, executed, and finally closed, but it’s the type of
work, the activities the project team is completing, that more clearly define the project
phases. In a simple construction example, this is easy to see:
■ Phase 1: Planning and prebuild
■ Phase 2: Permits and filings
26 Chapter 1 Introducing Project Management

■ Phase 3: Prep and excavation

■ Phase 4: Basement and foundation
■ Phase 5: Framing
■ Phase 6: Interior
■ Phase 7: Exterior

Typically, one phase is completed before the next phase begins; this relationship
between phases is called a sequential relationship. The phases follow a sequence to reach
project completion—one phase after another. Sometimes project managers allow phases
to overlap because of time constraints, cost savings, and smarter work. When time’s an
issue and a project manager allows one phase to begin before the last phase is completed,
it’s called an overlapping, or parallel, relationship because the phases overlap. You might
also know this approach as fast tracking. Fast tracking, as handy as it is, increases the risk
within a project.
A project is an uncertain business—the larger the project, the more uncertainty. It’s for
this reason, among others, that projects are broken down into smaller, more manageable
phases. A project phase allows a project manager to see the project as a whole and yet still
focus on completing the project one phase at a time. You can also think of the financial
distribution and the effort required in the form of a project life cycle. Generally, labor and
expenses are lowest at the start of the project, because you’re planning and preparing for
the work. You’ll spend the bulk of the project’s budget on labor, materials, and resources
during project execution, and then costs will taper off as your project eases into its
closing.

Working with a Project Life Cycle

Projects are like snowflakes: No two are alike. Sure, sure, some may be similar, but when
you get down to it, each project has its own unique attributes, activities, and requirements
from stakeholders. One attribute that typically varies from project to project is the project
life
cycle. As the name implies, the project life cycle
determines not only the start of the project, but
also when the project should be completed. All
that stuff packed in between starting and
The PMP exam will test your knowledge on the outcome of project
ending? Thosephases rather
are the thanphases
different the idealistic
of the outputs of a proje
project.
In other words, the launch, a series of phases,
and project completion make up the project
life cycle. Each project will have similar
project management activities, but the
characteristics of the project life cycle will
vary from project to project.
 Revving Through the Project Life Cycle 27

Completing a Project Feasibility Study

The project’s feasibility is part of the initiating process. Once the need has been identified,
a feasibility study is introduced into the plan to determine if the need can realistically be
met.

Project feasibility studies can be a separate project.

So how does a project get to be a project? In some organizations, it’s pure luck. In
most organizations, however, projects may begin with a feasibility study. Feasibility
studies can be, and often are, part of the initiation process of a project. In some
instances, however, a feasibility study may be treated as a stand-alone project.
Let’s assume that the feasibility of Project ABC is part of the project initiation phase.
The outcome of the feasibility study may tell management several things:
■ Whether the concept should be mapped into a project
■ If the project’s concept will deliver the anticipated value
■ The expected cost and time needed to complete the concept
■ The benefits and costs to implement the project concept
■ A report on the needs of the organization and how the project concept can satisfy
these needs

PMP
There is a difference between a feasibility study and a business case. A feasibility
c oac h study examines the potential project to see if it’s feasible to do the project work.
A business case examines the financial aspect of the project to see if the project’s
product, service, or result can be profitable, what the profit margin may be, what
the financial risk exposure may be, and what the true costs of the project may
be. Some projects can generate profit directly. A construction company running
a project to build a new strip mall will hopefully net a profit when the project is
done. The investment firm, say, who hired the contractor to build the strip mall as
part of a larger development project will not see a profit until leasing operations
start generating income.

Examining the Project Life Cycle

By now, you’re more than familiar with the concept of a project life cycle. You also know
that each project is different and that some attributes are common across all project life
cycles. For example, the concept of breaking the project apart into manageable phases to
move toward completion is typical across most projects.
As we’ve discussed, at the completion of a project phase, an inspection or audit is
usually completed. This inspection confirms that the project is in alignment with the
requirements and expectations of the customer. If the results of the audit or inspection are
not in alignment, rework can happen, new expectations may be formulated, or the project
may be killed.
28 Chapter 1 Introducing Project Management

Exploring Different Project Life Cycles

As more and more projects are technology-centric, it makes perfect sense for the PMBOK
Guide to acknowledge the life cycles that exist within technology projects. Even if you
don’t work in a technology project, it behooves you to understand the terminology
associated with these different life cycles for the PMP examination. You should know
about five technology-based life cycles:
■ Predictive life cycles
■ Iterative life cycles
■ Incremental life cycles
■ Adaptive life cycles
■ Hybrid life cycles

Predictive Life Cycles The predictive approach requires the project scope, the project
time, and project costs to be defined early in the project timeline. Predictive life cycles
have predefined phases, in which each phase completes a specific type of work and
usually over- laps other phases in the project. You might also see predictive life cycles
described as plan- driven or waterfall methodologies, because the project phases
“cascade” into the subsequent phases and the Gantt chart looks like a waterfall.

Iterative Life Cycles This approach requires that the project scope be defined at a high
level at the beginning of the project, but the costs and schedules are developed through
iterations of planning as the project deliverable is more fully understood. The project
moves through iterations of planning and definition based on discoveries during the
project execution. The project team focuses on iterations of deliverables that can be
released while continuing to develop and create the final project deliverable.

Incremental Life Cycles Incremental life cycles create the final product deliverable
through a series of increment. Each increment of the project will add more and more
functionality. Like the iterative life cycle, increments are a predetermined set amount of
time, such as two or four weeks, for example. Before each increment, the team and a
specific stakeholder determine what can be created within each increment, and then the
increments begins and the team tackles the defined objectives. The project is done when
the final increment creates a deliverable with sufficient capability as determined by the
stakeholders.

Adaptive Life Cycles Adaptive life cycles are either agile, iterative, or incremental.
Adaptive life cycles follow a defined methodology such as Scrum or eXtreme
Programming (XP). Change is highly probable, and the project team will be working
closely with the project stakeholders. You might also know this approach as agile or
change-driven, because
 Revving Through the Project Life Cycle 29

the team must be able to move or change quickly and the project scope and requirements
are likely to change throughout the project. This approach also includes iterations of
project work, but the iterations are fast sessions of planning and execution that usually
last about two weeks. At the start of each phase, or iteration, of project work, the project
manager, project team, and stakeholders will determine what requirements will be worked
on next, based on the set of project requirements and what has been completed in the
project.

Hybrid Life Cycles The hybrid life cycle is a combination of predictive and adaptive
life cycles. Parts of the project can follow the predictive life cycle, such as project
requirements and the budget, yet still utilize the flexibility and iterations that the
adaptive life cycle offers. Hybrid life cycles can be, well, a bit messy, because there may
be debates over what’s
established and what’s being flexible. The project team and the project manager need a
clear understanding of the “must haves” in the project and what components provide
flexibility.

See the video “Project Life Cycle.”

Working Through a Project Life Cycle

Most projects phases move the project along. They allow a project manager to answer
the following questions about the project:
■ What work will be completed in each phase of the project?
■ What resources, people, equipment, and facilities will be needed within each phase?
■ What are the expected deliverables of each phase?
■ What is the expected cost to complete a project phase?
■ Which phases pose the highest amount of risk?
■ What must be true in order for the phase to be considered complete?

Armed with the appropriate information for each project phase, the project manager
can plan for cost, schedules, resource availability, risk management, and other project
management activities to ensure that the project progresses successfully.
Although projects differ, other traits are common from project to project. Here are a
few examples:
■ Phases are generally sequential, as the completion of one phase enables the
next phase to begin.
■ Cost and resource requirements are lower at the beginning of a project but grow as
the project progresses. In a project, the bulk of the budget and the most resources
are used during the executing process. Once the project moves into the final
closing process, costs and resource requirements taper off dramatically.
30 Chapter 1 Introducing Project Management

■ Projects fail at the beginning, not at the end. In other words, the odds of completing
are low at launch and high near completion. This means that decisions made at
the beginning of a project live with the project throughout its life cycle, and a poor
decision in the early phases can cause failure in the later phases.
■ The further the project is from completing, the higher the risk and uncertainty. Risk
and uncertainty decrease as the project moves closer to fulfilling the project scope.
■ Changes are easier and more likely at the early phases of the project life cycle than
near completion. Stakeholders can have a greater influence on the outcome of the
project deliverables in the early phases, but in the final phases of the project life
cycle, their influence on change diminishes. Thankfully, changes at the beginning
of the project generally cost less and have lower risk than changes at the end of a
project.

