PMP Certification, A Beginner's Guide [1 ed.] 0071633707, 9780071633703
Essential Project Management Skills--Made Easy! This accessible guide bridges the gap between being a project manager a
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Contents......Page 10
Acknowledgments......Page 18
Introduction......Page 20
Part I: Essentials of Project Management and PMP Certification......Page 24
1 Bridging the Gap Between PM and PMP......Page 26
Introduction to Project Management Institute (PMI)......Page 29
Why Get Certified? What's in It for Me?......Page 30
The PMI Family of Credentials......Page 31
Demystifying PMI Exams......Page 36
Manage the Exam Preparation Like a Project......Page 44
Maintaining Your PMI Credential (CCRs/PDUs)......Page 51
References......Page 53
2 The Emerging World of Project Management......Page 54
What Is a Program?......Page 56
What Is an Operation?......Page 57
What Is Project Management?......Page 58
The Role of the Project Manager......Page 64
Try This: Who Are the Project Stakeholders?......Page 68
Project Framework......Page 69
Organizational Structures......Page 70
Try This: What Does the Customer Want?......Page 72
Case Study Introduction......Page 74
Pop Quiz......Page 82
References......Page 83
3 Project Management Process Groups......Page 84
What Are Process Groups?......Page 85
Introduction to PMI Knowledge Areas......Page 97
Global Standards......Page 103
Mapping Processes to Knowledge Areas and Process Groups......Page 104
References......Page 113
Part II: The Nine Knowledge Areas......Page 114
4 Project Integration Management......Page 116
Project Integration Management According to PMI......Page 118
Overview of Project Integration Management Processes......Page 119
The Selection Process: How Projects Are Born......Page 120
Project Integration Management Processes: Charter to Close......Page 125
Try This: Who Provides the Requirements?......Page 133
Try This: Plan the Work......Page 136
Try This: Sky's the Limit: Pet Projects Are Out of Scope......Page 141
Try This: Keeping Your Eyes Wide Open: Accurate Progress Reporting......Page 143
Try This: Having a Crystal Ball: Fix It Before It Breaks......Page 146
Try This: Pass the Shredder: Closing the Project Is So Therapeutic......Page 149
References......Page 150
5 Project Scope Management......Page 152
Definition of Scope Management......Page 155
Project Scope Management Processes......Page 157
Try This: Dealing with Unusual Demands: The Customer Wants What?......Page 161
Additional Information on Change Management......Page 182
References......Page 187
Project Scope Statement......Page 184
6 Project Time Management......Page 188
Managing the Schedule......Page 190
Project Time Management Processes......Page 191
Try This: Who's on First? (Knowing the Schedule)......Page 209
Try This: The Overachiever ("Pick Me, Coach!")......Page 210
Try This: Using Three-Point Estimate for Travel Time......Page 214
Try This: Out-of-Control Schedule......Page 229
References......Page 230
7 Project Cost Management......Page 232
An Offer I Couldn't Refuse......Page 234
How Cost Management Ties into Time Management......Page 235
Project Cost Management Processes......Page 236
Try This: Parametric Estimating......Page 244
Try This: Earned Value Example Using BEC Case Study......Page 255
References......Page 265
8 Project Quality Management......Page 268
How to Achieve Customer Satisfaction......Page 270
How Do You Measure Quality?......Page 271
Case Study: Sample Quality Measurements......Page 272
Importance of Quality......Page 273
Definition of Quality and How It Changed......Page 276
Try This: Go Lean Project......Page 282
Project Quality Management Processes......Page 284
References......Page 297
9 Project Human Resource Management......Page 300
Role of the Project Manager in HR Management......Page 302
Project Human Resource Management Processes......Page 303
Try This: Take Me Out to the Ball Game: Networking the Project Team......Page 323
Managing Customer Expectations......Page 329
References......Page 332
10 Project Communications Management......Page 334
The PM's Role in Communications......Page 337
The Medium (How We Deliver the Message)......Page 338
Project Communications Management Processes......Page 340
Try This: How to Plan Communications for Key Stakeholders......Page 341
Try This: Managing Unrealistic Expectations......Page 355
References......Page 362
11 Project Risk Management......Page 364
Threats, Opportunities, and Triggers......Page 366
Be Proactive (Plan for Risk and Mitigate Wherever Possible)......Page 368
Risk Tolerances and Thresholds......Page 370
Project Risk Management Processes......Page 371
Summary of Risk Management......Page 395
References......Page 396
12 Project Procurement Management......Page 400
Definition of a Contract......Page 402
Definition of Procurement......Page 406
Role of the Project Manager (Buyer or Seller)......Page 407
Project Procurement Management Processes......Page 408
Try This: Fixing Issues Before Turning Out the Lights......Page 427
References......Page 432
13 Closing the Project: Are We There Yet?......Page 434
Importance of Project Closure......Page 436
Closing Processes......Page 437
Next Steps: Where to Go from Here......Page 446
Go Confidently in the Direction of Your Dreams......Page 447
References......Page 448
A......Page 450
C......Page 451
E......Page 453
F......Page 454
I......Page 455
M......Page 456
O......Page 457
P......Page 458
Q......Page 460
R......Page 461
S......Page 462
T......Page 463
V......Page 464
W......Page 465
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PMP Certification ®
ABeginner’sGuide
About the Author GeorgeG.Angel,acertifiedProjectManagementProfessional(PMP),isfounder andownerofEagleBusinessServices,LLC,aprojectmanagementeducationand consultingcompanysince1994.Hehassuccessfullymanagedprojectsforover30years atIBMandwasaninnovativeglobaleducationprogrammanagerfortenyears. Asaleaderinprojectmanagementeducation,Georgehasextensiveexperiencein business,projectandprogrammanagementeducation,coursedevelopment,teaching, andconsulting.Heprovideshigh-qualitytrainingandconsultingservicestoabroad rangeofclients,includinguniversities,stateandfederalgovernment,international corporations,andprivatecompaniesofallindustriesandsizes.Healsodelivers classesusingamultitudeofmethods,includingvirtualclassroom,online,and face-to-facetothousandsofstudentsfromover60differentcountries. GeorgeachievedIBM’sExecutivePMCertificationin2001andservedontheir PMProfessionReviewBoardforoversixyears.Hehasalsobeenaprofessional speakeratProjectManagementInstitute(PMI)conferences,symposiums,andteaches PMclassesandworkshopsatColoradoStateUniversity(CSU)since2000. Whennotwriting,teaching,orconsulting,Georgecanbefoundhiking,biking, skiing,scubadiving,orrelaxingonthebeachwithhiswife,twodaughters,andtheir husbands.Youcancontacthimthroughthewww.eagle-business.comwebsiteorsend ane-mailto[email protected].
About the Technical Editor Ricardo(Ric)RothschildisaCertifiedPMPandIBMCertifiedExecutiveProject Managerwithglobalandenterprise-wideprojectmanagementexperience.Heisa 24-yearveteranofprojectmanagementandiscurrentlyanIBMServiceExecutive managingalargeglobalstrategicoutsourcingcontractforaninternationalbank.He hasmanagedprojectswithbudgetsinexcessofUS$20M,fromserver/workstation migrationstocompletetechnicaltransformationsforIBM’soutsourcingclients. RicalsoteachesprojectmanagementclassesatColoradoStateUniversity(CSU) andservesontheIBMProjectManagementReviewBoard.Inaddition,heisan internationalinstructorandDeliveryProgramManagereducationleadforIBM Americas(U.S.,LatinAmerica,andCanada). HehasworkedandtaughtclassesfromEnglandtoSingapore,CanadatoArgentina. RicisfluentinEnglish,Spanish,andPortuguese,withaworkingknowledgeofGerman. HelivesinColoradowithhiswifeandtwochildren,wheretheyenjoythe outdoorsandvariousprofessionalandyouthsports.Richasvolunteeredhundredsof hourscoachingandleadingyouthsportingprograms.Youcancontacthimviae-mail at[email protected].
PMP Certification ®
ABeginner’sGuide GeorgeG.Angel,PMP
McGraw-HillisanindependententityfromtheProjectManagementInstitute,Inc.andis notaffiliatedwiththeProjectManagementInstitute,Inc.inanymanner.Thispublication maybeusedinassistingstudentstopreparefortheProjectManagementInstitute’sPMP Exam.NeithertheProjectManagementInstitutenorMcGraw-Hillwarrantthatuseofthis publicationwillensurepassingtherelevantexam.PMIandPMParetrademarksorregistered trademarksoftheProjectManagementInstitute,IncintheUnitedStatesandothercountries.
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Copyright © 2010 by The McGraw-Hill Companies. All rights reserved. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher. ISBN: 978-0-07-163371-0 MHID: 0-07-163371-5 The material in this eBook also appears in the print version of this title: ISBN: 978-0-07-163370-3, MHID: 0-07-163370-7. All trademarks are trademarks of their respective owners. Rather than put a trademark symbol after every occurrence of a trademarked name, we use names in an editorial fashion only, and to the benefit of the trademark owner, with no intention of infringement of the trademark. Where such designations appear in this book, they have been printed with initial caps. McGraw-Hill eBooks are available at special quantity discounts to use as premiums and sales promotions, or for use in corporate training programs. To contact a representative please e-mail us at [email protected]. Information has been obtained by McGraw-Hill from sources believed to be reliable. However, because of the possibility of human or mechanical error by our sources, McGraw-Hill, or others, McGraw-Hill does not guarantee the accuracy, adequacy, or completeness of any information and is not responsible for any errors or omissions or the results obtained from the use of such information. TERMS OF USE This is a copyrighted work and The McGraw-Hill Companies, Inc. (“McGraw-Hill”) and its licensors reserve all rights in and to the work. Use of this work is subject to these terms. Except as permitted under the Copyright Act of 1976 and the right to store and retrieve one copy of the work, you may not decompile, disassemble, reverse engineer, reproduce, modify, create derivative works based upon, transmit, distribute, disseminate, sell, publish or sublicense the work or any part of it without McGraw-Hill’s prior consent. You may use the work for your own noncommercial and personal use; any other use of the work is strictly prohibited. Your right to use the work may be terminated if you fail to comply with these terms. THE WORK IS PROVIDED “AS IS.” McGRAW-HILL AND ITS LICENSORS MAKE NO GUARANTEES OR WARRANTIES AS TO THE ACCURACY, ADEQUACY OR COMPLETENESS OF OR RESULTS TO BE OBTAINED FROM USING THE WORK, INCLUDING ANY INFORMATION THAT CAN BE ACCESSED THROUGH THE WORK VIA HYPERLINK OR OTHERWISE, AND EXPRESSLY DISCLAIM ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. McGraw-Hill and its licensors do not warrant or guarantee that the functions contained in the work will meet your requirements or that its operation will be uninterrupted or error free. Neither McGraw-Hill nor its licensors shall be liable to you or anyone else for any inaccuracy, error or omission, regardless of cause, in the work or for any damages resulting therefrom. McGraw-Hill has no responsibility for the content of any information accessed through the work. Under no circumstances shall McGraw-Hill and/or its licensors be liable for any indirect, incidental, special, punitive, consequential or similar damages that result from the use of or inability to use the work, even if any of them has been advised of the possibility of such damages. This limitation of liability shall apply to any claim or cause whatsoever whether such claim or cause arises in contract, tort or otherwise.
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Contents at a Glance PartI EssentialsofProjectManagementandPMPCertification 1 BridgingtheGapBetweenPMandPMP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3
2 TheEmergingWorldofProjectManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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3 ProjectManagementProcessGroups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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PartII TheNineKnowledgeAreas 4 ProjectIntegrationManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
93
5 ProjectScopeManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129 6 ProjectTimeManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165 7 ProjectCostManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209 8 ProjectQualityManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245 9 ProjectHumanResourceManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277
vii
viii PMPCertification:ABeginner’sGuide 10 ProjectCommunicationsManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 311 11 ProjectRiskManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 341 12 ProjectProcurementManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 377 13 ClosingtheProject:AreWeThereYet? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427
Contents ACKNOWLEDGMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvii INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xix
PartI EssentialsofProjectManagementandPMPCertification 1 BridgingtheGapBetweenPMandPMP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IntroductiontoProjectManagementInstitute(PMI) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . WhyGetCertified?What’sinItforMe? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BenefitsofAchievingCertification/Credentials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ThePMIFamilyofCredentials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FiveLevelsofPMICredentials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ReasonsPeoplePursuePMPCertification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ExamplesofCredentialEligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DemystifyingPMIExams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DifferencesBetweentheExams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ExamBlueprint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PMIExamObjectives(SkillsTested) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ExpectedResults(First-TimePassRate) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HowtoApplyforaPMIExam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ManagetheExamPreparationLikeaProject . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TimelineofthePMPCredentialProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . StartTraining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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3 6 7 7 8 8 11 12 13 14 15 16 19 19 21 22 22
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PMPCertification:ABeginner’sGuide WhattoExpectonthePMPExam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BalancingCompetingDemands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ToolstoUsetoPreparefortheExam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . StudyTips . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ExamDayHasCome . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Usethe“MarkforReview”OptionontheExam . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MaintainingYourPMICredential(CCRs/PDUs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EasyPDUs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
23 24 24 26 27 27 28 30 30
2 TheEmergingWorldofProjectManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . WhatIsaProject? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . WhatIsaProgram? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . WhatIsanOperation? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . WhatIsProjectManagement? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TheProjectManagementInstitute(PMI)View . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TheReal-WorldView—ManagingProjectsUsingInstincts . . . . . . . . . . . . . . . . . . . . CompetingProjectConstraints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . WhatIsaPortfolio?WhatIsPortfolioManagement? . . . . . . . . . . . . . . . . . . . . . . . . . . TheRoleoftheProjectManager . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ImportanceofClearCommunications—LearntheLanguage . . . . . . . . . . . . . . . . . . ThreeTakeawayPointsfromThisChapter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RolesoftheStakeholders(WhoAreTheyandWhyDoWeCare?) . . . . . . . . . . . . TryThis:WhoAretheProjectStakeholders? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectFramework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TheProjectLifeCycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectPhases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OrganizationalStructures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BasicOrganizationalStructuresAccordingtoPMI . . . . . . . . . . . . . . . . . . . . . . . . . . . . OrganizingtheProject(UsingDifferentBreakdownStructures) . . . . . . . . . . . . . . . SuccessIsintheEyesoftheCustomer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TryThis:WhatDoestheCustomerWant? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . AddingValuetotheProject . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TryThis:BuildingaCorralforRodeoAnimals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CaseStudyIntroduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The“Ready,Fire,Aim”Dilemma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . AIMStrategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PopQuiz . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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3 ProjectManagementProcessGroups . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . WhatAreProcessGroups? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . InitiatingProcessGroup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PlanningProcessGroup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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Contents ExecutingProcessGroup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MonitoringandControllingProcessGroup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ClosingProcessGroup . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IntroductiontoPMIKnowledgeAreas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectIntegrationManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectScopeManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectTimeManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectCostManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectQualityManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectHumanResourceManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectCommunicationsManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectRiskManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectProcurementManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inputs,ToolsandTechniques,andOutputs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectProcesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GlobalStandards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . MappingProcessestoKnowledgeAreasandProcessGroups . . . . . . . . . . . . . . . . . . . . . . . . TheImportanceofPlanning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PMICodeofEthicsandProfessionalConduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
70 70 70 74 74 75 75 76 76 76 77 77 77 78 80 80 81 82 85 90
PartII TheNineKnowledgeAreas 4 ProjectIntegrationManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectIntegrationManagementAccordingtoPMI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . OverviewofProjectIntegrationManagementProcesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TheSelectionProcess:HowProjectsAreBorn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DefinetheBusinessNeed/OpportunityorRequirement . . . . . . . . . . . . . . . . . . . . . . . . ProjectMethodologyandSampleChecklist . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectIntegrationManagementProcesses:ChartertoClose . . . . . . . . . . . . . . . . . . . . . . . . 1.DevelopProjectCharterProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TryThis:WhoProvidestheRequirements? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.DevelopProjectManagementPlanProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TryThis:PlantheWork . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.DirectandManageProjectExecutionProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TryThis:Sky’stheLimit:PetProjectsAreOutofScope . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.MonitorandControlProjectWorkProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TryThis:KeepingYourEyesWideOpen:AccurateProgressReporting . . . . . . . . . . . . . 5.PerformIntegratedChangeControlProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TryThis:HavingaCrystalBall:FixItBeforeItBreaks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.CloseProjectorPhaseProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TryThis:PasstheShredder:ClosingtheProjectIsSoTherapeutic . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
93 95 96 97 98 100 102 102 110 112 113 116 118 119 120 120 123 125 126 127
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PMPCertification:ABeginner’sGuide 5 ProjectScopeManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DefinitionofScopeManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . WhatAreProjectDeliverables? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectCompletionCriteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CaseStudy:SampleCompletionCriteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectScopeManagementProcesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.CollectRequirementsProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TryThis:DealingwithUnusualDemands:TheCustomerWantsWhat? . . . . . . . . . . . . . 2.DefineScopeProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.CreateWorkBreakdownStructure(WBS)Process . . . . . . . . . . . . . . . . . . . . . . . . . . 4.VerifyScopeProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.ControlScopeProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . AdditionalInformationonChangeManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ChangeControlBoard . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TheImportanceofSolidProjectScopeManagement . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . PROJECTSCOPESTATEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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6 ProjectTimeManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TimeManagementSystem . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ManagingtheSchedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectTimeManagementProcesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.DefineActivitiesProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.SequenceActivitiesProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.EstimateActivityResourcesProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TryThis:Who’sonFirst?(KnowingtheSchedule) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TryThis:TheOverachiever(“PickMe,Coach!”) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.EstimateActivityDurationsProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TryThis:UsingThree-PointEstimateforTravelTime . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.DevelopScheduleProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.ControlScheduleProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TryThis:Out-of-ControlSchedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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7 ProjectCostManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . AnOfferICouldn’tRefuse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HowDoYouSpell“$ponsor”? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HowCostManagementTiesintoTimeManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectCostManagementProcesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.EstimateCostsProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TryThis:ParametricEstimating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.DetermineBudgetProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.ControlCostsProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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132 132 133 133 134 135 138 144 147 152 154 159 159 160 160 161 167 167 168 170 175 185 186 187 188 191 191 204 206 207 211 212 212 213 215 221 225 226
Contents TryThis:EarnedValueExampleUsingBECCaseStudy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232 CostManagementSummary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242
8 ProjectQualityManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HowtoAchieveCustomerSatisfaction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HowDoYouMeasureQuality? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . CaseStudy:SampleQualityMeasurements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ImportanceofQuality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . WhatIsBrokenandHowDoWeFixIt? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HowDoWeFixtheQualityProblems? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DefinitionofQualityandHowItChanged . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GurusofQuality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . KeyQualityTerms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SixSigma,Lean,andKaizenInitiatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TryThis:GoLeanProject . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectQualityManagementProcesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.PlanQualityProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.PerformQualityAssuranceProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.PerformQualityControlProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . QualityManagementSummary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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9 ProjectHumanResourceManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . WhatIsProjectHumanResourceManagement? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RoleoftheProjectManagerinHRManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectHumanResourceManagementProcesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.DevelopHumanResourcePlanProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.AcquireProjectTeamProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.DevelopProjectTeamProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.ManageProjectTeamProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TryThis:TakeMeOuttotheBallGame:NetworkingtheProjectTeam . . . . . . . . . . . . . ManagingCustomerExpectations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SignsofaConflict . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ConflictResolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TechniquestoHelpResolveConflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HRManagementSummary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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10 ProjectCommunicationsManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ThePM’sRoleinCommunications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TheMedium(HowWeDelivertheMessage) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VirtualCommunications(WaveoftheFuture) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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247 248 249 250 251 252 253 253 254 257 259 261 262 268 269 274 274 279 279 280 281 283 287 295 300 306 307 307 308 309 309 314 315 316
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xiv PMPCertification:ABeginner’sGuide ProjectCommunicationsManagementProcesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.IdentifyStakeholdersProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TryThis:HowtoPlanCommunicationsforKeyStakeholders . . . . . . . . . . . . . . . . . . . . . . . 2.PlanCommunicationsProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.DistributeInformationProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.ManageStakeholderExpectationsProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TryThis:ManagingUnrealisticExpectations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.ReportPerformanceProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SummaryofCommunicationsManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
317 317 318 321 329 332 332 336 339 339
11 ProjectRiskManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RiskFactors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Threats,Opportunities,andTriggers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TryThis:Don’tRainonMyProject . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BeProactive(PlanforRiskandMitigateWhereverPossible) . . . . . . . . . . . . . . . . . . . . . . . . RiskTolerancesandThresholds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectRiskManagementProcesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.PlanRiskManagementProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.IdentifyRisksProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.PerformQualitativeRiskAnalysisProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.PerformQuantitativeRiskAnalysisProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.PlanRiskResponsesProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.MonitorandControlRisksProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SummaryofRiskManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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12 ProjectProcurementManagement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DefinitionofaContract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ContractTermsandConditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ElementsofaLegallyBindingContract . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . DefinitionofProcurement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . RoleoftheProjectManager(BuyerorSeller) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectProcurementManagementProcesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.PlanProcurementsProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.ConductProcurementsProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.AdministerProcurementsProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.CloseProcurementsProcess . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . TryThis:FixingIssuesBeforeTurningOuttheLights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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343 343 345 345 347 348 349 354 358 360 364 366 372 373 379 379 382 383 384 385 386 397 400 403 404 409 409
Contents
13 ClosingtheProject:AreWeThereYet? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ImportanceofProjectClosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FormalAcceptance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ThreeTakeawayPoints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ClosingProcesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ReverseEngineering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ThePastIsaCrystalBallIntotheFuture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ExitCriteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . NextSteps:WheretoGofromHere . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ProjectObjectivesforthisBook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GoConfidentlyintheDirectionofYourDreams . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
411 413 413 413 414 414 415 415 423 424 424 425
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427
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Acknowledgments T
hisbook,likeanyother,istheendproductofalotofhardworkbymanypeople.I’dlike tothanksomeofthepeoplewhowereinvolvedwiththecreationofthisbook. First,abigthanksgoesouttoMeggMorin,acquisitionseditoratMcGraw-Hill. Meggsteppedbackandletmerunwiththisprojectyetwastheretoprovidegreat suggestionsandguidance.Shedidawonderfuljobtoensurethingsransmoothly. AlsothankstoRicardo(Ric)Rothschild,myfriend,co-instructor(wingman),andthe technicaleditorforthisbook. ManythanksgoouttomystudentsatColoradoStateUniversity(CSU)fortheirinterest inprojectmanagementandthegreatquestionsandinputtheyprovidedthroughtheyears togivemetheideasforthisbook.SpecialthanksgoestoChrisBonarandhiswifeSusy. AlongwithMegg,theyplantedtheseedthatgrewintothisbookandturnedintoadream opportunityforme.Alsoabigthankstomyfellowinstructors(LeeVarra-Nelson,Terry Skaggs,JeffVanBuskirk,andRicRothschild)atColoradoStateUniversitywhoprovided inputandreviewstohelpmakethisbookausefulresourceforourprojectmanagement classes.ThanksalsotoShaneCadwellandMattPellantattheBudweiserEventsCenter (BEC).Theyprovidedgreatcasestudyexamplesforthereal-worldviewofproject management.AdditionalthanksgoouttotheproductionandeditorialfolksatMcGraw-Hill,
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xviii PMPCertification:ABeginner’sGuide includingMeghanRiley,editorialsupervisorJanetWalden,copyeditorBartReed,and proofreaderandindexerClaireSplan.MythankstoBethBilkaandBeckyDragerfortheir helpwithillustrations,andtoVipraFauzdarofGlyphInternational. ThelastbigthanksgotomywifePam,forlettingmefollowmydreams,forbeingmy navigator,myeditor,andmybestfriendwhokeepsmeontherighttrackinouradventures towardawonderfullifetogether,andforputtingupwithmealltheseyears.
Introduction T
hisbook’sfocusisonbridgingthegapbetweenbeingaprojectmanager(PM)and beingagloballyrecognizedProjectManagementProfessional(PMP).Ittakesyou throughtheeverydaychallengesofmanagingprojectsandprovidestipsonhowtoprepare forandpassthePMIexam. Thedifferentiatorsinthisbookarethestraightforwardapproachtoprojectmanagement details,theprovenexamples,andthecollectionofchecklistsandreferencesthatserveasa guideforeventhemostexperiencedprojectmanagers. Thisbooktakesyouthroughthefundamentalsofprojectmanagementusingrealworldexamplesofwhatworksandwhatdoesn’tworkinthisdynamicprofession.Italso demonstrateshowsoundPMprinciplescanimprovetheefficiencyandeffectivenessof youandyourprojectteambyprovidingsampledocumentsandarealprojectcasestudy thatbuildonthetopicsdiscussedthroughoutthebook. Projectmanagementisrecognizedasoneofthefastest-growingprofessionsinmany oftoday’sindustries—softwareandhardwareproductdevelopment,government,military, construction,andinformationservices(justtonameafew).Itisrapidlybecomingarequired skillforcareeradvancementandimprovedprojectandprogrammanagementsuccess. ThisbookhelpsPMsbetterunderstandtheimportanceofbalancingprojectconstraints (barriers)andprovidingtimelyandaccurateprojectstatuscommunicationstoallkey stakeholders.
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PMPCertification:ABeginner’sGuide Itisalsoimportanttonotethatthisbookisjustastartingpointinthislargeand growingprofession.Ihopeitwhetsyourappetiteformoreonthetopicofproject management.
Assumptions Thisbookassumesthereadershavevaryingdegreesofknowledgeandexperience—from little(orno)formalPMexperiencetomoreadvancedexperience.Becauseofthisrangeof experience,thisbookisdesignedtobeaprimerandtoconfirmthefurtherstepsneededto beamoresuccessfulprojectmanager.
Organization Becausethisbookisdesignedtomeettheneedsofawiderangeofprojectmanagers—it isbrokenintotwomajorsections.Thefirstsection,whichconsistsofChapters1–3, discussesthevalueandbenefitsofPMcertificationandservesasanintroductiontoProject ManagementInstitute(PMI)PMcredentialsandthePMIexams.Thefirstsection“bridges thegap”betweenbeingaPMandbecomingacertifiedPMP. ThesecondsectioncontainsChapters4–12,whichdetailthenineknowledgeareas, andChapter13,whichexplainshowtoeffectivelybringaprojecttosuccessfulclosure. IfyouarenotfamiliarwithPMcredentialsorarenotsureyouwanttopursuePMI certificationrightaway,youdefinitelywanttostartthisbookfromthebeginning.Ifyou haveafewyearsofprojectexperienceandalreadyknowaboutPMIandthebenefits oftheircredentials,youmaywanttojumprightintotheknowledgeareas,startingat Chapter4. Nowhere’sabriefsummaryofthebook’sorganizationandcontents.
Part I: Essentials of Project Management and PMP Certification Thispartofthebooklooksatprojectmanagementfromareal-worldperspectiveandthen offersinsightintothebenefitsofprojectmanagement(PM)credentials. PartIhasthreechapters: ●
Chapter1:BridgingtheGapBetweenPMandPMP
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Chapter2:TheEmergingWorldofProjectManagement
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Chapter3:ProjectManagementProcessGroups
Introduction
Part II: The Nine Knowledge Areas PartIIcontainstenchapters,startingwithChapters4–12coveringPMI’snineknowledge areas,andendingwithChapter13,whichdiscusseshowtosuccessfullycloseaproject. Here’salistoftheknowledgeareachapters: ●
Chapter4:ProjectIntegrationManagement
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Chapter5:ProjectScopeManagement
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Chapter6:ProjectTimeManagement
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Chapter7:ProjectCostManagement
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Chapter8:ProjectQualityManagement
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Chapter9:ProjectHumanResourceManagement
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Chapter10:ProjectCommunicationsManagement
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Chapter11:ProjectRiskManagement
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Chapter12:ProjectProcurementManagement
Chapter13,“ClosingtheProject:AreWeThereYet?”,explainstheimportanceof properlyclosingtheprojectandoffersachecklistforeffectivelybringingtheprojectto successfulcompletion.
Tips, Notes, Try This, and Ask the Expert Elements ThisbookalsoincludesTips,Notes,TryThis,andAsktheExpertserieselements. Theseelementsareintendedtoshareaspecificexperience,addressacommonproblem, orhighlightkeyinformationthatwillhelpyouunderstandthetopicbetterandprovide helpfulinformationtowardyourPMIexamapplication,preparation,andsuccessful completionofthesehighlysought-aftercredentials.
Project Management Institute (PMI), Inc. ThisbooktiesdirectlytothefourtheditionofthePMBOKGuide*andcanbereadin tandemwithitchapterforchapter,oryoucanjumpintoanyofthechapterstofocuson specificareasofinterest. Thisbooknotonlywillhelpyouimproveyourprojectknowledge,butalsowillhelp explainthePMBOKbyofferingreal-worldprojectexamplesandtipstoincreaseyour successonyourprojectsandassistinpreparingyouforthePMIexam. ProjectManagementInstituteAGuidetotheProjectManagementBodyofKnowledge(PMBOK®Guide)-Fourth Edition,ProjectManagementInstitute,Inc.,2004.Copyrightandallrightsreserved.Materialfromthis publicationhasbeenreproducedwiththepermissionofPMI.
*
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Part
I
Essentials of Project Management and PMP Certification
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Chapter
1
Bridging the Gap Between PM and PMP
3
4
PMPCertification:ABeginner’sGuide
KeySkills&Concepts ●
Abriefhistoryofprojectmanagement
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Reasonsforgettingcertified
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Benefitsofcertification/credentials
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PMIandthePMBOK®Guide
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PMIcredentials
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PMIexams
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PMIexamobjectives
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HowtoapplyandprepareforaPMIexam
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Thevariouslearningstyles
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Studytipsandwhattoexpectonexamday
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MaintainingPMIcredentials
T
hereisahugedifferencebetweenbeingaprojectmanager(PM)andmanagingprojects asagloballyrecognizedcredentialedProjectManagementProfessional(PMP).The differencecanoftenbeseeninthereducednumberoffailedprojects.Asprojectmanagers developtheskillsneededtoeffectivelymanageprojectsandthengoontogetcertified, theirsuccessratetypicallyincreases,asdoestheirsalary.Infact,accordingtoPayscale .com,mediansalariesforPMPsareupto30percenthigherthanthosefornon-PMPs. Dependingonthecityyouworkinandthenumberofyearsofexperienceyouhave, salaryincreasesrangefrom6to30percent.PMPsintheUnitedStatesenjoysalariesfrom $56,000toover$115,000. Toquantifytheincreaseinprojectsuccessrates,TheStandishGroupstudiedmore than40,000projectsoveraten-yearperiodandreportedthatprojectfailuresdeclinedto 15percentofallprojects—avastimprovementoverthe31-percentfailureratereportedin 1994.Thereason,theysay:“Peoplehavebecomemuchmoresavvyinprojectmanagement.
Chapter1: BridgingtheGapBetweenPMandPMP Whenwefirststartedtheresearch,projectmanagementwasasortofblackart.”[1]Ina laterarticle,StandishChairmanJimJohnsongoesontosaythatmangershaveabetter understandingofthedynamicsofaproject.Johnsoncitedthreereasonsfortheimprovement insoftwarequality:“betterprojectmanagement,iterativedevelopmentandtheemerging Webinfrastructure.”[2] Togetabetterunderstandingofthesechanges,let’stalkfirstaboutprojectmanagement ingeneral.Itisinpracticallyeverythingwedo—creatinganewtechnology,designing anofficebuildingoranewhome,managingamajorevent(suchastheOlympics),and runningafundraiserforachurchorschool.Projectmanagementprinciplescanalsobe usedinourpersonallives—remodelingabasementorkitchen,designingalandscape,and planningaweddingorafamilyvacation.Alargenumberoftheseprojectsaredonewith littleornoformaltraining.Becauseprojectsbydefinitionareuniqueinnature,wetendto managetheminvariouswaystodifferentdegreesofsuccess.Mostofthetimewhenthe projectreachestheend,everyoneisfairlyhappywiththeresults. Lookingthroughouthistory,weseeprojectmanagementgoesbackthousandsofyears (somesaytothebeginningoftime).LookatthepyramidsofEgypt(somearedatedback to2550B.C.),theRomanaqueducts(Appiawasbelievedtobethefirstonebuilt,in 312B.C.),andtheGreatWallofChina(builtbetween221B.C.and206B.C.).Manyof theseengineeringmarvelsarestillstandingtoday(withsomerenovation). Howdoyousupposethesemarvelsweredesignedandbuilt?Projectmanagement. Projectmanagementexistedinoneformoranotherearlyon,andourancestorssomehow mastereditwithoutscopestatements,communicationsplans,ortaskschedules. Eventhoughmanyearlyprojectmanagersweresuccessful,theirprocesseswere independent(adhoc),inconsistent,andmostlynotreplicable.Thustheneedfor structure—documented,proven,andrepeatableprocesses;toolsandtechniques;methods andprojectmanagementdiscipline. Evensome“successful”projectswereanythingbutasuccessbytoday’sstandards(that is,ontimeandonbudget).Asamorerecentexample,taketheSydneyOperaHouse—one ofthemostrecognizableimagesofthemodernworld.ItwasdesignedbyJørnUtzonof Denmarkin1957anddeemed,atthetime,aspectacularfailure.Eventhoughitisnow reveredasaniconofSydney,itwasoriginallylabeleda“whiteelephant”and“acoustic nightmare.”WhenconstructionstartedontheSydneyOperaHousein1959,itwasestimated tocostAU$7millionandtakefiveyearstobuild.Itwasfinallycompletedin1973(9years behindschedule)atacostofoverAU$100million(AU$93millionoverbudget.)Even thoughthisprojectfailedtomeetthetraditionalprojectmanagementsuccessmetrics,itis consideredahugesuccess.[3]
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PMPCertification:ABeginner’sGuide
Introduction to Project Management Institute (PMI) Alotofushavebeenmanagingprojectslongerthanwecaretoadmit,andforthemost partwehavebeendoingprettywell,mainlygoingoninstinctsand“gutfeelings.” However,thegrowingneedtomodernizehascausedtheworldofprojectmanagementto reallytakeoff.The1950smarkedthebeginningofthemoderneraofprojectmanagement asweknowittoday. Thisnewerausheredintheneedforaframeworkofgloballyrecognizedstandard processes,tools,andmethods.Asmallgroupofprojectmanagementprofessionals recognizedthisneedandin1969foundedanonprofitorganizationcalledtheProject ManagementInstitute(PMI).PMIbegandocumentingaproposedsetofproject managementstandardstheycalleda“whitepaper”(anauthoritativeguide)in1987.Their intentwastostandardizeprojectmanagementinformationandpractices.Thewhitepaper laterbecametheoriginalAGuidetotheProjectManagementBodyofKnowledge (PMBOK®Guide),publishedforthefirsttimein1996.Thisguidebecamerecognized asaworldwidestandardandprovidedcommonprocesses,principles,knowledgeareas, toolsandtechniques,andaglobalprojectmanagementdiscipline.PMIsawtheneed totakethisnewdisciplineintothetwenty-firstcenturyandmakeitofficialbycreating anexaminationforprojectmanagerstovalidatetheirabilitytounderstandthenew standards.Todothis,PMIlaunchedtheProjectManagementProfessional(PMP) certificationexamin1994.Sincethattime,thePMPcredentialhasskyrocketedin popularity. TodemonstratetheemergingdemandforcertifiedPMPs,youneedonlylookatthejob postingsforprojectmanagers.Onlyafewyearsago,advertisementsforprojectmanager jobsstated,“PMPcertificationaplus.”Nowtheyread,“PMPcertificationrequired.”This istrueforpublicandprivatesectorcompaniesaswellasgovernmentagencieswhoare requiringtheirPMsgetcertified. Tomeetthisincreaseddemand,PMsaregettingseriousaboutacquiringthoseimportant initialsaftertheirnames.ThenumberofPMPshasgrownexponentiallysince1998,when therewereonly11,000PMPsworldwide.InJune2009,thenumberofPMPsexceeded 350,000—andthisnumbercontinuestogrowbyover4,000permonth. Forthosewhodon’thavethethreeyearsofPMexperienceleadingprojectteams thatareneededtogoafterthePMPcertification,thereistheCertifiedAssociateProject Manager(CAPM)credentialavailablefromPMI.
NOTE There were over 8,000 CAPM credential holders worldwide at the end of May 2009—and the numbers are continuing to grow.
Chapter1: BridgingtheGapBetweenPMandPMP
Why Get Certified? What’s in It for Me? Anythingworthwhile,suchasgettingcertified,requirescommitment.Alotofpeople wonder,“WhyshouldIsubjectmyselfandmyfamilytotheextratimeittakestoprepare forthePMIexam,especiallyintoday’sdemandingworkenvironment?”Mostofusare alreadyworkinglonghours,onseveraldifferentprojectsatthesametime,andwithless timeforfamilyandfriends. Withthecurrenteconomictimes,therearefewerjobsavailableandmanyqualified workerswhoaremorethanwillingtoputintheextratimetogetcertified,makingthem eligibletocompetefortopprojectmanagementpositions. Soundsprettycompetitive—sowhyputyourselfthroughtheextrawork?Thebiggest reasonIbelievestartswiththefeelingyougetwhenyouwalkoutofthetestcenterwith a“Congratulations,youpassed”letterinyourhand,knowingyoureachedagoalthat millionsofprojectmanagersarethinkingaboutpursuing.Achillrunsdownyourspine, andthesmileonyourfacecanbespottedamileaway.Youwanttotelltheworld,“Ihave arrived.IpassedthePMIexam!” Thencometherealbenefits.Youwillbeableto“talkthetalk”(knowacommon languagetobeabletocommunicatewithprojectmanagersonaglobalbasis)and“walk thewalk”bybeingabletoapplystandardprovenprocessesonglobalprojects. Yourfamilyandfriendswillbeproudofyoubecausetheyknowthetimeandenergy youputintostudyingforthePMIexam.Yourbossandcoworkerswilladmireyour commitmentandachievement.Somecompaniesevenrewardemployeesthatrisetothe levelofcertificationwithrecognitionbonuses,salaryincreases,and/orpromotionsfor theirdedication.