Risk and Cost

Very high
Potential Project

High

Moderate

Low

Project Life Cycle Duration

Your projects probably already follow a phasing structure that’s unique to the
development, construction, or industry that you’re involved in. Typical phases of a project
can include the following:
■ Concept
■ Feasibility study creation
■ Requirements gathering
■ Solution development
■ Design and prototype creation
■ Build or execution
■ Testing
 Revving Through the Project Life Cycle 31

■ Operational transfer or transition

■ Commissioning
■ Reviewing
■ Lessons learned documentation

Project Life Cycle vs. Product Life Cycle

There is some distinction between the project life cycle and the product life cycle.
We’ve covered the project life cycle, the accumulation of phases from start to
completion within a project, but what is a product life cycle?
In a project delivering products, a product life cycle is the parent of projects. Consider a
company that wants to sell a new type of lemon soft drink. One of the projects the
company may undertake to sell its new lemon soft drink is to create television commercials
showing how tasty the beverage is. The creation of the television commercial may be
considered one project in support of the product creation.
Many other projects may fall under the creation of the lemon soft drink: research,
creation and testing, packaging, and more. Each project, however, needs to support the
ultimate product: the tasty lemon soft drink. The product life cycle, though, also includes
the ongoing operations of manufacturing, marketing, selling, distributing, and potentially
end-of-life decommissioning of the product. Decommissioning of the product may
involve a series of projects, but the other items are not projects—they are operations.
Thus, the product life cycle oversees the smaller projects within the process and
operations.
As a general rule, the product life cycle is the cradle-to-grave ongoing work of the
product. Projects affecting the product are just blips on the radar screen of the whole
product life cycle. Consider all of the projects that may happen to a home. The home is the
product, while all the projects are things that make the product better or that sustain the
existing product.

The Project Life Cycle in Action

Suppose you’re the project manager for HollyWorks Productions. Your company would
like to create a new video camera that allows consumers to make video productions that
can be transferred to different media types, such as VHS, DVD, and PCs. The video
camera must be small, light, and affordable. This project life cycle has several phases
from concept to completion (see Figure 1-3). Remember that the project life cycle is
unique to each project, so don’t assume the phases within this sample will automatically
map to any project you may be undertaking.

1. Proof-of-concept In this phase, you’ll work with business analysts, electrical

engineers, customers, and manufacturing experts to confirm that such a camera is
feasible to make. You’ll examine the projected costs and resources required to
make the camera. If things go well, management may even front you some cash to
build a prototype.
32 Chapter 1 Introducing Project Management

Operational transfer
FIGURE 1-3

The project life

cycle for Project Project HollyWorks
HollyWorks

Proof-of concept
Feasibility study

First build Manufactured prototype

Prototype

Camera one
Final build

Adjustments and
enhancements

2. First build Management loves the positive information you’ve discovered in

the proof-of-concept phase—they’ve set a budget for your project to continue
into development. Now you’ll lead your project team through the process of
designing and building a video camera according to the specifications from the
stakeholders and management. Once the camera is built, your team will test,
document, and adjust your camera for usability and feature-support.
3. Prototype manufacturing Things are going remarkably well with your video
camera project. The project stakeholders loved the first build and have made some
refinements to the design. Your project team builds a working model, thereby
moving into prototyping the video camera’s manufacture and testing its cost-
effectiveness and ease of mass production. The vision of the project is becoming a
reality.
4. Final build The prototype of the camera went fairly well. The project team
has documented flaws, and adjustments are being made. The project team is
also working with the manufacturer to complete the requirements for materials
and packaging. The project is nearing completion.
5. Operational transfer The project is complete. Your team has successfully
designed, built, and moved into production a wonderful, affordable video
camera.
Each phase of the project allowed the camera to move toward completion. As
the project came closer and closer to moving into operations, risk and project
fluctuation waned.
 Revving Through the Project Life Cycle 33

Project Phase Deliverables

Every phase has deliverables. It’s one of the main points to having phases. For example, your
manager gives you an unwieldy project that will require four years to complete and has a
hefty budget of $16 million. Do you think management is going to say, “Have fun—see you
in four years”?
Oh, if only they would, right?
Of course, in most organizations, that’s not going to happen. Management wants to see
proof of progress, evidence of work completed, and good news about how well the project is
moving. Phases are an ideal method of keeping management informed of the project
progression.
The following illustration depicts a project moving from conception to completion. At the
end of each phase, there is some deliverable that the project manager can show to
management and customers.
Project Life Cycle

Deliverables
Phase 1

Deliverables
Phase 2

Deliverables
Phase 3

Deliverables
Phase 4

Project Advancement
Once a phase concludes, how does the project manager know it’s safe to continue? Based
on the size and type of the project, some form of scope verification must take place.
Management and customers will want to see if the deliverable you have completed to date
is in alignment with what they expected.
Project governance defines the rules for a project, and it’s up to the project manager to
enforce the project governance to ensure the project’s ability to reach its objectives. The
project management plan defines the project governance and how the project manager, the
project team, and the organization will all follow the rules and policies within the project.
Project governance can be seen as a constraint, but it really defines the project’s
boundaries and expectations.
Let’s go back to that juicy project with the $16 million budget. We know management
is not going to set us loose for four years. They’ll want a schedule of when we’ll be
spending their money and what they’ll be getting in return. And when will this fun
happen? At the
34 Chapter 1 Introducing Project Management

end of a project phase. The project manager will be accountable for several things at the
end of a project phase:
■ The performance of the project to date
■ The performance of the project team to date
■ Proof of deliverables in the project phase
■ Verification of deliverables in alignment with the project scope

The verification of the performance and the project deliverables are key to
management determining whether the project (cross your fingers) should continue or not.
Imagine that your project with a $16 million budget has produced a lousy deliverable
that is outside of the project scope, and you’ve blown a few hundred thousand more than
you said it would take to get to this point in the project. Hmmm…. Do you think the
project will continue? An analysis by management will determine whether the project
should be killed or allowed to go on. The idea of killing a project at phases is why phase
completion is also called a kill
point. (Uh, kill point for the project, not the project manager—hopefully.) Who’s to blame
or why the project should be killed can be debated on a scenario-by-scenario basis.

Monies already spent on continue. Instead, the cost of the work to

a project are called sunk costs and should not be taken
complete
into consideration
is one of the elements
when determining
that shouldwhether
be taken
a project
into cons
sh

Usually, one phase completes before the next phase begins—it’s a sequential
relationship between phases. Each phase of a project relies on the phase before it.
However, if you’ve ever driven past a large construction project, you may have seen
something different at work. For example, we lived in Indianapolis during the
construction of the new stadium for the Indianapolis Colts. During construction, we
could see the foundation for one side of the stadium well underway and loads of
construction happening. On the other side of the stadium, it was muddy and construction
was just barely starting on the foundation.
The construction company chose to allow phases of the construction to overlap as it
worked. Rather than completing all of the foundation for this giant stadium first, the next
phase of the project was started as soon as possible—even if not all of the first phase was
completed. Smart, huh? This approach to scheduling is called an overlapping relationship,
and you might also know it as fast tracking. Fast tracking allows phases to overlap in order to
 Revving Through the Project Life Cycle 35

compress the schedule and finish the job faster. Fast tracking does, however, add some risk
to the project, as errors that go undetected in the prior phases could affect the current
phase of the project work.
Finally, project managers can use an iterative relationship to manage project phases.
Iterative relationships are great for projects such as research and software development.
The idea is that the next phase of the project is not completely planned until the current
phase of the project is underway. The direction of the project can change based on the
current work in the project, the market conditions, or the discovery of more information.

Stage Gates
Project phase completions are also known as stage gates. Stage gates are used often
in manufacturing and product development; they enable a project to continue after a
performance and deliverable review against a set of predefined metrics. If the
deliverables of the phase, or stage, meet the predefined metrics, the project is allowed to
continue.
Should the deliverables not meet the metrics, the project may not be allowed to pass
through the gate to move forward. In this unfortunate case, the project may be terminated
or sent through revisions to meet the predetermined metrics. The following illustration
shows the advancement of the project through phases.
Project Life Cycle

Phase 1 Stage gate

Phase 2 Stage gate

Phase 3 Stage gate

Phase 4

Accepted deliverables

As a project manager, you should identify the requirements and all of the
stakeholders as close to the project launch as possible. With the expectations and
requirements, the project manager can know what the exit criteria for a phase
may be and can plan accordingly. There are few things more frustrating than
getting to the end of a project phase only to learn the exit criteria you had in
mind is different from what the customer is expecting.
36 Chapter 1 Introducing Project Management

The completion of a phase may also be known as a phase exit. A phase exit requires
that the project deliverables meet some predetermined exit criteria. Exit criteria are
typically inspection-specific and are scheduled events in the project schedule. Exit
criteria can include many different activities, such as the following:
■ Sign-offs from the customer
■ Regulatory inspections and audits
■ Quality metrics
■ Performance metrics
■ Security audits
■ The end of a project phase

Your company might callcalled a kill point. A phase gate, at the end this end-of-phase review a stage gate, phaseof a
an opportunity to cancel the project; this ishow well the project is fairing.

Of course, not all organizations are profit-driven; consider your favorite charities.
These not-for-profit entities, however, still have a strategic vision and they use business
philosophies to increase the value of their organization. The value of their organization
can help them grow their presence, bring more donors to their cause, and promote
awareness of their vision. Projects within these companies must also bring business
value or they
are a detriment to the organization. Projects—all projects—in for-profit or not-for-profit
organizations must support the strategic objectives of the organization or they are a
waste of resources.
Business value planning is an executive-level goal, but it is accomplished through
upper management, portfolio managers, operations, program managers, and project
managers within the company. The actions of the people within each organizational
component have a direct influence on the business value. Errors, wasted materials,
delays in the project, cost overruns, and other negative aspects of a project directly
affect the profitability of the project, the success of the organization, and the overall
business value of the organization.
 Revving Through the Project Life Cycle 37

INSIDE THE EXAM

The PMP exam is not for rookies. The applica- be familiar with the project management pro-
tion process alone can filter out the unqualified cess groups, what a project deliverable is,
and the merely curious. You’re reading this and the requirements of a project scope.
book to find more information on how to pass All projects are bound by the Triple Con-
the exam, what the exam entails, and to prep straints of Project Management: time, cost,
for your exam—a wise decision. Now make and scope. Quality is affected by the balance
another wise decision: Begin completing your of
PMP exam application. The application these three components. The Triple Constraints
process can be lengthy, since you’ll have to model is also known as the Iron Triangle, as
track down past information relating to shown in the following illustration. If any side of
projects you’ve completed. the triangle changes, the other two sides should
By starting sooner rather than later in change as well—if not, quality will suffer.
completing your exam application, you’ll be
focusing more on completing your exam
studies than on completing the exam
application.
In addition, response time from the Project
Management Institute (PMI) to accept and
approve your application usually takes up to
ten days. Start now and you’ll be on your
way.
PMI’s PMP exam will present you with
scenario-based questions that will test your
project management abilities. The chapter Scope
exams and the exams on the CD for this book
have been written to be tricky and tough, and Know that the project moves through phas-
to make you think. Practice these exams es to reach completion. The project manager
repeatedly, and they’ll help you prepare to pass oversees the project work as it moves through
your PMP exam. phases, but the project customer must approve
In addition to answering practice questions, the work. Specifically, the results of phases
you’ll want to focus on how the project must pass through scope verification, which is
manager should react in different scenarios. the formal acceptance of the project work.
Specifically, you’ll need to know how the
project manager works through the project
processes. You should
 38 Chapter 1 Introducing Project Management

CERTIFICATION OBJECTIVE 1.06

Defining Project Management Data and Information

A core responsibility for a project manager is writing about the project. You’ll be writing
about the intent for the project, what’s actually occurred in the project, what your plans are
for when things go awry in the project (rarely does any project execute as planned), and
loads more. Few people enjoy writing about project work, creating project plans,
communicating via reports and e-mails, but it’s something that’s required of every
successful project manager.
Here’s some good news: Although documenting the project is important, you don’t
always have to start from scratch. You can reuse plans, reports, and documentation
from a previous project, if you have one, as templates for your current project. Use
what’s been done in the past to help you better communicate and manage your current
project. Of course, this assumes that you have access to past project records on which
to base your current work. These could come from similar projects you or others in the
company have worked on. And if you don’t have documents to use as a starting point,
a quick Internet search will reveal many documents you can adapt to fit your current
project.
For your PMP exam, you’ll be asked to adapt past project records as templates for your
current project. You’ll still have lots of documents to create, but go with the idea that
you’re following a standard documentation approach in the organization, even if in real
life that’s not how it works for you. You’ll be introduced to lots of documentation
throughout the book and in preparation of your passing the PMP, but in this section we’ll
look at some of the most important project documents.

Understanding Data and Information

Before we get too deep into documentation, however, let’s nail down some terms that
relate to project management data and information. In a project, lots of data and
information
will be created, added to your project management information system (PMIS), compiled
into reports, distributed, communicated, and sometimes even ignored. You’ll need to have
good project knowledge to access the needed data and information quickly to
communicate what’s happening in your project and determine why things are going the
way they are.
You need to know three specific concepts that you’ll see throughout this book and that
describe data and information:
■ Work performance data This is the raw data and facts about your project work.
As your team completes assignments and works on assignments, they’ll report
their status. The status can be communicated as a percent complete, as in
progress, using start and finish dates, and in a number of different formats. You
will likely also track
 Defining Project Management Data and Information 39

the cost of the activities, number of change requests, defects, durations, and more.
This business is all about the raw data—good to have, but not actually very useful
until you analyze the data.
■ Work performance information Once you’ve collected the raw data—that is, the
work performance data—you’ll analyze the data to make sense of it all. This
analysis gives you useable information to help you better understand how well
your project is actually performing. Work performance information can include
the status of deliverables, status of change requests, and project forecasting on
time and cost.
It’s useable information, not just raw data.
■ Work performance reports Ah, reports—the love of every project manager I know.
Well, maybe not, but the reports enable you to format and formalize the work
performance information and communicate the information to management and
stakeholders, and to create a record of where you’ve been and where you’re going
in the project. You likely know work performance reports as status reports, memos,
dashboards, or project updates. Work performance reports help to communicate
project status, but they’re also used to help stakeholders make decisions about
events and issues within the project.

Reviewing a Project Business Case

Projects that are large in scope will likely be preceded by a business case, an analysis of
the financial feasibility and validity of the proposed project. The business case will walk
through the proposed project, include a sense of how much the project will likely cost,
calculate the return on investment for the project, and offer reasons why the project
should, or should not, be initiated. The business case can help decision-makers (the
project sponsors or the project steering committee) make a go/no-go decision to proceed
with the project.
The business case will present details of a needs assessment, or why the project is
needed. It will map out the current need or opportunity the project will resolve and the
stakeholders affected by the project, and it may rough out the project scope. This
document will help identify how the proposed project meshes with the organizational
goals and strategies.
Business cases provide an analysis of the current state, insight into the risks and
opportunities the project presents, and often include a recommendation regarding how the
organization should, or should not, deal with the proposed project.
Business cases often begin with the analysis of the need and define the root cause of the
project. Also included will be any known risks associated with the proposed project,
success factors for the project, and decision criteria for the project, such as required,
desired, and optional. A business case might also present options for the project, such as
do nothing
and maintain business as usual, do the minimum work needed to address the problem or
opportunity, or do more than a minimum amount of work and seize the project opportunity.
40 Chapter 1 Introducing Project Management

Creating a Project Benefits Management Plan

When a project is initiated, it sets about to accomplish something, to create something,
and, most importantly, to achieve business value for the organization. The project will
create a result, and that result is all about benefits. Benefits are the results and outcomes of
project actions. Consider a construction company, for example: When it constructs a
building for
a client, there are obvious benefits to the client and community, but there are also
benefits for the construction company. The company will generate income, create
opportunities
to market itself based on the project success, maintain employees, provide educational
opportunities with the team, and obtain other benefits as a result of the project work.
A benefits management plan defines the project benefits and typically addresses at
least seven components:
■ Target benefits The tangible and intangible values the project will create. Benefits
include the net present value of the project, which shows the value of longer
projects with intermittent benefits realized during the project.
■ Strategic alignment How the benefits of the project align with the organizational
business strategies.
■ Benefits realization timeline Defines when the benefits will be realized and
useable.
■ Benefits owner The individual accountable to monitor, record, and provide status
of the benefits throughout the project.
■ Metrics Measurements to show performance on benefits realization.
■ Assumptions Anything that is believed to be true, but that hasn’t actually been
proven to be true.
■ Risks Opportunities or threats for the realization of business. Risks aren’t always
negative; positive risks are called opportunities.