Benefits of Achieving Certification/Credentials Thebenefitsgofarbeyondtheinitialcongratulations.Onceyouarecertified,youhavea newfoundsenseofawarenessandunderstanding,knowingthereisaworldwiderecognized standardthatprovidesaroadmaptoguideyoutowardimprovedprojectresults. Youcanbecontentinknowingtherearethousandsofprojectmanagersacrosstheglobe facingthesamechallengesyouare—andinsomecasesstumblingoversimilarbarriersand “potholes.”Yourjobismadealittleeasierwiththerealizationthatyouarenotaloneonyour project. Here’sasummarylistofthebenefitsofcertification: ●
Demonstratedcommitmentandproofofprofessionalachievement
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Increasedcustomerandteamcredibility
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Increasedmarketability
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PMPCertification:ABeginner’sGuide ●
Potentialforhighercompensation
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Abetterunderstandingofhowtomanageresources
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Improvedcommunicationsskills
NOTE If you are already familiar with PMI’s credentials or if you are not planning to pursue certification just yet, that’s okay. Please feel free to jump to Chapter 2. You can always come back to Chapter 1 as a reference when you are ready for more information regarding exam eligibility, PMI credentials, or exam information.
The PMI Family of Credentials PMIoffersacomprehensivecertificationprogramforprojectmanagerswithdifferent levelsofexperience.Theprogramsupportsacareerframeworkintheprojectmanagement profession.PMI’scredentialsandprofessionaldevelopmentcanhelpbusinessprofessionals start,build,oradvancetheircareersinprojectmanagement,programmanagement,and schedulingandriskmanagement.
Five Levels of PMI Credentials PMIcredentialsestablishyourdedicationandproficiencyinprojectmanagement.Toattain oneofPMI’scredentials,youmustsatisfydefinededucationandprofessionalexperience requirements.TobetterunderstandPMIcredentialsandtherequirementsneededtoobtain certification,reviewthefollowingdefinitionsandthenrefertoTable1-1(laterinthis chapter)forthenecessaryrequirements,projectroles,anddetails.
Certified Associate in Project Management (CAPM) TheCAPMcredentialisgearedtowardpeoplewhocontributetoaprojectteambutwho arenotleadingordirectingtheteam(seethePMPcredential,explainednext,forthose whoareleadinganddirectingprojectteams).TheCAPMcredentialrecognizesaperson’s abilitytodemonstratetheircapabilitiesby: ●
HavingafundamentalknowledgeofthePMBOKGuide
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UnderstandingthestandardPMBOKprocessesandterminology
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Demonstratingknowledgeofbasicprojectmanagementpractices
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Beingresponsibleforindividualprojecttasksintheirareaofexpertise(e.g.,finance, marketing,legal,customercare,marketresearch,fulfillment,processing).
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Contributingtotheprojectteamasasubjectmatterexpert(SME)
Chapter1: BridgingtheGapBetweenPMandPMP
Project Management Professional (PMP) ThePMPcredentialisforpeoplewhoareleadinganddirectingaprojectteam.PMPsare ●
Responsibleforallaspectsoftheprojectthroughitsentirelifecycle
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Capableofleadinganddirectingcross-functionalteamsindeliveringprojectresults
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Abletodemonstratesufficientknowledgeandexperiencetoapplyamethodologyto projectswithintheconstraintsofschedule,budget,andresources
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Responsibleformanagingrisk,communications,stakeholderexpectations,and effectivelyperformingtheirdutiesinaprofessionalmanner
Program Management Professional (PgMP) PMI’sProgramManagementProfessionalcredentialisspecificallydevelopedtoacknowledge thequalificationoftheprofessionalwholeadsthecoordinatedmanagementofmultiple projectstowardastrategicgoalandensurestheultimatesuccessoftheoverallprogram. AsampleofthePgMP’scapabilitiesare ●
Responsibleforachievinganorganizationalobjectivebyoverseeingaprogramthat consistsofmultipleprojects
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Definesandinitiatesprojectsandassignsprojectmanagerstomanagecost,schedule, andperformance
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Maintainsalignmentofprogramscopewithstrategicbusinessobjectives
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EffectivelymonitorsandrespondstotheneedsofthePMsintheirprogram
PMI Risk Management Professional (PMI-RMP) ThePMIRiskManagementProfessionalcredentialrecognizesknowledge,skills,and experienceintheareaofprojectriskmanagement.ARiskManagementProfessional providesexpertiseinthespecializedareaofassessingandidentifyingprojectrisks,along withplanstomitigatethreatsandcapitalizeonopportunities. RMPsaretypically: ●
Responsibleforidentifyingprojectrisks,assigningownersandreviewingmitigationplans
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Indirectsupportofprojectmanagersandtheprojectteamasacontributingmember
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Abletodocumentaminimumofthreeyearsofprojectriskmanagementexperience
PMI Scheduling Professional (PMI-SP) TheSchedulingProfessionalcredentialrecognizesthespecializedskillsneededfor developingandmaintainingtheprojectschedule.
9
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PMPCertification:ABeginner’sGuide SchedulingProfessionalsare ●
Responsibleforcreatingandmaintainingtheprojectschedule
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Indirectsupportoftheprojectmanagerandprojectteamasacontributingmemberin managingtheoverallschedule
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Abletodocumentaminimumofthreeyearsofprojectschedulingexperience
PMI Credentials TobegintheprocessofbecomingcertifiedinoneofthePMIcredentials,youfirstneedto determineyourlevelofexperienceandeligibility.Table1-1shouldhelpwiththisprocess. CAPM
PMI-SP
PMI-RMP
PMP
PgMP
Full name
Certified Associate in Project Management
PMI Scheduling Professional
PMI Risk Management Professional
Project Management Professional
Program Management Professional
Project role
Contributes to project team
Develops and maintains project schedule
Assesses and identifies risks, mitigates threats, and capitalizes on opportunities
Leads and directs project teams
Achieves the organizational objectives through defining and overseeing projects and resources
Eligibility requirements
High school diploma or global equivalent AND 1,500 hours experience OR 23 hours PM education
High school diploma or global equivalent 5,000 hours project scheduling experience 40 hours project scheduling education OR Bachelor’s degree or global equivalent 3,500 hours project scheduling experience 30 hours project scheduling education
High school diploma or global equivalent 4,500 hours project risk management experience 40 hours project risk management education OR Bachelor’s degree or global equivalent 3,500 hours project risk management experience 30 hours project risk management education
High school diploma or global equivalent 5 years project management experience 35 hours project management education OR Bachelor’s degree or global equivalent 3 years project management experience 35 hours project management education
High school diploma or global equivalent 4 years project management experience 7 years program management experience OR Bachelor’s degree/global equivalent 4 years project management experience 4 years program management experience
Table1-1
PMI Credentials
Chapter1: BridgingtheGapBetweenPMandPMP
CAPM
PMI-SP
PMI-RMP
PMP
PgMP
Steps to obtaining credential
Application process + multiplechoice exam
Application process + multiple-choice exam
Application process + multiple-choice exam
Application process + multiple-choice exam
Three evaluations: application panel review + multiple-choice exam + multi-rater assessment
Exam information
3 hours; 150 questions
3.5 hours; 170 questions
3.5 hours; 170 questions
4 hours; 200 questions
4 hours; 170 questions
Fees for PMI members
US$225
US$520
US$520
US$405
US$1,500
Credential maintenance cycles and requirements
5 years; must retake the exam in the fifth year to recertify
3 years; 30 Professional Development Units (PDUs) in project scheduling
3 years; 30 PDUs in project risk management
3 years; 60 PDUs
3 years; 60 PDUs
Table1-1
PMI Credentials
NOTE To be eligible for the PMP credential, a candidate must meet the education and professional experience listed in Table 1-1, and all the project management experience must have been accrued within the last eight consecutive years prior to application submission.[4]
Foradditionaldetailsandthelatestinformation,gotothePMI.orgwebsite(click“Get Certified”toseetheguidelines).
Reasons People Pursue PMP Certification PMPisthepremiercertificationcredentialforprojectmanagers.Whenarandomaudience wasaskedwhytheywerepursuingthiscredential,themajorityoftheresponseswerefor careeradvancement(50percent)andthenexthighestreasonwasarecommendationfrom anemployer(21percent).YoucanseealltheresponsesinFigure1-1.[5]
Ask the Expert Q: Whichcredentialisrightforme? A: Itdepends.Thebestwaytodeterminetheanswertothisquestionistolookatyourexperience, yourlevelofeducation,yourcurrentandfuturejobrole,andyouraspirations.Eachcredential isdesignedtostandalone(noonecredentialservesasaprerequisiteforanother).However, youcanpursuemultiplecredentials.Eachcredentialcomplementstheothers.
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PMPCertification:ABeginner’sGuide
Career Advancement 50%
21%
Employer Recommended 12%
Employer Required
10%
Personal Satisfaction 3%
Higher Pay Job Security
2%
Other
2% 2% 0
5
10
15
20
25
30
35
40
45
50
Percent of Responses
Figure1-1
Reasons people pursue PM certification
Examples of Credential Eligibility Toputthiscredentialeligibilityinperspective,let’slookatthreepeoplewithdifferent levelsofexperiencetoseewhichcredentialisrightforeachofthem: ●
Joeyhasaminimumof1,500hoursexperienceworkingonprojectteamsbuthas notledaprojecthimself.Hehasahighschooldiplomaandover23hoursofproject managementeducation.JoeyhasagoodfoundationalunderstandingofthePMBOK processgroups,knowledgeareas,andconcepts. JoeyshouldgofortheCAPM-levelcredential(heiseligiblewitheither1,500hoursof experienceorthe23hoursofPMeducation).TheCAPMfocusesonthePMBOK.With only150multiplechoicequestions(comparedto200inthePMPexam),itmeasures one’sabilitytounderstandthePMfundamentalsaccordingtothePMBOKGuide.
●
Suzyhasoverthreeyears(36non-overlappingmonths)ofprojectmanagement experienceleadinganddirectingprojectteamsoverthepasteightyears.Whenshe addsupherhoursmanagingprojectsshehasmorethan4,500hoursandSuzyhasa bachelor’sdegree.Shealsohasover35hoursofformalprojectmanagementeducation. Suzyhasdemonstratedherabilityto“thinkonherfeet”inrealliveprojectsituations andhasagoodgraspofprojectmanagementprinciples,methods,andprocesses, accordingtothePMBOKGuide.
Chapter1: BridgingtheGapBetweenPMandPMP SuzyshouldgoforthePMP-levelcredential.SheunderstandsthatthePMPexam focusesontheabilitytoapplysoundjudgmenttoprojectsituations. ●
Suzy’ssisterMarycurrentlyhasahighschooldiploma(nocollegedegree).She doeshaveaminimumof7,500hoursofprojectmanagementexperienceleadingand directingprojectteamsoverafiveyear(60non-overlappingmonths)periodinthelast eightyears.Maryalsohasover35hoursofformalprojectmanagementeducation,so sheisalsoeligibletositforthePMPexam.
Demystifying PMI Exams Mostpeople(myselfincluded,beforeItookthetest)areconfusedandintimidatedby PMIexams.Thisisnormalandexpectedbecausefewpeoplewantorliketotaketests, especiallywiththecost,thetimetoprepare,andthelevelofcommitmenttopursuethis three-to-four-hourevent(notethatthePMPexamwaseighthourspriortoApril1998). So,thegoodnewsistheexamisnowonlythreetofourhours,dependingonthetypeof examyoutake.Plus,themajorityoftheexamsarecomputer-basedtesting(CBT),which means“touchscreen”forlesspaperprocessingandquickerscoring(andtoalignwiththe electronicgeneration).That’sright,yougettheresultsinminutesafteryoucompletethe examrightonthescreen. ThereisalsoagrowingnumberofPMIRegisteredEducationProviders(REPs).These arerecognizedcompanies,universities,andorganizationsthatofferprojectmanagement coursesandcertificateprogramsdesignedtohelpyoupreparetosuccessfullypassthe exam. Inordertofurtherdemystifytheexams,let’sstartwithaquickreviewofthefivetypes ofexaminationsPMIcurrentlyoffers.ThePMIexamtypesalignwiththecredentials mentionedearlier,soonlyabriefsummaryofthetypesisprovidedhere.Tobegin,thetwo mostcommonPMIexamsare ●
PMP(ProjectManagementProfessional)
●
CAPM(CertifiedAssociateProjectManager) ThenewerPMIexamsare
●
PgPM(ProgramManagementProfessional)
●
PM-SP(PMSchedulingProfessional)
●
PM-RMP(PMRiskManagementProfessional)
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PMPCertification:ABeginner’sGuide What’smore,youhavetwowaystotakePMIexams: ●
Computer-basedtesting(CBT)
●
Paper-basedtesting(PBT)
NOTE There are strict requirements to qualify to take the paper-based test. To be eligible, the candidate must live at least 186.5 miles (300 km) from a PMI test site. Also, there is a reexamination fee should you need to retake the test. (See the PMI.org website for the latest fee amounts.) You are allowed to retake the exam up to three times during your 12-month approved period. The reexamination fee must be paid prior to each sitting for the exam.
Differences Between the Exams BecausethePMPcertificationexamwasintroducedfirst,ithasthehighestnumberof credentialedPMs.Itisbyfarthemostsought-afterexamofallthecredentials.Becauseof itspopularity,wewillfocusmostlyonthedetailsofthePMPexam. AccordingtoPMI,thePMPexamisdesignedtodetermineyourabilitytodemonstrate proficiencyineachofthefiveprocessgroups(alsoknownas“domains”):Initiating, Planning,Executing,MonitoringandControlling,andClosing. ThePMPexamiscomposedof200multiple-choicequestions.Ofthe200questions, 25areconsidered“pretest”questions.Pretestquestionsdonotaffectthescoreandare usedinexaminationsasaneffectiveandlegitimatewaytotestthevalidityoffuture examinationquestions.Allquestionsarerandomlyplacedthroughouttheexamination. Eachquestionontheexamisdevelopedandindependentlyvalidatedbyglobalwork groups(credentialholders)andassignedacomplexityrating. Eachexamisuniqueinthatthesystemselectsarandomgroupofquestionsforeach participantandthenumberofcorrectanswersneededtopasstheexamdependsonthe complexityofthequestionsselected.Forexample,ifmanyofthequestionsinyour examarehigherincomplexity,thenyoucanpasswithaslightlylowernumberofcorrect answers—say,69percentasopposedto70percent.(Thesepercentagesareexamplesonly andaresubjecttochangewithoutnotice.) TheallottedtimetocompletethePMPcomputer-basedexaminationisfourhours.The CAPM,ontheotherhand,has150multiple-choicequestions,withthreehoursallottedto completethetest.Thesetimelimitsaretightlycontrolledatthetestcenterand,ingeneral, mostpeoplefeeltheyhavemorethanenoughtimetocompletetheexams.Youcansignin andouttotakeshortbreaks,eatasnack,andsoon—however,theclockisstillticking. CandidatesfortheCAPMcredentialmustbeabletodocumenttheircontributionto projectsassubjectmatterexperts(SMEs)andteammembers.Theymayalsoserveas
Chapter1: BridgingtheGapBetweenPMandPMP
How to Save Money on the Cost of the Exam ThePMPexamcostsUS$555in2009forthefirstsitting(forCBT).However,ifyou areamemberofthePMIorganization,youreceiveabigdiscountontheexam.The discountisapproximatelyUS$150(andsubjecttochange). Membershipalsoofferssavingsonchaptermeetings,books,events,andsoon. Therefore,itisrecommendedthatyoujointhePMIchapternearestyouforatleastone year(theyearyouplantotaketheexam).Someemployerswillevenpayforayearof membershipduesbecausethesavings(discount)ontheexamfeealoneisoffsetbythe costofayearofPMImembershipdues. TheannualcostofmembershipinPMIaveragesaroundUS$130,dependingon thechapter,andyoucanjoinadditionalspecialinterestgroups(SIGs),suchasIT (InformationTechnology),IS(InformationSystems),andSD(SoftwareDevelopment). EachSIGrunsaroundUS$20toUS$30peryear.
projectsponsors,facilitators,liaisons,orcoordinatorsontheprojectstheyparticipatedon, butarenotresponsibleforleadingordirectingtheprojectteam(whichistheroleofthe projectmanager).
Exam Blueprint ThePMPexaminationisdevelopedbasedonthePMPexaminationblueprintcontainedin theProjectManagementProfessionalExaminationSpecification.Theexamblueprintdetails thepercentageofquestionscontainedineachprojectmanagementprocessgroup.Table1-2 showsthepercentageofquestionsineachprocessgroup/domainincludedontheexam. ProcessGroup/Domain
PercentageofQuestions
NumberofQuestions
Initiating
11%
22
Planning
23%
46
Executing
27%
54
Monitoring and Controlling
21%
42
Closing
9%
18
Professional and Social Responsibility
9%
18
100%
200
Table1-2
Exam Blueprint
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PMPCertification:ABeginner’sGuide NOTE The percentages and the number of questions shown in Table 1-2 are subject to change. For the latest PMP exam or CAPM exam blueprint percentages, go to the PMI.org website.[4]
PMI Exam Objectives (Skills Tested) ThePMmustbeabletomakesounddecisionsandapplygoodjudgmentinordertomove theprojectforwardtoachievescheduleandbudgetdeadlines.AsaPM,youmustbeable toaddressvariousreal-worldsituationsandworkthroughthemquicklytosolvethemany differentproblemsfacedbyyouandtheprojectteam. Theapplicant’sskillstested(suchascommunications,riskmanagement,costand timemanagement,teambuilding,andsoon)varydependingonthetypeofexamtaken. Forexample,thePMPexamfocusesonthePM’sabilitytoapplytheirknowledge,tools, techniques,andmethodstoeffectivelymanageprojects,whereastheCAPMexamfocuses onthefundamentalprocessesandmoreacademicviewofprojectmanagement(straight fromthePMBOKGuide).
NOTE Because this book is focused on project management, as opposed to program management we will focus primarily on the PMP and CAPM exams.
PMP Exam Objectives ThePMPRoleDelineationStudyconductedbyPMIstatesthatcandidatesforthePMP credentialmust ●
Performtheirdutiesundergeneralsupervisionandberesponsibleforallaspectsofthe projectforthelifeoftheproject
●
Leadanddirectcross-functionalteamstodeliverprojectswithintheconstraintsof schedule,budget,andscope
●
Demonstratesufficientknowledgeandexperiencetoappropriatelyapplya methodologytoprojectsthathavereasonablywell-definedprojectrequirementsand deliverables
Overall,thePMPexamisdesignedtodetermineyourabilitytodemonstrate proficiencyinleadinganddirectingprojectteamsineachofthefiveprocessgroups listednext.
Chapter1: BridgingtheGapBetweenPMandPMP
1.InitiatingtheProjectProcessGroup: ●
Conductproject-selectionmethods
●
Defineprojectscope
●
Documentrisks,assumptions,andconstraints
●
Identifyandperformstakeholderanalysis
●
Developprojectcharter
●
Obtainprojectcharterapproval
2.PlanningtheProjectProcessGroup: ●
Defineandrecordrequirements,constraints,andassumptions
●
Developtheprojectmanagementplan
●
Identifytheprojectteamanddefinerolesandresponsibilities
●
CreatetheWorkBreakdownStructure(WBS)
●
Defineactivities,estimateresources,anddeterminethebudget
●
Developthescheduleandchangemanagementplan
●
Plancommunications,quality,andprocurement
●
Identifyrisksanddefineriskstrategies
●
Conductprojectkick-offmeeting
3.ExecutingtheProjectProcessGroup: ●
Executeactivitiesdefinedintheprojectplan
●
Ensurecommonunderstandingandsetexpectations
●
Implementtheprocurementofprojectresources
●
Manageresourceallocation
●
Implementqualitymanagementplan
●
Implementapprovedchanges
●
Implementapprovedactionsandworkarounds
●
Improveteamperformance
4.MonitoringandControllingtheProjectProcessGroup: ●
Measureprojectperformance
●
Verifyandmanagechangestotheproject
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PMPCertification:ABeginner’sGuide
●
Ensureprojectdeliverablesconformtoqualitystandards
●
Monitorallrisksandinitiatearesponsestrategy
5.ClosingtheProjectProcessGroup: ●
Obtainfinalacceptancefortheproject
●
Obtainfinancial,legal,andadministrativeclosure
●
Releaseprojectresources
●
Identify,document,andcommunicatelessonslearned
●
Archiveandretainprojectrecords
●
Measurecustomersatisfaction
NOTE Notice how the verbs vary among the process groups, especially between the Initiation and Planning process groups (i.e., define, identify, develop) and the Execution process group (i.e., execute, ensure, implement, and manage). This is to further emphasize the change in the fourth edition of PMBOK to be more action-oriented, using a “verb noun” format (Plan Risk) versus a “noun-verb” format (Risk Planning). This seems like a small change; however, it makes a big difference when it comes time to create the WBS or the schedule for your project.
Eventhoughtheprofessionalandsocialresponsibilitiesarenotcoveredinthe PMBOKGuide,thereareanumberofquestions(approximately18)onthePMPand slightlyfewerontheCAPMexam.Thesequestionsrelatetotheethicalapplicationof projectmanagementandarebrokenintofourvaluecategoriesintheCodeofEthicsand ProfessionalConductguidelinesarea.Thevaluecategoriesare ●
Responsibilities
●
Respect
●
Fairness
●
Honesty Thefocusareasforprofessionalandsocialresponsibilitiesareasfollows:
●
Ensureindividualintegrity
●
Contributetotheprojectmanagementknowledgebase
●
Enhanceprofessionalcompetence
●
Promoteinteractionamongstakeholders
Chapter1: BridgingtheGapBetweenPMandPMP
CAPM Exam Objectives OveralltheCAPMexamfocusesonthePM’sabilitytoworkinaprojectteamand understandthedomains/processgroups,nineknowledgeareas,and42processes, accordingtothePMBOK.Aspreviouslymentioned,theCAPMisbasedmoreonthe academicviewofprojectmanagementaccordingtothePMBOKasopposedtotheapplied practitionerviewastestedinthePMPexam. TheCAPMexamquestionstendtobestraightforwardcomparedtothemore situational(whatwouldyoudoif)questionsyouwillfindinthePMPexam.
Expected Results (First-Time Pass Rate) Thefirst-timepassrateistightlycontrolledbyPMIandchangesoccasionallyandwithout notice;however,historyindicatesthatthetargetisabout70percent,comparedtoonly 50percentin1998.ThismeanssevenoutoftenpeopletakingthePMPexamforthefirst time,onaverage,aresmilingwhentheyleavethetestcenter.Unfortunately,threeon averagearenotsmilingandwillhavetotryagainlater. PMIraisedthebarsignificantlyinthe2005PMPexamwhenthepercentageofcorrect answersneededtopassincreasedtoover80percent.Thisdrovethefirst-timepassrate ofpeopletakingtheexamdowntolessthan60percent.Fortunately,PMIrevisitedthose resultsquicklyandadjustedthetestscoringbacktoaround70percenttopass.PMItends tobeshyaboutpublishingthisinformation,anditrarelyhasbeenshownonthewebsite since2004.
How to Apply for a PMI Exam Onceyouhaveselectedthecredentialthatisrightforyou,yousubmitanonlineapplication formtositfortheexam.Directionsfortheapplication,currentpricing,andadditionaldetails arealsoavailableonthePMIwebsite.Again,youhavetwowaystotakeaPMIexam: computerbasedandpaperbased(youmustbephysicallylocatedfurtherthan186.5miles fromacontractedPMItestfacilitytoqualifyforpaper-basedtesting). Onceyourapplicationhasbeenreviewed,youwillreceiveapprovalordenialwithina matterof5–10businessdays.Onceapproved,youhaveuptooneyeartoscheduleandsit fortheexam.
TIP Start the registration process as early as possible and schedule a planned date to take the exam. This will make it real and help drive you to complete the process.
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Ask the Expert Q: Istheexamashardaseveryonesays?Andhowmuchstudytimedoesittake? A: Itdependsonyourlevelofexperience,yourcommitmenttolearnthelanguagefromPMI’s perspective,andtheamountoftimeyouplantopreparefortheexam.
NOTE The PMP exam can be tricky, with a high number (over 90 percent) of situational questions that require you to select the “best” answer from the PM’s perspective and PMI’s point of view. It is not a test of information from the PMBOK, as with the CAPM exam; you have to be able to determine which answer is best.
Theexamisdifficultandeverchanging.Thebiggestchangesoccurredin1998 whenPMIwenttothecomputer-basedexam,andagaininSeptember2004whenPMI raisedthebarontherequirementstopassthePMPexam(suchaspossessingproject managementexperienceactuallyleadinganddirectingprojectteams).Thischangewas maderightafterPMIlaunchedtheCAPMexam(forpeoplethatparticipateasaproject teammember).ThemostrecentchangesintheseexamsoccurredJuly2009whenPMI alignedtothelatestPMBOK.
TIP Many people feel they over-studied for the exam and it was not as hard as they thought it would be. I suggest you allow two to four months to prepare for the exam, depending on how well you take tests and your level of project management experience.
PMP Exam Application Checklist ItisbesttoapplyfortheexamonlinethroughthePMI.orgwebsite(selectCareer Development|Certification&Credentials|ObtainaCredentialandthenclicktheApply foraCredentialbutton). Thefollowingapplicationchecklistisasummaryofthetopthreestepsyouneedto taketoapplyforaPMIexam:
1.Completetheonlineapplicationform,providingallthekeyinformation.Besureto
provideyournameexactlyasitappearsonyourgovernment-issuedidentificationcard. Youalsoneedtofillouttheexperienceverificationsectionaccordingtothecredential examyouareapplyingfor,andprovidedocumentationofthe35hours(minimum)of educationyou’veobtained.
Chapter1: BridgingtheGapBetweenPMandPMP TIP Save a tree! You do not have to provide all the supporting documentation of your project experience unless you are audited. The backup documents are not sent to PMI unless requested.
Thetimeittakestocompletetheapplicationdependsontheamountofdetailandresearch necessaryforcredentialeligibility(forexample,youwillneedcontactinformationand detailsfrompreviousprojects).
2.Affirmthatyouhavereadandunderstandthepoliciesandproceduresoutlinedinthe
credentialhandbookwhichisavailableonthePMI.orgwebsite.
3.SubmityourpaymentaccordingtotheCredentialPaymentProcess(youwillnotbe
abletoscheduleyourexamuntilfullpaymentisreceived). PMIwillreviewyourapplicationandprovideanapprovalcode.Youwillthenneedto contactaPrometrictestcenternearyouandcalltoscheduleanexamdate.
NOTE Prometric is an independent group that provides comprehensive testing and assessment services to companies and organizations such as PMI across the globe. They offer an extensive, professional, and secure testing network from which tests are delivered in over 7,500 locations across 160 countries.
Manage the Exam Preparation Like a Project Agoodprojectmanagerisorganized,gainssatisfactionfromcheckingofftasks,andcan managetheexamasifitwereaproject(becauseitis).Youcanusethefollowingstepsas yourprojectplan:
1.Reviewthecoursesandcredentialsavailable.
2.Reviewtherequirementsandeligibility.
3.Determinewhichexamisrightforyouandapplyforit(seethe“TimelineofthePMP
CredentialProcess”section).
4.Buildaprojectplantoguideyoutowardachievingyourgoals(andstickwithit).
5.Setarealistictargetdatewithkeycheckpointstoensureyouareontrack.
6.Scheduletheexamdateandmarkitonyourcalendar.(Nowitisreal!)
7.Allowsome“down”timeduringthetrainingandpreparationprocess.
8.Tellyourboss,coworkers,andfamilythatyouaregoingintotraining.
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PMPCertification:ABeginner’sGuide
9.Monitoryourprogressandcontinuemanagingtheprocessasaproject. 10.Remembertostayfocusedontheexamusingthetoolsandresourcesavailable(study
materialsandyoursupportgroup)tomakesuccessfullypassingtheexamhappen.
11.Onceyoupasstheexam,celebrate!
Timeline of the PMP Credential Process Aswithothercredentials,thereisatimelineorflowforthePMPcredentialthatmustbe followedtoapplyforaPMIexam.RememberthatthetimeittakestoapplyforthePMP credentialwillvarydependingonhoworganizedyouarewithyourprojectinformation, contacts,andsoon,neededtocompletethesubmissionform.Alsorememberyouwill onlyneedtoprovidethedetailedsupportingdocumentationifyouareaudited,soplease don’tplantosendmoundsofpapertoPMI. Thefollowingbulletsarefromthe“AboutPMPCredential”sectionofthePMP CredentialHandbookatwww.pmi.org.Thehandbookcanbedownloadedandusedas areferencewhenthetimecomestobeginyourapplicationprocess. ●
Theapplicationsubmissionwindowisopen90daysfromthereceiptoftheapplication.
●
Theapplicantcompletenessreview(byPMI)takesfivebusinessdays(whensubmitted online).
●
Theapplicantpaymentprocessmustbecompletedandconfirmedbeforeyoucan scheduleyourexamwithPrometric.
●
Theauditprocess(iftheapplicationisselectedbyPMIforaudit)takesfivebusinessdays.
●
Examinationeligibilityperiodisoneyearfromthedateofapplicationapproval.
●
Thecertificationcycleisthreeyearsfromthedatetheexamispassed,thenyouneed torecertify.
NOTE To recertify once you attain a PMI credential, you must participate in the Continuing Certification Requirements (CCR) program to maintain active certification status. Additional details are provided in the “Maintaining Your PMI Credential” section later in this chapter.
Start Training Itisnevertooearlytostarttraining—andbythisImeanphysicaltraining.Iactually setupanexercisebikeinthebedroomwitharackonthehandlebarstorestmystudy materialonforeasyreading.Thensetupaschedule(Ichosethreenightsperweek,one hourpernight)tostartwithandthengraduallyincreasedthedurationandfrequencyasI
Chapter1: BridgingtheGapBetweenPMandPMP gotclosertothetestdate.Aftercominghomefromtheoffice,Iwouldspendatleast40to 60minutesgoingoverexampreparationmaterialwhileworkingoutonanexercisebike. Thisallowedmetobeingoodshapebothphysicallyandmentallyfortheexam.
What to Expect on the PMP Exam Youshouldexpectlotsofsituational-typequestions.RememberthePMPexamtestsyour abilitytoapplyprojectmanagementknowledgetoagivensituation. Herearesomeexamples:
1.Theprojectsponsorhasindicatedhewillbemakingalotofchangestothescopeofthe
projectduringtheInitiationandPlanningphases.Whatisthebestapproachtheproject managershouldtaketomanagetheexpectedchanges?
A Meetwiththesponsorandtellhimthechangeswilladdcosttotheproject.
B Sendanotetothesponsor’sbosstofigureoutawaytoassignhimtoanotherproject.
C Includethesponsorearlyintheprojecttounderstandhisneedsandexpectations.
Workwithhimtoensureheisawareofandisinagreementwiththechangeprocess.
D Justsaynotochanges—theyaredistractingtotheprojectteam.
Answer:C.
2.Duringaprojectteammeetingasoftwareengineerindicatesaneedtoprovidealarger
(newertechnology)systemtomeetthelong-termneedsofthecustomer.Theengineer admitsthischangewilldelaytheproject,butitneedstobedone.Astheproject manager,youremindtheteamfortheneedtofocusontheapprovedplan.Thisisan exampleofwhat?
A Timemanagementprocess
B Costmanagementprocess
C Scopemanagement
D WorkBreakdownStructure
Answer:C.Althoughitcouldbearguedthatthisisatime/schedulemanagementimpact orevenacostmanagementissue,itreallygoesbacktotheoriginalscopeoftheproject. Managingscopeeffectivelykeepsotherconstraints(timeandcost)undercontrol.
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Moving the Exam Date (Change Happens) Onceyouareapproved,youcancontactPrometrictoscheduleyourexamdatewithin the12-monthapprovedPMIwindowtotaketheexam.Changingtheexamdateis notrecommended.However,theremaybecertaincircumstancesthatforceyouto moveyourexamdate.SomereasonsthatwouldbeacceptedbyPMIformovingthe examinationdateincludemedicalemergency,militarydeployment,anddeathorserious illnessintheimmediatefamily. Reschedulingrequiresthatyoucontactthetestcenterdirectlynolaterthan twobusinessdayspriortoyourscheduledexamdate.YoumustprovideyourPMI identificationnumber,groupIDnumber,thelocationandtypeofexamyouare scheduledtotake,andthereasonforrescheduling.
Balancing Competing Demands Withtheadventofportable,easyaccesstotheInternet/intranet,itisfartooeasytoworkextra hoursevenwhenyouareonvacation.Manybosseshavecometoexpect,orevendemand,a higherlevelofaccessibilitytotheiremployees.Tobecompetitive,wefeeltheneedto“stay connected,”sowekeeppushingourselvesbecauseweareafraidoffallingoutoffavorwith theboss,losingourjob,ornotgettingthatpromotionwedeserve.Withthecurrenteconomic times,therearefewerjobsavailableandscoresofqualifiedworkerswhoaremorethan willingtoputintheextratimeonthejobandtogetcertifiedtoincreasetheirmarketability. Whenitcomestostudyingfortheexam,youwillfinditfartooeasytogetdistracted andlosefocus.Youwillneedtobalanceavarietyofcompetingdemandsforyourtime, especiallyifyouhaveafamilywithkids.Betweenyourjob,yourfamily,andyourfriends, howwillyoueverfindthetimeittakestopreparefortheexam?Theanswerisfocus, commitment,andasupportstructure.Ifyoucanmaintainfocusanduseyoursupport grouptohelpyoumeetyourcommitmenttoyourself,thesatisfactionandrewardsof passingtheexamareimmeasurable.
Tools to Use to Prepare for the Exam Manybooksareavailabletohelpyoulearnaboutprojectmanagement,tobuildyour knowledge,andtohelpprepareyouforthePMIexam.Thetoolsavailabletohelpyou studyfortheexam(suchasflashcards,sampleexamquestionworkbooks,anddownloads) areplentiful,thusitmaybedifficulttodeterminewhichonesarerightforyou.Theonly
Chapter1: BridgingtheGapBetweenPMandPMP waytochooseistofirstlookatyourownlearningstyle.Youneedtodeterminewhatmakes youfeelmostcomfortableandwhatstyleworksbestforyou.Herearesomeexamples: ●
Dawnisafaststudyandisusuallynotintimidatedbytests(well,maybealittle).She isveryorganizedandlearnsbestbyseeingthewordsandgoesasfarasrewritingher classnotesinneat,color-codedscript.Shelikesdescriptivescenes,diagrams,and posters,alwaysreadsdirections,andseeksoutpicturestohelpvisualizeandunderstand themessage.Dawnisusinga“visual”learningstyle.DawnusedthePMBOK,a popularPMPexam-preparationworkbook,flashcards,andherowncolor-codednotes.
●
Georgetendstosoundoutthewordsandusesaphoneticapproachtolearning.Heis eagertotalk.Hetendstogetdistractedbysoundsandnoises(suchasthetelevision) andprefersverbalinstructionsratherthanreadingdirections.Georgeisusingan “auditory”learningstyle.HestudiedforthePMPexamusingrecordedtapeshe createdwithkeystudymaterial.Helistenedtothetapesoftenwhileonthewayto work,walkingthedog,mowingthelawn—alltohelp“burnin”thematerial.
TheinformationinTable1-3isanextractparaphrasedfromColinRose’s1987book AcceleratedLearning.Thistablehelpsyoudetermineyourlearningstyle;readthewordin theleftcolumnandthenanswerthequestionsinthesuccessivethreecolumnstoseehow yourespondineachsituation. Whenyou...
Visual
Auditory
Kinesthetic&Tactile
Spell
Do you try to see the word?
Do you sound out the word or use a phonetic approach?
Do you write the word down to find if it feels right?
Concentrate
Do you become distracted Do you become distracted by sounds or noises? by clutter or movement?
Do you become distracted by activity around you?
Meet someone again
Do you forget faces but Do you forget names remember names or remember but remember faces or remember where you met? what you talked about?
Do you remember best what you did together?
Contact people on business
Do you prefer direct, face-to-face personal meetings?
Do you prefer the telephone?
Do you talk with others while walking or participating in an activity?
Read
Do you like descriptive scenes or pause to imagine the actions?
Do you enjoy dialog or hearing the characters talk?
Do you prefer action stories or are not a keen reader?
Do something new at work
Do you like to see demonstrations, diagrams, slides, or posters?
Do you prefer verbal instructions or talking about the subject with someone else?
Do you prefer to jump right in and try new things?
Put something together
Do you look at directions and pictures?
(not applicable)
Do you ignore directions and figure it out as you go along?
Table1-3
Learning Styles
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Study Tips Dependingonyourlearningstyleyouwillneedtodecidewhatstudytipsworkbestfor you.Manypeoplefindithelpfultoobtainorrecordkeymaterials,definitions,formulas, inputs,toolsandtechniques,andoutputsforthevariousprocessesandthenplayback thetapesduringtheirtraining/studyperiods.Sampleexams,flashcards(somecanbe downloadedtoyourpersonaldigitaldevice),CDs,andmoreareavailable. Ichosetorecordkeytopics,andIreplayedtherecordingwhilewalkingthedog, workingintheyard,andsoon.Icoveredoneknowledgeareaperweekoveraplanned study(training)periodof12weeks.Attheendofeachweek,IgotupearlyonSaturday morningandtookallthesampleexamquestionsIcouldgetmyhandsonforpractice.At keyintervals,IwouldtaketheentirepracticeexamfrommyhandyPMPexampreparation studyguidetogetusedtoa3-to-4-hoursitfortheexam.Ididthisthreetimes,untilIfelt comfortableinthattest-takingmode. Agoodfriendofmineonlyusedsampleexamquestionsfromvarioussourcesand wouldspendhourstakingandretakingthesample“exams”untilhefeltgoodabouthis answers.HepassedthePMPonthefirsttry. Countlessonlineandface-to-faceexam-preparationclassesandworkshopsare availabletohelpyouprepareforthePMIexam.Theseusuallycostanywherefrom US$350toUS$1,200,dependingontheprovider,thedurationoftheclass,thelocation, andtheprovider’ssuccessrate.
NOTE Check with your local PMI chapter or other education providers in your area for available classes or study groups.