Like most plan development in project management, the development of the benefits
management plan is an ongoing, iterative activity. As more information becomes available,
things shift in the project, or the organizational goals change, the benefits management
plan may need to be updated to reflect the changing environment within the organization.

CERTIFICATION SUMMARY
This chapter covered the fundamentals of project management and the expectations for
the PMP examination. The PMBOK Guide is an excellent book that documents the ideal
processes and procedures for project management. The PMP exam is based on the
PMBOK Guide, and this book (the one you’re reading now) focuses on the key exam
essentials to help you pass your PMP exam.
 Key Terms 41

We discussed what a project is and is not. Projects are temporary endeavors to create a
unique thing, product, or service. An operation, on the other hand, is a series of activities
that go on and on, such as manufacturing a car, writing a newspaper column, or running a
business. Many businesses have a business model of completing projects for other people
or organizations.
The PMP exam will focus on the function of the project manager, which covers the ten
knowledge areas of project management: integration management, time, cost, scope,
quality, human resources, communications, risk, procurement, and stakeholder
management. Each of these knowledge areas will be discussed in detail in Chapters 4–13
in this book. In this chapter we also discussed the project life cycle and the project
management life cycles. The PMP Code of Ethics and Professional Conduct is also
discussed in Chapter 14.
Finally, we discussed project documentation. Even before a project begins,
documentation is created through business cases and feasibility studies. Business
cases examine the financial aspect of completing a project, while feasibility studies
examine the feasibility of the organization taking on the project work. If a project is
launched, the project documentation abounds. Project documentation can be based
on historical
information from past projects. Project documentation stems first from the raw data—the
work performance data. Once the work performance data is analyzed, it becomes work
performance information—information that you can use to make decisions and forecast
project performance. Work performance information is then compiled and communicated
through work performance reports, such as status reports, memos, or dashboards.

KEY TERMS
To pass the PMP exam, you will need to memorize the following terms and their
definitions. For maximum value, create your own flashcards based on these definitions
and review them daily.

adaptive life cycle Adaptive life cycles can be either agile, iterative or incremental.
Change is highly probable, and the project team will work closely with the stakeholders
regarding any changes in the project. You might also know this approach as agile or
change- driven.

application areas The areas of discipline that a project may be based on. Consider
tech- nology, law, sales, marketing, and construction, among many others.

business value The total value of the tangible and intangible elements of an
organiza- tion. Consider liquid assets, real estate, equipment, reputation, brand
recognition, and trademarks.
42 Chapter 1 Introducing Project Management

Code of Ethics and Professional Conduct Addresses the values project

managers should possess and addresses integrity, respect, fairness, and honesty.

deliverable A product, service, or result that a project creates; projects generally

create many deliverables as part of the project work.

hybrid life cycle A combination of predictive and adaptive life cycles. Parts of the
project can follow the predictive life cycle, such as project requirements and the budget,
yet still utilize the flexibility and iterations that the adaptive life cycle offers.

incremental life cycle Incremental life cycles create the final product deliverable
through a series of increments. Each increment of the project will add more and more
functionality. Increments are a predetermined by a set amount of time, such as two or
four weeks, for example.

Iron Triangle A term used to describe the three constraints of every project: time,
cost, and scope. The sides of the Iron Triangle must be kept in balance or the quality of
the project will suffer. Also known as the Triple Constraints model.

iterative life cycle This approach requires that the project scope be defined at a high
level at the beginning of the project, but the costs and schedules are developed through
iterations of planning as the project deliverable is more fully understood. The project
moves through iterations of planning and definition based on discoveries during the
project execution.

operations A generic term used to describe the activities that support the core
functions of a business entity; the ongoing work of the business.

organizational project management (OPM) An organizational approach to

coordinate, manage, and control projects, programs, and portfolio management in a
uniform, consistent effort.

PMBOK Guide The abbreviated definition for PMI’s A Guide to the Project
Management Body of Knowledge.

PMP Your goal. A PMP is certified by the Project Management Institute as a Project
Management Professional.
 Key Terms 43

portfolio A collection of projects and programs that have been selected by the
organization based on factors such as risk, profitability, business value, business
need, market demand, and other components.

predictive life cycle An approach that requires that the project scope, the project
time, and project costs be defined early in the project timeline. Predictive life cycles
have
predefined phases, where each phase completes a specific type of work and usually
overlaps other phases in the project.

programs A collection of projects working in unison to realize benefits that could not
be achieved by managing each project independently of the others.

progressive elaboration The process of starting with a large idea and, through
incremental analysis, actions, and planning, making the idea more and more specific.
Progressive elaboration is the generally accepted planning process for project
management, wherein the project management team starts with a broad scope and works
toward a specific, detailed plan.

project An undertaking outside of normal operations to create a unique product,

service, or result. Projects are temporary, while operations are ongoing.

project communications management One of the ten project management

knowledge areas; it is the planning and management of communication among
project stakeholders. (See Chapter 10 for more information on this topic.)

project cost management One of the ten project management knowledge areas; it
is the estimating, budgeting, and controlling of the project expenses. (See Chapter 7.)

project feasibility study A study that examines the potential project to determine
whether it is feasible to do the project work.

project human resource management One of the ten project management

knowledge areas; projects are completed by people, and the project manager generally
oversees the management of the human resources on the project team. (See Chapter
9.)

project integration management One of the ten project management knowledge

areas; this knowledge area coordinates the activities and completeness of the other
nine knowledge areas. (See Chapter 4.)
44 Chapter 1 Introducing Project Management

project life cycle The phases of a project as it moves from its launch to
completion. Project life cycles are unique to each project and are not universal.

project management The management of the projects within an organization. It is

the initiation, planning, executing, monitoring and controlling, and closing of the
temporary endeavor of the project.

project management life cycle Universal to all projects, this life cycle comprises
the project management process groups of initiating, planning, executing, monitoring
and controlling, and closing. The process groups are not phases, but collections of
processes.

project manager The individual who manages the project’s activities for
an organization.

project portfolio management A management process to select the projects that

should be invested in. Specifically, it is the selection process based on the need,
profitability, and affordability of the proposed projects.

project procurement management One of the ten project management knowledge

areas; this knowledge area oversees the purchasing and contract administration for a
project. (See Chapter 12.)

project quality management One of the ten project management knowledge areas;
this knowledge area defines quality assurance, quality control, and the quality policy for
the project. (See Chapter 8.)

project risk management One of the ten project management knowledge areas;
project risk management defines the risk identification, analysis, responses, and control of
risk events. (See Chapter 11.)

project schedule management One of the ten project management knowledge areas;
this knowledge area defines the approach to time estimating, scheduling, and control of
the project activities. (See Chapter 6.)

project scope management One of the ten project management knowledge areas; this
knowledge area defines the project requirements, scope creation, and control. (See Chapter
5.)
 Two-Minute Drill 45

stage gates Also known as project phase completions, these allow a project to continue
after a performance and deliverable review against a set of predefined metrics. If the
deliverables of the phase, or stage, meet the predefined metrics, the project is allowed to
continue.

subprojects Exists under a parent project, but follows its own schedule to
completion. Subprojects may be outsourced, assigned to other project managers, or
managed by the parent project manager but with a different project team.

The Standard for Project Management A foundational publication, included in

the PMBOK Guide, sixth edition, that describes, not prescribes, the most common
best practices of project management.

work breakdown structure The visual decomposition of the project scope that
represents all of the deliverables the project promises to create.

TWO-MINUTE DRILL
The PMBOK Guide, This Book, and the PMP Exam
❑ The PMP exam is based on your experience and the sixth edition of PMI’s book
A Guide to the Project Management Body of Knowledge.
❑ This book, the one you’re reading now, explains project management in plain
language and helps you prepare to pass the PMP exam.
❑ Not everyone can take the PMP exam—you have to qualify for the test first.

Defining What a Project Is—and Is Not

❑ Projects are temporary, unique, and create a product, result, or service.
❑ Projects move from concept to completion through progressive elaboration.
❑ Not all projects get selected. The reasons for choosing one project over another may
vary from organization to organization. The selection of projects to be initiated and
invested in is part of project portfolio management.
❑ Projects have a definite beginning, middle, and ending; operations do not.
❑ Programs are a collection of projects working in unison to realize benefits that would
not be available if the projects were managed independently of one another.
46 Chapter 1 Introducing Project Management

Defining Project Management

❑ Within the project management framework are ten knowledge areas that span the
project management life cycle.
❑ The focus of project integration management is managing all of the interactions of
project components, processes, and knowledge areas.
❑ The focus of project scope management is on protecting, fulfilling, and achieving the
project objectives and benefits.
❑ The focus of project schedule management is on scheduling activities, monitoring
the project schedule, and working with the project team and stakeholders to ensure
that the project completes on time.
❑ The focus of project cost management is on estimating and maintaining project costs.
❑ The focus of project quality management is on setting the quality expectations and
then delivering the project product with the expected level of quality.
❑ The focus of project human resources management is on developing the project
team to work together to deliver the project as expected.
❑ The focus of project communications management is on delivering needed
information to the correct parties at the correct time. Much of project
communications involves keeping the stakeholder informed of the project
issues, risk, progress, and overall performance.
❑ The focus of project risk management is on identifying and managing project threats
and opportunities.
❑ The focus of project procurement management is communicating with, selecting,
and managing vendors to complete project work, deliver a project subcomponent,
or supply project materials.
❑ The focus of project stakeholder management is identifying project stakeholders,
planning the management of the stakeholders, and then managing and controlling
the stakeholder engagement throughout the project.

Examining Related Areas of Project Management

❑ Projects often operate under the auspices of a program. A program is a collection
of projects working together for a common goal. By orchestrating the management
of the projects, benefits are realized that may not have been achieved if the
projects were managed independently of one another.
❑ A project manager must have multiple skills to be successful, including the ability
to organize, solve problems, communicate, manage a budget, negotiate, and
provide leadership for the project.
 Two-Minute Drill 47

❑ Project managers in different sectors of business, government, and nonprofit

entities will encounter situations unique to their area of expertise. For example, a
project manager of a construction project will have issues and concerns that differ
from those of a project manager of a manufacturing project.

Revving Through the Project Life Cycle

❑ Predictive life cycles predict the work that will happen with the project. Predictive
life cycles are known as waterfall projects or plan-driven projects.
❑ Iterative life cycles plan the scope at a high level at the beginning of the project,
but project costs and schedules are developed through iterations of planning as the
deliverables of the project are more clearly defined.
❑ Incremental life cycles create the final product deliverable through a series of
increments. Each increment of the project will add more and more functionality.
Like the iterative life cycle, increments are a predetermined set amount of time,
such as two or four weeks.
❑ Adaptive life cycles are either agile, iterative, or incremental. Adaptive life cycles
follow a defined methodology such as Scrum or eXtreme Programming (XP).
Change is highly probable, and the project team will be working closely with the
project stakeholders.
❑ Hybrid life cycle is a combination of predictive and adaptive life cycles. Parts of the
project can follow the predictive life cycle, such as project requirements and the
budget, yet still utilize the flexibility and iterations that the adaptive life cycle
offers.

Defining Project Management Data and Information

❑ Work performance data is the raw data and facts about the project work. Work
performance data are items likes percent of activities completed, start and finish
dates, number of change requests, and actual duration of tasks.
❑ Work performance information is the processed, useable analysis of work performance
data. Work performance data is analyzed and then becomes work performance
information—useable information to make project decisions.
❑ Work performance reports are communications about project performance, such
as status reports or variance reports. Work performance reports take the work
performance information and formats and publish the information to communicate
what’s happening within the project.
48 Chapter 1 Introducing Project Management

SELF TEST

1. As a PMP candidate, you must have a firm grasp on what constitutes a project. Which one of
the following is not an attribute of a project?
A. Has a definite starting date
B. Has no definite end date
C. Creates a product, service, or result
D. Requires resources
2. You are a project manager for Johnson Keyboards, Inc. Your organization has adapted the
PMBOK Guide as a standard tool for how projects should operate, and you are involved in
shaping the standardization for all future projects. In light of this information, what is the
recommended course of action for the processes and procedures in the PMBOK Guide?
A. Not all processes and procedures in the PMBOK Guide are actually required on all projects.
B. All processes and procedures are to be followed as defined in the PMBOK Guide.
C. Not all processes and procedures are needed, unless the PMBOK Guide states the process
or procedure is a requirement for the project type.
D. All processes and procedures are to be followed as identified in the PMBOK Guide;
otherwise, the PMP is in violation of the PMP Code of Ethics and Professional Conduct.
3. Your organization is considering launching a new project. Robert, the CEO, wants to know what
business value the proposed project will contribute. Which one of the following is not an
example of business value consideration for a new project?
A. Return on investment
B. New equipment
C. Skills obtained by doing the project
D. Risk assessments within the project
4. You are explaining to a junior engineer the difference between a project and operations.
Which one of the following is true only of operations?
A. They are performed by people.
B. They are constrained by limited resources.
C. They are ongoing.
D. They are planned, executed, and controlled.
5. You are the project manager for your company, Mark Manufacturers. Your company has a
large client that has requested that a special component be created for one of its test engines.
Your
 Self Test 49

organization agrees and creates a standard contract with the customer, and your manager assigns
you to manage this project. The project was launched because of which one of the following?
A. A customer request
B. A change in the technology your customer is creating
C. A legal requirement (contractual)
D. An organizational need
6. Project managers are not responsible for which one of the following in most organizations?
A. Identifying the project requirements
B. Selecting the projects to be initiated
C. Balancing demands for time, cost, scope, and quality
D. Establishing clear and achievable project objectives
7. You and William, a project stakeholder, are discussing risks within your project. Which one of
the following best describes risk?
A. Any event that can cause your project to fail
B. Any event that may have a positive or negative effect on your project’s team
C. An uncertain event that may have a positive or negative effect on your project
D. An event that will cause time and cost constraints to be broken
8. You are the project manager for a large software development project. You have concerns that
one of the components of the Iron Triangle is slipping. Your project sponsor, Jim Bob, is not
familiar with the Iron Triangle, so you explain the concept to him. What will be affected if any
angle of the Iron Triangle is not kept in balance?
A. Cost
B. Quality
C. Time
D. Scope
9. Which knowledge area includes the creation of the project charter?
A. Project scope management
B. Project cost management
C. Project integration management
D. Project communications management
10. Beth is a project manager and she’s working with Karen, the program manager. There is some
disagreement about the project management methodology Karen is requiring all project
managers to operate by. Who has authority over this decision in this scenario?
A. Project sponsor
B. Karen, as she is the program manager
C. Beth, as she is the project manager
D. Beth, as each project manager can select the appropriate project management
methodology regardless of the program
50 Chapter 1 Introducing Project Management