The Key Is to Stay Focused and Committed Focusisthekey;ifyougetdistractedeasilylikemanyofusdo,youwillneedtowork harderatstayingfocusedonexampreparation.Itisfartooeasytoputitoff,evenfora night,thentwo,andbeforeyourealizeit,weeksorevenmonthshavepassed. Thereisasaying(quotedbyanIBMsystemprogrammerinthebookTheOneMinute ManagerbyKennethH.Blanchard,Ph.D.andSpencerJohnson,M.D.),thatgoeslike this:“Howdoyougetayearbehindonaproject?”Answer:“Onedayatatime.” Thisiswherethecommitmentcomesintoplay.Youwillneedthetrainingdiscipline wementionedearlierandthesupportofyourfamily,friends,andcoworkerstomakethis happen.Allowforsomedowntimetorelaxandgetre-energizedduringthetrainingcycle, butyouwillneedtostayfocused.
Chapter1: BridgingtheGapBetweenPMandPMP TIP How to stay focused? Answer: Make it real; go into training mode and ask your support group (friends, family, boss, and co-workers) to allow you the study time you need. You may have to remind them of your commitment and the date (put it on your calendar in bold print).
Exam Day Has Come Youmustarrivetothetestingcenter30minutesaheadofyourscheduledstarttime.You mustbringanoriginalgovernment-issuedIDthathasbothaphotoandasignaturethat matchesyournameexactly.TheidentificationmustincludeEnglishcharacters(ora translation).Itcanbeavaliddriver’slicense,militaryID,orpassport.Youmustsignin andprovideyouruniquePMI-approvedidentificationcode(youmaybeaskedtoprovide yourconfirmationnumberfromPrometricaswell). Youwillbeprovidedwithscratchpaper,pencils,andacalculator.Itemsnotallowedin thetestareaincludecellphones,pagers,food,drinks,books,notes,jackets,sweaters,and personalbelongings.Also,visitorsandchildrenarenotallowedinthetestingfacility. Onceyousignin,areseatedatyourcomputer,andbegintheexam,itisbesttodoa quickbraindumpofalltheformulasyourememberontoapageofscratchpaperwhile theyarefreshinyourmind.Thisservesasaquickreferencelateronwhenyougetto thosequestionsintheexam. Thecomputer-basedexaminationisprecededbyatutorialandfollowedbyasurvey, bothofwhichareoptionalandcantakeupto15minuteseachtocomplete.Thetimeused tocompletethetutorialandsurveyisnotincludedinthefourhoursallottedforthePMP examorthethreehoursallottedfortheCAPMexam.Isuggestyoutakethetutorialtoget settledinandtobetterunderstandthecomputer-basedexamprocess.
Use the “Mark for Review” Option on the Exam Ifyouarenotsureofthecorrectanswerforanyquestion,youcanmarkitfor“review” withthetouchofthecomputerscreen.Attheendoftheexam,youcanselecttheoptionto reviewallmarkedquestions.Thiswilltakeyoubackthroughallthequestionsyoumarked forlaterreview.
NOTE You can also select the “Review All Questions” option, which I do not recommend because the system takes you back to the beginning of the exam. Valuable time is taken going back over all the questions.
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PMPCertification:ABeginner’sGuide Onceyouarecomfortablewithyouranswers,pressEnd(complete).Thesystemwill thenaskifyouaresureyouwanttoendtheexam.Atthispointyoumightthink,“What dotheyknowthatIdon’t?”Thetendencyistosecond-guessyourself.Instead,justpress Yes,andafterashorttime(whichseemslikeseveralminutes)youwillbepresentedwith ascreenthateitherstates“Congratulations,youpassed”orreadssorryyoudidnotpass theexam,inwhichcaseyouneedtotryagainlater.Again,youcanretakethetestupto threetimeswithinthe12-monthwindowfromyourapproveddate. Whenyoureceivethe“Congratulations,youpassed“messageandprintoutfromthe testfacilitator,thengocelebrate!Youdeserveitforallyourhardwork.
Maintaining Your PMI Credential (CCRs/PDUs) Onceyoubecomecertified,youwillwanttomaintainyourcredentials.Thisisnecessary todemonstrateyourcontinuedparticipationinthePMprofession.Theprogramfor maintainingyourcredentialsiscalledContinuingCertificationRequirements(CCR).Your certification/CCRcyclebeginsthedayyoupasstheexamandendsonthesamedatethree yearslaterforallcredentialholders. TomeettheCCRrequirements,youneedtoparticipateinprofessionaldevelopment activitiesinwhichyouearnprofessionaldevelopmentunits(PDUs).PDUsareusedto quantifyapprovedprofessionalactivities.Typically,youearnonePDUforonehourspent inaplanned,structuredprofessionaldevelopmentactivity. EachcredentialrequiresacertainnumberofPDUsperthree-yearcredentialcycle.Refer tothePMI.orgwebsiteundertheCCRforthelatestinformationbecausethesenumbersare subjecttochange.The2009credentialrequirementsaredetailedinTable1-4.[4]
Credential
NumberofPDUsNeeded intheThree-YearCycle
PMP (Project Management Professional)
60 PDUs.
PgMP (Program Management Professional)
60 PDUs.
PMI-SP (PM Schedule Professional)
30 PDUs in the specialized area of project scheduling.
PMI-RMP (PM Risk Management Professional)
30 PDUs in the specialized area of project risk management.
CAPM (Certified Associate Project Manager)
No PDUs. Retaking the CAPM exam is required in the last year of your five-year cycle to recertify.
Table1-4
PDU Requirements by Credential
Chapter1: BridgingtheGapBetweenPMandPMP Therearecurrentlytendifferenttypes(orcategories)ofPDUsandvariousways toobtainthem.Themostcommonisformalacademiceducation(Category1),offered throughcontinuededucationprogramswithPMIregisterededucationproviders(REPs). Thesearecompanies,trainingfacilities,orotheracademicprovidersthatregisterwith, andarerecognizedby,PMItomeettheireducationalrequirementsforclassesoffered outsideofPMI.OtherwaystoobtainPDUsincludeprofessionalactivitiesandselfdirectedlearning(Category2).
NOTE For Category 1 PDUs, one hour of classroom contact usually equals one PDU.
Ask the Expert Q: Whatisthebestwaytomaintainmycredential? A: Thebestwayistofollowthesesteps:
1.StartearlybyestablishingastrategyforattainingyourPDUsbeforeyourcycle
begins.Forexample,setreminderdatesonyourcalendarforanyplannedPMIevents oreducation.Don’twaituntilyearthreeofyourcycletostartapplyingforPDUs.
2.MaintainapersonalfolderofallyourPDUclaimdocuments.Theclaimdocuments
shouldbeprintedfromtheonlineregistrationprocessatthePMI.orgwebsite.This informationwillbevaluableifyourreportingformisrandomlyselectedforaudit.
3.Reportactivitiessoonaftercompletionwhiledatesandtopicsarefreshonyour
mind.ThismakesiteasiertocompletetheActivityReportingForm.
4.TakeadvantageoftheopportunitytotransferPDUsfromonecycletothenext.
Youcantransferupto20PDUsearnedinthelastyearofyourcurrentcycleifyou exceedthe60totalneededforthethree-yearcycle. Forexample,sayyouearn20PDUsthefirstyearofyourcredentialcycle,30PDUs thesecondyear,and30PDUsinthethirdyear.Youhaveatotalof80PDUsinyour three-yearcycle(youonlyneed60).Inthisscenario,youcancarryover20PDUs fromyearthreetoyournextrecertification/CCRcycle.Thisisagreatwaytogeta headstartonthenextcycle.
5.MakesureyouhavetheregisteredprogramnumberforallREPclassesyou
complete,whichisrequiredontheActivityReportingForm.
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Easy PDUs YoucanevenclaimPDUsforreadingprojectmanagementmaterial,magazines,andtrade journals,collaboratingwithfellowPMs,andparticipatinginfreewebinarsandpodcasts, whichareoftenofferedasdemosandteasersformanyPMeducationproviders.Youare limitedtofivesuchPDUsperyear(subjecttochangewithoutnotice).
NOTE If you do not maintain an active certification status by meeting the CCR program requirements, your credential will expire and you will no longer be allowed to refer to yourself as a credential holder unless you retake the exam and pass.
Yourparticipationincontinuingeducationactivitiesindicatestoyourpeers, employers,andclientsthatyouarecommittedtoongoingprofessionaldevelopment. Stayingcurrentonstandardpracticesandpoliciesaswellaskeepingupwiththelatest processesandmethodsareallhelpfulinmanagingyourprojectsinaprofessional, effectivemanner.
References
1.“Standish:ProjectSuccessRatesImprovedOver10Years,”fromApplication
DevelopmentProductCoverage.January15,2004(http://www.softwaremag.com/ L.cfm?doc=newsletter/2004-01-15/Standish).
2.“StandishGroupReport:There’sLessDevelopmentChaosToday,”byDavidRubinstein.
March1,2007.
3.ArchitectureWeek,April23,2003andIbid.
4.PMPCredentialHandbook(www.pmi.org).
5.PMIToday,asupplementtoPMNetworkmagazine,November2008.
Chapter
2
The Emerging World of Project Management
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KeySkills&Concepts ●
Definitionofaproject
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Differencebetweenprojects,programs,andoperations
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Definitionofprojectmanagement
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Howtheworldofprojectmanagementisemerging
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Differentviewsofprojectmanagement
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Roleoftheprojectmanager
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Importanceofcommunications
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Organizationalstructures
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Howtomeasuresuccessonaproject
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The“Ready,fire,aim”dilemma
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TheAIMstrategy
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Whyprojectsfailandwhatyoucandoaboutit
T
hebestwaytodescribehowtheworldofprojectmanagementisemergingistostartby definingwhataprojectreallyis.Whatdoesprojectmanagementreallymeanandwhat istheroleoftheprojectmanger? Inthischapterandthroughoutthisbook,wewilllookatprojectmanagementfrom twodifferentperspectives.Theseviewsaredifferentinnature,basedontheextentof formaltrainingandexperienceyoumayhave.Yet,whentheviewsarecombined,they providesynergyandbenefitstoyouasaprojectmanager. Herearethetwoprojectmanagementperspectives:
●
Thereal-worldview Managingprojectsusingcommon-senseinstincts
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TheProjectManagementInstitute(PMI)view Managingprojectsusingglobally acceptedstandards
Beforewegointothedifferentviewsofprojectmanagement,let’slookatthe definitionofaproject,program,andoperationandreviewprojectmanagementingeneral.
Chapter2: TheEmergingWorldofProjectManagement
What Is a Project? Eventhoughprojectmanagementhasbeenaroundalongtime,therestilltendstobea fairamountofconfusion,evenamongexperiencedprojectmanagers,concerningthe definitionofaproject.Peopleoftenusetheterm“project”todescribeeverythingfrom designingsoftwareorbuildinganewhybrid(fuel-efficient)car,tobuildinganewhouse, planningamajorevent,installingnewcomputerequipment,findingawaytofixa problem,orsettingupanicecreamstand. So,whatisthecorrectdefinitionof“project”?Isuggestwefirstlooktotheexpertsin thePMprofession.AccordingtoPMI,aprojectis“atemporaryendeavorundertakento createauniqueproduct,serviceorresult.”[1]Thetemporarynatureofprojectsindicatesa definitebeginningandend.Projectsareputinplacetocreateauniqueproduct,service, orresult.Mosteveryonehasaprettygoodideaaboutwhatproductsandservicesare,but whatabout“results”?Thiswasaddedtothe2004versionofthePMBOK,anditmeans thattheresultsoftheprojectmayfaroutlivetheprojectitself—forexample,Mount Rushmorewasamassivesculptureprojectcompletedin1941nowhasover2million visitorsayear;reducedpollutionfromhybridcarswillbenefittheplanetfarbeyondthe designproject;andincreasedsavingsduetoautomatedsystems—theseareallresultsfrom projects. Tobealittlemorespecific,let’slookatsomeofthecharacteristicsoftypicalprojects. Allprojectsshouldhavethefollowingcharacteristics: ●
Theyaretemporaryinnature—thatis,theyhaveadefinitestartandadefiniteend(ifa projectislongtermandneverends,itislikelyaprogramoranongoingoperation).
●
Asmentioned,projectscreateauniqueproduct,service,orresult(eveniftheproject hasbeendonebefore,thereissomethinguniqueaboutit,suchasthelocation,team members,materials,andsoon).
●
Theyhave(orshouldhave)clearlydefinedgoalsandobjectives(ifitisopenendedor changesovertime,itislikelyaprogramoranongoingoperation).
●
Theendoftheprojectisreachedwhenitsapprovedobjectiveshavebeenachieved.
What Is a Program? Programsaredifferentfromprojectsinthattheyusuallyareacollection(orgroup)of projects,theytendtobelongerinduration,andhavenodefinedenddate.Anexamplewould beNASA’sspaceshuttleprogram(officiallycalledSpaceTransportationSystem[STS]),
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PMPCertification:ABeginner’sGuide whichconsistsofmultipleprojectsandtheongoingmaintenance/operationofseveralaircraft, suchastheColumbia,Challenger,Discovery,Atlantis,andEnterprise. Programmanagementisawayforustobundle(orgroup)similarprojectsandsupport operationsintoalogicalmanner.Groupingprojectsintoaprogrammakesthemeasier toassignandmanage.Aprojectmanagementeducationprogram,agovernmentwelfare program,aspecificsoftwareapplicationprogram—theyalltendtobeongoingandusually includemanyprojectsandsubprojects.
What Is an Operation? Usuallyanoperationistheactivityofoperatingsomething(suchasamachineora business).Onalargerscale,acompanymayhavemultinationaloperations.Inthe worldofprojectmanagement,thekeywordstolookfortohelpdistinguishoperations fromprojectsorprogramsareenhancement(forexample,improvingexistingsoftware applicationcodeoraddingaprocesstoenhance[orimprove]theoperationofcomputer installations),dailyactivities,orongoing. Operationsareusuallyrepeatableactivitiesperformedtoestablishaproduct(for example,anassemblylineoperationtomanufacturecars). Agoodwaytoclarifythedifferencesbetweenprojects,programs,andoperationsis tothinkaboutthecharacteristicsofeach,asdetailedintheprecedingdefinitions,andthen lookattheexamplespresentedinTable2-1. Event/Activity
Project
Design software
X
Testing software
X (if new)
Program OngoingOperation X (if repetitive)
Maintain the software once promoted to production
X
Manage a group of software application products
X
Design a hybrid car
X
Set up an assembly line to build hybrid cars
X
Assemble/build hybrid cars
X
Plan a major event (like a wedding)
X
Develop a new PM class on risk management
X
Manage a new class as part of a series of PM courses
Table2-1
Examples of Projects, Programs, and Operations
X
Chapter2: TheEmergingWorldofProjectManagement
Ask the Expert Q: Whathappenswhenapersoniscalledaprojectmanageryetisresponsibleforvarious
aspectsofaprogramandevendailyoperations(systemsavailability,staffing,andsoon)?
A: Therearetimeswhenthestaffislimitedandthepersoninchargeofleadingtheprojectis
expectedtobeallthings(one-stopshopping)acrosstheentireprogram.WhenthePMis handlingdailyoperationalissuesandproblemsoralong-termprogram(multipleprojects orsubprojects),thenthespecificprojecttendstogetneglected.Theendresult,atbest, iscontrolledchaos,andthemostlikelyresultisuncontrolledchaos.Whenapersonis subjectedtothiscross-sectionofresponsibilities,theycanrarelyfocusonthespecific projectandoftenfailattheprojectmanagementlevel.Ifyoufindyourselfinthissituation, thesolutioninmyopinionistoworkwiththesponsor(s)toverifytheprioritiesofthe project(orprogram)andreasonwiththemtoallowyoutohavethestaffneededortime requiredtofocusontheprojectathand.
TIP There is no hard-and-fast rule on what is called a “project.” Therefore, don’t correct your boss or project sponsor when they tell you to go manage a “project” that may not be one by definition. Simply smile and take comfort in knowing the difference for yourself, and do your best to help train the rest of the world a little along the way.
What Is Project Management? Nowthatyouknowwhataprojectisandhaveseensomeexamplesofprojects,programs, andoperations,let’stalkaboutprojectmanagement.Whatisprojectmanagement,and whatdoesthePMneedtodotoperformthisdynamicrole? Inpractice,projectmanagementisallaboutbeingabletolookacrosstheentire project—fromtherequirements(whatthecustomerwants)towhatisbeingaccomplished (whatneedstobedonetomeetthecustomerrequirements).InChapter8,youwillseethis referredtoasmeetingspecificationsandfitnessforuse—forexample,doestheproduct, service,orresultdowhatwesaiditwilldo(providethefunctionsandfeaturesasspecified) andworkthewaywedesignedittoworkinordertomeettheapprovedrequirementsofthe project(fitnessofuse)? Projectmanagementmayinvolvestaffingtheprojectteam(whowilldothework) andplanning,estimating,andmanagingtheschedule(wheneachphaseoftheproject willbecompleted)aswellasthecostoftheproject.Notethathiringorassigning
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PMPCertification:ABeginner’sGuide theteammembersmaybemanagedbytheHumanResources(HR)department(orthe ContractsandProcurementdepartmentinsomecompanies),andthePMmaynotgetto picktheteammemberstoworkontheproject.Theymaybepreassignedorprovidedby afunctionalmanageraspartofa“pool”ofresources. AccordingtoPMI,projectmanagementistheapplicationofknowledge,skills, tools,techniques,andpracticestoprojectactivitiestomeetprojectrequirements.Thisis accomplishedthroughtheappropriateapplicationandintegrationofthe42logicallygrouped projectmanagementprocessesinthePMBOK.(Note:Thekeywordisapplication.)
TIP The PMP exam focuses on the PM’s ability to apply knowledge and skills to solve various problems, to be able to think on their feet (that is, to be able to manage in many different situations).
The Project Management Institute (PMI) View PMI’sviewofprojectmanagementistohaveagloballyrecognizeddisciplinewitha standardacceptedframeworktoassistinthepursuitofimprovedprojectsuccess.PMI’s visionistoprovideanetworkofhighlyskilledprofessionalstoshareexperiencesand knowledgeandtohelppromotetheprojectmanagementprofession. StrongPMskillsarenoteasytoacquireandinmanycasesneedtobedevelopedover timebyworkingonrealprojects;thisisonefieldthatcan’tbetotallylearnedfrombooks. PMskillsmustbedevelopedandpracticedtoensuresuccess.ThatiswhyPMIcallsus “practitioners”andrequireson-goingrecertificationeverythreeyears. PMIrecognizesthatprojectandprogrammanagersfacemanyvariablesand challengesandattheendofthedayitallcomesdowntobeingabletoapplysoundproject managementjudgment,leadership,andorganizationalskillstobalancethecompeting projectdemands.Thisconstantbalancingact,ifdonewell,canhelpyoureachahigher levelofsuccessonyourprojects.PMI’sgoalistoprovidethebroaderperspectiveand assistthePMcommunitytostriveforcontinuousimprovement. Asaprojectmanager,youshouldconstantlywatchforandmanagethevariousaspects ofaproject:time(schedule),cost(budget),andscope.Attheendofaproject,according toPMI,itssuccessismeasuredbyproductquality,timeliness,budgetcompliance,andthe degreeofcustomersatisfaction.
The Real-World View—Managing Projects Using Instincts Manyofusapplyprojectmanagementskillsinourdailyjobsandineverydayactivitiesusing sheergutinstincts(oftenreferredtoasmanagingbythe“seatofourpants”).Manyproject managersareputintoprojectswithlittleornoformaltrainingandmusttrusttheirinstincts.
Chapter2: TheEmergingWorldofProjectManagement Alargenumberofprojectmanagersperformwellusingnothingbutcommonsense. Othersperformpoorlyanddon’tevenknowit.Theytendtomakethesamemistakesover andover,developingbadhabitsthatmayneverberealizedorcorrected. Thegoodnewsisthatcommonsensegoesalongway,andchancesareyouhavebeen managingprojectswithgoodtoreasonablesuccessmuchlongerthanyoumightrealize. Thinkaboutputtingonthosepuppetshowsasakid,workingonschoolprojects(there’s thatwordagain,projects),andplanningasurprisebirthday,anniversary,orweddingparty forafriendorfamilymember—alloftheseareexamplesofprojects. Commonsenseandgutinstinctsareatthecoreofbeingagood,solidprojectmanager. However,havinggoodinstinctsisgreatuptothepointwhereyouhavetoleadothersand presenttheprojectstatustothestakeholders(thatis,anyoneaffectedbytheproject).For thatyouneedmorethancommonsense—youneedacommonlanguage. Onceyoulearnthelanguageofprojectmanagement,thestandardprocesses,and thetools,thenthe“ah-ha”momentscome(whenyouseethelinkbetweenwhatyoudo instinctivelyandwhatthesecomponentsarecalledintheprofessionalworldofproject management). Asaprojectmanager,youneedtoseethebiggerpicture(acrosstheentireproject,as previouslymentioned)andbeabletoidentifyrisks;tocommunicateeffectively;toaddress thevariousneeds,concerns,andexpectationsofthestakeholders;andmostimportantlyto balancethecompetingprojectdemandsandconstraints(limitationsorbarriers.)
Competing Project Constraints Regardlessofwhichprojectmanagementbookyouread(andtherearemany),youwill hearabouttheneedforthePMtobalancecompetingdemandsandconstraints.Thisused tobecalledthe“tripleconstraints,”andwasshownasatrianglewithTime,Cost,and Scopeonrespectivesidesofthetriangle. Toputthisinperspective,afriendofminewhenfacedwiththechallengeofbalancing projectdemandsoftensays,“Good,fast,orcheap—pickanytwo,”meaningthatifyou wantsomethinggoodandfast,itwilllikelycostmore;ifyouwantitgoodandcheap,it maytakemoretime.Anychangetothetripleconstraintsthrowsthetriangleoutofbalance. Becauseofthedynamicsofmanagingprojectsintoday’scomplexworld,weneeda broaderviewbeyondjustthethreeprimaryconstraints.MostauthorsagreeonTime(often shownas“Schedule”)andCost(oftenshownas“Budget”),butthethirdkeycomponent variesbetween“Scope,”“Quality,”“Resources,”and“Risk.”PMIrecognizesthatmultiple componentsmustbemanaged(balanced)andthereforehaspulledawayfromusingthe term“tripleconstraints”infavorofcallingthese“competingconstraints.”
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PMPCertification:ABeginner’sGuide Thebasicconceptisstillthesameinthattheprojectmanagerandteammustbalancethe keycomponentstokeeptheminlinewiththeprojectsponsor’srequirements.Iftime(the schedule)iscompressed(forexample,thecustomerneedsthesolutionsooner),thentheother componentsoftheconstraintsshift,thusincreasingcostordecreasingqualityandpotentially affectingthescopeoftheproject.Ifscopechanges,thentimeandcostaresurelyeffected. Thekeyistoclearlyunderstandthedriver(ormaincomponent)oftheprojectconstraints.For example,theprimarydriverontheOlympicsprojectistime—makingsurethetorchislitata specifictimeonaspecificdate,evenifthepaintisnotdryonthebleachers. Projectstakeholdershavedifferentprioritiesandsometimeschangingdemands,which makesthebalancingactextremelydifficult.ThisiswhyIoftenrefertoprojectmanagers as“jugglers.”Weconstantlyhavetokeeptheplatesspinningandalltheballsintheair(so tospeak)atthesametime. Finally,Ibelievethereisanothersidetotheseconstraintsthatisrarelymentioned— andthatiskeepingtheteamhappy.IfthePMisfocusedontheteamasthenumber-one assettotheproject,therestofthepiecestendtofallintoplace.Iftheteamishappy, workingwelltogether,andfocusedontherequirements,theprojecthasamuchhigher chanceforsuccess.
What Is a Portfolio? What Is Portfolio Management? Intheworldofprojectmanagement,aportfolioreferstoacollectionofsimilarprojectsor programsandotherworkthatisgroupedtogetheratacompanylevel.Theautoindustry isaprimeexample.AlargecompanysuchasToyotahasaportfolioofvariousbrands, models,andstyles—theydesignandmanufacturetheCamry,Corolla,Rav4,Highlander, Prius,andmore,withcars,trucks,andSUVs. Portfoliomanagementreferstothecentralizedmanagementofoneormoreportfolios, whichincludesidentifying,prioritizing,authorizing,managing,andcontrollingprojects andprogramsaswellasthegovernanceofthecollectiveworktoachievespecificstrategic objectives. Table2-2providesanoverviewofproject,program,andportfoliomanagement.It compareshowprojects,programs,andportfoliosdifferinkeyareassuchashowtheyare planned,managed,andmeasured,andhowscopeisdefined.
Introduction to the Project Management Office (PMO) Projectmanagementoffices(PMOs)areemergingmostlyinlargercompaniestosetup acommonapproachtoprovidingstandardsacrossmanyprojects.Whenprojectsare managedinconsistently,theoverheadcostofsettingup,running,andreportingusing differenttypesofreports,tools,andprocedurescanbeprohibitive.
Chapter2: TheEmergingWorldofProjectManagement
Projects
Programs
Portfolios
Scope
Projects have defined objectives. Scope is progressively elaborated upon (that is, it builds) throughout the project life cycle.
Programs have a larger scope and provide more significant benefits.
Portfolios have a business scope that changes with the strategic goals of the organization.
Change
Project managers expect change and implement processes to keep change managed and controlled.
The program manager must expect change from both inside and outside the program and be prepared to manage it.
Portfolio managers continually monitor changes in the broad environment.
Planning
Project managers progressively integrate high-level information into detailed plans throughout the project life cycle.
Program managers develop the overall program plan and create high-level plans to guide detailed planning at the component level.
Portfolio managers create and maintain necessary processes and communication relative to the aggregate portfolio.
Program managers manage the program staff and the project managers; they provide vision and overall leadership.
Portfolio managers may manage or coordinate portfolio management staff.
Management Project managers manage the project team to meet the project objectives. Success
Success is measured by product and project quality, timeliness, budget compliance, and the degree of customer satisfaction.
Success is measured by the degree to which the program satisfies the needs and benefits for which it was undertaken.
Success is measured in terms of aggregate performance of the portfolio components.
Monitoring
Project managers monitor and control the work of producing the products, services, or results that the project was undertaken to produce.
Program managers monitor the progress of program components to ensure the overall goals, schedule, budget, and benefits of the program will be met.
Portfolio managers monitor aggregate performance and value indicators.
Table2-2
Comparative Overview of Project, Program, and Portfolio Management
PMOsalsoprovide“governance”(controlleddirection)toprojectsandprograms.The wordgovernanceoriginatesfromtheGreekverbkubernáo,whichmeanstosteerandwas usedforthefirsttimeinametaphoricalsensebyPlato.ItthenpassedtoLatin(gubernare) andthenontomanyotherlanguages.Thetermgovernanceasusedintheindustry—especially intheinformationtechnology(IT)sector—describestheprocessesthatneedtoexistfora successfulproject.[2] Governanceworksbestwhenstandardsareselectedandenforcedacrossprojectsand programswithinaportfolioororganization.
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Ask the Expert Q: Aretherestandardtemplatesandreal-worldexamplesofscopestatementsandother projectdocumentstohelpmemanagemyprojectinamoreconsistentmanner?
A: Yes.IrecommendanInternetsearchon“PMTemplates”forawealthofprojectmanagement freewareandgreatexamplesusedinreal-worldprojectsliketheonefromDr.GaryEvans athttp://cvr-it.com/PM_Templates/.Youcanalsotalktofellowprojectmanagersinsideand outsideyourteam/organizationforexamplesaswell.
NOTE The message here is to use the tools available (never reinvent the wheel if you don’t have to) to manage projects in a shared learning environment (working together to learn from one another and gain synergy). Most project managers are happy to offer templates they have designed or used on successful projects to share their knowledge and experience.
Being Audit Ready Whenitcomestoprojects,inthecorporateworldweoftensay,“Itisnotaquestionof ifyourprojectwillbeaudited,butwhenitwillbeaudited.”Therefore,itisimportantto stayorganizedandmaintainthedocumentsoftheprojectbykeepingthemcurrentand accurate. Thebestwaytobe“auditready”istohaveaprojectcontrolbook(PCB),preferably inanelectronicdatabase,teamroom,MicrosoftSharePoint,orotherformofacentral repositorytoensureeasyaccessbytheprojectstakeholders.ThePCBshouldalsobe includedintheoverallProjectManagementInformationSystem(PMIS).ThePMISis whereyoushouldkeepallyourprojectplansandoutputdocuments(statusreports,risk andcommunicationplans,scheduleupdates,approvedchanges,andsoon). WithaPMIScomestheresponsibilitytokeepitcurrent,whichmeansversioncontrol (makingsureyouhavethelatestversionofallprojectdocuments).Being“auditready” meansbeingabletodemonstrateyouareeffectivelymanagingallaspectsoftheproject. Itisagreatfeelingtowalkoutofaprojectauditwithnonegativefindingsandnoaction itemsbecauseyouwereabletoshowthatyourprojectiswellorganized,currentwithall documents,andthatyouareincontroloftheproject.
Chapter2: TheEmergingWorldofProjectManagement
The Role of the Project Manager Theprojectmanageristhe“glue”thatholdstheprojecttogether.ThePMisresponsible andaccountablefortheprojectandmusttakechargeastheprojectleader. Tobeagoodleader,thePMmustbeagoodcommunicator,beorganized,playwell withothers(thatis,beteamoriented),andbeateambuilder/motivator.ThePMmustbe willing(andable)totakecalculatedrisks,beanadvocatefortheteam,beabletosolve problems,andunderstandstakeholders’needsandexpectations.Asthepersonresponsible forprojectsuccess,thePMisinchargeofallaspectsoftheproject,includingbutnot limitedtothefollowing: ●
Developingtheprojectmanagementplanandupdatingitasneededtoensurecurrency, accuracy,andapplicability
●
Keepingtheprojectontrack(budget,schedule,scope,anddeliverables)
●
Managingriskandprovidingtimelyandaccuratereportsonprojectstatus/metrics
●
Managingstakeholderneedsandexpectations
Ideally,thePMshouldbeassignedtotheprojectearlyintheprojectlifecycle toassistindevelopingtheprojectcharter,planningdocuments,andestablishingthe projectteam(dependingonthetypeoforganizationalstructure,theteammayalready beassignedormaybeassignedbythefunctionalmanagerbasedonlocation,skills,and availability). TheroleofthePMisdistinctandshouldbefocusedontheproject.If,forexample, thispersonisafunctional(line)managerinadditiontobeingassignedthePMrole,there willlikelybeconflictingdemandsontheirtimeandrequirements. Beingagoodprojectmanagerrequiresaspecificsetofcompetencies(skills). AccordingtoPMI,therearethreedimensions(layers)ofprojectmanagementcompetency: ●
Knowledge ThisreferstowhatthePMknowsaboutprojectmanagement.
●
Performance Thisreferstowhattheprojectmanagerisabletodooraccomplish whileapplyingtheirprojectmanagementknowledge.
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Personal Thisreferstohowtheprojectmanagerbehaveswhenperformingwithin theprojectorrelatedactivity.Personalcompetencyencompassesattitudes,core personalitycharacteristics,andleadership—theabilitytoguidetheprojectteamwhile achievingprojectobjectivesandbalancingtheprojectconstraints.[3]
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PMPCertification:ABeginner’sGuide EventhoughtheroleofthePMvariesbasedonthesize,type,andcomplexityof theproject,thefundamentalskillsrequiredareuniversal(theprimaryPMskillsand disciplinescanbepluggedintopracticallyanyindustry).Thisisnottosay“onesizefits all,”becauseprojectsbydefinitionareunique.However,projectmanagementasaskillis extremelyversatileandcanbeusedinabroadspectrumofapplications. Finally,agoodprojectmanagermustbeastrongleadertoeffectivelycontrolthe project.Beingaleadermeanstakingcontroloftheproject.
TIP The true measure of success for you as a project manager is when team members say they want to work with you on future projects. The only way you gain this kind of trust and dedication is by being an advocate for the team, being able to admit when you have made a mistake, and by being honest and respectful. This will go a long way toward establishing your credibility and integrity.
Irecommendthefollowingactionstepsfortakingcontrolofeitheraneworexisting project:
1.Get(andstay)informed.Beaspongeandabsorbasmuchabouttheprojectaspossible
byreviewingprojectrequirements,theprojectmanagementplan,outputdocuments, thecontract,workorders,changerequests,andthestatusreportsoftheproject.This meanslisteningmorethantalking.Oneofmypreviousmanagershasasayingthat goeslikethis:“MydaddyalwayssaidIhavetwoearsandonemouth,soIshouldlisten twiceasmuchasItalk.”
2.Documentkeyissuesandconcerns.Reviewactionsandoptionswithkeyindividuals
firsttounderstandasmuchaspossibleaboutpervasive(chronic)issues,staffissues, customercontacts,organizationalstructure,environmentalfactors,andorganizational assets(standardtools,templates,forms,andsoon)asappropriateandavailable.
3.Meetwiththecustomertobeginestablishingarelationshipinordertounderstandtheir
concernsaswellaswhattheylikeanddon’tlikewhenitcomestotheproject,theteam, andthedeliverables.
4.Bringthesestepstogetherbyholdingaprojectkickoffmeetingusingalltheinformation
collectedtoestablishyourselfastheleaderoftheproject.Thisiswheresteps1–3pay off,becauseyouneedtodemonstrateyourawarenessoftheproject,thestakeholders, projectobjectives,customerexpectations(hotbuttons),andoverallstatus.Youneedto providecleardirection(aplan)andreiteratetheroles,responsibilities,andassignments usingprovenprojectmanagementtools,techniques,andprocessestoshowyour competencyastheprojectmanager.
Chapter2: TheEmergingWorldofProjectManagement
Ask the Expert Q: Onceyouareassignedasaprojectmanager,whatisthebestwaytotakecontrolofa project?
A: Thebestwaytotakecontrolofaprojectistoestablishyourselfastheleader(notbybeing
boldordictatorial,butbyshowinginterest,knowledge,andprofessionalism).Whenyou(as theprojectmanger)takeresponsibilityandaccountabilityfortheproject,youshowtheteam youareincontrol.Beingincontrolalsomeansyouneedtosupportyourteamintheireffort todelivertheapprovedscopeoftheproject.Beingfirmbutfairhelpsleadtopositiveresults.
Importance of Clear Communications—Learn the Language Beingabletospeakandunderstandthelanguageofprojectmanagementisessentialtothe combinedsuccessoftheprojectstakeholders,andtheprojectitself. Onaverageprojectmanagersspendabout90percentoftheirtimecommunicating. Communicationsoccurinmanydifferentways:formal,informal,written,verbal,and nonverbal(throughbodylanguage). Thetypesofcommunicationsarevariedandshouldbetailoredtomeettheneedsof theproject.Somecommonformsofcommunicationsonmostprojectsincludetheproject managementplandocument,variousprocessdocuments(forexample,theWorkBreakdown Structure[WBS]),communicationsplan,variouswrittenreports,statusmeetingminutes, emails,phonemessages,andgeneraldiscussionswithprojectstakeholders.Theproject manageriseithercommunicatingorplanningcommunicationsduringthemajorityoftheir timeonagivenproject.MultiplythisseveraltimesoverifthePMismanagingmultiple projectsorprogramsatthesametime.Thisbecomesquiteajugglingactfortheproject manager. Theprimarypurposeofprojectcommunicationistoensureeveryoneassociatedwiththe projectisrowinginthesamedirection(onthesamepage),andmakingsureeveryoneonthe projectunderstandsthedeliverables,roles,responsibilities,schedule,andexpectedresults. Thebestwaytokeepeveryonefocusedisthroughcleartwo-waycommunications.To communicateeffectivelyyouneedtolearnthelanguageofprojectmanagement.Usingthis book,youwilllearnhowtokeeptheteamfocusedontheproject.Giventheimportanceof communicationmanagement,youcanbetitisakeyPMIknowledgearea(tobediscussed inmoredetailinChapter10ofthisbook).
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Three Takeaway Points from This Chapter Understandingtheimportanceofapplyingclearcommunications,commonprocesses, tools,techniques,andpracticesinaconsistentmannerisessentialforqualitydeliveryand measuredresultsonyourprojects.Manyofmystudents,associates,andclientsoftenask forthe“magicbullet”tosuccessfulprojectmanagement—thatis,whatarethekeyfocus itemsthatwillhelpmemanagemyprojectmoreeffectively? Inmyopinion,therearethreeprimarypointsthatwillassistyouinachievingyour goalstoeffectivelymanageyourprojects: ●
Stayfocusedontheendgoalsandobjectives Itisveryeasyintherealworldto getdistractedbythemanyrequestsfromsponsors,potentialrisksidentifiedbythe team,changesinscope,andthenaturaltendencytowanttoaddvalue(domore)tothe project.Changemanagementasaprocesscanhelpyouandtheteamstayfocusedon theapprovedscopeandgoalsoftheproject.
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Usethetoolsavailable Itisimportanttousestandardtoolsandtemplatesfromthe PMBOK,fromyourprojectmanagementoffice(ifavailable),fromotherprojectsin yourgrouporcompany,andfromtheInternet.Also,youcanacquiresharewaretools atnocost(orlowcost)tohelpyoutrackandmanagethecost,schedule,andscopeof yourproject.
●
Workasateam Rememberthenumber-oneassetonaprojectistheteam.Asaproject manager,youcannotdoitall.Thebestwaytoensuretheteamisworkingtogetheris throughclearcommunicationsandrewards/recognitionwhenthingsaredoneright.
NOTE There is a saying in the PM world that goes like this: “If you have more than one person on a project, you have a team, and if you have a team, you have conflict.” Therefore, be aware of the ongoing need to keep the team informed, engaged, and focused. As a PM, you must provide clear direction to the team for success.
Roles of the Stakeholders (Who Are They and Why Do We Care?) Ihavementionedthetermstakeholdersseveraltimesinthischapterandwanttotakea minutetodefinewhotheyareandtheirimportancetotheproject. ●
Whoareprojectstakeholders? Answer:Anyoneoranyorganizationthatispositivelyornegativelyaffectedbythe project.
Chapter2: TheEmergingWorldofProjectManagement ●
Whyshouldwecarewhotheprojectstakeholdersare? Answer:Theprojectcannotexistwithoutstakeholders;theyarethesponsors(provide thebudget),thecustomer,theendusers(orcustomers)oftheproductproducedbythe project,andtheprojectteam(includingthePM)responsibleforbringingtheprojectto asuccessfulclosetomeettheneedsoftheotherstakeholders.Thestakeholdersareso importanttotheproject,PMIaddedIdentifyStakeholdersasanewprocessin theInitiatingprocessgroup.Itisextremelydifficulttomeetstakeholderneedsifwe don’tknowwhotheyare.
TryThis
Who Are the Project Stakeholders?