11. You are working on a construction project that proceeds through the following sequential
steps: planning and prebuild, permits and filings, site prep and excavation, build basement
and foundation, framing, interior, and exterior. Each needs to be executed to the highest
quality. Which one of the following is an example of a project life cycle phase?
A. Framing
B. Phase gate review
C. Project quality management
D. Executing
12. Smith Construction has won a contract to build a 77-story condominium building in downtown
Chicago. The building will have 650 condos, a parking garage, indoor and outdoor pools, two
floors for retail, two floors of offices, and several shared community rooms. Mary Anne
Kedzie has elected to create a program for the creation of the building. Which one of the
following best describes a program?
A. A standardized approach to project management within an organization
B. A standardized approach to project management with multiple projects coordinated together
C. A collection of related projects managed in coordination to gain control that would
not necessarily be available if the projects were managed independently
D. A collection of related projects all contributing to one deliverable
13. Which one of the following statements best defines the difference between a program and
a portfolio in regard to scope?
A. Programs do not have scopes, because they are made up of projects. Portfolios have
an organizational scope.
B. Programs have larger scopes than projects. Portfolios have an organizational scope.
C. Programs have larger scopes than projects. Portfolios don’t have scopes because they are
a financial investment.
D. Programs and portfolios can share the same scope because a portfolio may have two or
more programs.
14. Who is usually responsible for portfolio management within an organization?
A. Project managers
B. Project sponsors
C. Stakeholders
D. Senior management
15. You are the project manager of a large project to install 1900 kiosks throughout college
campuses in North America. The kiosks will collect applications for credit cards, phone
services, and other services marketable to college students. The bulk of your project is focused
on information technology integration, the wide area network (WAN) connections from each
kiosk, security of the data transferred, and the database of the information gathered. For ease of
management, you have hired local contractors to install the kiosks that you will ship to each
campus. The contractors
 Self Test 51

on each campus will be responsible for the WAN connection, the electrical connection, the
security of the kiosk, and all testing. The local contracted work could be called what?
A. Risk mitigation
B. Operations
C. Subprojects
D. Management by projects
16. You’ll need to know and be familiar with several different project life cycle approaches for
your PMP exam. Which life cycle approach defines the project scope, timeline, and project
costs early in the project?
A. Predictive
B. Iterative
C. Incremental
D. Adaptive
17. Which of the following is likely to be part of an operation?
A. Providing electricity to a community
B. Designing an electrical grid for a new community
C. Building a new dam as a source for electricity
D. Informing the public about changes at the electrical company
18. Of the following, which one is not part of project integration management?
A. The creation of the project plan
B. The interaction between project teams
C. The execution of the project plan
D. The documentation of changes to the project plan
19. You are the project manager for the Fixture Installation Project in your organization. You’ve
just completed the second of three phases. What event will happen next?
A. Phase gate review
B. Initiating of the third phase
C. Project quality management activities
D. Phase closure
20. You are a new project manager in a company that uses a project management office. A new
technology has been released in the marketplace that will supersede the technology your
project is implementing. There are doubts that the project should continue. Martin, a member
of the project management office, is considering the amount of funds already invested in the
project. What term is given to the monies you’ve already spent in the project?
A. Capital losses
B. Return on investment
C. Sunk costs
D. In the red
52 Chapter 1 Introducing Project Management

21. What term best describes the raw data of a project, such as number of change requests and
actual duration?
A. Project data outcomes
B. Work performance information
C. Work performance data
D. Work performance reports
22. The project manager typically devotes the most amount of time to which of the following tasks?
A. Communications
B. Budget management
C. Project organization
D. Management of team negotiations
23. You have an excellent idea for a new project that can increase productivity by 20 percent in
your organization. Management, however, declines to approve the proposed project because
too many resources are already devoted to other projects. You have just experienced what?
A. Parametric modeling
B. Management by exception
C. Project portfolio management
D. Management reserve
24. Which one of the following documents is an analysis of the financial feasibility of a proposed
project?
A. Feasibility study
B. Business case
C. Feasibility case
D. Portfolio analysis review
25. Of the following, which is the most important stakeholder involved with a project?
A. The project manager
B. The project sponsor
C. The chief executive officer (CEO)
D. The customer
 Self Test Answers 53

SELF TEST ANSWERS

1. As a PMP candidate, you must have a firm grasp on what constitutes a project. Which one of
the following is not an attribute of a project?
A. Has a definite starting date
B. Has no definite end date
C. Creates a product, service, or result
D. Requires resources

☑ B. A project does have a definite end date; operations do not.

☐✗ A, C, and D are incorrect. Projects do have a definite starting date; they do create a
unique
2. You are a project manager for Johnson Keyboards, Inc. Your organization has adapted the
PMBOK Guide as a standard tool for how projects should operate, and you are involved in
shaping the standardization for all future projects. In light of this information, what is the
recommended course of action for the processes and procedures in the PMBOK Guide?
A. Not all processes and procedures in the PMBOK Guide are actually required on all projects.
B. All processes and procedures are to be followed as defined in the PMBOK Guide.
C. Not all processes and procedures are needed, unless the PMBOK Guide states the process
or procedure is a requirement for the project type.
D. All processes and procedures are to be followed as identified in the PMBOK Guide;
otherwise, the PMP is in violation of the PMP Code of Ethics and Professional Conduct.

☑ A. Not all information in the PMBOK Guide should be applied uniformly to all projects.
It is the responsibility of the project management team to determine what practices are
appropriate for each project.
☐✗ B, C, and D are incorrect. They are all false statements regarding the
implementation of the
PMBOK Guide.
3. Your organization is considering launching a new project. Robert, the CEO, wants to know what
business value the proposed project will contribute. Which one of the following is not an
example of business value consideration for a new project?
A. Return on investment
B. New equipment
C. Skills obtained by doing the project
D. Risk assessments within the project
54 Chapter 1 Introducing Project Management

☑ D. A risk assessment within the project is not a business value, but a project management
activity. Risks can be positive or negative, but the assessment of a risk is not a business value
element. Business value means that the project is contributing something positive for the
organization.
☐✗ A, B, and C are incorrect. A is incorrect because return on investment is an
example of
business value. B, new equipment, can be a business value consideration because the
equipment will be owned as an asset by the organization and can be used in other endeavors.
C, skills obtained by doing the project, is a business value. By doing the project, the project
4. You are explaining to a junior engineer the difference between a project and operations.
Which one of the following is true only of operations?
A. They are performed by people.
B. They are constrained by limited resources.
C. They are ongoing.
D. They are planned, executed, and controlled.

☑ C. Operations are ongoing and can last for as long as the organization is in business.
Projects are temporary; they do not go on forever.
☐✗ A, B, and D are incorrect. Projects and operations are performed by people, are
constrained
by limited resources, and are planned, executed, and controlled.
5. You are the project manager for your company, Mark Manufacturers. Your company has a large
client that has requested that a special component be created for one of its test engines. Your
organization agrees and creates a standard contract with the customer, and your manager
assigns you to manage this project. The project was launched because of which one of the
following?
A. A customer request
B. A change in the technology your customer is creating
C. A legal requirement (contractual)
D. An organizational need

☑ A. This project was launched because the customer requested the new component.
☐✗ B, C, and D are incorrect. B is incorrect because the project is not a response to a
change
in technology, but a customer request. C, a legal requirement, is incorrect because this
actually refers to a law or mandated regulation that has been created. D, an organizational
6. Project managers are not responsible for which one of the following in most organizations?
A. Identifying the project requirements
B. Selecting the projects to be initiated
C. Balancing demands for time, cost, scope, and quality
D. Establishing clear and achievable project objectives
 Self Test Answers 55

☑ B. Project managers typically do not select which projects are to be initiated. The
project selection committee, customers, or project sponsors are typically responsible for
this.
☐✗ A, C, and D are incorrect. The project manager is responsible for these activities.
7. You and William, a project stakeholder, are discussing risks within your project. Which one of
the following best describes risk?
A. Any event that can cause your project to fail
B. Any event that may have a positive or negative effect on your project’s team
C. An uncertain event that may have a positive or negative effect on your project
D. An event that will cause time and cost constraints to be broken

☑ C. Risk is an uncertain event that can have a positive or negative effect on your project.
☐✗ A, B, and D are incorrect. These are all characteristics of risk, but the best choice
is C
8. You are the project manager for a large software development project. You have concerns that
one of the components of the Iron Triangle is slipping. Your project sponsor, Jim Bob, is not
familiar with the Iron Triangle, so you explain the concept to him. What will be affected if any
angle of the Iron Triangle is not kept in balance?
A. Cost
B. Quality
C. Time
D. Scope

☑ B. If any angle of the Iron Triangle is changed, the quality of the project will suffer.
☐✗ A, C, and D are incorrect. Cost, time, and scope are the three sides of the Iron
Triangle.
9. Which knowledge area includes the creation of the project charter?
A. Project scope management
B. Project cost management
C. Project integration management
D. Project communications management

☑ C. Project integration management, which focuses on the coordination of all components

of
project management, includes the development of the project charter.
☐✗ A, B, and D are incorrect. A is incorrect because project scope management
focuses on the
creation and control of the project scope. B, project cost management, is incorrect because its
role is to manage, control, and respond to the financial concerns within the project. D, project
56 Chapter 1 Introducing Project Management

10. Beth is a project manager and she’s working with Karen, the program manager. There is some
disagreement about the project management methodology Karen is requiring all project
managers to operate by. Who has authority over this decision in this scenario?
A. Project sponsor
B. Karen, as she is the program manager
C. Beth, as she is the project manager
D. Beth, as each project manager can select the appropriate project management
methodology regardless of the program

☑ B. Karen, the program manager, oversees the project managers and the approach they’ll
take in managing their individual projects.
☐✗ A, C, and D are incorrect. A is incorrect because the project sponsor would defer
to the
program manager, as this decision fits within Karen’s roles and responsibilities. C is
incorrect; Beth may be the project manager, but she must follow Karen’s directives for
project management within the program. D is also incorrect, because each project manager
doesn’t choose her project management methodology, but defers to a common approach for
11. You are working on a construction project that proceeds through the following sequential
steps: planning and prebuild, permits and filings, site prep and excavation, build basement
and foundation, framing, interior, and exterior. Each needs to be executed to the highest
quality. Which one of the following is an example of a project life cycle phase?
A. Framing
B. Phase gate review
C. Project quality management
D. Executing

☑ A. Of all the choices presented, only framing is a project life cycle phase. A life cycle phase is
unique to a project and shows the type of work and expected deliverables achieved within that
phase.
☐✗ B, C, and D are incorrect. These are not project phases. B, the phase gate review,
happens at
the end of a phase. C, project quality management, is a knowledge area, not a phase. D,
12. Smith Construction has won a contract to build a 77-story condominium building in
downtown Chicago. The building will have 650 condos, a parking garage, indoor and outdoor
pools, two floors for retail, two floors of offices, and several shared community rooms. Mary
Anne Kedzie
 Self Test Answers 57

has elected to create a program for the creation of the building. Which one of the following best
describes a program?
A. A standardized approach to project management within an organization
B. A standardized approach to project management with multiple projects coordinated together
C. A collection of related projects managed in coordination to gain control that would
not necessarily be available if the projects were managed independently
D. A collection of related projects, all contributing to one deliverable

☑ C. A program is a collection of related projects managed and coordinated together to

gain a higher level of control.
☐✗ A, B, and D are incorrect. These do not accurately describe a program. D is not the
best
answer, because programs typically create many deliverables and benefits—rarely just one
13. Which one of the following statements best defines the difference between a program and
a portfolio in regard to scope?
A. Programs do not have scopes, because they are made up of projects. Portfolios have
an organizational scope.
B. Programs have larger scopes than projects. Portfolios have an organizational scope.
C. Programs have larger scopes than projects. Portfolios don’t have scopes because they are
a financial investment.
D. Programs and portfolios can share the same scope because a portfolio may have two or
more programs.

☑ B. Portfolios have an organizational scope that reflects the strategic goals of the
organization. Programs have larger scopes than projects and may be part of portfolios.
☐✗ A, C, and D are incorrect. A is incorrect because programs do have scopes. C is
incorrect
because portfolios do have organizational scopes and are not financial investments. D is
incorrect because programs and portfolios won’t have the same scope. Programs may be part
of a portfolio, but portfolios have an organizational scope.
14. Who is usually responsible for portfolio management within an organization?
A. Project managers
B. Project sponsors
C. Stakeholders
D. Senior management

☑ D. Senior management is responsible for portfolio management.

☐✗ A, B, and C are incorrect. A is incorrect because project managers are responsible
for a
project’s success, but they are not responsible for the portfolio. B, project sponsors, authorize
58 Chapter 1 Introducing Project Management

15. You are the project manager of a large project to install 1900 kiosks throughout college
campuses in North America. The kiosks will collect applications for credit cards, phone
services, and other services marketable to college students. The bulk of your project is focused
on information technology integration, the wide area network (WAN) connections from each
kiosk, security of the data transferred, and the database of the information gathered. For ease of
management, you have hired local contractors to install the kiosks that you will ship to each
campus. The contractors on each campus will be responsible for the WAN connection, the
electrical connection, the security of the kiosk, and all testing. The local contracted work could
be called what?
A. Risk mitigation
B. Operations
C. Subprojects
D. Management by projects

☑ C. This is the best answer because work that is subcontracted out for ease of
management,
as in this situation, becomes a subproject.
☐✗ A, B, and D are incorrect. A is incorrect because risk mitigation describes the
measures
a project manager takes to reduce or eliminate risks. The scenario did not provide enough
information to determine what risks would have been mitigated. B, operations, is incorrect
because it does not describe this scenario at all. D, management by projects, is incorrect
16. You’ll need to know and be familiar with several different project life cycle approaches for
your PMP exam. Which life cycle approach defines the project scope, timeline, and project
costs early in the project?
A. Predictive
B. Iterative
C. Incremental
D. Adaptive

☑ A. The predictive approach requires the project scope, the project timeline, and project
costs to be defined early in the project timeline. Predictive life cycles have predefined
phases, where each phase completes a specific type of work and usually overlaps other
phases in the project.
☐✗ B, C, and D are incorrect. These life cycles do not plan the project scope, the
project timeline,
 Self Test Answers 59

17. Which of the following is likely to be part of an operation?

A. Providing electricity to a community
B. Designing an electrical grid for a new community
C. Building a new dam as a source for electricity
D. Informing the public about changes at the electrical company

☑ A. An electrical company’s primary operation is to provide electricity; it is ongoing and

there is no end to its operation.
☐✗ B, C, and D are incorrect. B and C are projects, not operations. Although D,
providing
information, could potentially be part of an ongoing operation, A is still the best answer
18. Of the following, which one is not part of project integration management?
A. The creation of the project plan
B. The interaction between project teams
C. The execution of the project plan
D. The documentation of changes to the project plan

☑ B. Project integration management focuses on the project plan and its implementation,
not the interaction between project teams. Although this answer could, in some instances,
be considered part of integration management if the project plan had some interaction with
other project teams, that assumption cannot be made in this question.
☐✗ A, C, and D are incorrect. These are all part of project integration management, so
they are
not valid answers.
19. You are the project manager for the Fixture Installation Project in your organization. You’ve
just completed the second of three phases. What event will happen next?
A. Phase gate review
B. Initiating of the third phase
C. Project quality management activities
D. Phase closure

☑ A. Phase gate reviews happen at the end of each project phase and before the next
phase begins. These are an opportunity to review the project work so far and to confirm
that the project can and should move forward.
☐✗ B, C, and D are incorrect. B is incorrect, because the third phase of the project will
commence
after the phase gate review. C, project quality management activities, will happen throughout
the project, not just at the end of a phase. D isn’t a valid project management term.
60 Chapter 1 Introducing Project Management

20. You are a new project manager in a company that uses a project management office. A new
technology has been released in the marketplace that will supersede the technology your
project is implementing. There are doubts that the project should continue. Martin, a member
of the project management office, is considering the amount of funds already invested in the
project. What term is given to the monies you’ve already spent in the project?
A. Capital losses
B. Return on investment
C. Sunk costs
D. In the red

☑ C. Sunk costs describe the funds already “sunk” into a project, and they should not be
considered when determining whether a project should move forward or not.
☐✗ A, B, and D are incorrect. A is incorrect because capital losses describe the money
that is lost,
never to be recouped. B is incorrect because return on investment is the money earned after
the project is completed and as a result of the investment made in the project endeavor. D, in
the red, is a term used to describe a project that is losing money. In the red is a financial slang
for an endeavor that is not profitable (in the black, on the other hand, means that your project
21. What term best describes the raw data of a project, such as number of change requests and
actual duration?
A. Project data outcomes
B. Work performance information
C. Work performance data
D. Work performance reports

☑ C. Work performance data is the raw data and facts about the project work.
☐✗ A, B, and D are incorrect. A, project data outcomes, is not a viable project
management term.
B is incorrect because work performance information is the result of analyzed data, not raw data.
22. The project manager typically devotes the most amount of time to which of the following tasks?
A. Communications
B. Budget management
C. Project organization
D. Management of team negotiations