Sayyouaretheoverallprojectmanagerworkingonamajorevent(suchasaconcert).Itis yourjobasPMtoidentifyallthestakeholders(includingwhomtocallboss)ontheproject. Takeafewminutesandwritealistofwhoyouthinkthestakeholdersareforanevents centerandthencompareyourlisttothefollowing: ●
Corporatesalesrepresentative.
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Marketingrepresentative.
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Contractmanager.
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Finance(Pricer).
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Businessofficemanager.
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Eventmanager.
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Ticketsales(boxoffice).
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Operationsmanagerandteam.
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Changeoverprojectmanagerandteam(settingupthevenueforconcertseating).
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Hundredsofpart-timeemployees,includingsecurity,ushers,lighting,sound,dressing roomsetup(tomeetartistrequirements),food,merchandising,audio/video(AV) technicians,post-eventcleanup,parking,trafficcontrol,and,ofcourse,thepeople attendingtheevent.
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Theartistandperformingband,riggers,wardrobe,makeupartist,andmanagingagent.
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Theboss.Thisisthepersontowhomyoureportandareaccountabletoontheproject. Thepersonyoucall“boss”variesdependingonwhereyouareinthepeckingorder (chainofcommand).Attheendoftheday,theprojectmanageristhe“boss”ofthe project,andofcoursethesponsor(thepersonorpersonspayingfortheproject)isthe “boss”oftheprojectmanager.Remembereveryonehasaboss(usuallyseveral).
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PMPCertification:ABeginner’sGuide
Project Framework Theprojectmanagementframeworkprovidesabasisforunderstandingprojectmanagement. Theframeworksetsthestagefortheoverallstructureoftheproject.Itlaysthefoundation forthetypeoforganization,thetypesofproducts,services,anddeliverables,andtheresults tobeachievedfromtheproject.Keytounderstandingtheprojectframeworkistheproject lifecycle.
The Project Life Cycle Thelifecycleofaprojectcandifferintypeandtermsused.Softwaredevelopmentisa goodexample,whereyouhaveconcept,development,test,implementation,andclosing phases(remember,projectsshouldhaveabeginningandanend).Becauseofthehigh potentialforchange,theprojectandassociatedPMplanareiterativeinnature,meaning theygothroughwhatPMIcalls“progressiveelaboration”throughouttheproject’slife cycle.Progressiveelaborationinvolvescontinuouslylookingforwaystoimproveonthe workandresultsoftheproject.Astheprojectevolves,youlearnmore,youhavemore information(more“knowns”andlessrisk),andwithinformationcomesknowledge.This increaseinknowledgeallowstheprojectteamtomanageahigherlevelofdetailasthe projectevolves. Nomatterhowlarge,small,simple,orcomplextheproject,ingeneralallprojectshave abasicstructure: ●
Initiatingtheproject(gettingitstarted)
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Organizingandpreparingtheprojectthroughplanning(planningthework)
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Carryingouttheworkoftheproject(workingtheapprovedplan)andmonitoring/ controllingresults
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Closingtheproject
Insummary,aprojectlifecycleisacollectionofsequential(butsometimes overlapping)projectphases.
Project Phases Projectmanagementisallaboutorganizingtheworkoftheprojectinmanageablelogical chunks(groupsorcategoriesofwork).Withthemanydependenciesthatexistonaproject togetfromonephasetothenext,itisalmostlikemanagingmanysubprojectsorsubsetsof theproject.Takethecaseofsettingupanicerinkforahockeygameoranyothershowon iceevent.Clearlytheeventwillnotoccurunlesstheiceisproperlyfrozen,andevenifthe icerinkisreadyforplay,unlessmarketing,advertising,andtheboxofficedotheirjobs,
Chapter2: TheEmergingWorldofProjectManagement noticketswillbesoldordelivered.Theseareoftenconsideredprojectphasesespecially whensettingthemupforthefirsttime.Oncethesestepsbecomerepeated,documented, andapproved,thestepsmayultimatelybecomeongoingoperations. Alsoconsideraprojectthatiscomingtoaclose.Eventhoughyouareinthefinal phaseoftheoriginalproject,theclosingphasebecomes,andshouldbemanagedlike,a project.Closingaproject(asyouwillseeinChapter13)takesonaprojectlifecycleand shouldbemanagedaccordingly.
Organizational Structures Therearemanydifferentorganizationalstructuresaswellasmultiplemethodsofmanaging projects.However,itisbesttofocusonthebasicstructures(especiallyifyouareplanning totakethePMIexam.)
Basic Organizational Structures According to PMI Organizationalstructureisanenterpriseenvironmentalfactorthatcanaffectthe availabilityofresourcesandinfluencehowprojectsaremanaged.Organizationalstructure referstothewayacompanyorgroupisformedoraligned.Thebasicstructures(according toPMI)areasfollows: ●
Functional Thisisusuallyhierarchical(linemanagers)orbyskill(plumbers, eventplanners,programmers,securityadministration,andsoon).Withthistypeof organizationalstructure,thepowertendstoberetainedbythefunctionalmanager,not theprojectmanager.
●
Matrix(Weak,Balanced,andStrong) Thisisusuallyapoolofpeoplealigned similarlytothefunctionalstructure;however,theyareusedacrossmultipleprojects andorganizationsandhavemuchmoreflexibilityincross-coveragebetweenprojects. Weak,Balanced,andStrongrelatetothelevelofpowerorauthoritythePMhasinthe matrixorganizationalstructure.
TIP Don’t get these confused with the term tight matrix, which means to have the project team co-located (working) in the same room or building. ●
Projectized(alignedandmanagedbyproject) Thisstructureprovidestheproject managerwiththehighestlevelofauthorityofallthestructuretypesbecausetheteam usuallyreportsdirectlytotheprojectmanager.However,therearedisadvantages. Forexample,whenaprojectends,thePMandteamwillhavetofindanewhome (project);otherwise,theyclosewiththeproject.
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PMPCertification:ABeginner’sGuide NOTE Remember organizational structures are part of the enterprise environment factors (EEFs) that need to be considered on your project. These EEFs can affect a number of areas of your project, such as how you obtain resources (people and equipment), how you execute your project, how payments are made, and so on. Some companies may have a combination of these structures or spin-offs they use to manage their business and projects. Because of the importance of EEFs, more information is provided in Chapter 3 of this book.
Organizing the Project (Using Different Breakdown Structures) SeveraltoolsareavailabletoassistthePMinorganizingaproject.Themostcommonare theWorkBreakdownStructure(WBS),theRiskBreakdownStructure(RBS),Resource BreakdownStructure(alsoRBS)andtheOrganizationalBreakdownStructure(OBS). TheWBSisextremelybeneficialtohelpingidentifytheworkoftheprojectandto breaktheworkintomanageablechunks(groupsorcategories.)TheWBSprovidesaway tosystematicallycarveout(identify)whatneedsbedonetomeetthedeliverablesofthe project.TheWBSalsoprovidesawaytocapturekeycategoriesofworkandputthem intologicalgroups(workpackages)thatcanbeassignedtodifferentworkgroupsor departments.TheWBSis“deliverablesoriented,”meaningtheWBSshouldbedeveloped aroundthedeliverablesoftheproject.
TIP A deliverable is a product of work completed on a project. Deliverables are sometimes described as inputs or outputs. One person’s output is the next person’s input, until the project is complete. An example of a deliverable is a training manual, or survey results that are needed as an input to the type of classes that need to be developed to meet a particular program curriculum.
ItisimportanttonotethatPMIisreallybigontheWBS—itismentionedmanytimes inthePMBOKGuide.WhenyoutakeaPMIexam,youwilllikelyseemanyquestions concerningtheWBS.Asamateroffact,creatingtheWBSisaprocessintheProjectScope Managementknowledgearea,andwediscussthisinmoredetailinChapter5ofthisbook. TheOBStypicallyshowstheorganization’sdepartments,units,orteamsaligned totheprojectactivitiesorworkpackagestheyareresponsiblefordelivering.TheOBS shows“who”isdoingtheworkoftheproject. TheRiskBreakdownStructure(RBS)showshowtheriskshouldbemanaged.The RBSshouldshowtheriskeventsthathavebeenidentified,theanalysisofimpactand probability,andtheriskeventownershouldtheriskoccur.Riskresponsestrategyand howtomanageriskontheprojectiscoveredindetailinChapter11ofthisbook.
Chapter2: TheEmergingWorldofProjectManagement TheResourceBreakdownStructure(RBS)breakstheworkdownbytypeofresource, suchasprogrammers,plumbers,electricians,testers,trainers,andsoon. Nowthatyouareuptospeedontheprimarybreakdownstructures(BSs)andtheiruse, let’slookathowprojectsuccessisachieved.
Success Is in the Eyes of the Customer Thecustomerisalwaysright,right?Itisimportanttoknowthatintherealworld,the customerisnotalwaysright;however,thecustomerisalwaysthecustomer,right?Sowe havetobesensitivetothecustomer’sneedsandexpectations. AccordingtoPMI,customersatisfactionisameasureofsuccessonaproject.Itis importanttokeepthecustomerintheloopandinvolvedinmanyaspectsoftheproject planning,tracking,andareasofrisk,communications,andsoon. Customerneedsandexpectationscanbeadichotomy.Needsareusuallyfairlyprecise andmeasurable,whereasexpectationsvaryearlyandoften,dependingon“selective amnesia.”Forexample,thecustomeroftenrememberstheextrafeaturesyoupresentedin thesalespitchbuttheymayconvenientlyforgetthosefeatureswerenotpurchasedbased onaffordability.Yet,theyarestillexpectingtheextras.Thecustomermaychangefocus onwhattheywantattheendoftheprojectforvariousreasons(thisisespeciallytrue whenrequirementsorscopeareuncleargoingintotheproject).Theseandahostofother reasonscancause“scopecreep”oreven“scopeleap”(thatis,whenprojectrequirements changesignificantlyfromthestartoftheprojecttotheend). Ingeneral,themeasureofsuccessonanyprojectshouldbequalitydelivery(ontime andonbudget)basedoncustomer-approvedscopeanddeliverables.
NOTE PMI states that in general all conflicts on the project should be resolved in favor of the customer. Therefore, make sure you are in close communication with the project sponsor (customer) to help ensure you meet their needs and expectations (which at the end of the project is the true measure of success). In the real world, however, this could be viewed as a “Yes-Man” approach and could be costly. So, what is the answer? The answer is to be very aware of the customer needs and expectations, and add value to the project without giving away the store (extras at no additional cost).
TryThis
What Does the Customer Want?
Supposeyouaretheprojectmanageronakitchenremodelingproject.Youhireaplumber (subcontractor)todotheplumbingandsinkinstallation.Youobtainthebidfromtheplumber, andwhenyourollthisintoyouroverallbidwiththeotherwork,thetotalestimateisthree monthstocompletetheprojectatacostof$30,000.Youpresentthebidtothecustomer,
(continued)
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PMPCertification:ABeginner’sGuide theyagree,signacontract,andtheworkbegins.Youaretwomonthsintotheprojectandthe plumbertellsyou(thePM)thatthespecialfixtures(brushednickelsinkandfaucet)areback– orderedandwilldelaytheprojectbysixweeks.AsacompetentPM,youdiscoverthatthe fixturesareavailableatahighercostfromanalternatesupplierinanotherstate.Thepurchase ofthefixturesfromthealternatesupplierwillcostanadditional$3,000. Nowthatyouhavetheanalysis(expectedimpact)youtakeittothecustomerandthey haveadecisiontomake.Herearethekeyquestionsthatneedtobeansweredfromthe customer:
1.Howimportantarethespecialfixtures?Aretheywillingtoallowtheprojecttobe
delayed?Iftimeisnotimportantandtheyreallywantthebrushednickelfixtures, theymaydecidetoacceptthedelay.
2.Iftimeorcostisimportant(saythecustomerhasaspecialeventplannedattheirhome
andthedelaywillspoiltheplans),aretheyarewillingtogowithalternativestandard fixtureselections,savingtheextratimeandcost.Orarethespecialfixturessoimportant thattheyarewillingtopayextrafortheadditionalcostandshipping? AsthePMyouneedtolearnfromthislessonandestablishastrategytopreventthis fromhappeninginthefuture.ThebeststrategyforthePMistofrequentlycheckproject statuswiththeteamtominimizetherisksofthistypeofproblemoccurringagain.You mustbepreparedandhaveaction(back-up)planstohelpmitigatetherisksshouldthey occur.Insummary,thestrategyasaPMshouldbetoplanwelltohelpensurethereareno (orminimal)surprises!
Adding Value to the Project Therearewaystoaddvaluetoaprojectwithoutgivingawaythestore.Howisthis possible,youask,especiallygiventhatvalueisoftenverydifficulttomeasure?Youcan addvaluebyconsistentlyshowingintegrityinhowyoumanagetheproject.Provide on-timeandaccuratestatusreportsevenifthestoryisnotgood—beingbehindschedule oroverbudgetarerealsituations,andyoudonotwanttohide,ignore,ordelaybadnews inyourstatusreports. Alwayspresenttheimpacttotheprojectinclearterms.Moreimportantly,presenta planofactionoralternativeoptionssothesponsorcanmakeaninformeddecisiononwhere theprojectneedstogonext.Trytoanticipatethequestions:Ifyouwerethecustomer,what wouldyouwanttoknowaboutariskeventandthepossibleimpact?Isitathreatorpossible opportunity?Isitgoingtocostmoreordelaytheprojectinanyway?
Chapter2: TheEmergingWorldofProjectManagement
TryThis
Building a Corral for Rodeo Animals
SupposeyouarethePMonaprojecttobuildacorral.Asyourteamisdiggingthepost holes,theyencounteranunforeseenevent—theyhitsolidrock.Theequipmentisdamaged, andtheimpacttotheprojectisatwo-weekdelayanda$1,000repairtotheequipment. BecauseyouareanexperiencedPM,youknowthefirststepistoassessthesituation. Yougathertheteamtogetheranddiscussthesituation.Oneoftheteammembersmentions shehasprobedthegroundaroundtherockandfoundthatthesoilismorefavorableifthe fencelineweretobemovedtenfeetinfromtheoriginalboundary.Thiswouldallow theteamtocontinuebuildingthecorralaroundtheremainingproperty.Ifyouremainon theoriginalfenceline,youwillneedtobringinspecialequipmentatgreatexpense,and younotonlyhaveadelay,butalsoabigimpacttothecostoftheproject. Whatdoyoudo? Youranswershouldbetobalancethecompetingdemands:time,cost,andscope.Itis besttodeterminetheprioritiesfromthecustomertodeterminewhatismoreimportant. Oncethepriorityisclearandyourealizethattimeisoftheessence,itappearsthatmoving thefencelineintenfeetisthebestapproach.Itwillsavetimeandmoney.Youpresentthis astherecommendedoptiontothecustomerintheformofachangerequest.Oncethisis approved(signed)bythecustomer,youdirecttheteamtomovethefencelineandproceed withtheproject. Itisimportanttoremembertoreportthestatus(finding)toyoursponsorandother stakeholdershonestlyinaprofessionalandtimelymanner.Provideabestestimateof impacttotheproject.Youalwayswanttoprovidetheall-importantrecommendedaction planastohowtobestsolvetheproblemandtokeepitfromhappeningagaininthe future.Thisishowyouaddvalueandgainthemuchneededtrustandconfidencefromthe customer,otherkeystakeholders,andsponsors.
Case Study Introduction Nowthatwehavewalkedthroughacouplereal-worldexamples,Iwouldliketointroduce acasestudythatwewillusethroughoutthisbooktohelpapplytheconceptsdiscussed alongtheway. Manyofmystudentsfrequentlyaskforreal-worldexamplesinacasestudyformatthat tieintothediscussionsinclassconcerningscopemanagement,riskmanagement,andso on.Othershaveaskedifthereisabookwitharealcasestudythatbuildsoverthecourseof
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PMPCertification:ABeginner’sGuide thebookandtiesintotheprojectmanagementknowledgeareasandprocessgroupsinthe PMBOK.So,bypopulardemandandinanefforttomeettheirrequest,heregoes.... Ihavechosenthiscasestudybasedonreal-worldexamplesthathaveoccurredata majoreventscenterinnorthernColorado.Ithinkyouwillfindtheseeventsinformative, interesting,beneficial,andentertaining.Theobjectiveistolearnfromtheexperiencesofthis casestudyandtoapplythisexperiencetoyourownprojects.Thebestwaytolearnabout projectmanagementsuccessesistoseetheeventsinaction—andifwecandiscussevents thatareofaninterestingnature,wemaybeabletohavesomefunalongthewayaswell. WithpermissionfromtheBudweiserEventsCenter(BEC),Iwillshowcasesomeof theireventprojectsinthiscasestudy.Thecenter,locatedinadevelopmentcalledThe Ranch,isownedbyLarimerCountyandmanagedbyGlobalSpectrum,apublicassembly facilitymanagementcompanywithmorethan80facilitiesthroughouttheUnitedStates andCanada. Wewillstartfromthecontractphaseoftheproject,whenanagent,manager,or promotercontactstheeventscentertohostaneventsuchasaconcert,rodeo,iceskating show,orhockeygame.ThiscasestudywillbuildfromstarttofinishandtieintothePMI processgroupsandknowledgeareas.Youwillwitness(intext)thesetupforconcertsand managingthechangeovertorodeosandthentoicehockey. Throughvariousinterviewswiththeeventscenterdirector,operationsmanager,and changeoverprojectmanagers,youwillseehowTheRanchmakestheseeventshappenon timeandonbudgetalmostallthetime. WewillstartwithPhaseIofTheRanchfacilitiesproject,whichincludessixbuildings androughly150acresofsitework.First,let’slookatsomeofthechallengesoftheproject indesigningfacilitiescontainingbuildingsadaptabletothehundredsofeventshostedeach year.Thenwewillcoverspecificprojectmanagementprocessesandmethodsusedtohelp tieeverythingtoprojectmanagement. Thebiggestchallengeisclearly“flexibility”—theabilitytomeettheneedsofamultitude ofevents,especiallyconsideringthedangerspresentedbyrodeoanimals,flyingpucksat hockeygames,andsometimesdemandingconcertartists. Thenextchallengeisthelogisticsoftransformingthecenterforavarietyofevents. Thevenuemustbeadaptablewithareasonablyshortchangeovertimeandbeableto handleawiderangeoflighting,sound,andvideorequirements,aswellasscoreboards andsoon.Oneventday,theconcernsaresecurity,crowdcontrol,merchandisesales,and foodandbeverageservices. NowthatIhaveintroducedthecasestudyandsetthestage(sotospeak)onthemany variablesandchallenges,let’smoveontothedifferentapproachesusedfortheseand otherprojectsandsomeofthedilemmasthatcanoccur.
Chapter2: TheEmergingWorldofProjectManagement Manydifferentapproachescanbeusedtomanageprojects.Asmentionedpreviously wetendtomanageusingourpersonalexperiences,andinstincts.Thesemethodsworkin somecases,butinmanycasestheydon’t.Wefallintocertainhabits(someofthembad), andaseveryoneknows,habitsareoftenhardtobreak.Themostcommonhabitisoften referredtoasthe“Ready,fire,aim”dilemma.
The “Ready, Fire, Aim” Dilemma Toooftenwegetaheadofourselvesonprojects.Weliveinaworldinwhichmostpeople areusedto,andexpect,instantgratification.Wewantanall-in-one,state-of-the-artgadget thatisaphone,camera,personalplannerthatplaysmusicandcanshineourshoes,allatthe sametime.Theendresultisdistractions—andlotsofthem.Thiscanleadtoa“jumpthegun” mentality,wherewefrequentlystartdoingtheworkwithouthavingaclearscopeandthen wonderwhywecontinuetomissthetarget. ThistendencycomestolightinthebookTheToyotaWayFieldbook,byDr.Jeffrey Liker,whocautionsagainstthetendencyinmostWesterncompaniestoshort-changethe problem-solvingprocess:
“Oneofthesignsofa‘Ready,fire,aim’cultureisthetendencyto‘jump’immediately fromthe‘problem’tothe‘solution.’Inmanycasestheproblemmaybementioned casuallyandmuchtimeisspentproposingvarious‘solutions’beforethe‘problem’has beenclearlydefined.Atthisstageintheprocessitislikelythatasymptomhasbeen observedratherthanthetrueproblem.”[4] TheToyotaproblem-solvingapproachisimplementedinfoursteps:
1.Developathoroughunderstandingofthesituationanddefinetheproblem.
2.Completeathoroughrootcauseanalysis.
3.Consideralternativesolutionswhilebuildingconsensus.
4.UsePlan-Do-Check-Act(PDCA)—theShewhart-Demingcycle: ●
Plan Developanactionplan.
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Do Implementsolutionsrapidly.
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Check Verifyresult.
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Act Makenecessaryadjustmentstothesolutionsandactionplananddetermine futuresteps.
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Finally,reflectandlearnfromtheprocess.[5]
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PMPCertification:ABeginner’sGuide The“Ready,fire,aim”dilemmawaspainfullyrealizedwhenaPMbeganworkingon anine-monthprojectwithoutclearlydefinedrequirements.Therewasnoprojectcharter toauthorizetheproject.Becausethiswasanewandexcitingsoftwareapplicationproduct andhadneverbeendonebefore,thePMdecidedtherequirementsandfeaturesweretobe “open-ended”code.Theworkneededtostartimmediately,andthecustomerwasexcited aboutthepotentialofthisnewproduct.Ateverymeetingthecustomerbroughtmany greatideastotheteamforadditionalfeaturestheywantedaddedtothecode.Because oftheaddedfeatures,thePMkeptaddingmoreandmorepeopletotheproject.Asyou canimagine,attheendofninemonthstheyhadsomegoodcode,butaveryunclear productthattriedtodoeverything—frompayingbillsonlinetoautomaticallybalancing yourcheckbook.However,theycouldn’tgetittoworkreliably.Theyneededmoretime. Unfortunately,thecustomerranoutofpatience,time,andmoneyanddecidedtotakethe developmentworkbackin-house.“Thanksforthehardwork,”theysaid,“Wewilltake itfromhere.”Thecustomerandserviceproviderwerenothappywiththeresultsandthe projectwasdeemedafailure. Inlookingatour“Ready,fire,aim”dilemma,let’sgobacktothefirstword:Ready.If everythingisdoneproperly,wearereadytobeginwhenwehaveaprojectcharter,weknow whattheprojectdeliverablesare,andwecanbegintheplanningcycle(the“aim”part). Manyprojectsbeginwithoutanyoneknowingwhotherealcustomerisorwhat therequirementsare,andyetwecontinuetojumprightintothat“newopportunity.” Wegatherateamofpeopleandschedulethekickoffmeeting(PMIisbigonkickoff meetings).Wemaynotevenhaveallthedetailsoftheprojectyet,butwefireitoff.We introducetheproject(orwhatwethinktheprojectshouldbe),wesettargetdates(based onwhenthesponsorwantstheprojectcompleted—usuallyadateoutofthinair),andwe startbuildingtheproject,onlytofindwearebuildingthewrongsolution,inthewrong place,withdown-levelspecifications.Ohmy! Projectmanagementisallaboutcommunication,andyetwerarelyaskquestionsormake sureweunderstandwhatthesponsorwantsorexpectsfromtheprojectmanagerandteam. Inthisdiscussion,thewordfireaheadofthewordaimalludestouspullingthetrigger ofagunbeforeweactuallyaimit.Youwillneverhitthetargetifyoudon’taim.Thiscomes fromyearsofbeingpushedtodeliverresultswithoutknowingexactlywhatthecustomer wants.Thecustomeralwaysknowswhattheywant,right?Thisislikeakidwatching commercialsonTVatChristmastimeandhiswishlistchangesandgrowswithevery seriesofcommercials. Tocloseonthe“Ready,fire,aim”dilemma,let’stalkaboutaim.Wealwaysseemto beinsuchahurrytodotheworkevenifthescopeisnotclear,thatwedon’ttakethetime toplan(aim).Andthenwewonderwhywecontinuetomissthetarget.
Chapter2: TheEmergingWorldofProjectManagement
Ask the Expert Q: Whatisthesolutiontothe“Readyfire,aim”dilemma? A: ThesolutioniswhatIcallthe“AIMstrategy.”Manyofmyclientsagreethatsponsorsare
quicktothrowaprojectatthemwithoutanythoughtforthetimeittakestocompletethe project,theplanningneeded,orevenhowmuchitwillcost.Manysponsorsjustwanta problemtogoawayfastortobefirsttomarketwithanewproductorservice.TheAIM strategybreaksthesolutiondownintoamanageableflowandallowsthePMandteam tosystematicallyanalyzetheproblem,implementasolution,andeffectivelymanagethe project.
Youwouldthinkaconceptasbasicasplanning(aiming)beforeexecutingtheproject (firing)wouldbesomethingwewoulddoinstinctively,andyetwedoitsorarelythatit causesahighpercentageoffailedprojects—wekeepmakingthesamemistakeoverand overagain! Ioftenwonderwhywedon’ttakethetimetoaim(thatis,planourprojects).Theonly excuseIcancomeupwithisthatwearesodistractedwefoolourselvesintothinkingthat wedon’tneedtotakeaimbeforewefire(orwedon’tthinkatallandsimplyreacttothe pressure).Thecosttoindustryandtoourselvesinlosttimeandenergyisenormous. So,whatarethelessonslearned?Ifweproperlyprepare(getreadywithadequate planning)andtakethetimetoaimbeforewefireoffaproject(thatis,ensuretheproper processes,procedures,andexpectationsareinplace),manyheadachescanbeavoided. Howdoyouknowifyouhavetherightorder?Whatisthepropersequenceofplanning aprojecttoavoidsteppinginfrontoftheproverbialbullet?Forananswer,let’slookatthe AIMstrategy.
AIM Strategy TobetterunderstandtheAIMstrategy,let’slookatwhyweneedastrategyinthefirst place.Astrategyrequiresplanning.LookingatthePMBOKGuide,youwillseethatthe majorityofprocesses(20of42)areplanningprocesses.Thisshouldbeyourfirstclueto takeadeepbreathandthinkaboutwhatittakestomanageaproject.Weneedtoprepare notonlytheprojectitself,buthowwearegoingtomanageit. Fartoooftenwhenprojectsarepriced,werarelyconsiderthecostofproject management,thetimeittakestobuildtheteam,andhowtomanagetheflowof information.Rarelydowetaketimetoactuallybuildcommunicationandriskplans,
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PMPCertification:ABeginner’sGuide documentandverifythescopeoftheproject,lookattheprocessgroupstoseewhere weareinthelifecycleoftheproject,ordeterminewhichprocessesareneededand appropriatetohelpuseffectivelymangetheproject.Instead,wejustjumprightinto“fire”! TheAIMstrategyisallaboutstayingfocusedonthetaskathandandunderstanding whatthegoalsarebeforepullingthetriggertostarttheproject.Thisrequiresplanningand coordination,andthisiswhereweneedtolookatthewholeproject,toensurewehavea solidPMstrategy.
What Does AIM Stand for? First,analyzethesituationandgetinvolvedwiththekeystakeholders,developtheplanas ateam,andobtainformalacceptance(approval)fortheprojectplan. Second,implementtheapprovedplan. Andlastbutnotleast,managethewholeprojectandnothingbuttheproject.Ifyou stray,whichisfartooeasytodowiththemanydistractionsmentionedearlier,your projectislikelytofallintothecategoryofafailedortroubledproject.
Why Projects Fail and What You Can Do About It? First,let’sreviewwhatconstitutesafailedortroubledproject.Thedefinitionvariesbased onthesize,type,andcomplexityoftheproject.AccordingtoTheStandishGroup,which specializesinindependentresearchandanalysisofITprojectperformance,projectresults canbedividedintothreecategories: ●
Projectsthatsucceed Theprojectiscompletedontimeandonbudget,withall featuresandfunctionsasinitiallyspecified.
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Projectsthatarechallenged Theprojectiscompletedandoperationalbutover budget,overthetimeestimate,andoffersfewerfeaturesandfunctionsthanoriginally specified.
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Projectsthatareimpaired Theprojectiscanceledatsomepointduringthe developmentcycle.
ReportsfromTheStandishGroupandothersourcesshowthatapproximately30percent ofprojectssucceed,over50percentarechallengedinsomeway,andlessthan20percent fail,whichisanimprovementfromseveralyearsagowhenover30percentofprojects failedforonereasonoranother. Businessrequirementschangesoquicklythesedaysthat,unlesstheprojectmanageris fullyawareoftheissuesatabusinesslevel,evenaprojectthatdeliverstheplannedscope withintimeandcostmaybedeemedunsuccessfulbecauseitsdeliverablesarenolonger relevanttothebusiness.[6]
Chapter2: TheEmergingWorldofProjectManagement StatisticsfromtheGartnerGroupstatethat30percentofITprojectsnevercometo afruitfulconclusion.Onaverage,51percentexceedbudgetby189percentwhileonly delivering74percentoftheoriginallystatedfunctionality.[7] Factorsthatdrivepoorperformancerangefromlackofdisciplinedprojectmanagement tolackofcommunicationbetweentheITorganizationandthebusinessunitdirectors.Itis essentialthattheprojectmanagershaveasolidunderstandingoftheenterprise’sbusiness objectivessotheycancontinuallymeasuretheprojectintermsofdeliveringthesebusiness objectives. Hereareseveralfactorsthatdrivefailedprojects: ●
Projectsponsorsareoftennotcommittedtotheprojectobjective.Theyhavealackof understandingoftheprojectandarenotinvolvedintheprojectstrategyanddirection. Theymayhavetheirownagenda,petprojects,orpetpeevesconcerningother projects.
●
Someprojectsdonotmeetthestrategicvisionofthecompany,orthedirectionhas changed.Whenbusinessneedsarenotclearlydefined,theresultisaprojectthatdoes notaddvaluetothebottomlineorenhancebusinessprocesses.
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Projectsarestartedforthewrongreasons.Someareinitiatedpurelytoimplementnew technologywithoutregardforwhetherthetechnologyisrightforthebusinessneeds.
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Staffingisoftenareasonforfailure.Forexample,notenoughdedicatedstaff(project managersandprojectteammembers)isallocatedtoprojects.Projectteammembers maylackexperienceanddonothavetherequiredqualifications.
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Incompleteprojectscope.There’snocleardefinitionoftheproject’sbenefitsandhow theywillbedelivered.
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Theprojectplanisnonexistent,outofdate,incomplete,orpoorlyconstructed.Not enoughtimeandeffortarespentonprojectplanning.
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Projectvaluemanagementisnotputintopracticetoevaluatethebaselinecostagreed uponduringbaselinetransferagainstactualcostsspentatanygiventime.
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Insufficientfundsandincorrectbudgetingareamajorreasonforprojectsnotdelivering theirgoalsandobjectiveswithinthequalityframeworkrequired.
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Formalprojectmanagementmethodologiesandbestpracticesalignedtothecompany’s specificneedsaren’tusedtoassistprojectperformance.
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Projectsdon’tgothroughanormalsignoffusingaproperpostmortem(LessonsLearned) processtobuildareferencemodelforfutureuse.
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PMPCertification:ABeginner’sGuide Herearesomethingsyoucandotohelpkeepyourprojectsfromfailing: ●
Useprovenprojectmanagementdisciplines.
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Ensurecleartwo-waycommunication.
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Workwiththestakeholderstofocusontheendresults(includingendusers).
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Managechange,risk,scope,time,andcostdiligently.
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Reviewandreportstatusfrequentlyandhonestly.
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Beanadvocate(cheerleader)fortheprojectteam(catchthemdoingsomethingright).
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Useprojectmanagementstandards(toolsandresourcesavailable)forplanning, executing,andcontrollingtheproject.
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Verifytheoverallhealthoftheprojectbyaskingyourselfandtheteamthefollowing questions: ●
Weredeliverablesproducedontime,withintheapprovedscope,andwithinthe approvedbudget?
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Didtheprojectsatisfythebusinessrequirementsofthestakeholders(forexample, wastheproblemsolvedorsolutionaccomplished)?
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Hastheprojectmetthebusinessvaluegoals(thatis,costsavings,increased marketshare,orstreamlinedprocessesneededtoimprovequality)?
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Mostimportantly,dothebusinessowners(sponsors)believetheprojectwas successful?Didyoudeliveraqualityproductandmeetstakeholderexpectations?
Projects Fail for Many Reasons Keepinmindthatprojectsmaybedeemedafailureforreasonsoutsideofyourcontrol asaprojectmanager.Evenwheneverythingisexecutedproperly,theremaybechanges indirection,strategy,funding,orlimitedavailabilityofkeyskilledstaffmembersto effectivelycompletetheproject.Asaprojectmanager,youneedtokeeptheseinfluencing factorsinmindandrealizetherearetimeswhenprojectsareconsideredfailuresthrough nofaultofyourown.Itisdifficultnottotakethispersonally.Still,youmustperforma LessonsLearnedsession,documenttheissuesaswellaswhatworkedandwhatdidn’t work(includinginputfromthecustomer),andthenmoveon.Wediscussthisinmore detailinChapter13.
Chapter2: TheEmergingWorldofProjectManagement Attheendoftheday,thesuccessorfailureofaprojectdependsentirelyonmeasured resultsandperception—aprojectmaybeontimeandonbudget,butmaynotmeetthe customer’sexpectations.
Pop Quiz Bynowyoushouldhaveabetterunderstandingofwhatconstitutesfailedprojects;thingsyou cantodotohelppreventprojectsfromfailing;whataprojectis;whatprojectmanagementis; thethreetakeawaypoints;theAIMstrategy,andwhataprogramis.Totestyourselfonthese importanttopics,takethefollowingsimplepopquiz:
1.Whatisaproject?
2.Whatisaprogram?
3.Whatarethethreetakeawaypointsfromthischapter?
4.WhatdoesAIMstandfor?
5.Namethreereasonswhyprojectsfail.
Takeafewminutesandwritedownyouranswers.Thenreferbacktotheappropriate sectionsinthischapterforconfirmationorcheckouttheanswersthatfollow. Answers:
1.Aprojectisatemporaryendeavortocreateauniqueproduct,service,orresult.Ithas
adefinitestartandend,isusuallyshortterminduration,andhasclearlydefinedgoals andobjectives.
2.Aprogramisacollectionofprojects,usuallyhasnoenddate,andtendstobelonger
terminduration.
3.Thethreetakeawaypointsare ●
Stayfocusedontheendgoalandobjectivesoftheproject.
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Usethetoolsavailabletohelpeffectivelymanagetheproject.
●
Workasateam(remember,thenumber-oneassetontheprojectistheteam).
4.AIMstandsfor ●
Analyzethesituationandgetinvolvedwiththekeystakeholders,developtheplan asateam,andobtainformalacceptancefortheprojectplan.
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Implementtheapprovedplan.
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Managethewholeprojectandnothingbuttheproject.
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5.Here’sasamplesummarylistofreasonsofwhyprojectsfail: ●
Lackofprojectmanagementdiscipline
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Lackofuser(keystakeholder)involvement
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Lackofprojectsponsorscommittedtoorinvolvedintheprojectstrategyand direction
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Projectsnotmeetingthestrategicvisionorbusinessneedsofthecompany
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Projectsstartedforthewrongreasons
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Lackofproperlytrainedorskilledpeopletoworktheproject
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Lackofculturalskillsandabilitytomanageinamulticulturalenvironment
References
1.AGuidetotheProjectManagementBodyofKnowledge(PMBOK®Guide),FourthEdition,
(PMI–ProjectManagementInstituteGlobalStandard:NewtownSquare,PA),2008,page5.
2.Wikipedia,http://en.wikipedia.org/wiki/Governance.
3.AGuidetotheProjectManagementBodyofKnowledge(PMBOK®Guide),Fourth
Edition,(PMI–ProjectManagementInstituteGlobalStandard:NewtownSquare,PA), 2008,page13.
4.Liker,JeffreyK.andDavidMeier,TheToyotaWayFieldbook:APracticalGuidefor
ImplementingToyota’s4Ps(McGraw-Hill:NewYork),2004,page325.
5.Liker,JeffreyK.andDavidMeier,TheToyotaWayFieldbook.APracticalGuidefor
ImplementingToyota’s4Ps(McGraw-Hill:NewYork),2004,page313.
6.TechForum,“TheTop10ReasonsWhyProjectsFail,”issuedbyASTGroup
(Johannesburg),July12,2001.
7.Ibid.
Chapter
3
Project Management Process Groups
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KeySkills&Concepts ●
ImportanceofthefivePMIprocessgroups
●
Initiatingaproject
●
IntroductiontotheninePMBOKknowledgeareas
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Inputs,toolsandtechniques,andoutputs
●
Applicationofprojectknowledge
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Mappingprocessestoknowledgeareasandprocessgroups
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Closingprocessgroup
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Codeofethicsandprofessionalconduct
T
hischapterfurtherdefines,identifies,anddescribesPMI’sfiveprocessgroupsaswell asbrieflyintroducesthenineknowledgeareasandtheirassociatedprocessesrequired formostprojects.ThischapteralsodetailsPMI’sCodeofEthicsandProfessional Conduct,whythisisimportantforprojectmanagersandprojectteams,andwhatto expectinthissectiononthePMPexam.
What Are Process Groups? Processgroupsserveasindependentdomains(orgroups)ofprocessesthataretiedtoa particularphaseofaproject.Theyareofteniterativeinnature,meaningtheybuildonone another.Eachprocessgrouphasassociatedprojectmanagementprocessesthatarelinked byrespectiveinputsandoutputs;forexample,theoutputofoneprocessoftenbecomes theinputtothenextprocess. PMIrecognizesandendorsesfivebasicprocessgroups(sometimesreferredto asdomains).“Thesefiveprocessgroupshavecleardependenciesandaretypically performedinthesamesequenceoneachproject.Theyareindependentofapplication areasorindustryfocus.”[1] Aprocessgroupcanalsobeperformedindependently,forexample,planningaproject thatdoesn’tgetfundedorclosingaprojectattheendofitslifecyclewhereclosingthe projectisaprojectinitself.
Chapter3: ProjectManagementProcessGroups Thefiveprocessgroupsarebrieflydescribedasfollows: ●
Initiatingprocessgroup Definesandauthorizesthestartofaprojectoraphase
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Planningprocessgroup Establishesthescopeoftheproject,refinestheobjectives, anddefinesthecourseofactionrequiredtoattaintheobjectivesoftheproject
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Executingprocessgroup Integratespeopleandotherresourcestocompletethe workoftheproject
●
MonitoringandControllingprocessgroup Includesthoseprocessesrequiredto track,review,andregulatetheprogressandperformanceoftheprojectandidentify areaswherechangesorcorrectiveactionneedstobetakentomeetprojectobjectives
●
Closingprocessgroup Includesthoseprocessesperformedtofinalizeallactivities acrossallprocessgroupstoformallyclosetheprojectorphase
TIP If you are planning to take the PMP exam, it is important to note that the questions on this exam align with the five process groups and not the knowledge areas (as in the past.) The reason for this, in my opinion, is that it is more important to know when a process should occur relative to the five process groups rather than which knowledge area it happens to fall into.