☑ A. It’s been said that project managers spend 90 percent of their time communicating.
☐✗ B, C, and D are incorrect. The project manager does not devote most of his time to
 Self Test Answers 61

23. You have an excellent idea for a new project that can increase productivity by 20 percent in
your organization. Management, however, declines to approve the proposed project because
too many resources are already devoted to other projects. You have just experienced what?
A. Parametric modeling
B. Management by exception
C. Project portfolio management
D. Management reserve

☑ C. Project portfolio management is the process of choosing and prioritizing projects

within an organization. An excellent project idea can still be denied if there aren’t enough
resources to complete the project work.
☐✗ A, B, and D are incorrect. A is incorrect because parametric modeling is used to
estimate
costs, such as cost per ton or cost per hour. B is incorrect because this is a management theory
to manage people and problems. D is incorrect because management reserve is an amount of
time and money reserved for projects running late or over budget.
24. Which one of the following documents is an analysis of the financial feasibility of a proposed project?
A. Feasibility study
B. Business case
C. Feasibility case
D. Portfolio analysis review

☑ B. Projects that are large in scope will likely be preceded by a business case. A business
case is an analysis of the financial feasibility and validity of a proposed project.
☐✗ A, C, and D are incorrect. A, feasibility study, is a study of whether the
organization has the
capabilities to undertake the proposed project or whether some aspect needed for the project
can do what it is supposed to do (for instance, can the technology perform as specified?).
This could be a phase of a project. C and D are incorrect because these are not valid project
25. Of the following, which is the most important stakeholder involved with a project?
A. The project manager
B. The project sponsor
C. The CEO
D. The customer

☑ D. Customers, internal or external, are the most important stakeholders in a project.

☐✗ A, B, and C are incorrect. A is incorrect because the project manager manages the
project
for the customer. B is incorrect because the project sponsor authorizes the project. C is
incorrect because the CEO may not even know about the project—and even so, she would be
This page is intentionally left blank to match the printed book.
Chapter 2
Managing Projects in Different
Environments

CERTIFICATION OBJECTIVES

2.1 Utilizing Enterprise Environmental 2.4 Completing Projects in

Factors Different Organizational
2.2 Leveraging Organizational Process Structures
Assets ✓ Two-Minute Drill
2.3 Working with Organizational Systems Q&A Self Test

W here you work as a project manager is likely different from where other readers of
this book work. Just as every project is unique, so, too, is the environment in which
a project exists. Consider software development projects, construction projects,
IT infrastructure projects, learning and development projects, and many other different types of
projects. Each of these projects operates in a distinct environment. The environment is a factor of
influence in these projects and in your projects.
 64 Chapter 2 Managing Projects in Different Environments

The environment in which a project exists can influence the expectations of the project
manager, how you manage the project, how stakeholders contribute to the project, and
a myriad of other concerns. Understanding the environment and what’s expected of the
project manager as far as formalities, processes, rules, and regulations—and even simpler
things like templates and forms—are all part of the project environment.
Often when we discuss the project environment, we think of things like the tangible
attributes of where the project takes place: construction sites, offices, hospital settings,
and more. Although these are certainly part of the environment, there’s also the political
landscape, the reputation of the project manager and stakeholders, and the industry
influence in which the project is operating. The environment includes all characteristics of
where
the project exists—all the moving parts, the seen and unseen, and the expectations of
management regarding the project manager; these are all parts of the project environment.

CERTIFICATION OBJECTIVE 2.01

Utilizing Enterprise Environmental Factors

Enterprise environmental factors are the elements that directly or indirectly influence
the management of the project, but the project manager has no direct control over these
elements. For example, your organization may have particular rules for bringing a
project
team member onto your project. This rule is outside of your control, and you must abide
by it. This rule might sometimes hinder you from zipping along in project execution, but
it also helps bring order and control to the projects within the organization. Just as
organizational process assets are inputs to many project management processes, so, too,
are enterprise environmental factors.
Every organization has unique enterprise environmental factors. For the PMP exam,
you’ll need to recognize that enterprise environmental factors are things that the project
manager must abide by but has very little control over. Enterprise environmental factors
are basically rules and policies, but they could also include regulations that directly
influence how the project manager manages the project. You’ll see enterprise
environmental factors often through this book, the PMBOK Guide, and likely your PMP
exam.

Reviewing Internal Enterprise Environmental Factors

There are internal and external enterprise environmental factors that you’ll have to
work with—and know for your exam. Internal enterprise environmental factors are the
factors unique to your organization. To be clear, there’s sometimes a negative
connotation about
 Utilizing Enterprise Environmental Factors 65

enterprise environmental factors, because you’re required to use them and abide by them.
Sure, some enterprise environmental factors may be a pain to deal with and work through,
but they’re designed to create structure and framework, and to establish a common
approach to all projects within your organization.
Here are some common internal enterprise environmental factors:
■ Organizational culture, structure, and governance Probably the most obvious
internal enterprise environmental factor is the makeup of your organization.
Consider the leadership, vision, beliefs, hierarchy of management, ethics, and
organizational code of conduct expectations.
■ Physical location of resources and facilities In a large organization, facilities and
resources may be dispersed around the globe. The physical location of resources
and worksites can directly influence how you manage your project. Challenges
can include communications, risks, and sharing and accessing resources.
■ Infrastructure of your organization Consider the equipment, facilities, tools,
communication channels, technology, and the availability and capabilities of these
resources.
■ IT software Most project managers utilize software for scheduling, configuration
management, online systems, and work authorization systems. This software,
often required to be used, is a great example of an enterprise environmental
factor.
■ Resource availability Resources aren’t just people and could also include tools,
equipment, facilities, and materials. The internal processes the project manager
must follow to obtain resources, such as procurement, contracting, and
subcontractors, can all influence the project management approach.
■ Employee capability You must also examine the capabilities of the employees
involved in the project. You’ll need to consider their expertise, skillsets,
competencies, and any specialized knowledge. You’re looking for those with skills
as well as those who need training.

These are just some of the more common internal enterprise environmental factors.
Other factors in your organization may cause the project management approach to be
limited in other ways. For your PMP exam, however, these are the most common ones to
recognize.

Reviewing External Enterprise Environmental Factors

External enterprise environmental factors are conditions, regulations, and other influences
that affect how you manage your project. Not all projects will, of course, have the exact
same external enterprise environmental factors, because many factors are industry specific.
For example, a healthcare organization won’t have the same enterprise environmental
factors as a banking organization. External factors are somewhat broad, and your industry
will likely
 66 Chapter 2 Managing Projects in Different Environments

have more specific factors because of the nature of your work. For your exam, you should
be familiar with the following external enterprise environmental factors:
■ Marketplace conditions The marketplace you operate within is an enterprise
environmental factor. Consider your competition, market share, organizational
brand, trademarks, and the economic makeup of your industry.
■ Cultural influences and issues How your industry is perceived is an external
enterprise environmental factor. The political climate, customer perceptions, and
news within your industry all are cultural influences and issues that make up the
unique external enterprise environmental factors. For example, consider the cultural
factors surrounding the weapons industry and how they affect these organizations’
operations.
■ Laws and regulations Laws and regulations are external enterprise environmental
factors that directly affect the management of projects.
■ Commercial databases Databases that organization purchase to help predict cost
and schedule estimating, risk studies, and benchmarking directly affect how a
project is estimated and managed.
■ Academic research Some organizations rely on information from academic studies,
white papers, and other publications to guide their efforts and projects.
■ Government and industry standards Organizations can adhere to government
and industry standards for production, environmental considerations, expectations of
quality, and the products or services they provide.
■ Financial Organizations that span countries will likely consider currency exchange
rates and tariffs. Longer projects may consider inflation and interest rates.
■ Physical enterprise environmental factors There’s little you can do about the
weather, and that’s a great example of a physical factor that can affect a project.
The environment where the project is taking place is also a physical enterprise
environmental factor.

See the video “Enterprise Environmental Factors and Organizational

Process Assets.”

CERTIFICATION OBJECTIVE 2.02

Leveraging Organizational Process Assets

“Organizational process assets” is a nice way of referring to all the resources within an
organization that can be used, leveraged, researched, or interviewed to make a project
successful. This means past projects, subject matter experts within your organization, risk
databases, procedures, plans, processes, stakeholder knowledge, and methods of
operations.