Processgroupsprovidealogicalsequenceofeventsratherthansimplygrouping processesintotheirareaofknowledge.Forexample,IdentifyStakeholdersisoneof theProjectCommunicationsManagementknowledgeareaprocesses.However,itis extremelyimportanttoinitiatethisprocessearlyintheprojectmanagementlifecycle, whichiswhyitisgroupedintheInitiatingprocessgroup.Thiscanbeabitconfusing becauseallthePMI-recognizedprocessesareassociatedwiththeirrespectiveknowledge areasandtheprocessesaregroupedinoneofthefiveprocessgroups(see“Mapping ProcessestoKnowledgeAreasandProcessGroups”laterinthischapterformoredetails.)
Ask the Expert Q: Domostprojectmanagersuseprocessgroupstomanagereal-worldprojects? A: Projectmanagersfrequentlymakeuseoftheseprocessgroupsandknowledgeareas
instinctivelyandmaynotevenrealizetheyaredoingso.Evenexperiencedproject managerswithoutformaltrainingusetheseprocessgroupsandoftencouldnottellyou whattheprocessgroupsarecalled.
(continued)
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Forexample,thiswasevidentwhenmydaughterstartedplanningherwedding.Even thoughshehasnoformalPMtraining(althoughIliketothinktherewassomelearningby osmosisfromlivingwithmeforsomanyyears),sheinstinctivelysatdownandwroteout herideaoftheperfectwedding,thusinitiatingtheproject(inprojectmanagementtermswe callthis“developingtheprojectcharter,”whichisthefirstprocessintheInitiatingprocess group).Herdocumentedviewoftheweddingsetupthecriteria/requirementstobemetfor thisprojecttobesuccessful.Theserequirementsweretheinputtotheprojectcharterandto thescopestatement. Next,mydaughterandherfiancéputtogetheralistofparticipants,whotheywantedas attendants,whotheywantedtopresideovertheceremony,andtheirinvitationlist.Indoing so,theyidentifiedthestakeholders,whichisthesecondprocessundertheInitiatingprocess group.Notevenrealizingit,mydaughterhadjustcompletedthefirstprocessgroupofany project(initiating). Next,sheapproachedmywifeandmetonegotiatethesizeoftheweddingandpreliminary budget.Herestimatednumberofattendeescameto200.Basedonherexpectationsand research,shewasabletoprovideabest-guessestimateofthecost.Thisisknownasa roughorderofmagnitude(ROM)costestimate,whichisoneoftheprocessesintheProject CostManagementknowledgeareaunderthePlanningprocessgroup. OncemywifeandIreviewedtheestimateandwereconvincedmydaughterandher futurehusbandwereseriousaboutkeepingthebudgetreasonablewithoutushavingtotake outasecondmortgageonourhome,weallagreed.Thisbecameourformallyaccepted projectcharter(eventhoughwedidn’tcallitthat).Withthecharterandthebudgetestimate inhand,weofficially“authorized”theprojecttobegin.Weemphasizedthatthecheck shereceivedrepresentedanagreement,andiftheyoverspentthebudget,theextracost wouldbeoutoftheirpocket.Iftheyspentlessthanthebudgetedamount,sheandhernew husbandcouldapplyanyleftoverdollarstotheirhoneymoon(whichisexactlywhatthey wereabletodo). Establishingabudgetandissuingthecheckforthetotalweddingupfrontturnedout tobeagreatideabecauseitkeptmywifeandmefrombeinginvolvedineverylittledetail andfromhavingtonegotiateforeachitemalongtheway.Thisapproachalsokeptmy daughterfromfeelingguiltyaboutthecostofaparticularitem(suchastheweddingdress orthecake)becauseshehadthedecisiontomakeandthebudgettomanage.Talkabouta lessonlearned(akeyprojectmanagementprinciple)!Ihighlyrecommendthisapproachfor allparentsofabridebecauseitreallyinstillsasenseofownershipintheweddingproject andforcesthebrideandgroomtomanagetheirbudgetwellorsuffertheconsequences. ImustadmitthecreditforthisgreatideagoestooneofmyPMstudentsatColorado StateUniversity(CSU)whowasgoingthroughplanningherownweddingduringthe timeshewastakingaprojectmanagementfundamentalsclass.Weactuallyusedher weddingasateamprojectduringthiseight-weekclass.Itwasgreattoseeeventheolder menintheclasstakesuchanactiveroleinhelpingplanherwedding,usingalltheproject managementprocessesandknowledgeareasaswediscussedtheminclass.Thebridewas abletousetheworkoftheteamtomakeherweddingprojectacompletesuccess,andthe classhadfunasateamworkingtheproject.
Chapter3: ProjectManagementProcessGroups TheprocessflowdiagramshowninFigure3-1providesanoverallsummaryofthe basicflowandinteractionsamongprocessgroupsandspecificstakeholders.Alsonotethat theMonitoringandControllingprocessgroupoverlapstheotherprocessgroups.
Initiating Process Group Asyoumightimagine,theInitiatingprocessgroupshouldbethefirstintheseriesof processgroupactivitiesandconsistsofthoseprocessesperformedtodefineanew projectoranewphaseofanexistingproject.Thisprocessgroupisfocusedonobtaining authorizationtostarttheprojectorphase. TheInitiatingprocessgroupincludesonlytwoprocesses: ●
Developprojectcharter.
●
Identifystakeholders.
Develop the Project Charter Theprojectmanagershouldbeassignedasearlyintheprojectlifecycleaspossible, eitherduringorshortlyaftertheprojectcharteriswrittenbecausethisiswhenthingscan gowellifthePMisrepresentedorcangowrongifaPMisnotassigned. Notethatsomeprojectsareonlyauthorizedorfunded(budgeted)foronephase,such asa“feasibilitystudy”orconceptphase,todeterminewhethertheprojectisappropriate andwillprovidethecorrectsolutiontomeetthebusinessneedorsolvetheproblemthat needstoberesolvedbytheproject. Youhaveprobablyseenaprojectcharterinoneformoranother—andmaynothave realizedit.Thechartercancomeinmanydifferentflavors/forms.Itcanbeformal(such asacontract),informal(suchasaphonecallfromyourbossorcustomer),orinwriting (suchasane-mailormemo).Ifatallpossible,itisbestifyoucangetitinwritingevenif onlyinane-mail.Someadditionalexamplesareprovidedinthefollowinglist(additional detailscanbefoundinChapter4): ●
Informal Aworkorderorserviceorder/requesttoupgradeacomputersystem,thus changingthescopeoftheproject
●
Informal Ane-mailfromyourbosstellingyoutogetateamtogetherandfixa designproblemonasoftwareapplication
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Formal Awrittencontractforanyproduct,service,orresult(anexampleofaresult wouldbeaprojecttoconsolidateworktodecreaseproductioncostsby10percent)
●
Formal Astatementofwork(SOW),serviceagreement(SA),projectchangerequest (PCR),servicerequest(SR),orrequestforservice(RFS)tomodifyorchangeaproject
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PMPCertification:ABeginner’sGuide • Project statement of work • Business case • Contract Project Initiator or Sponsor
Initiating Process Group • Stakeholder register • Stakeholder management strategy
• Project charter
Planning Process Group
• Organizational process assets • Enterprise environmental factors
Project Documents
Enterprise/ Organization • Teaming agreements
Customer
• Procurement documents
• Resource calendars
• Requirements
• Final product, service or result
Executing Process Group
• Seller proposals
Sellers
• Procurement contract award Closing Process Group
• Project management plan
Monitoring and Controlling Process Group
• Make-or-buy decisions • Source selection criteria
• Approved Change Requests • Quality Control Measurements • Performance Reports • Deliverables • Change requests • Work performance information • Selected sellers
• Accepted deliverables • Procurement documentation
NOTE: The darker dotted lines represent relationships between Process Groups; the lighter dotted lines are external to the Process Groups.
Figure3-1
Project Management process interactions. (Project Management Institute A Guide to the
Project Management Body of Knowledge [PMBOK® Guide]–Fourth Edition, Project Management Institute, Inc., 2004. Copyright and all rights reserved. Material from this publication has been reproduced with the permission of PMI.)
Chapter3: ProjectManagementProcessGroups
Identify Stakeholders TheIdentifyStakeholdersprocessisthefirstintheProjectCommunicationsManagement knowledgeareaandisextremelyimportantwithintheInitiatingprocessgroup. AsmentionedinChapter2,stakeholderscanbeanyonewhoispositivelyornegatively impactedbytheproject.Itistheprojectmanager’sresponsibilitytoidentifythestakeholders oftheproject.AdditionaldetailsonthisprocessareprovidedinChapter10ofthisbook.
Manageable Phases Itiscommon(orshouldbe)todivideprojectsintoseparatemanageablephases.Identifying stakeholdersandknowingtheirexpectationsforthedifferentphasesoftheprojectmakes thephasesmoremanageable.Repeatingtheinitiatingprocessesatthestartofeachphase helpskeeptheprojectteamfocusedonthekeydeliverablesforeachprojectphase.This doesn’tmeancreatingorobtaininganewprojectcharteratthebeginningofeachphasebut meansensuringyouhaveauthorizationtoproceedtothenextphaseoftheproject.
TIP Setting and verifying key measurements and jointly determining project success criteria with key stakeholders will help ensure project success. The success criteria—once documented, approved, and communicated—provide key indicators of the health and progress of the project and will help you manage the primary project constraints more effectively. An example of a success criteria is having an events center facility fully set up, tested, and ready to host a concert prior to curtain up time.
Itisalsoimportanttoinvolvethecustomersandotherkeystakeholdersidentifiedin theInitiatingprocessgroupasitgenerallyimprovestheprobabilityofsharedownership, deliverableacceptance,andcustomer/stakeholdersatisfaction.
Planning Process Group Thisgroupconsistsofprocessesperformedtoestablishthetotalscopeoftheproject, todefineandrefineobjectives,andtodevelopthecourseofactionrequiredtoattain theapprovedobjectives.Theplanningprocessesmakeupalmosthalf(20of42)ofthe PMBOKprocessesandhelptheprojectmanagerdeveloptheprojectmanagementplan anddocumentsthatwillbeusedtocarryouttheproject.Asyouwouldimagine,the processesgroupedintothePlanningprocessgroupoccurearlyintheprojectlifecycle whentherearemanyunknowns.Theriskforfailureisincreasediftheplanningprocesses arenotperformed,areunclear,ornotcommunicatedproperly. Figure3-2helpsclarifytheinteractionofthedifferentplanningprocessesincludedin thePlanningprocessgroup.Thereferencenumbershownatthetopofeachprocessbox mapstoitschapterandsectionofthePMBOK.
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Project Time Management Project Scope Management 5.1 Collect Requirements
5.2 Define Scope
6.1 Define Activities
6.3 Estimate Activity Resources
6.2 Sequence Activities
6.4 Estimate Activity Durations
6.5 Develop Schedule
5.3 Create WBS
Project Procurement Management 12.1 Plan Procurements
Project Cost Management 7.1 Estimate Costs
7.2 Determine Budget
Project Integration Management
Project Quality Management
4.2 Develop Project Management Plan
8.1 Plan Quality
Project Human Resource Management Project Risk Management 11.3 Perform Qualitative Risk Analysis
11.1 Plan Risk Management
11.4 Perform Quantitative Risk Analysis
11.2 Identify Risks
11.5 Plan Risk Responses
Figure3-2
Project Communications Management
9.1 Develop Human Resource Plan
10.2 Plan Communications
The dashed circular arrow indicates that the process is part of the Project Integration Management Knowledge Area. This Knowledge Area coordinates and unifies the process from other Knowledge Areas.
Planning process group. (Project Management Institute A Guide to the Project Management Body of Knowledge [PMBOK® Guide]–Fourth Edition, Project Management Institute, Inc., 2004. Copyright and all rights reserved. Material from this publication has been reproduced with the permission of PMI.)
Chapter3: ProjectManagementProcessGroups
Ask the Expert Q: Doestheprojectmanagerreallyneedaprojectmanagementplaniftheprojecthas beendonebefore?
A: Yes,thePMshouldhaveadocumentedandapprovedprojectplantoserveasaguideto
howtheprojectistobemanaged,tohelpensuretheaccountabilityandauditreadinessof theproject,andtohelpensuresuccess.Theplancanlaterberefinedintoanoperations guideforrepeatprojects.Ineithercase,youneedadocumentedplantoguidetheworkof theproject. Forexample,let’ssayyouareworkingontheeventchangeoverprojectforalarge conventioncenterandtherequirementsforthenexteventaretosetuparodeo.Becausethis projecthasbeendonebefore,youbegintheprocessbysettinguptheusualcorrals,gates forbullandbroncoriders,andsoon.Thenyouhearoverlunchthatthisisa4-HSpecial Olympicsrodeo,andthemaineventsaregoatropingandmuttonbusting—therewillbeno bullsandbroncos.You’vejustlostseveralhoursifnotdaysofsetuptimeandmoneybecause youdidn’tfullyunderstandtherequirements.
Poorplanningandlackofprojectmanagementdisciplinearetwocommonreasons forprojectfailure.Therefore,itisessentialtodevelopasolidprojectplanandtoworkthe plan(don’tjustletitcollectdustinadeskdrawerorinyourbriefcase). Theiterativemultidimensionalnatureofprojectmanagementcreatesanatmosphere forrepeatedinputandfeedbackloopsforfurtherconsiderationandanalysis.Remember, everyonelikestomakeinformeddecisions,andthemoreinformationyoucanprovide,the betterthechancesofhittingthetarget.
TIP Success is not possible unless you plan first and then verify, verify, verify the scope and deliverables of the project.
ThePlanningprocessgroupisallaboutrevisitingoneormoreoftheplanning processesandpossiblysomeoftheinitiatingprocessesinaprogressivefashiontoensure therequirementsareclearandcommunicatedproperlyandtheworkoftheprojectisinline withthescopeanddeliverablestobeprovidedbytheproject.Thisiterativeprogression detailingoftheprojectmanagementplanisoftencalled“rollingwaveplanning,”which meansyoukeepcomingbackandcheckingfortherippleeffect—inotherwords,whenyou identifyariskormakeachangetotheproject,youarelikelytoaffectsomethingelseand willneedtoupdatescope,budget,orschedulealongtheway.
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Executing Process Group Thisiswheretherealworkbegins,andasyouwouldexpect,thelargestportionof theprojectbudgetisusuallyspentduringtheexecutingprocesses.Thisiswherethe majorityoftheteamisengagedandperformingtheworkoftheproject.Thisgroup consistsofeightprocessesthatareperformedtocompletetheworkdefinedintheproject managementplan(refertoTable3-1,laterinthischapter). ThegoaloftheprojectmanagerintheExecutingprocessgroupistocoordinatethe peopleandotherresourcesaswellasintegrateandperformtheactivitiesoftheproject tomeettherequirementsbysatisfyingtheapprovedspecifications(seeFigure3-3).
Monitoring and Controlling Process Group Thisprocessgroupisthe“eyeinthesky,”sotospeak,makingsuretheprojectisgoing accordingtotheprojectplanaswellasreviewingandtrackingtheoverallattainmentand performanceoftheprojectpertheapprovedscopeanddeliverables. Thisstepiswheremanyprojectsfail—thePMeitheristoodistractedwiththedaily work,orisintoomuchofahurrytoeffectivelymonitortheoverallprogressoftheproject. Inmanycases,thePMsimplydoesnothaveenoughresources(people)toeffectively measureprogress,orisjustnotfamiliarwiththetoolsandtechniquestoeffectivelymonitor andcontroltheproject.Inanyevent,thingsslipwhenthePMtakestheireyesoffofthis processgroup. TherearetenprocessesinthePMBOKMonitoringandControllingprocessgroup. Someofthekeyprocessesincludedetermininghowyouandtheteamwilltrackprogress, decidingwhattoolsandtechniquesyouwillusetomeasuretheprogress,andhowyou willreportthatprogress(typeofreports,frequency,andsoon)tothekeystakeholders oftheproject(seeFigure3-4).
Closing Process Group TheClosingprocessgroupisallaboutbringingtheproject(orphase)toanorderlyand hopefullysuccessfulcompletion.TheClosingprocessgroupcontainstwoprocessesthat areperformedtofinalizeallactivitiesacrossallprojectprocessgroups: ●
Closeprojectorphase.
●
Closeprocurements.
Chapter3: ProjectManagementProcessGroups
Project Human Resource Management 9.2 Acquire Project Team
Project Quality Management 8.2 Perform Quality Assurance
9.3 Develop Project Team Project Integration Management 4.3 Direct & Manage Project Execution
Project Procurement Management 12.2 Conduct Procurements
9.4 Manage Project Team
Project Communications Management 10.3 Distribute Information
10.4 Manage Stakeholder Expectations
The dashed circular arrow indicates that the process is part of the Project Integration Management Knowledge Area. This Knowledge Area coordinates and unifies the process from other Knowledge Areas.
Figure3-3
Executing process group. (Project Management Institute A Guide to the Project Management Body of Knowledge [PMBOK® Guide]–Fourth Edition, Project Management Institute, Inc., 2004. Copyright and all rights reserved. Material from this publication has been reproduced with the permission of PMI.)
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Project Scope Management
Project Time Management
5.4 Verify Scope
6.6 Control Schedule
Project Cost Management 7.3 Control Costs
5.5 Control Scope
Project Integration Management
Project Procurement Management 12.3 Administer Procurements
4.4 Monitor & Control Project Work
4.5 Perform Integrated Change Control
Project Quality Management 8.3 Perform Quality Control
Project Risk Management
Project Communications Management
11.6 Monitor & Control Risks
10.5 Report Performance
The dashed circular arrow indicates that the process is part of the Project Integration Management Knowledge Area. This Knowledge Area coordinates and unifies the process from other Knowledge Areas.
Figure3-4
Monitoring and Controlling process group. (Project Management Institute A Guide to the Project Management Body of Knowledge [PMBOK® Guide]–Fourth Edition, Project Management Institute, Inc., 2004. Copyright and all rights reserved. Material from this publication has been reproduced with the permission of PMI.)
Chapter3: ProjectManagementProcessGroups ThestepsinvolvedwiththeClosingprocessgroupareessentialfortheformal completionoftheprojectorphaseortomeetcontractualobligations.Oncetheprocesses arecompleted,anumberofsignoffs(formalacceptance)shouldoccur.Forexample: ●
Conductpost-projectorphase-endreview.
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Documentopenissuesrelatingtochangesorthetailoringofprojectorprocesses.
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Documentlessonslearnedfromtheteamandcustomer.(Youshouldusethisstepall alongtheway,notjustattheendoftheproject.Itworksbestifdoneattheendof eachphaseoftheprojecttohelpidentifyissuesandtotrackcorrectiveaction asappropriate.)
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Applyallappropriateupdatestoorganizationalprocessassets.
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ArchiveallrelevantprojectdocumentsintheProjectManagementInformation System(PMIS)asappropriate.
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Closeoutalloutstandingprocurements(purchaseorders,accountspayable,accounts receivable,supplieragreements,equipmentrentalsorleases,softwarelicenses,andsoon).
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Obtainacceptancefromthecustomerorsponsors.
Ask the Expert Q: Whathappenswhentheprojectmanagerreceivesaninvoiceforsubcontractor (vendororsupplier)servicesthreemonthsaftertheprojectisofficiallyclosed?
A: Iftheinvoiceisforlegitimateservicesprovidedforapprovedworkfromanapproved
supplier,thentheinvoicemustbepaid. Thekeyquestionsthatneedtobereviewedandaddressedare:Howwasthisinvoice overlooked?Whatstepsshouldhavebeentakentoensureitwasaccountedforaspartof theClosingprocessgroup?Themainthingistodowhatyoucantoensurethisdoesn’t happenonotherprojectsinthefuture.
TIP Missing or late invoices are far too common. The best approach is to set up a project closeout check list using the project management plan documents, information system, and all the startup phase deliverables to help ensure a clean closeout of the project.
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Introduction to PMI Knowledge Areas Knowledgeareasarefieldsofspecialization,suchasprojectintegrationmanagement, scopemanagement,timemanagement,costmanagement,qualitymanagement,human resourcemanagement,communicationsmanagement,riskmanagement,andprocurement management.Knowledgeareasapplytoallprojectsorphasestosomedegreeandcan, insomecases,beusedtoorganizeprojectstartup.Thissectionprovidesonlyabrief introductiontoknowledgeareas;moredetailsareprovidedinChapters4through12. Eachofthenineknowledgeareascontainsprojectmanagementprocessesand crossesoversomeorallofthefiveprocessgroups.Forexample,theProjectIntegration Managementknowledgeareacontainsthefollowingsixprocessesandtheassociated processgroupforeachisshowninparentheses: ●
Developprojectcharter(Initiatingprocessgroup).
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Developprojectmanagementplan(Planningprocessgroup).
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Directandmanageprojectexecution(Executingprocessgroup).
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Monitorandcontrolprojectwork(MonitoringandControllingprocessgroup).
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Performintegratedchangecontrol(MonitoringandControllingprocessgroup).
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Closeprojectorphase(Closingprocessgroup).
Keepinmindthattrueknowledgecomesfromtheprojectmanager’sandtheproject stakeholders’experience,decision-makingskills,capabilities,andwillingnesstotake pride,ownership,andaccountabilityintheproject.Thetruemeasureofsuccessonany projectiswhentheteamrespectstheprojectmanagerandiswillingtoworkonfuture projectswiththePM. Withthatinmind,thePMBOKshouldbeusedasaguidethatoffersglobally recognizedprocesses,terms,andmethods.However,attheendoftheday,thePMis responsiblefortheapplicationofknowledge,skills,tools,andtechniquesforproject activitiestomeetprojectrequirements. Intheremainderofthissection,webrieflyintroducethenineknowledgeareas accordingtoPMI,startingwithProjectIntegrationManagement,aswellasabrief introductiontoprocessinputs,toolsandtechniques,andoutputs.
Project Integration Management Thisknowledgeareaincludestheprocessesandactivitiesneededtoidentify,define, combine,unify,andcoordinatethevariousprocessesandprojectmanagementactivities withintheprojectmanagementprocessgroups.Projectintegrationisthecapstone
Chapter3: ProjectManagementProcessGroups (thatis,itbringstheprojecttogether)andiscrucialtoprojectcompletionandprovidesthe keycomponentsofprojectmanagement.Anotherkeyingredienttosuccessismanaging stakeholderexpectationsandmeetingtheapprovedrequirementsandobjectivesofthe projectinaccordancewiththeapprovedcharter. Here’salistoftheProjectIntegrationManagementprocessesandassociatedprocess groupsinparentheses(asareminderthenumbersforeachprocessmaptothechaptersand sectionsinthePMBOK): ●
4.1:Developprojectcharter(Initiatingprocessgroup).
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4.2:Developprojectmanagementplan(Planningprocessgroup).
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4.3:Directandmanageprojectexecution(Executingprocessgroup).
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4.4:Monitorandcontrolprojectwork(MonitoringandControllingprocessgroup).
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4.5:Performintegratedchangecontrol(MonitoringandControllingprocessgroup).
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4.6:Closeprojectorphase(Closingprocessgroup).
Project Scope Management Thisknowledgeareaincludestheprocessesrequiredtoensurethatalltheworkrequired (andonlytheworkrequired)tocompletetheprojectsuccessfullyisidentified.Managing projectscopeisprimarilyconcernedwithdefiningandcontrollingwhatisandisnot includedintheproject. Here’salistoftheProjectScopeManagementprocesses: ●
5.1:Collectrequirements(Planningprocessgroup).
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5.2:Definescope(Planningprocessgroup).
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5.3:CreateWBS(Planningprocessgroup).
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5.4:Verifyscope(MonitoringandControllingprocessgroup).
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5.5:Controlscope(MonitoringandControllingprocessgroup).
Project Time Management Thisknowledgeareaincludestheprocessesrequiredtomanagetimelycompletionof theproject. Here’salistoftheProjectTimeManagementprocesses: ●
6.1:Defineactivities(Planningprocessgroup).
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6.2:Sequenceactivities(Planningprocessgroup).
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6.3:Estimateactivityresources(Planningprocessgroup).
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6.4:Estimateactivitydurations(Planningprocessgroup).
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6.5:Developschedule(Planningprocessgroup).
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6.6:Controlschedule(MonitoringandControllingprocessgroup).
Project Cost Management Thisknowledgeareaincludestheprocessesinvolvedinestimating,budgeting,and controllingcostssotheprojectcanbecompletedwithintheapprovedbudget. Here’salistoftheProjectCostManagementprocesses: ●
7.1:Estimatecosts(Planningprocessgroup).
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7.2:Determinebudget(Planningprocessgroup).
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7.3:Controlcosts(MonitoringandControllingprocessgroup).
Project Quality Management Thisknowledgeareaincludestheprocessesandactivitiesoftheperformingorganization thatdeterminesqualitypolicies,objectives,andresponsibilitiessotheprojectwillsatisfy theneedsforwhichitwasundertaken. Here’salistoftheProjectQualityManagementprocesses: ●
8.1:Planquality(Planningprocessgroup).
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8.2:Performqualityassurance(Executingprocessgroup).
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8.3:Performqualitycontrol(MonitoringandControllingprocessgroup).
Project Human Resource Management Thisknowledgeareaincludestheprocessesthatorganize,manage,andleadtheproject team.Theprojectteamiscomposedofpeoplewithassignedrolesandresponsibilitiesfor completingtheproject. Here’salistoftheProjectHumanResourceManagementprocesses: ●
9.1:Develophumanresourceplan(Planningprocessgroup).
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9.2:Acquireprojectteam(Executingprocessgroup).
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9.3:Developprojectteam(Executingprocessgroup).
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9.4:Manageprojectteam(Executingprocessgroup).
Chapter3: ProjectManagementProcessGroups
Project Communications Management Thisknowledgeareaincludestheprocessesrequiredtoensurethetimelyandappropriate generation,collection,distribution,storage,retrieval,andultimatedispositionofproject information.Itisimportanttonotethatprojectmanagersspendthemajorityoftheirtime communicating. Here’salistoftheProjectCommunicationsManagementprocesses: ●
10.1:Identifystakeholders(Initiatingprocessgroup).
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10.2:Plancommunications(Planningprocessgroup).
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10.3:Distributeinformation(Executingprocessgroup).
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10.4:Managestakeholderexpectations(MonitoringandControllingprocessgroup).
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10.5:Reportperformance(MonitoringandControllingprocessgroup).
Itisimportanttonotethatthecommunicationsmanagementprocessesareinterrelated andoverlapwithprocessesintheotherknowledgeareas.Goodclearcommunicationsare essentialtotheoverallsuccessoftheproject.
Project Risk Management Thisknowledgeareaincludestheprocessesofconductingriskmanagementplanning, identification,analysis,responseplanning,monitoring,andcontrolonaproject.The objectivesofriskmanagementseektoincreasetheprobabilityandimpactofpositive events,anddecreasetheprobabilityandimpactofnegativeeventsintheproject. Here’salistoftheProjectRiskManagementprocesses: ●
11.1:Planriskmanagement(Planningprocessgroup).
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11.2:Identifyrisks(Planningprocessgroup).
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11.3:Performqualitativeriskanalysis(Planningprocessgroup).
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11.4:Performquantitativeriskanalysis(Planningprocessgroup).
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11.5:Planriskresponses(Planningprocessgroup).
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11.6:Monitorandcontrolrisks(MonitoringandControllingprocessgroup).
Project Procurement Management Thisknowledgeareaincludesthecontractmanagementandchangecontrolprocesses requiredtodevelopandadministercontractsandpurchaseordersissuedbytheauthorized projectteammembers.Italsoincludesadministeringcontractsissuedbyanoutside
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12.1:Planprocurements(Planningprocessgroup).
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12.2:Conductprocurements(Executingprocessgroup).
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12.3:Administerprocurements(MonitoringandControllingprocessgroup).
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12.4:Closeprocurements(Closingprocessgroup).
Inputs, Tools and Techniques, and Outputs Everyprocesshasinputs,toolsandtechniques,andoutputs.Thesecomponentsprovide links(orcommonthreads)fromoneprocesstothenext.Manyoftheprocesseshavethe sameinputs.Forexample,enterpriseenvironmentfactorsandorganizationalprocess assetsaretheinputstoalmostalltheknowledgeareaprocessesandshouldbeconsidered evenifnotspecificallyidentifiedineachprocess.
TIP Any time you see a particular topic mentioned frequently in this book or the PMBOK, you should take note, because this means the topic is viewed as highly important by PMI and you can bet it will likely be on the PMI exam. This is especially true with process inputs, tools and techniques, and outputs (watch for the ones repeated often between processes and focus on them if you plan to take a PMI exam).
Enterpriseenvironmentalfactorsrefertobothinternalandexternalenvironment factorsthatsurroundorinfluenceaproject’ssuccess.Anenterpriseisnothingmorethan anorganization(includingcorporations,smallandlargebusinesses,nonprofitinstitutions, andgovernmentbodies).Inpractice,thetermenterpriseisusedmoreoftentodescribe largerorganizationsthansmallerones. Environmentalfactorsmaycomefromanyoralloftheenterprisesinvolvedinthe project.Thesefactorsmayenhanceorconstraintheprojectmanagementoptionsandmay haveapositiveornegativeinfluenceontheoutcome.Thevariousenvironmentalfactors aretobeconsideredasinputstomostplanningprocessesandinclude,butarenotlimited to,thefollowing: ●
Organizationalculture,structure,andprocesses
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Governmentorindustrystandards(regulatoryagencyregulations,codesofconduct, productstandards,qualitystandards,andworkmanshipstandards)
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Infrastructure(existingfacilitiesandcapitalequipment)
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Existinghumanresources(skills,disciplines,andknowledge)
Chapter3: ProjectManagementProcessGroups
Ask the Expert Q: Canyouprovideanexampleofhowenterpriseenvironmentfactorsmayaffectareal project?
A: Yes.AFortune50companyinitiatedaserviceagreement(contract)tohaveaprojectteam comeintotheirofficestoconductaphysical(wall-to-wall)inventoryoftheircomputers. Thecostestimatesweredevelopedbasedonacertainsetofassumptions.Astheproject planwasdevelopedandverified,thecustomerinformedtheprojectmanagerthattheir organization’scultureandstructure(enterpriseenvironmentalfactor)is“managementby consensus.”Thismeantthattheyhaveacommitteeofmanagersthatsetscertainpolicies. Inthiscase,thecompanypolicyrequiredallthepeopleconductingtheinventorytofirst gothroughfourhoursoftrainingonsensitivityintheworkplace(forexample,howto berespectfuloftheemployees’timewhenconductingthedata-collectionprocess).Also, theentireinventoryteamhadtoprovideverydetailedbackgroundinformationandsign nondisclosurestatementsbecausesomeofthebuildingswheretheywouldbeconducting inventorieswerehighlyconfidentialresearchanddevelopmentcenters.Asyoucan imagine,withalltheadditionalrequirementsandconstraints,thecostandthetimeto conducttheinventorymorethandoubled. Themoraltothisstoryisthatyouneedtofullyunderstandtheenvironmentalfactors priortothefinalagreementforthetime,cost,andscopeoftheproject.
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Personneladministration(staffingandretentionguidelines,performancereviews, training,overtimepolicies,andtimetracking)
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Companyworkauthorizationsystems
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Marketplaceconditions,stakeholderrisktolerances,politicalclimate
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Organization’sestablishedcommunicationchannels
Further,aninputissomethingthatneedstobeconsideredaspartoftheinfluencing factorstocompleteaprocess.Inputstoaparticularprocessareoftentheoutputsfromthe previousprocess.Insomecasestheretendstobealogicalsequence,andinothercasesthe processesmaybetotallyindependent. Toolsandtechniquesarethemethodsinwhichtheinformation(input)isappliedtoget theprocesstotheintendedoutput.Forexample,youmayuse“expertjudgment”asatool ortechniquetohelpensureyouhavetherightskilledresourcestoreviewtheinputand provideexpertrecommendationsonhowtheinputinformationorconditionsmayaffect theoutput. Finallyanoutputofanyprocessisthefinishedproductorresultoftheprocess—for example,theprojectcharteristheoutputoftheDevelopProjectCharterprocess.
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Project Processes “Aprocessisasetofinterrelatedactionsandactivitiesperformedtoachieveaprespecified product,service,orresult.Eachprocessischaracterizedbyitsinputs,thetoolsand techniquesthatcanbeapplied,andtheresultingoutputs.”[2]Insimpleterms,aprocess servesasaguide(whatneedstobedone)asopposedtoaprocedure(howtodotheworkby usingaseriesofstepstoaccomplishanend). Processestendtooverlapandinteractinavarietyofways.Someprocessesruninseries, whereoneprocesscanbuildonthenext.However,manyprocessesarerepeatedwithinthe differentprocessgroupsorphasesoftheproject.Thegoodnewsistheprojectmanagerand projectstakeholdersgettodecidewhichprocessesareappropriatefortheirspecificproject. Inorderforaprojecttobesuccessful,theprojectteammust ●
Selecttheappropriateprocessesrequiredtomeettheprojectobjectives.
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Useadefinedapproachtomeettherequirementsoftheproject.
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Balancecompetingdemandsofscope,time,cost,quality,resources,andriskto producethespecifiedproduct,service,orresulttheprojectisintendedtoaddress.
Nowthatyouhaveabetterunderstandingofprojectprocesses,thenextstepisto groupthemintoprocessgroups(domainsorcategories). Theprojectmanagementteamisresponsibleforselectingtheappropriateprocessesto meetandcomplywiththerequirementsofaproject. Eachprocessanditsinputs,toolsandtechniques,andoutputsshouldserveasa high-levelguidefortheprojectmanagementteam.Theprojectmanagementteamshould “tailor”eachprocesstotheindividualneedsoftheproject.Projectmanagementprocesses tiedirectlyintothefiveprocessgroups.Allprocessesinteractthroughouttheproject viatheirinputsandoutputs.AccordingtoPMI,successfulprojectmanagementincludes activelymanagingtheseinteractionstosuccessfullymeetprojectrequirements.
Global Standards Globalstandardsarecrucialtotheprojectmanagementprofessionbecausetheyensure thatabasicprojectmanagementframeworkisappliedconsistentlyworldwide.The AmericanNationalStandardsInstitute(ANSI)hasrecognizedPMIasastandards developmentorganization. Withtheincreasedfocusonprojectmanagementacrosstheglobe,ithasbecome moreandmoreimportanttooperateinacommon,consistentmannerwhereverpossible.
Chapter3: ProjectManagementProcessGroups PMIprovidesgenerallyrecognized“goodpractices”forprocesses,applications,skills, tools,andtechniquestoenhancethechancesofsuccessoverawiderangeofprojects. This,however,doesnotmeantheknowledgeshouldalwaysbeapplieduniformlyacross allprojects. PMIoffersastandardvocabularyfordiscussing,writing,andapplyingproject managementconcepts.Havingagloballyrecognizedstandardinterms,methods,and processesisanessentialelementofaprofessionaldisciplinesuchasprojectmanagement. SeveralrecommendedstandardscanbefoundinthePMBOKandinsomeofthe inputsofmanyoftheprocesses.Earlierwediscussedenterpriseenvironmentalfactors andhowtheymustbeconsideredasinputstomostallprocesses(especiallytheplanning processes).Anotherkeyinputthatneedstobeconsideredasaninputtomostallprocesses isorganizationalprocessassets.Thisiswherestandardprocessesreside.Theorganization’s processesandproceduresforconductingworkincludethefollowingstandards: ●
Organizationalstandardprocessessuchascompanypolices(safetyandhealth,ethics, projectmanagementpolicy,standardprojectaudits,andqualitypolicies)
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Standardguidelines,workinstructions,proposalevaluationcriteria,andperformance measurementcriteria
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Standardtemplates(RiskBreakdownStructure,WorkBreakdownStructure,project schedulenetworkdiagrams,andcontracttemplates)
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Communicationrequirementsandguidelines
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Changecontrolproceduresandapprovers(includinghowprojectdocumentswillbe modified)
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Riskcontrolprocedures(includingriskcategories,probabilitydefinition,andimpact analysis)
Mapping Processes to Knowledge Areas and Process Groups AGuidetotheProjectManagementBodyofKnowledge(PMBOKGuide)isacollection ofprocessesandknowledgeareasgenerallyacceptedasbestpracticeswithintheproject managementdiscipline.Itisalsoaninternationallyrecognizedstandard(IEEEStandard 1490-2003)thatprovidesthefundamentalsofprojectmanagement,regardlessofthe typeofprojectbeingmanaged—construction,hardware/productdevelopment,software development,engineering,aviation,automotive,andsoon.
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PMPCertification:ABeginner’sGuide Table3-1mapsthe42PMBOKprocessestoboththenineknowledgeareas(inthe firstcolumn)andthefiveprocessgroups(acrossthetopofthetable).
NOTE Each process is identified by its PMBOK chapter and section number. For example, 4.1 is the Develop Project Charter process, which is discussed in Chapter 4 of the PMBOK and is the first process in the Project Integration Management knowledge area.
The Importance of Planning Toseetheimportanceofplanningaproject,simplylookatthenumberofplanning processesinthePMBOK.Aspreviouslymentioned,themajority(20of42)ofthe processesareplanningprocesses. Intherealworld,projectsarefartoooftenmanagedwithlittle,ifany,planning.We areluckyifwegetthreehours(muchlessthreedaysorthreeweeks)ofactualplanning beforewebegintheworkofaproject.This,inmyopinion,isduetocurrentculture (especiallyintheUnitedStates)wherewehavegrowntoexpectinstantgratification. Betweenwatchingtheproblemsoftheuniversebeingsolvedina30-minutetelevision showandthewondersofmoderntechnology(phonesthatplaymusic;takepictures; receiveup-to-the-minutesportsscores,traffic,andweatherforecasts;anduseglobal navigationsystems),itisnowonderwehavelittleornopatience.Wearemultiplexingour wayintolossofsleep,frustration,accidents,andpotentiallydeath.Empiricalproofshows thatourculturalchangesanddistractions(intheinterestofimprovedproductivity)are hazardoustoourhealth.Thefollowingisfromanarticletitled,“DriversonCellPhones KillThousands,SnarlTraffic,”byRobertRoyBritt,postedatLiveScience.com: “Cellphonedistractioncauses2,600deathsand330,000injuriesintheUnited Stateseveryyear,accordingtothejournal’spublisher,theHumanFactorsand ErgonomicsSociety. Thereasonisnowobvious: Driverstalkingoncellphoneswere18percentslowertoreacttobrakelights, thenewstudyfound.Inaminorbrightnote,theyalsokepta12percentgreater followingdistance.Buttheyalsotook17percentlongertoregainthespeedthey lostwhentheybraked.Thatfrustrateseveryone. ‘Oncedriversoncellphoneshitthebrakes,ittakesthemlongertogetback intothenormalflowoftraffic,”[David]Strayersaid.“Thenetresultistheyare impedingtheoverallflowoftraffic.’”[3]
ProjectManagementProcessGroups Knowledge Areas Project Integration Management
Initiating
Planning
Executing
4.1: Develop Project Charter
4.2: Develop Project Management Plan
4.3: Direct and Manage Project Execution
Monitoringand Controlling
4.4: Monitor and 4.6: Close Control Project Work Project or Phase 4.5: Perform Integrated Change Control
5.1: Collect Requirements 5.2: Define Scope 5.3: Create WBS
5.4: Verify Scope 5.5: Control Scope
ProjectTime Management
6.1: Define Activities 6.2: Sequence Activities 6.3: Estimate Activity Resources 6.4: Estimate Activity Durations 6.5: Develop Schedule
6.6: Control Schedule
ProjectCost Management
7.1: Estimate Costs 7.2: Determine Budget
7.3: Control Costs
ProjectQuality Management
8.1: Plan Quality
8.2: Perform Quality Assurance
ProjectHuman Resource Management
9.1: Develop Human Resource Plan
9.2: Acquire Project Team 9.3: Develop Project Team 9.4: Manage Project Team
8.3: Perform Quality Control
Mapping Processes to Knowledge Areas and Process Groups
(continued)
Chapter3: ProjectManagementProcessGroups
ProjectScope Management
Table3-1
Closing
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Knowledge Areas
Planning
Executing
10.1: Identify Project Communications Stakeholders Management
10.2: Plan Communications
10.3: Distribute Information
ProjectRisk Management
11.1: Plan Risk Management 11.2: Identify Risks 11.3: Perform Qualitative Risk Analysis 11.4: Perform Quantitative Risk Analysis 11.5: Plan Risk Responses
Project Procurement Management
12.1: Plan Procurements
Table1-1
Initiating
Monitoringand Controlling
Closing
10.4: Manage Stakeholder Expectations 10.5: Report Performance 11.6: Monitor and Control Risks
12.2: Conduct Procurements
Mapping Processes to Knowledge Areas and Process Groups
12.3: Administer Procurements
12.4: Close Procurements
PMPCertification:ABeginner’sGuide
ProjectManagementProcessGroups
Chapter3: ProjectManagementProcessGroups
Ask the Expert Q: Howlong,onaverage,shouldonespendplanningona12-monthproject? A: Italldependsontheuniquenessoftheproject(hasitbeenperformedbefore,orisita
uniquefirsttimeproject),theexperienceoftheteamandprojectmanager,andthelevelof commitmentfromthesponsorsandotherstakeholders).Also,isthereaclearlydefinedscope andanapprovedprojectcharter? Theansweralsowillvarydependingonthecountryinwhichtheprojectisbeing performed.Forexample,inAsiaplanningisawayoflife,andprojectteamsoftenwill spendseveralmonthsonthisphase.OneofmystudentsfromKoreastatedthatinhis countryplanningwouldtakeapproximatelyeighttoninemonthsona12-monthproject. Granted,theplanningprocessisvieweddifferentlyindifferentcountries.IntheU.S.,we usuallywanttodiverightinandbegintheprojectpriortohavingaclearscope,acharter, or,inmanycases,approvedfunding. Sowhatistherightamountofplanning?Onaverage,Iwouldsuggest100hoursfor every1,000hoursofworkontheproject.Thekeythingtorememberistherealanswerto theamountofplanningneededdependsentirelyonthevariablespreviouslymentionedand theexperienceofthePMandtheprojectteam.Wemustfirstaimatthetargetbeforewe fire(starttheproject)toensureourchancesathittingthetarget.
Thesameistruewithprojectactivities—theprojectteamandmanagerareconstantly beingdistracted.Becauseover90percentofthePM’stimeisspentcommunicating,the unscheduledinterruptionsofphonecalls,newconcernsandissues,andprojectchanges arelikeajugglingact.Withtheurgentdemandsfromtheprojectstakeholdersandalmost immediateresponseexpectedfromeveryone,itisnowonderwedon’ttakethetimeto planproperlyhowtomanageaproject.
PMI Code of Ethics and Professional Conduct PMIformedtheEthics,StandardsandAccreditationGroupin1981.Thisgrouphas evolvedthroughtheyears.However,thetopicofethics,standards,andaccreditation issodynamicandhasgonethroughsomanychangesthatitispublishedasaseparate documentratherthanaspartofthePMBOK. In1997,thePMIBoarddeterminedtheneedforamembercodeofethics,which wasapprovedinOctober1998astheProjectManagementInstituteCodeofEthicsand ProfessionalConduct.ItisonlybrieflymentionedinthefourtheditionofthePMBOK (releasedinDecember2008.)
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PMPCertification:ABeginner’sGuide TIP You should not be fooled by the Project Management Institute Code of Ethics and Professional Conduct’s minimal appearance in the PMBOK. There are several questions (approximately 16–20) on the PMP exam concerning this area, which is viewed as essential by PMI and the business world to ensure the high standards and integrity of project managers around the world.
PMI’sCodeofEthicsandProfessionalConductisspecificaboutthebasicobligationof responsibility,respect,fairness,andhonesty.ItrequiresPMpractitionerstodemonstratea commitmenttoethicalandprofessionalconduct,includingcomplyingwithlaws,regulations, andorganizationalandprofessionalpolicies.AcceptanceofthecodeisrequiredforPMP certificationbyPMI.[4] TheCodeofEthicsandProfessionalConducthasbeenrenamedatleastthreetimes throughtheyearsandhasexpandedtoincludeanewstructureandtwokeyareascalled “MandatoryStandards/Requirements”and“AspirationalCodes.”Withallthechanges tothissectionandonlyasmallamountofcoverageinthePMBOK,itisbesttoview thelatestdetailsonthePMI.orgwebsite.Thedocumentcanbedownloadedfrom http://www.pmi.org/PDF/AP_PMICodeofEthics.pdf. Tobetterunderstandthereasonforthecodeofethicsanditspurpose,let’slookat PMI’sVisionandApplicabilitystatement.
Vision and Applicability Statement Aspractitionersofprojectmanagement,wearecommittedtodoingwhatisrightand honorable.Wesethighstandardsforourselvesandweaspiretomeetthesestandardsinall aspectsofourlives:atwork,athome,andinservicetoourprofession. ThePMICodeofEthicsandProfessionalConductdescribestheexpectationswehave ofourselvesandourfellowpractitionersintheglobalprojectmanagementcommunity.It articulatestheidealstowhichweaspireaswellasthebehaviorsthataremandatoryinour professionalandvolunteerroles. Thepurposeofthiscodeistoinstillconfidenceintheprojectmanagementprofession andtohelpanindividualbecomeabetterpractitioner.Wedothisbyestablishinga profession-wideunderstandingofappropriatebehavior.Webelievethatthecredibility andreputationoftheprojectmanagementprofessionisshapedbythecollectiveconduct ofindividualpractitioners.[5]
Chapter3: ProjectManagementProcessGroups
Persons to Whom the Code Applies TheCodeofEthicsandProfessionalConductappliestoallPMImembersandindividuals whoarenotmembersofPMIbutmeetoneormoreofthefollowingcriteria: ●
NonmemberswhoholdaPMIcertification
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NonmemberswhoapplytocommenceaPMIcertificationprocess
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NonmemberswhoservePMIinavolunteercapacity
Structure of the Code TheCodeofEthicsandProfessionalConductisdividedintosectionsthatcontain standardsofconductthatarealignedwiththefourvaluesidentifiedasmostimportantto theprojectmanagementcommunity. EachsectionoftheCodeofEthicsandProfessionalConductincludesbothaspirational standardsandmandatorystandards.
AspirationalStandards Theaspirationalstandardsdescribetheconductwestriveto upholdasPMpractitioners.Althoughadherencetotheaspirationalstandardsisnoteasily measured,conductingourselvesinaccordancewiththesestandardsisanexpectationthat wehaveofourselvesasprofessionalsanditshouldnotbeviewedasoptional.
NOTE The conduct covered under the aspirational standards and the conduct covered under the mandatory standards are not mutually exclusive; that is, one specific act or omission could violate both aspirational and mandatory standards. Also, both aspirational and mandatory codes are further divided into values of Responsibility, Respect, Fairness, and Honesty.
Hereareexamplesofrespectundertheaspirationalstandards: ●
Aspractitionersintheglobalprojectmanagementcommunity,weinformourselves aboutthenormsandcustomsofothersandavoidengaginginbehaviorstheymight considerdisrespectful.
●
Welistentoothers’pointsofview,seekingtounderstandthem,andweapproach directlythosepersonswithwhomwehaveaconflictordisagreement.
MandatoryStandards/Requirements Themandatorystandardsestablishfirm requirementsandinsomecaseslimitorprohibitpractitionerbehavior.Practitioners whodonotconductthemselvesinaccordancewiththesestandardswillbesubjectto disciplinaryproceduresbeforePMI’sEthicsReviewCommittee.
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PMPCertification:ABeginner’sGuide Aspractitionersintheglobalprojectmanagementcommunity,werequirethefollowing ofourselvesandourfellowpractitioners: ●
●
RegulationsandLegalRequirements ●
Weinformourselvesandupholdthepolicies,rules,regulations,andlawsthat governourwork,professional,andvolunteeractivities.
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Wereportunethicalorillegalconducttoappropriatemanagementand,if necessary,tothoseaffectedbytheconduct.
ExamplesofRespectUndertheMandatoryStandards Aspractitionersinthe globalprojectmanagementcommunity,werequirethefollowingofourselvesandour fellowpractitioners: ●
Negotiateingoodfaith.
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Donotexercisethepowerofourexpertiseorpositiontoinfluencethedecisionsor actionsofothersinordertobenefitpersonallyattheirexpense.
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Respectthepropertyrightsofothers.
Ask the Expert Q: Ihaveatrustingrelationshipwithmyteamandprojectsponsoranddon’tfeelI
shouldenforcerigidchangecontrolonmyproject.WhyshouldItakeextratimefor “bookkeeping”whenitisnotneeded?
A: Clearlyyouhavetomanagethesponsorandteaminatrustingandeffectivemanner;
however,therearetimeswhenasimple“domeafavor”requestfromthesponsor,ateam member,orotherstakeholderisarequesttolooktheotherwayortoperform“extras” ontheprojectwithoutproperchangemanagement.These“favors”oftenposeaconflict ofinterestandshouldnotbeperformedbecausetherewilllikelybeconsequences.Asa projectmanagementprofessional,youshouldbepreparedfortheserequestsandrespondin astraightforwardprofessionalmanner. Thetermintheworldofprojectmanagementforprovidingextras(thatis,givingaway somethingthatisnotinthescopeoftheproject)is“goldplating.”Goldplatingisoften viewedasabadthingalthoughmanypeoplefeelitisagoodthingandtheywanttoprovide theextrastoshowcommitmenttotheproject.However,thereisabigdifferencebetween goldplatingandprovidingaddedvalueonyourproject.Ifyouunderstandthedifference, youcanalwaysprovidehigh-quality“value-added”managementtotheprojectwithout givingawaythingsthatarenotinthescopeagreement. Value-addedservicecancomeinthewayofstreamliningaprocess(makingitmore effectiveorefficient)andofferingsuggestionstothestakeholderstosavetimeormoney. ShowingintegrityandoperatinginanhonestmanneriswhatthePMICodeofEthicsand ProfessionalConductisallabout.
Chapter3: ProjectManagementProcessGroups
What to Expect on the Exam TogiveyouanideaofwhattoexpectonthePMPexamwhenitcomestothePMICode ofEthicsandProfessionalConductsection,hereareacouplesamplequestions:
1.AprojectyouaremanagingisattheendoftheClosingphaseandduringtheLessons
Learnedmeetingthecustomerinformsyouofanumberofactivitiesanddeliverables thathavenotbeencompleted.Whatdoyoudofirst?
A Tellthecustomeryouwillcheckontheincompletedeliverablesandgetbackto
themwithinafewdays,eventhoughyouknowthesedeliverablesarenotinthe projectscope.
B Reviewtheprojectdeliverablesinquestionduringthemeetingtounderstandthe
statusandthecustomer’sexpectationstoensureyoureachformalacceptancefor allapproveddeliverables.
C Askthecustomerfortheirscheduleandcompareittoyourownschedule.
D Telltheprojectteamtoworkovertimetocompletethedeliverables.
Answer:B.Openlyreviewinganddiscussingtheprojectactivitiesanddeliverableswith allthestakeholders(includingthecustomer)showsrespectandhelpsensureyouare clearontheexpectations,thestatus,andwhatitwilltaketoobtainformalacceptance fromthecustomerpriortoclosingtheproject.(Note:BothPMIandIarebigon“formal acceptance.”Gettingsignoffinwritingorevenintheformofane-mailhelpsyoustay auditreadyonyourproject.)
2.Youhavejustbeenassignedastheprojectmanagerforanewglobalprojectandhave
beentoldbyoneofthefoursponsorstoworkonlywithhim(Bob)becausetheotherthree sponsorsliveindifferentcountrieswithdifferenttimezones.Bobasksyoutoconducta projectkickoffmeeting(face-to-faceforlocalteammembersandviaconferencecallfor internationalteamandsponsors)andtellsyounottoinvitetheothersponsorsbecause “theyaretoobusy.”Whatshouldyoudo?
A WorkonlywithBobbecausethiswillmakecommunicationsmucheasier.
B Insistoninvitingtheothersponsors.
C NotifytheothersponsorsthatBobdoesn’twanttheminvitedtothemeeting.
D TalktoBobtobetterunderstandthereasonsfornotinvitingtheothersponsorsand
stronglyencouragehim(politelyinsist)toallowyoutoincludetheothersponsors.
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What Else Is Missing from the PMBOK? Remember,thePMBOKisonlyaguide.Itcannotpossiblycoveralltheaspectsand variationsdocumentedinthemanytextbooks,journals,andarticlesacrosstheglobe. Therefore,don’texpecttouseonlythePMBOKwhenpreparingforthePMPexam. Youwillneedagoodcross-sectionofknowledge,experience,andproblem-solving capabilityandbeabletoapplyallyourskillstoreal-worldsituationstopassthePMP exam.Ifthistipmakesyounervousandyouarethinkingyoumightnothaveenough PMexperiencetopassthePMPexam,youshouldconsidertakingtheCAPMexam, whichisbasedmostlyonthePMBOKGuide.
Answer:D.Itisimportanttoensureallsponsorsoftheprojectshavetheopportunity toparticipateinthekickoffmeetingsotheycanprovidetheirinput,expectations,and support.Thesponsorsaremakinganinvestmentintheirshareoftheprojectandhave specificexpectationsfortheendresults.Thus,theyneedtobeincludedinthekickoff meeting.
References
1.AGuidetotheProjectManagementBodyofKnowledge(PMBOK®Guide),Fourth
Edition,(PMI–ProjectManagementInstituteGlobalStandard:NewtownSquare,PA) 2008,page41.
2.AGuidetotheProjectManagementBodyofKnowledge(PMBOK®Guide),Fourth
Edition,(PMI–ProjectManagementInstituteGlobalStandard:NewtownSquare,PA) 2008,page37.
3.http://www.livescience.com/technology/050201_cell_danger.html.
4.PMICodeofEthicsandProfessionalConduct,http://www.pmi.org/PDF/AP_
PMICodeofEthics.pdf.
5.Ibid.
Part
II
The Nine Knowledge Areas
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Chapter
4
Project Integration Management
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KeySkills&Concepts ●
Overallintegrationmanagement
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Projectselectionprocess(howprojectsareborn)
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Theprojectcharterandwhoownsit
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Jumpstartingaproject
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Projectmanagementplan(planningthework)
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Executionoftheproject(workingtheplan)
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Howtoknowwhethertheprojectisontrack
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Importanceoftheclosingphaseoftheproject
T
hinkofProjectIntegrationManagementastheprojectmanagerflyingovertheprojecton adailybasis1,000feetintheairtoseehoweverythingisgoing.Arealltheboatsrowing intherightdirection?Arethebarriers(levies,dikes,anddams)allholdingproperly,oris thereafloodcomingthatcouldbreakdownthebarriersandruintheproject? Astheprojectmanager,itisuptoyoutobethepilotincommand,theeyeinthesky, theonewhokeepstheprojectmovingforwardasplanned.Itisuptoyoutoprovideclear directionandsupporttoallthestakeholderswhilekeepingeveryonefocusedontheend results(projectobjectives).TheProjectIntegrationManagementknowledgeareaalso involvesreportingtheprogressandoverallstatusoftheprojectaccuratelyandinatimely mannertoensureadjustmentscanbemadeifneeded. Integrationmanagementisalsoabouttheteam.Istheprojectteamfullystaffed,do theyhavetherightskills,aretheyattherightplaceattherighttime?Dotheyhaveall theinformation,tools,andsupporttheyneedtomanagetheirportionoftheproject? Aretheteammembersclearonthegoalsandobjectivesoftheproject?Aretheyplaying welltogether?Aretheyproductive?Theseareonlyafewofthequestionsyouneedtoask yourselfandaddresstoeffectivelymanageprojectintegrationacrosstheentireproject. ThePMmusteffectivelymanagetheinterdependenciesbetweengroupsandindividuals toensureasmoothflightwhiletravelingthroughtheprojectlifecycleanddifferent knowledgeareas.Integrationmanagementnotonlyentailsmakingchoicesaboutresource allocation,butisalsoaboutmakingtradeoffsamongcompetingobjectivesandalternatives tosolveproblemsandaddressconcerns/issuesbeforetheybecomeproblems.
Chapter4: ProjectIntegrationManagement IfthePMistooclosetothedetailsoftheproject,theywillnotbeabletoseethebigger picturebeyondtheprojectitself.ThePMneedstothinkstrategically(frombeginningtoend) andlookatthewholeproject,notjustthepiecesandparts.ThisiswhereProjectIntegration Managementisessentialandifdoneproperlywillhelpensuresuccessonyourproject.
Project Integration Management According to PMI ProjectIntegrationManagement(whichwasintroducedinthe2000versionofthe PMBOK)isthefirstknowledgeareainthePMBOK(Chapter4)andprobablythemost importantinthatitcrossesallfiveprocessgroups.Itsetstheoverallframeworkofhow theprojectwillbemanaged. PMIstatesthatProjectIntegrationManagementincludestheprocessesandactivities neededtoidentify,define,combine,unify,andcoordinatethevariousprocessesand activitieswiththeprojectmanagementprocessgroups. Inthecontextofprojectmanagement,integrationmanagementincludesavarietyof characteristics,suchasbeingabletoarticulateprojectdeliverables(whataretheproductsof theproject?)andtakingintegrativeactionstomakesurealltheworkproductsandpackages (activities)fittogetherproperly.Thisalsoincludessuccessfullymanagingstakeholder expectationsandmeetingallapprovedprojectrequirements(whichiseasiersaidthandone).
Ask the Expert Q: Isiteasiertomanageintegrationoftheprojectwithoutincludingtheteam? A: ManyPMsfeeltheycanconductintegrationmanagementfasterontheirownwithout
theinvolvementofandquestionsfromtheteam.Thismayworkforalittlewhileearlyin theprojectlifecycle;however,withouttheteam’sinputorinvolvement,thePMmisses awealthofknowledge,experience,and,mostimportant,“buy-in”(acceptance)fromthe team.EventhoughthePMmustbethe“pilotincommand”oftheproject,integration managementrevolvesaroundtheteamandworksbestiftheteamisinvolved.
TIP Integration management is a “team sport,” and the project manager cannot do it all. Therefore, it is of the utmost importance to include the team in the integration management process activities.
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Overview of Project Integration Management Processes TheProjectIntegrationManagementknowledgearea,accordingtoChapter4ofthe PMBOK,includesthefollowingsixprocesses: ●
4.1:Developprojectcharter(Initiatingprocessgroup) Theprocessofdeveloping adocumentthatformallyauthorizesaprojectoraphaseofaprojecttobeginand documentingtheinitialrequirementsneededtosatisfystakeholderneedsand expectations.
●
4.2:Developprojectmanagementplan(Planningprocessgroup) Theprocess ofdocumentingtheactionsnecessarytodefine,prepare,integrate,andcoordinateall subsidiaryprojectplans.
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4.3:Directandmanageprojectexecution(Executingprocessgroup) Theprocess ofperformingtheworkdefinedintheprojectmanagementplantoachievetheproject’s objectives.
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4.4:Monitorandcontrolprojectwork(MonitoringandControllingprocess group) Theprocessoftracking,reviewing,andregulatingtheproject’sprogressto meettheperformanceobjectivesdefinedintheprojectmanagementplan.
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4.5:Performintegratedchangecontrol(MonitoringandControllingprocess group) Theprocessofreviewingallchangerequests,approvingchanges(as appropriate),andmanagingchangestothedeliverables,organizationalprocessassets, projectdocuments,andtheoverallprojectmanagementplan.
●
4.6:Closeprojectorphase(Closingprocessgroup) Theprocessoffinalizingall activitiesacrossalltheprojectmanagementprocessgroupstoformallycompletethe projectorphase.
NOTE Project phases can actually be projects or subprojects unto themselves. For example, closing the project involves the same process groups and knowledge areas that should be used for managing the whole project. The same can be true with any of the project phases. I have seen many cases where the project plan and schedule were aligned with and grouped by the project phases or process groups, in essence breaking the project down into more manageable subprojects.
ProjectIntegrationManagementiscomplex,andoftenthetimeandcosttoperform thisknowledgeareaareoverlookedduringestimatingprocesses.Weusuallydoapretty goodjobofestimatingthecostoftheworknecessarytocompletethefinishedproductor
Chapter4: ProjectIntegrationManagement solvetheproblemtheprojectiscreatedtoaddress;however,wetendtounderestimatethe costtomanagethetimeandeffortittakestooverseeandintegratetheoverallproject. Integrationmanagementincludessettingupmeetings,buildingtheteam,settingup atrackingmechanism,collectinginformation,addressingissues,andreportingproject status.Aprojectmanagerneedstobeassignedearlyintheprojectlifecycletofocuson theprojectforthesereasons.Fartoooftentheexistingoperationsmanagerorprogram managerisexpectedtooverseetheprojectbecausetheywillinherittheproductorresult oftheproject.And,ofcourse,theyareexpectedtomanagetheprojectintheirsparetime andatnoextracharge.Ahostofactivitiesareinvolvedwithintegrationmanagement,and theseactivitiesarerarelyconsideredaspartoftheproject.Becausetheworkoftheproject willbenefittheongoingoperations,itisoftenassumedtheprojectworkwillbedone bythedailyoperationsmanagerandoperationssupportteamwithoutcostorschedule impact.Thisisagreatideaifitworks;however,itrarelyworks. Forexample,supposeabusinessneedisidentifiedtoreducethecostofcallcenter operationsby10percentfortheGetItThere(GIT)TruckingCompany.Aprojectmanageris broughtintoidentifyasolution.ThePMandsolutionsteamagreethatanautomatedVRU (voiceresponseunit)wouldexpeditecallhandlingwithfewerhandoffsandthusreduced timeandcost.Theestimatedtimetocompletetheprojectistwomonths.Theprojectproposal isreviewedandapprovedforimmediateimplementation.However,insteadofassigning aPMtoinitiateandmanagetheproject,theGITTruckingCo.executivesfeeltheycan saveadditionalcostbyhavingthecallcenter’soperationsmanageroverseetheprojectin additiontohisfull-timeoperationsjobbecausehewillownthesolutiononceitisinstalled. Doyouthinkthiswillwork?No,becausetheoperationsmanageralreadyhasadayjob (andcoincidentallyhasverylittleprojectmanagementexperience).Therefore,bothroles willbedonepoorly.BetweenlackofPMexperienceandthedistractionsoftheday-to-day operations,theoperationsmanagerwillbetoodistractedtoperformwellineitherfunction.
The Selection Process: How Projects Are Born Projectsareusuallyborn(initiated)foroneoftwoprimaryreasons: ●
Businessneedsoropportunity(increaserevenue,decreasecost,andsoon)
●
Problemthatneedstobesolved(forexample,equipmentfailurecausinglost productivityoraconstructionprojecttostimulatetheeconomy)
Thinkaboutit:Alltheprojectsyouhaveeverworkedonprobablyfallintooneofthetwo categoriesmentioned.
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PMPCertification:ABeginner’sGuide Businessneedscanmanifestthemselvesasaperceivedproblemorareasontochange thewayacompanyisdoingbusiness(orchangetheproductstheysell).Becausebusiness needsmayoftenbeperceivedandarenotadirectresultofarealproblem,Iuseboththe primaryreasonsjustmentionedasdriversintheprojectselectionprocess. Forexample,takeanIT(InformationTechnology)projecttoconsolidatethenumber ofservers.Thejustificationforthisprojectistoreducecostandtoincreasereliabilityof theservers.Theneedtoreducecostisabusinessneed(tobemorecompetitive),andthe needtoincreasereliabilitynotonlyreducesoutageandserviceproblemsbutalsosaves moneyandimprovescustomersatisfaction.Allgreatbenefitsthatcanjustifytheproject (aprojectisborn). Usuallythecompany’sexecutivecommittee,togetherwithitssubcommittees, identifiestheneedforprojectsandapprovesprojectfunding(budgetary)commitments. Thiscommitteeordelegateisresponsibleforestablishingthestrategicdirectionandplans forensuringthatprojectsareconsistentwiththeorganization’soverallstrategy.Itisalso responsibleforensuringapprovedpoliciesorpracticesarefollowed.
Define the Business Need/Opportunity or Requirement Thebestwaytogetaprojectapprovedistoidentifytheopportunity,benefit,orbusiness needfortheproject.Ifthebenefits(resultsoftheproject)outweighthecostandtime tocreatetheproductorservice,thentheprojectproposalshouldbeaneasysell.Ifthe projectistosatisfyasafetyorregulatorycompliancerequirement,itmaybemandated.
TIP Most companies or organizations have project review boards or PMOs that serve as a governing body to determine which projects are worthy to be funded and chartered/ approved.
Theprojectstatement,justification,orproposalshouldexplain,inclearbusiness terms,howtheprojectwilladdressspecificneedsoropportunities.Whyshouldthe companyspendtimeandmoneyonthisproject?Herearesomeexamplesofhowtohelp satisfybusinessneeds,opportunities,oraregulatoryrequirement: ●
Streamline/improvequality,reliability,oreffectivenessofaproductortheefficiency ofaservice,procedure,oroperation.
●
Meetmandatedorregulatorycompliancerequirementsofaninternalorexternal authority(Sarbanes-Oxley,OCC,OSHA,FDA,ISO,ITIL,andsoon).
Chapter4: ProjectIntegrationManagement ●
Reduceoperatingoroverheadcostsorincreaserevenue.
●
Gainmarketshareorprovideastrategicbusinessadvantage.
●
Improvetheskillsoftheteamtoenhancetheirabilitytoperformmoreeffectively (througheducation,on-the-jobtraining,ormentoring).
Herearesomeadditionaldetailsthatcan(orshould)beprovidedinthediscussionof thebusinessneed/opportunitytohelpprovideabetterunderstandingoftheproject: ●
Howtheneed/opportunitywasrecognizedandwhobenefits.
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Abestestimateofthesizeorimpactoftheneed/opportunityinspecificterms.
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Resultsorcontributingfactors,suchasincreasedworkload,reductioninstaff,budget ortimeconstraints,increasedrisk,andtheneedtointroducenewtechnology.
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Alternatives,riskanalysis,advantages,anddisadvantages.
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Thepotentialcostoftheprojectifapprovedandthepotentialcostifnoactionistaken (forexample,acontinuedfailurerateof15percentifnoactionistaken).Youshould beasspecificaspossiblewithfailureorimprovementrates.
Remember,theinformationyouprovideintheprojectproposalwillhelptheproject sponsorsmakeinformeddecisionsandwillhelppromotesupportfortheproject.The businessneedoropportunitycanbebetterjustifiedifitisbasedonsoundinformation andfacts.Unfortunatelytherearemanyvariablesandyoumaynotalwayshavethe answers.
Famous Words in Project Management: “It Depends” AfellowPMinstructor(andfriendofmine)frequentlysays,“Thetwomagicwordsin projectmanagementare‘Itdepends.’”Thisistruebecauseeveryprojecttendstobe uniqueinonewayoranother.Nomatterhowmanytimesaprojectisperformed,many variablesmakeeachtimedifferent,andthewaytheprojectismanageddependsentirely onthesevariables. Projectmanagershavetobeabletosolveproblems,handledifferentsituations,and beabletothinkontheirfeettocomeupwiththebestanswerbasedontheinformation availableatthattime.Ifitwereeasy,anyonecoulddoit,right?
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Project Methodology and Sample Checklist InthePMclassesIteachatbusinessesanduniversities,twoquestionsarefrequently askedbymystudents: ●
Whatisaprojectmethodology?
●
Aresamplechecklistsandtemplatesavailableforthedifferentaspectsofaproject?
I’llanswerthesecondquestionfirst:Yes,hundredsofsamplechecklistsandtemplates areavailablefromtheInternetandfromfellowprojectmanagers.Projectmanagersare usuallymorethanwillingtosharetheirtoolsandtechniques,suchaschecklists,sample documents,andsoon.Togetanideaofwhatisavailable,simplyperformanInternet searchfor“PMTemplates.”Someareavailableatafee,ofcourse,butmanyarefree “shareware.”Onesuchwebsite(discoveredbyastudentinmyclass)isawebsiteshowing afantasticlistoftemplates.Theyareexplainedclearly,organizedwell,andcoverahost oftopicsonprojectmanagement.ThewebsiteisownedbyDr.GaryEvans,PMP,andthe URLishttp://www.cvr-it.com/PM_Templates/.ThetemplatesfromCVR/ITConsulting LLCarefreeforpersonaluse,orforgovernmentalandnonprofitagencies.However,there isanominallicensingfeeforcommercialuse,whichiswellworththecost. Nowlet’stacklethefirstquestion:Whatisaprojectmethodology? PerWikipedia,methodologyisdefinedasfollows:
1.Theanalysisoftheprinciplesofmethods,rules,andpostulatesemployedbya
discipline.
2.Thesystematicstudyofmethodsthatare,canbe,orhavebeenappliedwithina
discipline.
3.Aparticularprocedureorsetofprocedures.
Methodologyincludesthefollowingconceptsastheyrelatetoaparticulardisciplineor fieldofinquiry:
1.Acollectionoftheories,concepts,orideas
2.Acomparativestudyofdifferentapproaches
3.Acritiqueoftheindividualmethods[1]
Methodologyreferstomorethanasimplesetofmethods;itreferstotherationaleandthe assumptionsthatunderlieaparticularstudyorapproachrelativetothemethod.
Chapter4: ProjectIntegrationManagement Manycompaniesarerealizingtheimportanceofastandardapproach,ormethodology, tohelpensureconsistencyandagreaterdegreeofsuccessacrosstheprojectsand programstheymanage.Todothisinanorganizedmanner,morecompaniesarecreating projectmanagementoffices(PMOs).Aspartofitscharter,thePMOisresponsiblefor ensuringandmaintainingadocumentedprojectmanagement(PM)methodologyforuse acrossallprojects.Thismethodologyisdesignedtomeettheneedsofallsegmentsofthe organization.Itservesasaguidetotheorganizationconcerningtheprojectsitselects, toprojectteamsastheyplantheworkandreportthestatusoftheirprojects,andto managementasitsuppliestherequiredoversight. OftenthechosenPMmethodologyisdesignedaroundthePMBOK,andinothercases companiesdeveloptheirownPMmethodology.Eitherway,itisimportanttoremember thePMBOKisonlyaguide(notamethodology).APMmethodologyshouldworkequally wellonlargeandsmallprojects.Standardtemplatesaretypicallypartofthemethodology, andhundredsofgreattemplatesareavailableontheInternetorwithinyourcompany’s PMmethodology(ifoneexists).Ifyourcompanydoesn’thaveanapprovedstandardPM methodology,nowisagoodtimetocreateone.Yourbosswillseethebenefitsandshower youwithbonuses,keystotheVIPwashroom,andexecutiveparking...oratleastapaton theback. Thebestwaytosetupaclearlydefinedprojectmethodologyistouseasetoftried andtruechecklists.Oneconstantwithprojectmanagersaroundtheworldisthatwe lovecheckmarks,andcheckmarksworkbestonachecklist.Tothisend,Ihaveincluded severalbulletedandnumberedchecklistsinthischapterforyouruseandenjoyment. Astandardprojectmanagementmethodologyisextremelybeneficialandthegoalsare quitesimple.PerCVR/ITConsultingLLC,thefollowinggoalsorobjectivesshouldapply whendefiningaPMmethodology: ●
Provideacommonpointofreferenceandacommonvocabularyfortalkingand writingaboutthepracticeofprojectmanagement.
●
Increaseawarenessanduseofgoodprojectmanagementpracticebythosecharged withtheresponsibilitiesdefinedinthemethodology.
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Definetherolesoftheexecutivecommittee,sponsor,projectmanager,stakeholders, andotherteammembersandobtainconsensuswithintheorganizationaboutcritical successfactors(CSF).
●
Createthebasisforacollaborativeenvironmentwhereeveryoneengagedintechnical projectworkunderstandswhatisrequiredofthemandwhythoserequirementsare keyfactorsforimprovingprojectresults.[2]
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Project Integration Management Processes: Charter to Close TobetterunderstandProjectIntegrationManagement,weneedtolookattheindividual processes.ThedetailsofthesixprocessesintheProjectIntegrationManagement knowledgeareaaredefinedandexplainedthroughouttheremainderofthischapter.
1. Develop Project Charter Process Whatisaprojectcharter?Insimpletermsitistheauthorizationforaprojectorphaseofa projecttobegin.ItalsoauthorizestheprojectmanagertobeassignedandallowsthePM tobeginassigningresources(peopleandequipment)totheproject.Inotherwords,itis thegreenlightfortheprojecttoofficiallybegin.
When Does a Project Officially Become a Project? Inreality,manyprojectsarebornlongbeforetheyreceivetheofficialcharter.PMIviews theprojectcharterasthefirstofficialauthorizationandrecognitionofaprojectorphase ofaproject.Therearemanywaysforaprojectorphasetobegin,andmanyorganizations don’tevenuseorrecognizethetermprojectcharter.
TIP The term project charter is not commonly used in many government agencies and public and private sector companies. It is more often referred to as one of the following: work order, service request, statement of work (SOW), request for service (RFS), contract, work initiative, work action, grant, or any of a number of other different names (especially on government contracts).
TheDevelopProjectCharterprocessisthefirstintheseriesof42processesinthe PMBOKandoccursduringtheInitiatingprocessgroup.Itistheprocessofdevelopinga documentthatformallyauthorizestheproject.Itisalsotheprocessfordocumentingthe initialrequirementsthatsatisfythestakeholders’needsandexpectations;definingthe product,service,orresultoftheproject;andoutliningacceptancecriteria. Here’salistofsomeofthekeyactivitiesthatshouldoccurduringthisprocess: ●
Identifyprojectsponsor(s).
●
Identifyanddocumentprojectdeliverables(whatisexpectedfromtheproject).
●
Identifyanddocumentprojectconstraints(limitations).
●
Determineprojectsuccesscriteria.
Chapter4: ProjectIntegrationManagement ●
Documentprojectassumptions.
●
Developandanalyzecost-benefits.
Where Does a Project Charter Come From? Theprojectchartercancomeinmanyformsandindifferentnames.Itmaybeformal, suchasacontractorletterofagreement(LOA),orinformal,suchasacallore-mailfrom yourbossorthecustomertellingyoutoproceedwiththeprojectorphase.Itisbestifthe charterisinwritingtominimizeconfusionandtomeetauditrequirements. Toclarifythetermprojectphase,let’suseasanexampleaspecificprojectto estimatethecostofdesigninganewfuel-efficientcar.Theapprovalmaybetoconduct apreliminaryrevieworfeasibilitystudy(conceptphaseanalysis)todeterminewhether thereissufficientbusinessjustificationtoproceed.Theprudentapproachtoanyprojectis tofirstdeterminewhetheritisdoableorcanbecost-justifiedbeforethecompanycommits totheprojectinitsentirety. Intoday’seconomy,manycompaniesarenotabletoaffordlong-terminvestmentsand needtorealizebenefitsandROI(returnoninvestment)soonerthanlater,thustheneedto takeprojectsinsmallerstepsusingfewerinvestmentdollars.
Sample Components of a Project Charter Template Asmentioned,manygreattemplatesandformsareavailablethatprovideagoodstarting placefordocumentssuchastheprojectcharter.Hereisasummarylistofthekey componentsofasampleprojectchartertemplate: 1.0:Generalprojectinformation ●
1.1:Projectname
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1.2:Sponsors(whoisfundingorwillbetheprimarybenefactoroftheproject)
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1.3:Documenthistory(fortrackingchangesandversioncontrol)
2.0:Identifystakeholdersandcontacts(projectmanager,teamlead,etc.) 3.0:Projectdescription ●
3.1:Projectpurpose,businessneed,opportunity,orjustification(problemtobesolved)
●
3.2:Projectobjectives(measurableoutcomes,suchasreducecost,increase performance,increasesales,etc.)
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3.3:Deliverablesormajormilestones(productsoftheproject,suchasworking softwarecode,trainingmanual,completedcallcenter,usertestdocument,etc.)
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3.4:Whattheprojectisintendedtodoandnotdo
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3.5:Risksorconstraints(barriers/limitations)
4.0:Financialorresourceinformation ●
4.1:Budgetassumptions
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4.2:Reportingstrategy(frequencyandformat)
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4.3:Typeofestimate
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4.4:Fundingsource(s)
5.0:Acceptancecriteria ●
5.1:Approvers
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5.2:Changecontrolprocess
6.0:Finalsignoff(formalacceptancesignatures)ofthecharter[3]
NOTE When filling out a template, remember that all projects are unique in some way, so the template might not fit the project exactly. Therefore, consider all the inputs, tools and techniques, and outputs of the processes to ensure you haven’t missed anything.
Case Study: Sample Project Charter Alternative Inourcasestudy,theBudweiserEventsCenter(BEC)usestheircontractwiththeclient (artist,performer,promotingagent,ororganization)astheirprojectcharter.Thecontract alsoservesasimportantinputtothescopeoftheproject. InthecaseofBEC,contractsusuallyhavea“rider”(technicaldatasheet)thatspecifies theartist’s(organization’s)requirements,whichvarybasedonthenatureoftheevent.Here areafewofthekeycomponents: ●
Compensationandhowpaymentismade/received
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Eventdateandticket“on-sale”date
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Advertisementandmerchandisesales
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Contractcancellationandliabilityinsurance
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Permitsneededandspecialsecurity/staffing
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Advancingrequirementssuchasthefollowing:
Chapter4: ProjectIntegrationManagement ●
Productionsetuprequirements(power,rentals,spotlights,andsoon)
●
Dressingroomsneededandspecialrequirementssuchasfoodandbeverage
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Stageconfiguration,soundandaudio/video(AV)specialeffects,andotherlighting
●
“Backline”bandequipmentorgearnotbeingprovidedbytheband/performer
Theserequirementsarethendocumentedinan“eventdatasheet”thatservesas theformalcommunicationsdocumentfortheevent.Thenextstepisthentobeginthe setupprocessforthatparticularevent.Thisisreferredtoas“buildingconversion”or “changeover,”andtheprocessinvolvesthefollowingsteps:
1.Transferringthephysicalsetuprequirementsfromthepreviouseventtothenext
scheduledevent.
2.Schedulingthelaborfortheevent(ticketsellers,merchandisesellers,ushers,ticket
takers,security,parking,lawenforcement,firemarshal,medical,conversionlabor, cleaners,operationsstaff,firepanelmonitor,houseaudio/visual,electricians,stagehand labor,runners,andsupervisingstaff).
Who Owns the Project Charter? Becausetheprojectcharteristheofficialauthorizationdocumentoftheproject,itshould beinitiatedbytheprimarychampionorexecutiveowner(sponsor).Becausemost high-levelmanagersarenotusuallydocumentcreators,itisuptotheprojectmanagerto draftthecharter,reviewitwiththesponsor,andobtainformalacceptanceorapprovalof thedocument.Thiscanevenbeine-mailformat,aslongasitisinwriting.
Ask the Expert Q: Whoownstheprojectcharter? A: Theprojectsponsorresponsibleforthefinancialresourcesoftheprojectownstheproject
charter.Thesponsorisusuallythepersonwhopromotesorsupportsthebenefitsofthe projecttohigherlevelsofmanagement.Inthereal-world,however,theprojectmanager (orprojectleader)usuallydocumentsthedetailsofthecharterandobtainsapprovalforthe projecttobegin.
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Definition of a Project Sponsor AccordingtoDr.GaryEvans(CVR/ITConsultingLLC): “TheSponsoristheindividual[orindividuals],generallyanexecutive,who isresponsibleforthestrategicdirectionandfinancialsupportofaproject. ASponsorshouldhavetheauthoritytodefineprojectgoals,secureresources, andresolveorganizationalandpriorityconflicts.” “Ithasbeenshown,butmaynotbegenerallyrecognized,thatlackofproject sponsorshipcanbeamajorcontributortoprojectfailure.Conversely,an appropriatelyplacedandfullyengagedSponsorcanbringadifficultproject tosuccessfulconclusion.AssumptionsthataformalSponsorisnotneeded (orforpoliticalreasonscanbeavoided)aremisplaced.Steeringcommittees arenosubstitute.ApowerfulbutuninvolvedSponsorisnohelp.EvenbigbudgetandhighlyvisibleprojectsrequireaformalSponsor.” Here’sasamplelistofsponsorresponsibilities(fromDr.GaryEvans): ●
Championtheprojectfrominitiationtocompletion.
●
Participateinthedevelopmentandsellingoftheprojectbusinesscase.
●
Presenttheoverallvisionandbusinessobjectivesfortheproject.
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Assistindeterminingandapprovingthefinalfundingandprojectdirection.
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Serveasexecutiveliaisontokeystakeholders(forexample,seniormanagement, departmentdirectors,andsupportmanagers).
●
Supporttheprojectteam.
Forbestresults,itisalsoimportantfortheprojectmanagertobeassignedearlyinthe initiationphasesothechartercanbereviewedand/ordevelopedbythepersonresponsible fortheexecutionoftheproject. Theprojectsponsorneedstoprovidethedirection,executivesponsorship,and expectationsthatneedtobemettoconsidertheprojectasuccess.Thesecomponentsmust beconsideredaskeyinputstotheproject.
Develop Project Charter Inputs, Tools and Techniques, and Outputs Asareminder,everyprocesshasinputs,toolsandtechniques,andoutputs.Aninputoften comesfromtheoutputofthepreviousprocess,sothereisalogicalprogressioninmany cases.
Chapter4: ProjectIntegrationManagement ProcessInputs Asmentionedpreviouslyinputsareitemsthatneedtobeconsidered fortheprocesstobeadministered.Further,inputisatermdenotingeitheranentrance orchangesinsertedintoasystemorprocess.Thequalityoftheinputcanbecrucialto thevalueoftheoutputoftheprocess,whichbringsustothefamoussaying“garbagein, garbageout”(GIGO).ThereareseveralinputstotheDevelopProjectCharterprocess,as listedhere: ●
Projectstatementofwork(SOW)
●
Businesscase
●
Contract
●
Enterpriseenvironmentalfactors
●
Organizationalprocessassets
ToolsandTechniques Toolsandtechniquesareusedtoanalyzetheinputsreceived foraparticularprocess.Subjectmatterexperts(SMEs),focusgroups,andspecialistsare oftenusedasconsultants;theycanbeconsideredtobethetoolortechniqueusedtoassess theinputsforaprocess.Theseexpertsapplytheirknowledgeandexperiencetohelp determinethebestapproachtoaccomplishspecificoutputsoftheprocess.IntheDevelop ProjectCharterprocess,thereisonlyonetoolandtechnique—anditissimplyexpert judgment.NotethattheSMEsmayhave(andcertainlycanuse)avarietyoftoolsand techniquestohelpthemdeveloptheprojectcharter.) Outputs Theoutputsofaprocessarethedocumentsorresultsbeingdevelopedaspart oftheprocess.Forexample,thesingleoutputoftheDevelopProjectCharterprocessis theprojectcharter. Whentheprojectcharter(oralternativeauthorizationdocument)isreceived,the projectmanagerneedstodiverightinandjumpstarttheproject.
How to Jumpstart a Project Projectsusuallycomeatyouwithlittlewarning.Yougetatapontheshoulderfrom yourboss(usuallyviae-mailoraphonecall)withtheall-too-familiarline,“HaveIgot anopportunityforyou.”Andasalways,theprojectishighpriorityandneedstobegin immediately.Sowhatdoyoudo?
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Ask the Expert Q: HowdoI“hitthegroundrunning”tojumpstartaproject? A: Isuggestyouuseastandardchecklistandtemplatesfromprevioussimilarprojectsoryou
canusethesamplechecklistIprovideinthissection.Thekeyistohaveachecklistready beforeyoureceive“thecall.” Onceachecklistischosen,thenextstepistoselectthetemplatesthatcanbeused. Templatescanbeyourfriendoryourenemy.Theyaregreatforgettingyourthoughts flowingandtoapplysynergybasedonotherpeople’sexperiences.However,ifthetemplates youselectareusedas“fill-in-the-blanks”forms,youandyourteamcouldwastecountless hoursdoingworkcollectinginformationoransweringquestionsthatreallydon’tapplyto yourproject.Atemplateisjustashelluntilyoufititintoyourproject.Ihaveseenmany projectmanagersandprojectteamslosefocusandcreativityontheirprojectwhenusing templatesiftheysimplyfillintheblankswithlittlethoughtofhowitfitstheirproject. Thebestwaytocollectandorganizethetemplatesistoputtheminabinderor electronicfolder—oftenreferredtoasaprojectcontrolbook(PCB.)ThePCBprovidesa greatwaytoorganizedocumentsortemplatessoyoucandiverightinwhenstartinganew projectorupdatinganexistingproject.
Tohelpyoubegin,I’veprovidedasamplePMjumpstartchecklist.Althoughyour actualchecklistwilllikelybedifferentfromthisone,thegoodnewsaboutproject managementisthatthefundamentalstendtoapplytomostallprojects.Withthatinmind, hereisthesamplechecklist:
1.Reviewprojectobjectivesfromtheproject-selectionprocess.Whatistheproblemtobe
solved?Whatisthebusinessneedoropportunitytobeaddressed?
2.Identify/verifytheprojectsponsor(orsponsors)whoneedtobesatisfiedthatthe
projectdoeswhatisexpectedofit.ThePM’sjobistoidentifythesponsorsandother stakeholdersontheproject(inotherwords,knowyouraudience).
3.Obtaintheprojectcharterandotherinputs(contract,workorder,servicerequest,and
soon)toreviewwhatisauthorized(inscope)intheproject.
4.Acquiretheprojectteamandotherresourcesneededtoperformthework.Insome
cases,aletterofcommitmentfrommanagementforkeyresources(especially“missioncritical”orhighlyskilledpeople)isrecommendedtoensuretheiravailability.
5.Assessandmaintainstafftechnicalproficiencyandprovidetrainingwhereneeded.
6.Gathertheteamtobeginintroductionsandconductskillandcapabilityreviews.
Chapter4: ProjectIntegrationManagement
7.Reviewconstraints(financial,resource,time,andsoon)tohelpestablishthescope.
8.Documentandreviewthescopestatementwithkeystakeholdersandobtainscope
verificationfromtheprojectsponsor(s).
9.CreateaResourceAssignmentMatrix(RAM)andOrganizationalBreakdownStructure
(OBS)andreviewthesewiththeteam.*(Thisshouldincludebackupresources.)
10.Scheduleakickoffmeetingtoofficiallyannouncetheproject,geteveryoneonthesame
page,setthegroundrules,showtheprojectstructure“chainofcommand,”andsoon.
11.Developtheprojectmanagementplanincludingtoolsandtechniquesneededtomanage
theproject.*
12.DeveloptheWorkBreakdownStructure(WBS).*
13.Begindevelopmentoftheprojectschedule(timemanagement).*
14.Begincostestimating(costmanagement)withinputfromthestakeholders.*
15.Conductriskmanagementassessmentandassignownerstothehigh-priorityrisks.*
16.Developtheprojectcommunicationsplan,includingformatandfrequency.Reviewthis
withthestakeholdersforapprovalanddeterminationofhowissueswillbetrackedand managed.
17.Oncetheprojectisunderway,beginthePMBOKexecutionandcontrollingprocesses.
18.Reviewtheprojectstatusonaregularbasisandreportthestatustokeystakeholders
weekly(orasneeded,basedonthesize,type,andcomplexityoftheproject).
19.SetupaProjectManagementInformationSystem(PMIS).Thisisoftencalledan
electronic“teamroom”or“centraldatabaserepository.”Itspurposeistoallowthe projectmanagerandteamtostoretheprojectplanandoutputdocumentsforeasy accessandauditreadiness. *Withteaminvolvement—Keepinmindtheteamdevelopment“formingstage”may havecertainconstraints,suchaspersonalityconflicts,lackofskilledresourcesfor theassignment,lackofcommitment,andlackoftrustfromateammemberorfroma manager.Therefore,itisimportanttoallowtimefortheteamtogettoknowoneanother onanewproject. BruceWayneTuckmanisanAmericanpsychologistwhohascarriedoutresearchon thetheoryofgroupdynamics.In1965,hepublishedoneofhistheoriescalled“Tuckman’s Stages,”wherehestatesthat“Groupsinitiallyconcernthemselveswithorientation accomplishedprimarilythroughtesting.Suchtestingservestoidentifytheboundariesof bothinterpersonalandtaskbehaviors.Coincidentwithtestingintheinterpersonalrealm
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PMPCertification:ABeginner’sGuide istheestablishmentofdependencyrelationshipswithleaders,othergroupmembers,or pre-existingstandards.Itmaybesaidthatorientation,testinganddependenceconstitute thegroupprocessofforming.”[4] Thebestapproachtohelpformaprojectteamistomaketimefortheteammembers togettoknowoneanotherandforyoutogettoknowtheteammembers—theyareyour number-oneassetontheproject. Oncetheprojectinitiation(startup)hasbegunandthepreliminaryteamisformed,itis timetolockin(verify)theprojectdeliverables.
What Are the Project Deliverables? Aprojectdeliverableistheproductofworkdoneonaproject,suchasablueprintofa building,atestscriptforsoftwaretesting,oraspecifictrainingmanual.Deliverables aresometimesdescribedasinputsoroutputs.Oneperson’soutputsarethenextperson’s inputs.Adeliverablecanbea“product”oftheproject.Itshouldbeauniqueandverifiable product,service,orresultthatmustbeproducedtocompleteaprocess,phase,orthe projectitself. Projectdeliverablesincludeboththeoutputsthatcomprisetheproductorservice oftheprojectaswellasancillaryresults,suchasprojectreportsandotherdocuments. Deliverablescanbedescribedatasummaryleveloringreatdetail,dependingonthe needsoftheproject.
TIP As important as it is to clearly identify project deliverables, it is equally important to identify and document what is excluded from the project as well. Project exclusions should be precise to leave very little room for confusion or challenges of what is and is not included in the project scope. An example of project exclusion is, “The training manual will only be provided in English.” Or, “Special sound effects and laser light show equipment for the concert must be provided by the artist, not the events center.”
Theonlywaytobecompletelyclearontheprojectdeliverablesistocollectandverify therequirementsoftheprojectwiththesponsor(s).Therequirementsusuallydictatethe deliverables.
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Who Provides the Requirements?
Afamousrockstar’sbookingagentcontactstheeventscentermanagertobooktheBEC (BudweiserEventsCenter)foraconcert.Therequirementsforthestageplacement,seating, andspecialeffects(forexample,pyrotechnics/fireworks)poseasafetyhazard.Thebooking agentiscontactedandheisinsistentontherequirementsasstated.Whatdoyoudo?
Chapter4: ProjectIntegrationManagement Answer:Eventhoughthecustomer(bookingagent)providestherequirements,ifthese requirementsposeahazardorareinconflictwithacityorfireordinance,theywillneed tobechanged.Otherwise,theeventcannotgoonasrequested.
Therequirementsmustbeclear,documented,approved,andposenoconflictsinthe safedeliveryoftheproject.Oncetherequirementsareapproved,theprojectmanager shouldscheduleakickoffmeetingandbegindevelopingtheprojectmanagementplan. Notethattherecanbemorethanonekickoffmeeting;however,thereshouldbeat leastonefairlyearlyintheprojectlifecycletogeteveryoneuptospeedquicklyandto formallyannouncetheprojectscope,thedeliverables,theteam,sponsors,andsoon.
The Kickoff Meeting Thekickoffmeetinghelpssetthestage(framework)fortheprojectanddemonstratesthe team’simportanceintheplanningandexecutionprocess.Sowhoshouldattend?Asample listisshownbelow: ●
Projectsponsor(s)
●
Projectmanager
●
Projectleads(coordinators)
●
Projectteammembersandsupportpersonnel
●
Keysubjectmatterexperts(SMEs)
●
Othersasappropriate: ●
Administratororscribe(totakeminutesofthemeeting)
●
Financialrepresentative(persontrackingbudgetandexpenses)
●
Customer,end-usermanagement,orleadrepresentatives
Whattopicsarecoveredinthekickoffmeeting?Itdepends(youknewthatwascoming, right?)onthesize,type,andcomplexityoftheproject.Iftheprojectisanextensionof anexistingproject,thisstepshouldbeprettyeasy.If,however,itisatotallynewproject withatotallynewteamandnewtechnology,thiscanbelaborintensive.Attheendofthe meeting,theattendeesshouldleavewithaclearunderstandingofthefollowing: ●
Projectorganization,keystakeholders,andteammembersassigned.Wheretheplan andoutputdocuments,meetingminutes,andassignmentswillbepostedandstored (preferablyinanelectronicteamroom).Howtoaccessandupdatetheproduct documents.
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Theprojectcharter,includinggoalsandobjectivesoftheproject.
●
Thescopeoftheprojectandhowthescopewillbemanaged(forexample,through formalchangecontrol).
●
Successfactors(measureddeliverablesandresultsexpected).
●
Generalschedule,budget,andpreliminarynextsteps(actionitems).
●
Benefitsorbusinessresultsexpecteduponcompletionoftheproject.
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Knownissues,constraints,orrisksthatneedtobeconsideredgoingintotheproject.
●
Keyassumptionsandmilestones,ifidentified.
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Activitiesplannedforthenextseveraldays/weeks.[5]
Withthekickoffmeetingcomplete,youarenowreadytodevelopthemoredetailed overallprojectmanagementplanwithinputfromtheteam(rememberthisshouldbea teamsport).
2. Develop Project Management Plan Process TheDevelopProjectManagementPlanprocessinvolvesdocumentingtheactionsnecessary todefine,prepare,integrate,andcoordinatealltheotherworkplansoftheproject.Itdefines howtheprojectwillbeexecuted,monitoredandcontrolled,andthenclosed. Theprojectmanagementplan,oncedeveloped,servesasaguidetohowtheproject willbemanaged.Thisguideshouldbeusedasaworkingdocument.Itshouldbeusedfor variouspurposesandisthefirststepindemonstratingthatthePMiseffectivelymanaging theprojectbasedonanapprovedmethodologyandformalplan. Attheendoftheday(ortheendofanaudit),thetruemeasureofcontroloveraproject iswhetherthePMhasaplanandisworking(managing)theplan. Theprimaryowneroftheprojectmanagementplanistheprojectmanager.Theproject managerhastotalresponsibilityandaccountabilityfortheoverallprojectanditssuccessful completion.Tosucceed,theprojectmanagermustworkcloselywiththesponsor,the team,andotherkeystakeholderstoensureadequateplansareputinplaceforallaspects oftheproject,including(butnotlimitedto)resources,funding,riskmanagement, communications,schedule,andchangecontrol. Insomecasesonreal-worldprojects,theprojectmanagermaynotbeassignedto theprojectuntiltheplanningorevenexecutionphase(aftertheprojecthasstarted),in whichcasetheremaybeahandoffororientationmeetingtobringthePMuptodateon theagreementsmadeduringtheinitiationphase.Inthesecases,theprojectmanagermust thoroughlyreviewallthematerialspreviouslycollectedorcreatedaswellasensurethey
Chapter4: ProjectIntegrationManagement arereasonableinscopeanddeliverycapabilitiesandareapproved.Onceapproved,and allprojecthistoryandcurrentstatushavebeenreviewed,thePMmustthenfinalizethe projectmanagementplandevelopment.
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Plan the Work
InChapter2,Imentionedthe“Ready,fire,aim”dilemma.Thisisthestagewhereyoucan avoidthisdilemma.Planningtheworkoftheprojectwillhelpensureasmoothproject. Therearefartoomanyvariables—thustheimportanceofplanning. Considerthefollowing:YourbosscomestoyouonMondayandsays,“Youarethe newprojectmanagerofasoftwaredevelopmentprojecttocreateatrackingsystemfor downloadsfromtheEZtrackmusic.comwebsiteandyouneedtodelivertheprojectplanto thesponsoronFriday.”Whatisthefirststeptogetyoustarted? ThisisagreattimetobeginthefirststepoftheAIMstrategy:
1.Analyzethesituation,includingwhatneedstobedone,targetdates,limitations,and
possibleroadblocksandbarriers.
2.Lockinapreliminaryplanfirstattheteamlevel.Agoodapproachistouseachecklist
(suchasthe“SampleChecklistforPMManagementPlanDevelopment”shownnext.)
3.Thentaketheplanforwardforreviewandvalidationbythekeysponsors/stakeholders.
Onceapproved,younowhaveaplantoworkfromforyournewproject.
Sample Checklist for PM Management Plan Development ThefollowingsamplechecklistcanbeusedtoassistintheDevelopProjectManagement Planprocess(notethatmanyofthesestepsarealsoincludedintheprojectjumpstart checklist):
1.Developadetailedprojectmanagementplanwiththeassistanceoftheprojectteam.
2.CreateaWorkBreakdownStructure(WBS),OrganizationalBreakdownStructure
(OBS),andRiskBreakdownStructure(RBS)withassistancefromtheprojectteam.
3.Developorassistinthedevelopmentofascopestatement,projectschedule,and
communicationsplan.
4.Createapreliminaryriskmanagementplan(includingownersandcontingencyplans)
andcostbenefitanalysis(asappropriate).
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5.Createaprocurementplan.Thisplanwillvarydependingonorganizationalstructure
(forexample,acentralizedprocurementdepartmentversusadecentralizedprocurement department,wherethePMhasmoreinvolvementandcontrol).
6.Developtheprojectbudget,assumptions,exclusions,andthetrackingandreporting
plan.Notethatitisimportanttoidentifyanddocumentthetypeofestimateused(for example,orderofmagnitudeordefinitive).
7.Obtainmanagementcommitment,adocumentofunderstanding(DOU),statementof
work(SOW),orcontractor(vendor/supplier)agreementforkeyresourcestoclearly statetheworktheyareexpectedtoperform.
8.AssignresourcestotheprojectandassignworkpackagesfromtheWBStospecific
teammembers(resourceplanorresourceassignmentmatrix[RAM]).
9.Approveprojectqualitymanagementprocessesandprocedures,measurementsand
trackingformat,andreportingfrequency.
10.Developabaselineandobtainapproval(baseliningtheplanmeanstoestablishastarting
pointorapointofreferenceforcomparingagainstforchanges). Oncetheseitemsarecomplete,asthePMyoumustprovidecleardirectionand ongoingmanagementoftheprojectmanagementplan.Itisallaboutplanningthework andworkingtheplan.Theplanalsoservesasaguidetohowyouareplanningtomanage thedifferentaspectsoftheproject.
Case Study: Example of a Project Management Plan InthecaseoftheBEC(BudweiserEventsCenter),theirprojectmanagementplanisthe “EventDataSheet,”whichiscreatedbytheEventManagerusingastandardprocess andtemplatethatclearlydefineshowtheprojectistobemanageddowntothefollowing items: ●
Theschedule(includingeventdate,setupdate,soundcheck,anddoorsopentimes)
●
Contacts(includingpromoter,tourmanager,productioncontacts,operationsmanager, media/PRmanager,boxoffice,finance/HR,concessions,andcatering)
●
Boxofficeinformation(includingattendance/seatingandtickethandling)
●
Staff(numberofsupervisors,numberofstaffneededforeachcategory—sound/lights, runners,receptionists,cleaning,video,pyroshooter,andsoon)
●
Firstresponders(locallawenforcement,emergencymedical,firedepartment)
Chapter4: ProjectIntegrationManagement ●
Security(includingparkinglot,entrances,loadingdock,anddressingrooms)
●
Parkinglotmanagement
●
Concessions/catering
●
Setup(stadiumseating,stage,tables,dressingrooms,andsoon)
●
Showproduction(trucks,buses,food/beverage,stagehandlabor,andsoon)
●
Miscellaneous
ThestandardformatandflowoftheEventDataSheetoffersconsistencyinhow eventswillbemanagedregardlessofthetypeofevent.Fromthecustomer’spointofview, themeasureofsuccesswillbewhethertheprojectiscompletedontime,withinbudget, andatanacceptablelevelofquality.
Develop Project Management Plan Inputs, Tools and Techniques, and Outputs AccordingtothePMBOK,inputstotheDevelopProjectManagementPlanprocessareas follows: ●
Projectcharter
●
Outputsfromthepreviousplanningprocesses
●
Contract
●
Enterpriseenvironmentalfactors
●
Organizationalprocessassets
Thetoolandtechniqueforthisprocessisexpertjudgment,andtheoutputistheactual projectmanagementplan. Don’tbefooledbythesingletoolandtechniqueandoutputforthisprocess, becausetheprojectmanagementplanisessentialtothesuccessoftheprojectandisa compilationofallthekeycomponentsoftheproject.Theprojectmanagementplancan beafairlylargedocumentwithmanyvolumesoritcanbesmallinsize,dependingon thecomplexityoftheproject.ThePMplanshouldbeusedtoguidetheexecutionofthe project.Itwillbethefirstplacesomeone(suchasanewteammemberoranauditor)goes tounderstandtheprojectandhowitistobemanaged.Thecopies/filesshouldbedate stampedandclearlymarkedwithaversionnumbersothereisnoconfusionoverwhichis thelatestversiontobeusedforreferencebythePMandtheteam.
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PMPCertification:ABeginner’sGuide TIP The project management plan should be used early and often throughout the project life cycle. It should be a “working document” and readily available in a centrally located file cabinet or an electronic team room (such as a Wiki or SharePoint location). It is extremely important to keep the document up to date and accurate without multiple versions. The rule of thumb is to keep the current and previous two (v-2) versions for reference.
3. Direct and Manage Project Execution Process Thisiswheretheactualworkexecutionbegins.Thebulkoftheprojectbudgetisspent duringthisphaseoftheproject.Asprojectmanager,youneedtoexerciseyourleadership skillsandputthemintoaction.Beproactivelyinvolved,constantlylookingforways tokeeptheteamfocusedonthedeliverablesoftheproject.Providecleardirection.Be availabletotheteamandensuretheyhavethetoolsnecessarytodotheirjob.Ensure schedulesarebeingmet,andworkthedetailsoftheprojectplantoanticipatebreakdown orrisks,suchasmissedhandoffs.Forexample,youshouldbeawareofdependencies wheresomeoneneedstoprovideinformationorworkproductstoallowtheproject “assemblyline”tocontinueoperating. Theprojectmanager,alongwiththeteam,directstheperformanceoftheplanned projectactivitiesaswellasmanagesthevarioustechnical,operational,andorganizational interfacesthatexistwithintheprojecttoachieveprojectobjectives.
Project Execution Activities Checklist Duringtheprojectexecutionphase,itishelpfulfortheprojectmanagerandprojectteam toperformtheirworkinanorganizedfashion.Asalways,agoodwaytobeginiswitha checklistofkeyactivities.
TIP Notice that the action words (verbs) change during the execution phase (perform, maintain, manage, and review) when compared to the earlier initiation phase (develop, create, and assign). In most cases, the verbs will change during each phase of the project life cycle.
Thefollowinglistincludessomekeyactivitiesthatshouldbeconsideredwhen executingtheworkofyourproject(notethattheorderofactivitiesmaychangedepending ontheneedsofyourproject):
1.Performactivitiestoaccomplishprojectrequirementsanddeliverables.
2.Createprojectdeliverablesperapprovedrequirements.
3.Implementtheplannedmethods,processes,andstandards.
Chapter4: ProjectIntegrationManagement
4.Maintaintheprojectmanagementplanandoutputdocumentsfromotherprocesses.
5.Managerisksandmakesureanownerisassignedtoeachofthehighest-priorityrisks.
6.Workwithriskownerstoensuremitigationplansandresponseactionplans/procedures
areinplaceandbeingmonitoredaswellasmanagedshouldtherisksoccur.
7.Maintainstafflevelsandtechnicalproficiency,providingtrainingandmentoringwhere
needed(includingsellers,vendors,andsuppliers,asappropriate).
8.Manageproductivityandthescheduletoensuretheworkisbeingdoneontime.
9.Managecommunicationwithallstakeholders,includingtimelyandaccuratereporting.
10.Manageday-to-dayactivitiesandprovidecleardirectiontoteammembers.
11.Reviewprojectstatus,comparingbudgetedcoststoactualcostsandthevalueofthe
workperformed(EarnedValueanalysis)onaregularbasis(weeklyisrecommended).
12.Managethescope,budget,andscheduleandupdatethembasedonapprovedchanges.
13.Makerecommendationsandadjustmentsasneededtoimprovetheproject.
14.Managequalityresultstoensurecompliance.
15.ManagethechangeprocessandparticipateintheChangeControlBoard(CCB)to
approveproduct/projectchanges.
16.Documentlessonslearnedandimplementapprovedprocessimprovements.
Direct and Manage Project Execution Inputs, Tools and Techniques, and Outputs Theinputs,toolsandtechniques,andoutputsfortheDirectandManageProjectExecution processaredetailedinTable4-1.
Inputs
ToolsandTechniques
Outputs
Project management plan
Expert judgment
Deliverables
Approved change requests
Project Management Information System (PMIS)
Work performance information
Enterprise environmental factors
Change requests
Organizational process assets
Project management plan updates Project document updates
Table4-1
Direct and Manage Project Execution Inputs, Tools and Techniques, and Outputs
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PMPCertification:ABeginner’sGuide Clearlydefinedprocessesandafirmunderstandingofinputs,toolsandtechniques,and outputsaregreat;however,intherealworldofprojectmanagement,somethinginvariably getsintheway—timeorcostconstraints,resourceturnover,skillsorexperiencelimitations, misguided(ordistracted)projectsponsorswithunrealisticexpectations,riskevents,andso on.Therefore,managingprojectsintherealworldissometimeseasiersaidthandone.
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Sky’s the Limit: Pet Projects Are Out of Scope
Youareaseasonedprojectmanagerforaninternationalproject,andtheprimarysponsor (director)isagoodpersonwhoknowsalotabouttheproject.However,hehashis own“pet”sub-projectthatisnotfundedandisoutsidethescopeoftheprojectyouare managing.Thedirectorhasaskedyoutowriteaproposaltogetfundingforhispetproject andhewantsitcompletedASAP.Youarefullycommittedrightnowforyourin-scope deliverablesandyoupolitelyexplaintohimthathisrequestisoutsidethescopeofyour project.Thedirectorgetsveryupsetandsaysyouarenotateamplayer.Howdoyou handlethesituation?
A. Writeuptheproposaltoproveyouareateamplayerandtogethimoffyourback.
B. Holdyourground(befirm)inyourpositionandremindhimthathisrequestisnot
partofthefundedprojectandyouwillnothavetimetoworkonhispetproject.
C. Negotiatewiththedirectorandtellhimyouwillwritetheproposal;however,you
needmoretimeontheoriginalprojectfromhiminreturn.
D. Tellthedirectorthathisplantogetadditionalfundingisagoodideaandyouwill
behappytoassistintheproposalwhentimeallows;however,hisrequestneeds togothroughtheapprovedchangecontrolprocesstoassesstheimpacttothe fundedproject. Answer:Disthebestanswerinthiscase.However,thisiseasiersaidthandone,because thedirectorcanimpactyourcareerandyourfuturebytellingothersyouarenota“team player”orevenfiringyou.Unfortunately,thissortofthinghappensoccasionallywhen oneplaysbytherules. Ifallprojectsponsorswereeasytoworkwithandstucktotheapprovedscope statement,anyonecouldbeaprojectmanager.Attheendoftheday,youhavetostand firmonmanagingscopeandfeelthatyouaredoingtherightthing—whichsometimes meansupdatingyourresumeandbeingpreparedforachange.
Chapter4: ProjectIntegrationManagement
4. Monitor and Control Project Work Process TheMonitorandControlProjectWorkprocessinvolvestracking,reviewing,and regulatingtheprogressofprojectactivitiesnecessarytomeetperformanceobjectives definedintheprojectmanagementplan.Thisprocessneedstobeimplementedearly duringplanexecutiontoensuretheprojectisontrack.Manytoolsandproceduresare availabletoassisttheprojectmanagerandteamwiththisprocess. ThePMmustconstantlykeepaneyeontheproject,teamperformance,change requests,theissuesandconcernsthatsurface,andtheriskeventsthatoccurtoensurethe projectisundercontrol.ThefollowingisasimplelistofsomeofthethingsthePMneeds towatchforduringtheMonitorandControlProjectWorkprocess: ●
Monitoringandcontrollingthequalityofthedeliverablesoftheproject
●
Comparingtheactualprojectperformanceagainsttheapprovedprojectmanagementplan
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Assessingperformancetodetermineifcorrectiveorpreventiveactionsareneeded
●
Monitoringrisksandidentifying,analyzing,andtrackingnewones
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Maintainingtimelyandaccuratestatusreportsandupdatestotheinformationsystem (includingup-to-datedocuments,versioncontrol,andauditreadiness)
●
Providingaccurateforecaststoupdatethecurrentcostandschedule
●
Monitoringtheimplementationofapprovedchangesastheyoccur
Asfortheinputs,toolsandtechniques,andoutputsofthisprocess,thereareonlya fewdifferencesfromthepreviousprocess,andtheyarelistedhere: ●
Inputs Projectmanagementplanandperformancereports,suchascurrentstatus, accomplishments,scheduledactivities(anyoverdueorcoming-dueactivities?),open issuesthatmayimpacttheproject,and,ofcourse,forecasts(areyouontrack?).
●
ToolsandTechniques Expertjudgmentisusedtointerprettheinformationprovided bytheMonitoringandControllingprocesses,andthePM(incollaborationwiththe team)determinesanyactionsrequiredtoensuretheprojectperformancematches expectations.
●
Outputs Theoutputsforthisprocessfocusonchangerequestsandupdatestothe projectmanagementplanandotherdocuments,asneeded.
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TryThis
Keeping Your Eyes Wide Open: Accurate Progress Reporting
Aprojectteamlead(Joey)hasreportedforthelastthreeweeksthatheis85percentcomplete ona“testscript”workpackagehehasbeenworkingonfortheapplicationtestgroup.It appearsthereiseithernoprogressonthisactivityorJoeyhasfailedtoaccuratelyupdate hisreport.However,whenaskedaboutit,hereplieswithadefinite“Yes,progressisbeing madeandIamonschedule,”whichshouldmeanabout98percentcompletion.Thetestgroup lead(Mary)saysshehasnotseenanyprogressonthetestscriptandthatthisactivityisonthe criticalpathoftheprojectandwillaffecttheenddateifnotprovided.Whatdoyoudo?
A. RequestthatJoeyshowyouthetestscriptandhand-carryitwithJoeytothetest
grouptoverifyitisusablefortheupcomingtestsequence.
B. AskJoeytoupdatethestatusreporttoaccuratelyreflectthe98percentcompletion.
C. WorkoutthedetailswithJoeyone-on-oneandthenscheduleacheckpointmeeting
withallappropriateteammemberstoverifythecurrentstatusofthescriptandits readinessforhandofftoensuretherearenosurprises.
D. LetitgobecauseJoeyknowspeopleinhighplacesandyoudon’twanttorock
theboat. Answer:C.ItisbesttoworkoutthedetailswithJoeyfirstandthengetwiththe appropriateteammembers(especiallyforactivitiesonthecriticalpath)tohelpensure properprogressofactivities,accuratereporting,andasmoothhandoffofdependenciesto meettheprojectschedule.
OneofthekeyoutputsmentionedduringtheMonitorandControlProjectWork processis“changerequests.”Changerequestsmayincludethefollowing: ●
Takingcorrectiveactiontoresolveaproblem.
●
Takingpreventativeactiontoavoidaproblem.
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Repairingadefectinaprojectcomponent.(Theactiontakenmaybetorepairor replacethecomponent.)
5. Perform Integrated Change Control Process ThePerformIntegratedChangeControlprocessinvolvesreviewingallchangerequests aswellasapprovingandmanagingchangestotheprojectdeliverables,organizational processassets,scope,projectdocuments,andtheprojectmanagementplan.Thechange
Chapter4: ProjectIntegrationManagement process(liketheriskmanagementprocess)shouldbeconductedearlyandoftenthrough theprojectlifecycle.
Process Activities Thisprocessincludes,butisnotlimitedto,thefollowingchangemanagementactivities: ●
Ensuringachangemanagementsystemisinplacetoreview,analyze,andapprove changerequestsinatimelymanner(includingarequestform,log,andworkorder).
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Identifyingthepeopleauthorizedtorequestandapproveprojectchanges.
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Ensuringonlyapprovedchangesareimplemented.
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Managingandenforcingthechangecontrolprocess.
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Coordinatingchangesacrosstheentireproject.(forexample,aproposedschedulechange willoftenaffectcost,risk,quality,andstaffing.)
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Documentingandcommunicatingthecompleteimpactofchangerequests.
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Updatingappropriatedocuments,deliverables,andactivitiesbasedonapproved changes.
Importance of Change Control (Be Stubborn on Change) Ilovetousethequote“Changeisinevitable,exceptfromavendingmachine”(unknown source)whenteachingmyPMclasses—itisalwaysgoodforalaugh(exceptinsome countrieswhereitislostintranslation).Oneofmystudentsevengavemeaplacardwith thisquoteonit,whichIprominentlydisplayforalltosee(inmyhomeoffice). Changehappens,andasaprojectmanageryoucan’t“justsayno.”Instead,you mustbewillingtoacceptchangebecauseitisreal—andsometimesitcanevenbenefit theproject,resolveregulatoryrequirements,orenhancethefinishedproduct(aslong asthechangeisapprovedbytheappropriatestakeholders/sponsors).Changecontrolis bestmanagedwhenyouhaveaclearlydefinedprocessandanidentifiedChangeControl Board(CCB)withauthorizeddecisionmakerstoreviewandvoteonrequestedchanges. Thisprocessfocusesonfirsthavinganapprovedchangeprocess.Theprocessinvolves thecollectionofchangerequests,loggingandreviewingallchangerequests,analyzing thepotentialimpacttotheproject,obtainingproperacceptance(ordeferral/rejection)of thechange,andlast,makingsureyoudocumentandcommunicatechanges.Remember, changetendstohavearippleeffecttotheprojectdeliverables,organizationalprocess assets,projectdocuments,andtheprojectmanagementplanitself.
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Changesthatimpacttheproject’sconstraints(andmayincreasecost,time,orscope).
●
Dailyoperationalchanges,suchasshiftcoverage,materialadjustments,andsoon, thatmaynotimpacttheoverallproject’scost,schedule,orscope.
TIP All changes should go through a change control system—especially anything that potentially impacts the project’s scope, cost, or schedule. All changes must be reviewed and approved prior to implementation. In the real world, many project managers have a certain amount of authority in making daily change decisions without going through the full-blown change process. This can be risky, though—depending on the size, type, and complexity of the project; the criticality of the project; as well as the trust and confidence in the project team.
Change Control System Thebestwaytomanagechangeistoestablishachangecontrolsystem(anelectronictool ordatabaseisrecommended)tomoreeasilydocumentchangerequests,logandtrackthe changerequests,anddocumenttheresponseactiontotherequests.Thissystemdoesn’t havetobeelaborateorexpensive;itcanbesimpleandshouldincludeatleastthesethree components: ●
Arequestform(keepitsimple—aone-pagerequestformintheprojectteamroom)
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Trackinglogwithresponse(canbeanordinaryspreadsheet)
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Workorder(requirements,direction,responsestrategy,guidance,andback-outplan) Responseactionsinthetrackinglogaretypicallyoneofthefollowing:
●
Accept
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Reject
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Defer(postpone)
TIP The most important action for all changes is to document and communicate the response. The response action/status should go first to the requestor, then to the team so that everyone is crystal clear on the request and the response.
Chapter4: ProjectIntegrationManagement Also,inthechangemanagementprocessitisgoodtohavecategoriesorprioritiesof changeswithanapprovedresponsetime.Here’sanexample: Urgency: ●
1=Emergencychange Forexample,one-to-four-hourfixrequiredifsomethingis brokenandimpactsahighnumberofusers.Thiscouldbeasystemoutage,down network,out-of-servicetrain,andsoon.
●
2=Normalchange Forexample,three-to-five-dayresponsetime,withaccepted solutionorworkaround(temporaryfix).
Itisalsoimportanttotracktheresultsofachangetodeterminewhetherornotitwas successful.Ifitfailed,howwilltheresultsbetrackedandreported?(Usually,resultsare recordedinastandardtemplateandreportedweeklyoratleastmonthlywithactionplans andfutureplannedchangeactivity.) Theonlywaytoeffectivelymanagechangeistohavearegularlyscheduledchange controlmeeting(usuallyweekly;themeetingcanbecancelledifnochangerequests aresubmittedforthechangereviewperiod).Youshouldidentifykeyrepresentatives (authorizeddecisionmakersandSMEs)inthemeetingtovoteonthechangerequestsand toidentifypotentialrisksorconflictsifchangesareapprovedforimplementation.
TIP A single change may not pose a serious risk to the project; however, when coupled with or installed out of sequence with other changes, it could fail or cause other things to fail. Also, when unauthorized changes are forced into the system, they can catch you by surprise. If they are installed without going through the proper review and approval channels, this is a recipe for failure.
TryThis
Having a Crystal Ball: Fix It Before It Breaks
YouarethePMonasoftwareapplicationdevelopmentprojectandtheITmanager(Bob) comestoyouwitharequestfortheinstallationofanewsoftwareproducthejustread aboutinatradejournal.Bobissoimpressedwiththisproduct—the“FixItBeforeIt Breaks”(FIBIB)Wizard—thathewantsitinstalledon500laptopsbeforetheendof nextweek. Thenormalchangeprocesstakesatleasttwoweeks,butBob,whohasbeenagood friendandcustomer,isaskingyoutoexpeditethechangebecauseitwillmakehimahero withhisendusers(customers).Whatdoyoudo?Takeafewminutestoformulateyour responseandthenlookatthefollowinganswer. (continued)
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PMPCertification:ABeginner’sGuide Answer:Politelysitdownandsay,“ToensureIgettherequestaccurate,let’sfilloutthe requestformtogether.Itwilljusttakeafewminutes,anditwillgivemethespecificsto ensurewegetthisright.Wewillalsoneedtodiscussthelevelofurgencybecausethe changewillneedtogothroughtheemergencychangeprocess.” AfterreviewingtheprioritywithBobandquestioninghimonmanagementapproval, Bobdecidednottosubmittherequest.Thiswasagoodthingbecauseitturnedouthe didnothaveapprovalfromhismanagertorequestthechangeandthesoftwareproduct requestedwas“beta”(stillbeingtestedandnotyetavailabletothegeneralpublic). Themoralofthestoryis ●
Followthechangeprocess,and
●
Askquestionstofullyunderstandtheimportance,levelofsponsorshipfrommanagement, andlevelofpriorityofallchanges.
Perform Integrated Change Control Inputs, Tools and Techniques, and Outputs Thekeyinputstothisprocessaretheprojectmanagementplanand,ofcourse,change requests.Thetoolsandtechniquesarethepeople(expertjudgment)andthechangecontrol meetings.Outputsarethestatusofthechangerequestaswellasupdatestotheproject managementplanandupdatestootherprojectdocuments.
Ask the Expert Q: Whoisresponsibleforturningoutthelightsandclosingthedooronaproject? A: Thejanitor,right?Well,thatwouldbethePM.And,likeawarrantyperiodonanewproduct, aprojectshouldhaveasettimeperiodforclosingdown,evenafterthelightsareturnedout andyouthinkthedoorsareclosedandlocked.Thisperiodoftimeallowsforanyresidual chargesordelayedbillings(invoices)thatcancomeinaftertheprojectiscomplete.Timeis neededtocompileandreportfinalperformanceandaccomplishmentstoensureassetsand peoplehavebeenofficiallytransferred(topayfinalutilitybills,vendorservices,andsuch). Thebestwaytoeffectivelyturnoutthelightsonaprojectandmakesureyoudon’t missanythingistouseaproject“closeout”checklist.Agoodinputtothischecklistis the“startup”checklistyouusedwhenyouinitiatedtheproject(assumingyouhaveone). Closingaprojectislikeopeningitinreverse—buttheclosingphaseshouldbemore completebecauseyouwillhaveidentifiedthingsalongthewaythathavebeenaddedor weremissedduringthestartupphase.
Chapter4: ProjectIntegrationManagement
6. Close Project or Phase Process Closingdownaprojectisasimportantasthestartup/initiationphase.Theclosingphase shouldbehandledasaprojectinitselfandoftentimesisdifficultbecausetheteam membersareawaretheprojectisgoingawayandtheywanttofocusontheirnextproject. Mostprojectteamsstartabandoningtheshiptowardtheendoftheprojectbecausenoone wantstobethelastpersonoutthedoor.Thisattitudemakesitmoredifficulttomanage aprojectduringtheclosingphase. You’llhavenumerousimportantconsiderationstomakeduringtheclosingphaseof aproject,andthefollowinglistrepresentsonlyasamplingofthosethings.Theactuallist youusedependsonthespecificsofyourproject.
1.Determinethetargetedprojectclosedateanddeveloparight-to-leftplanschedule
(backintotheschedulebyworkingfromthemust-finish-on“close”date).
2.Closeoutallopenactionitemsanddevelopactionplansforanyproductdeficiencies,
openissues,andfollow-upactivitiesneededtosatisfytheapproveddeliverables.
3.Createaprojectclosuredocumentandreviewitwiththecustomerandteam.
4.Conductafinalcustomeracceptancemeetingandtakemeetingminutes(distributeand
retainacopyoftheminutes).
5.Obtaincustomerandmanagementformalacceptanceofthecompletedproject(in
writing,ifpossible)andretaintheacceptancedocumentforauditpurposes.
6.Findhomes(newassignments)fortheprojectteammembersandprojectassets.
7.ConductaLessonsLearnedassessmentmeeting(includethecustomer).Notethatyou
shouldbecollectinglessonslearnedthroughouttheproject,notjustatclosure.
8.Closeoutanyfinancialaccountsoraccountingchargecodes.
9.Assistasneededwithanypost-projectdeliveryactivities.
10.Assistpurchasingandcontractadministratorsincontractcloseout.
11.Archiveallprojectdocuments(ensurerecordretentioncomplieswithcompanyand
outsideauditorregulatoryagencyrequirements).
12.Celebratesuccesswiththekeystakeholdersandprojectteam.
Abigdilemmaduringtheclosingphaseisthattheremaybeamountainofdocumentation (paperwork)togothrough,muchofitoldandoutdated.Sohowdoyouhandlethisdilemma?
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PMPCertification:ABeginner’sGuide Theansweris,gettheteamtogetherforacasualdressday,getalargeshredderand fileboxes,andthencarefullygothroughandorganizethedocumentsfilesandsuch(you don’twanttothrowawayimportantpapersandyoudon’twanttokeepolddocuments thathavebeenreplacedorupdatedwithnewerversions).Thisiswhereelectronicstorage mediacomesinhandybecauseitissmallandeasytostore.
TryThis
Pass the Shredder: Closing the Project Is So Therapeutic
Dougisoneofyourleadprojectcoordinatorsonaten-monthproject.Therewerea numberofproblemsonthisproject,andtheteamwaspushedhardtocompleteontime andonbudget—whichtheydid.Afterthecelebrationlunch,yougobacktoyouroffice feelingprettygoodaboutthesuccessfulcompletion—andthereisDougshreddingallthe projectdocuments.Youstophimandask,“Whatareyoudoing?”Dougsmilesandreplies thatheisclosingdowntheprojectbyshreddingtheprojectdocuments,andthatitfeels verytherapeutic.Whatdoyoudo? Takeaminutetoformulateyourresponseandthenlookatthefollowinganswer. Answer:Youstophimimmediately,collectallthedocumentsfromDoug,determine whichwereshredded,andtrytorecapturethemfromsoftcopy(orothersources)toensure allkeydocumentsareretainedforauditpurposes.YouinformDougthatthelatestproject documentsmustbestoredinasafeplacetoensureyoumeetrecordretentionandother businesscontrolandauditrequirements.
Inmyexperience,closingtheprojectisonephasethatisoftenneglected.Youshould planforclosingtheprojectatthebeginningoftheproject.Thatiswhatprojectintegration isallabout—lookingacrosstheentireproject(chartertoclose)andplanningadequate timeandresourcesfortheall-importantclosingphase. Thebiggestfactorthatmaynegativelyimpacttheclosingprocessiswhentheproject wasnotclearlydefinedinthefirstplaceormayhaveexperiencedsignificantoruncontrolled changes.Inmanycases,theprojectwasnottrulyaprojecttobeginwith(forexample, on-goingoperationsorprograms).Ifyourprojectseemstobeneverending,youmightwant togobacktothebasicdefinitionofaproject(definiteenddate)andseeifitstillmeetsthe criteria. TheclosingphaseofprojectsisgenerallywherethegapbetweennoncertifiedPMs andcertifiedPMPsisthewidest.Ournaturalinstinctstendtobetowrapuptheproject
Chapter4: ProjectIntegrationManagement asitends.Oftenweforgetaboutthelengthoftherunwayneededtogracefullyshut downthesystems,closethefinancialaccounting,conductLessonsLearnedmeetings, makearrangementsforrecordretentionstorage,andmostimportantly,obtainthe“formal acceptance”(signofffromthesponsororcustomer)oftheclosingphaseoftheproject. Chapter13providesmoredetailsoneffectiveprojectclosure.
References
1.Wikipedia,http://en.wikipedia.org/wiki/Methodology
2.CVR/ITConsultingLLC,http://www.cvr-it.com/PM_Templates/
3.ProjectCharterLitetemplatefromCVR/ITConsultingLLC
4.BruceTuckman’smodelonteamdevelopment,
http://www.infed.org/thinkers/tuckman.htm
5.ProjectManagementBestPractices.ProjectStart-Up:TheProjectKick-offMeeting,
http://oa.mo.gov/itsd/cio/projectmgmt/PDF/Chapter4V3-1.pdf
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Chapter
5
Project Scope Management
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KeySkills&Concepts ●
Theimportanceofscopestatements
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Takingmeetingminutestoimprovecommunications
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Howtomanagescopeonyourproject
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Whoownsandshouldprovideprojectrequirements
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Theimportanceofclearlydefineddocumentedrequirements
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Thefivescopemanagementprocesses
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Scopecreepandscopeleap
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CreatingaWorkBreakdownStructure(WBS)
●
Projectcompletioncriteria
A
stheprojectmanageronalargeprojectmanyyearsago,Iwasconductingakickoff meetingandpresentingthescopestatementtotheteamwhentheprojectexecutive (PE)sponsorspokeupandsaid,“Holdon!Scopeisamouthwash,andwedon’ttalkabout ittothecustomer!”Hewentontosay,“Whateverthecustomerwants,aslongastheyare willingtopayforit,theywillgetit.”Knowingtheimportanceofscopemanagement,I cringedandhadthefeelingofbeingonashipthatwasrollingonveryhighwaveswithno signoflandinsight. MyresponsetothePEwasabitabruptwhenIstated,“Scopeisnotamouthwash, and,yes,wedoneedtotalkaboutit.”ThePEsaid,“Ifthecustomeriswillingtopay,we willdowhatevertheyask.”BecauseIdidn’twanttomakeasceneinfrontoftheteam, Ichosetoeaseupandapproachhimlater(oneonone).WhenIspoketohimaboutthe importanceofscopemanagement,hewouldn’tbudge.Itwashiscustomerandhisproject afterall,andhehadthefinalword.Hewastheboss,andthebossmaynotalwaysberight, butthebossisalwaystheboss,right? ThePE’sdecisionmadeitpainfullyclearthescopeoftheprojectwasgoingtobe wideopen.Thenextstepwastotakeadeepbreathandlookatthepotentialimpactto theproject,theteam,andthecustomer.Forabriefmoment,mygutwassaying,“Update yourrésuméandmoveon!”However,projectmanagersarenotquitters.Asateamwe
Chapter5: ProjectScopeManagement pulledtogetherandperformedanimpactanalysisbasedonthenumberofrequestsalready receivedfromthecustomer.Basedontheseresults,Imadethedecisiontoseekoutand obtainatemporarychangemanagementtool(database)andcalledameetingtoimplement acontrolprocesstotrackthechangerequests. Inthechangemeeting,weintroducedaverysimple(three-step)changeprocess tothePE,thecustomer,andtheteam.Everyoneagreedtheprocesswasneeded,and weeklymeetingstoreviewandapprovechangeswouldbeimplementedtohelpmanage theprocess.Wecapturedtheminutesofthemeeting,whichincludedalistofattendees, detailsoftheprocess,andformalapprovaltoimplementthechangeprocess.Theminutes werecommunicated,distributed,andpostedinanelectronicteamroomfolder,andthe approvedprocesswasimplementedimmediately. Atfirstthechangeprocesswasalittledifficultforeveryonetogetusedto,butall agreedthatitwastherightthingtodo.Beforelongitbecameahabit. Asexpected,thechangesdidflow,andattheendofthefirstthreemonthsofthe project,wehad40pagesofrequestsinthetrackinglog.Icalledanothermeetingand raisedtheredflagastotheimpactontheteam,thedelayscausedbythehighnumberof changes,andtheadditionalcostintermsofpersonhourstokeeptrackofallthechange requests.ThePEacknowledgedtheneedforadditionalresourcesandbroughtinafulltimechangecontrolagenttomanagetherequests.Thathelped;however,thePMand projectteamweredistractedwithallthechangesthatcontinuedtocomein,andsoonthe projectscheduleslippedandcostssoared. Attheendofsixmonthsthecustomer’schieffinancialofficer(CFO)raisedabigred flagtothechiefexecutiveofficer(CEO)ontheadditionalcost,whichturnedouttobe30percenthigher(severalmilliondollars)thantheoriginalapprovedbudget.TheCEOcalled foranindependent(external)audit.Theprojectteamwasinterviewedextensivelybythe auditors,andthechangeprocessandminutesofmeetingswerereviewedaswell.The biggestsavinggracewasthefactthatwehadadocumentedandapprovedchangecontrol processthatwasbeingmanagedandenforced.Becauseofthisfinding,theauditorsruled infavoroftheprojectteam.Asaresultofthefinding,thecustomerCEOmadesignificant changesandsettightercontrolsoverwhocouldrequestandapprovechanges.Thenumber ofchangeswentdownbyover60percent,allowingtheprojectsupportteamstofocuson theplannedactivitiesoftheproject,andmosteveryone(exceptthemanagerscreatingall thechanges)livedhappilyeverafter. Wenotonlyrealizedtheimportanceofchangeandscopemanagement,butalsothe importanceofkeepingmeetingminutes.Theminutesfromthemeetingintroducingthe changeprocesssavedtheday!
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PMPCertification:ABeginner’sGuide TIP To help ensure proper focus on and response to important documents such as minutes to meetings, I highly recommend using the following closing statement for meeting minutes and other important communications: “If any information is misstated or omitted in this document, please reply with corrections or suggestions within seven business days. No response implies acceptance of this document as written.”
Definition of Scope Management Scopemanagementinvolvestheprocessesofdefininganddocumentingallthework(and onlythework)requiredtosuccessfullycompletetheproject.Scopeistheessenceofthe project—itdefineswhattheprojectisallabout,thedeliverablestobeprovided,andthe foundationonwhichtheteambuilds.Oncethescopeisdefinedforyourproject,itshouldbe documentedinaprojectscopestatement,whichisanarrativedescriptionoftheobjectives andpurposefortheprojectaswellasthespecificbusinessneedorproblemtobesolved. Thedocumentshouldclearlystatekeycontacts,keymilestones(majorevents),theproject targetcompletiondate,andsoon.Thenextstepismanagingwhatisincludedandnot included(exclusions)intheprojectscopestatement.Thelastandmostintensivepartofscope managementistheactofconstantlycheckingtoensurealltheworkisbeingcompletedand managedeffectivelytoensuretheintegrityoftheapprovedscopeoftheproject.
What Are Project Deliverables? Deliverablesaretangibleproducts(usuallystatedatahighlevel,suchasmilestones)that theprojectwillproduce.Theydescribewhatthecustomerorprojectsponsorwillgetat keyintervalsandwhentheprojectiscomplete.Theyalsostateexclusions,orwhatwill notbeincludedintheproject.[1] Table5-1providessomeexamplesofprojectdeliverables.
Ask the Expert Q: Whatisthebestwaytomanagescopeonaproject? A: Oncescopeisverified,thebestwaytomanagescopeisthroughanagreed-upon, documented,communicated,andenforcedchangecontrolprocess.
NOTE Regular change control meetings (I recommend weekly) are essential to allow the PM and team to stay focused on scope, risk, and other key aspects of the project.
Chapter5: ProjectScopeManagement
Includes:
Design of a new service. Specifications for a new automation. A feasibility study for a product or project. A customer-level procedures manual. A user’s guide or training manual. A new voice response system for a call center. Installation of standard lighting and sound equipment for the concert event.
Excludes:
Implementation of the new service. Implementation of the feasibility study recommendations. The user’s guide will not be available in other languages (English only). Training material will not be provided in printed form (electronic form only). Maintenance or on-going support of the new system. No “backline” equipment for the concert will be provided without advance reservations.
Table5-1
Examples of Project Deliverables
Project Completion Criteria Projectcompletioncriteriamaybelistedbyprojectphase,byfunctionaldepartment,or asamilestone.Thecriteriashoulddescribewhatwillbecreatedintermsofdeliverables andtheircharacteristics.Itshouldalsodescribewhatwillconstituteasuccessfulphase completion. Thescopestatementshouldcontainclearlyexpressedcriteriaforsuccess,describing quantitativelywhatmustbeaccomplishedatthecompletionoftheproject.Agoodrule ofthumbistohavefourtoseven(maybemoreonalargeproject)conciselydocumented criteriapresentedina“priority”listortableshowingtheexpectedresultsoftheproject.
Case Study: Sample Completion Criteria Let’stakealookatourcasestudyfortheBudweiserEventsCenter(BEC)andexaminea concerttodetermineprojectcompletioncriteria.Wefirstlookatthescopeoftheproject andlistouttheitemsthat,ifdoneproperly,willconstituteasuccessfulproject. TheBEC-assignedeventmanagerusesanEventDataSheet(EDS)todocumentthe detailsofthecontract.Oncecompleted,theEDSservesastheprojectplan.Inthiscase theEventDataSheetservesthesamepurposeoftheprojectscopestatementandoutlines allthemajorsupportgroupactivitiesthatapplytotheevent.TheEDSalsooutlinesall
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Priority Criteria
MeasureofSuccess
Owner
1
Conduct a safe and secure event.
No injuries and no incidents on premises or in parking lots.
Event Manager & Director of Operations
2
Meet or exceed financials.
Hit targeted box office and sponsorship sales Director of and stay within approved budgets. Marketing
3
Provide excellent service Client receives 8 or higher (on a 1–10 scale) as host to concert on guest response surveys. promoter and guests.
All staff
4
Meet or exceed facility and equipment objectives.
No performance interruptions due to equipment or facility failure, and quality sound and lighting effects.
Operations Manager
5
Meet or exceed concession and merchandise sales.
Concession and merchandise sales to meet per-capita targets.
Concession and Merchandise Manager
Table5-2
Sample of BEC Project Completion Criteria
theworkthatmustbedone,whenitshouldbedone,andbywhom(subprojectowners areassignedtoensureaccountability).Asyoucanseeinthiscase,asingledocumentcan servemanypurposes. Thebestwaytodocumentcompletioncriteriaistolookattheworktobedoneand thenpickthetopdeliverablesasmeasuresofsuccess.Reviewthesewiththecustomer andprojectsponsorandonceapprovedtheybecomeyourapprovedcompletioncriteria. Table5-2providessampleprojectcompletioncriteriaforBEC.
Project Scope Management Processes FiveprocessesareincludedintheProjectScopeManagementknowledgearea: ●
5.1:Collectrequirements(Planningprocessgroup) Theprocessofdefiningand documentingstakeholderneedstomeetprojectobjectives
●
5.2:Definescope(Planningprocessgroup) Theprocessofdevelopingadetailed descriptionoftheprojectandproductoftheproject
●
5.3:CreateWBS(Planningprocessgroup) Involvessubdividingtheprojectinto smaller,moremanageablecomponents
Chapter5: ProjectScopeManagement ●
5.4:Verifyscope(MonitoringandControllingprocessgroup) Theprocessof formalizingacceptanceofthecompleteprojectdeliverables
●
5.5:Controlscope(MonitoringandControllingprocessgroup) Involves monitoringprojectstatusandproductscopeaswellasmanagingchangestothe approvedscopebaseline
Theseprocessesandtheprocessesinotherknowledgeareasinteractwitheachotherand areinterdependent. Itisalsoimportanttorecognizethedifferencebetweenprojectscopeandproductscope: ●
Projectscopeistheworkthatneedstobeaccomplishedtodeliveraproduct,service, orresultwithapprovedspecifiedfeaturesandfunctions.
●
Productscopeisthefeatureorfunctionidentified,designed,andapprovedforthe productthattheprojectistoproduce.
TIP The processes used to manage project scope vary based on the size, type, and complexity of the project and by the applications, tools, and techniques needed to produce the product, service, or result of the project.
1. Collect Requirements Process ThisprocessisoneoftwonewprocessesaddedtothefourtheditionofthePMBOKin December2008.Inmyopinion,thisisoneofthemostimportantprocessesduetothe impactontheprojectifnotdoneproperly. Oneofthebiggestreasonsforprojectfailureisincompleteorinaccuraterequirements. TheCollectRequirementsprocessisoneof20processesgroupedwiththePlanningprocess groupinthePMBOK.Thismeansitshouldbeperformedduringtheplanningphase. Gatheringrequirementscanbeanartforminitself.Becauseofthisandtheimportance ofrequirementstothesuccessoftheproject,Iwillspendafairamountoftimeonthis process.Gatheringandagreeingonrequirementsisfundamental;however,thisdoesnot necessarilyimplythatallrequirementsneedtobefixedbeforeanyarchitectureanddesign aredone,butitisimportantfortheprojectteamtounderstandwhatneedstobebuilt. ThebestplacetostartwiththeCollectRequirementsprocessistofirstlookatthe goalsoftheproject.Thesegoalsrepresentplannedoutputsorresultsofwhatshouldbe accomplishedasaresultoftheproject. Collectingrequirementsshouldinvolvereviewandanalysisofinformationandbusiness/ organizationalneeds.Whatisitthecompanyorgroupneedsdone,andwhatdotheyexpect
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Ask the Expert Q: Whatisthebestwaytocollectrequirements? A: Thebestwaytocollectmeaningfulrequirementsisthroughinterviews.Thetrickistoget
withtherightpeopletointerview.Ifyoutalktothewrongpeople,youmaygetskewed, bogus,orvariedinformationandexpectations,whichwillwastetimeandmoney.Also, interviewshelptoestablishrelationshipsandshowthatyouarewillingtolistenandlearn andthatyoucareaboutthepeopleinvolvedintheproject. Howdoyouknowyouareinterviewingtherightpeopletogatherrequirements? First,makesureyoutalkingtothekeysponsors,endusers,orotherstakeholderswho haveavestedinterestintheprojectresults.Next,makesurethepeopleyouintervieware knowledgeableabouttheprojectandexpectedresults.Onceyouhavetheinputfromkey sponsors/stakeholders,youneedtodocument,communicate,andmostimportantlyvalidate therequirements. Remember,therearemanytechniquesforconductinginterviews.Onetechniquemay workwellonagivendaywithaspecificpersonandmaynotworkforsomeoneelsein anothercircumstance.
attheendoftheproject?Theanswertothesequestionsshouldbethecornerstoneofthe scopeoftheproject.Requirementsshouldmatchthescope,andthescopemustmapbackto theprojectcharter.(Seeatrendhere?).Bynowyoushouldbegettingabetterfeelforhow oneprocesslinkstothenextandmorefullyunderstandtheimportanceandinterdependency oftheinputsandoutputsofeachprocess.
Interview Techniques for Gathering Requirements Goodinterviewtechniquesforgatheringrequirementsare“allintheapproach,” andbecauseprojectsandprojectmanagersareunique,theapproachtakentocollect requirementsvaries.Todemonstratethis,Iofferthreedistinctlydifferentapproachesand youcanpickwhichworksbestforyou: ●
Openapproach ThisiswherethePMandteamhaveahighdegreeoftrustand opencommunications,andthePMfrequentlyallowstimeforcheckingandrechecking requirementstoensuretheyareclearandalignedwiththedeliverablesoftheproject.
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Bythebook ThisiswherethePMmaybeabitrigidinthewaytheycollect requirements.Theysticktotherulebook(sotospeak)andaresomewhatresistantto changeoncetherequirementsarecollected.
Chapter5: ProjectScopeManagement ●
The“one-sided”interview Inthiscase,theinterviewermaintainseyecontactand willaskonlyafewopen-endedquestions.Thisisanunusualbuteffectivetechnique anditdoestakesomepractice(unlessyouarethesilenttypealready).Thistechnique israreandnotrecommendedbut,sinceIhaveseenitusedafewtimesIwantedto makeyouawareofitsexistence.
Toooftentimeisoftheessenceandwedon’tseemtodoagoodjobinterviewing peopletolearnaboutthedetailsandexpectationspriortoinitiatingtheproject.Itseems ourinterviewtacticismorelikethis: ●
Theimpatientinterviewer Theattitudeoftheimpatientintervieweris,“Whohas timeforinterviewsanyway?Weknowwhatthisprojectisaboutandwhattodeliver, sowhywastethetimeinterviewingstakeholders?Let’smoveforward;wecanadjust laterifwehaveto.”
Whenwedon’ttakethetimetoproperlyinterviewthepeoplemostknowledgeable abouttheprojectiswhenthePMandteamgetintotrouble.Itisbesttotakeanopenmindedapproachandtolearnabouttheprojectdetailsforthebestresults.
TIP Interview techniques tend to vary depending on the situation, how well you know the people involved, the location, and cultural considerations. For example, in Australia it is said that people don’t care how much you know until they know how much you care, meaning Australians are wary of authority and of those who consider themselves “better” than others. According to the authors of Kiss, Bow, or Shake Hands, in conducting an interview, you should “be modest in interactions, and downplay your knowledge and expertise. Let your accomplishments speak for themselves.”[2]
Anothergoodalternativetocollectingrequirementsistoformfocusgroupsor facilitatedworkshopstoobtainvaluableopinionsandinput(moredetailsonthese methodswillbecoveredlaterinthischapter).
Who Owns and Provides Requirements? Theprojectsponsorwhoisprovidingthefundingand/orauthorizationtobegintheproject ownstherequirements.Thispersonisresponsibleforprovidingtherequirementsand expectationsfortheproject.Insomecompanies,theprojectsponsorisalsocalledthe “champion”or“requestor.”Nomatterwhatnametheygoby,thatpersonshouldclearly statewhattheywantastheproduct,service,orresult(forexample,a10-percentincreasein revenue,an8-percentreductionincost,or12-percentimprovedcallcenterresponsetime.)
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Requirements Should Map to the Project Goals and Objectives Thebusinessororganization’sgoalsandobjectiveswilldictatewhichrequirementsare important.Also,requirementsarebestdividedintoprojectrequirementsandproduct/or servicerequirements.Theprimarypurposeforcollectingrequirementsistoallowthe projectteamtofocusonwhattheprojectwilldeliver.Thedeliverablesandtheproduct, service,orresultoftheprojectmustmapbacktothecustomer’sbusinessororganization’s needsandexpectations. Businessobjectivescanbedescribedintwodifferentways: ●
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Hardobjectives Relatetothetime,cost,andoperationalobjectives(scope)ofthe productorprocess.Herearesomeexamples: ●
Reduceeventstaffingexpensesby15percent.
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Reduceutilitycostby10percent.
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Reducemaintenance/operationalexpensesby$25,000peryear.
SoftObjectives Relatemoretohowtheobjectivesareachieved,andmayinclude attitude,behavior,expectations,andcommunications.Herearesomeexamples: ●
Improvecustomerservicebydevelopingauniquewayforallstafftoaddress guestswhentheyarrive.
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Improvethetimelinessandaccuracyofthebuildingchangeoverprocessthrough improvedcommunicationsandactiveparticipationbytheteam.
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Improveintercompanycommunicationbydiscussingeventrequirementsone monthinadvancewithalldepartments.
TryThis
Dealing with Unusual Demands: The Customer Wants What?
Theyearis1994andawell-knownmusicianhasbookedadateforaconcertatapopular eventscenter.Hisagenthasprovideda“rider”requirementinthecontracttohavefive bowlsofplainblueM&Msavailableinthedressingroomonehourpriortostagetime. (ThiswasbeforeblueM&Mswereevenavailable.)Whatdoyoudo?
A. ContactMarsCandyCompanyforaspecialorder(althoughthere’slikelynot
enoughtimeforthis).
B. Getoutthespraypaint.(Butthenhowdoyoupaintthelittlem’sbackon?)
Chapter5: ProjectScopeManagement
C. TellthepromoterblueM&Msarenotavailable.
D. Contactthepromotertoseeifanalternativecolorisacceptable.
Answer:D.Youcontactthepromotertoverifytherequirement,andshesaysshewasjust jokingandanycolorwilldo.(Bytheway,blueM&Mswereintroducedin1995.)
Therearemanytypesofrequirements,andmosttiebacktotheneedsofthebusiness, opportunitiestobecapitalizedon,problemstobesolved,orhelpfocusonimproved quality.Mostrequirementsarestraightforwardandeasytounderstand;however,two oftherequirementtypesareworthmorediscussion:functionalandnonfunctional requirements.
Functional vs. Nonfunctional Requirements IdentifyingrequirementscanbeliketryingtonailJell-Otoatree—itgetsalittlewiggly andtheconsistencytendstochangewiththeweather.Let’slookatfunctionaland nonfunctionalrequirements.
FunctionalRequirements Functionalrequirementsareusedtodescribethe capabilityofaproduct.Theyoftendescribecharacteristicsthattheproductmust haveifitistoprovideusefulfunctionalityforitsoperator(whattheproductwilldo). Functionalrequirementsaretypicallystatedingeneral,nonspecificterms.Hereare someexamples: ●
Thesystemwillproduceanupdatedeasy-to-readreport.
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Theconferencewilleducatesuppliersontheproductdevelopmentprocess.
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Thenewdata-retrievalunitwilldeliverdatafasterthantheoldone.
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Thevacationwillbeattheseashoretoprovidewarmthandrelaxation.
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ThenewdoghousewillaccommodateafullgrownSt.Bernard.
Nonfunctional(Technical)Requirements Nonfunctionalrequirementstendtorevolve aroundareassuchasservicelevels,performance,safety,security,regulatorycompliance, andsupportability.Oftennonfunctionalrequirementsarereferredtoas“technical requirements”or“performancerequirements”thatfocusonthepropertiesorfeaturesthe
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PMPCertification:ABeginner’sGuide productoftheprojectmusthave.Theydescribewhattheproductneedstodosothatit meetsthefunctionalrequirements.Herearesomeexamples: ●
Usabilityrequirements(basedontheintendeduser): Anewlytrainedcallcenterservicerepresentativewillbeabletousetheproblemticket trackingsystem,withnominalerrorsorassistance. Theaudio/visualequipmentdirectionsintheclassroomwillbeeasytofollow.
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Performancerequirements(howfast,big,accurate,safe,reliable,andsoon): Thenewdoghousemustbefourfeethighandhavea24-inch-widedoor. Thegarmentmustbe100-percentwaterproofduringonehourofexposuretothree inchesofrainfallperhour.
Collect Requirements Inputs, Tools and Techniques, and Outputs We’llnowcovertheinputs,toolsandtechniques,andoutputsfortheCollect Requirementsprocess,aslistedinTable5-3.
NOTE As a reminder, because all process inputs, tools and techniques, and outputs are shown in the PMBOK, I only discuss those that are new or have significant pertinence to the topics of discussion in this book. For a complete list of all processes and associated inputs, tools and techniques, and outputs refer to the PMBOK Guide, Fourth Edition.
Inputs AccordingtoPMI,thetwoprimaryinputsfortheCollectRequirements processare ●
Projectcharter Usedtoprovidethehigh-levelprojectrequirementsandhigh-level productdescriptionsomoredetailedrequirementscanbedeveloped
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Stakeholderregister Usedtoidentifystakeholderswhohavetheskillsneededto provideimportantinformationtohelpdevelopdetailedproductandprojectrequirements
Inputs
ToolsandTechniques
Outputs
Project charter
Interviews
Requirements documentation
Stakeholder registry
Focus groups
Requirements management plan
Facilitated workshops
Requirements traceability matrix
Group creativity techniques
Table5-3
Inputs, Tools and Techniques, and Outputs for the Collect Requirements Process
Chapter5: ProjectScopeManagement Intherealworldofprojectmanagement,collectingrequirementscanoccuratdifferent timesandmaysurfaceindifferentways(casualconversationsovercoffeeorlunch,inthe hallway,duringmeetings,whilereviewingprocesses,oraspartofproceduraldocuments). Therefore,itisimportanttolistenmorethantalkduringtherequirements-gatheringphase oftheproject.Theinformationprovidedoftenbecomesavaluableinputandcanbethe differencebetweensuccessandfailurefortheproject. Goingbacktothe“Ready,fire,aim”dilemma,weneedtomakesureweknowwhat andwherethetargetisbeforewecaneverhopetohitit.Wemusttaketheextratimeto collectandverifyprojectrequirements(thatis,wemustaimbeforewefire).
ToolsandTechniques AnumberoftoolsandtechniquesareavailabletoassistthePM andprojectteamincollectingrequirements: ●
Interviews Asmentionedearlierinthischapter,therearemanyinterviewingstyles ortechniques.Interviewsprovideaformalorinformalwaytocollectinformation fromstakeholdersandareagreatwaytodiscoverthe“real”situation,theareasof concern,aswellaswhatisworkingiftheprojectisalreadyunderway.
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Focusgroups Oneformofinterviewistoformafocusgroup.Thisinvolves bringingtogetherprequalifiedstakeholdersorsubjectmatterexperts(peoplewith similarandperhapsvestedinterest)intheprojecttolearntheirinterests,preferences, concerns,andexpectationsfromtheproject.Forexample,acompanyisplanning tobuildanewfitnesscenterinaparticularlocationandwantstogetinputfromthe residentsofthelocalcommunitytoseewhattheywouldlikeinthewayoffacilities, childcare,pool(ornopool),tenniscourts(indoororoutdoor),hoursofoperation, availableclasses,andsoon.
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Facilitatedworkshops Thesearesessionsthatbringavarietyofpeopletogether todiscussoptions,helpdefineproductrequirements,buildtrust/relationshipsonthe projectteam,andmostimportantlyimprovecommunications.Theseworkshopsare sometimescalledQualityFunctionDeployment(QFD)workshops,JointApplication Development(JAD)Designworkshops,orJointApplicationRequirements(JAR) Definitionworkshops.
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Groupcreativitytechniques Oneormoreofthefollowinggroupcreativity techniquescanbeusedtohelpcollectrequirements: ●
Brainstorming—Agoodwayforagrouptogenerateandcollectmanyideas (usessynergy,whereoneideahelpsgenerateanother).
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Nominalgrouptechnique—Sameasbrainstorming,onlyavotingprocessis addedtohelprankthemostusefulideasforfurtherbrainstorming.
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Delphitechnique—Usedtobuildaconsensusofexpertswhoparticipate anonymously.Arequestforinformationissenttoaselectgroupofexperts,their responsesarecompiled,andtheresultsaresentbacktothegroupforfurther reviewuntilconsensusisreached.
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Ideaormindmapping—Ideascreatedthroughindividualbrainstormingare consolidatedintosinglemaptoreflectthecommonalitiesanddifferencesin understandingtohelpgeneratenewideas.
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Affinitydiagram—Allowslargenumbersofideastobesortedintogroupsfor reviewandanalysis.
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Groupdecision-makingtechniques—Anassessmentprocesswithmany alternativestohelpprioritizerequirements.Herearesomeofthemethodsinthis process:
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Majority:Supportfrommorethan50percentofthegroup.
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Plurality:Thelargestblockofthegroupdecides,evenifit’snotamajority.
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Unanimity:Everyoneagreesonrequirementsorthecourseofaction.
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Dictatorship:Onepersonmakesthedecisionforthegroup.
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Questionnairesandsurveys—Awrittensetofquestionsdesignedtoquickly collectinformationfromawideraudience.
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Observations—Involvesusabilitylabs,jobshadowing,orothertypesofviewing tocollectneededinformationorrequirementsfromendusers.
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Prototyping—Involvesputtingtheearlyrelease(prototype)productinthehands oftheusertoseehowitworks
Outputs AccordingtoPMI,therearethreeoutputsfromtheCollectRequirementsprocess.The detailsofeachare ●
Requirementsdocumentation Thisdetailshowrequirementswillmeetthebusiness need/opportunityorthesolutiontotheproblemtheprojectisintendedtoaddress.The componentsoftherequirementsdocumentationincludethefollowing: ●
Acceptancecriteria
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Businessneed
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Qualitymeasurementsandtracking
Chapter5: ProjectScopeManagement ●
Organizationalimpacts(forexample,trainingandsupport)
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Assumptionsandconstraints
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Requirementsmanagementplan Documentshowrequirementswillbeanalyzed andmanagedthroughouttheprojectlifecycle.
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Requirementstraceabilitymatrix Typicallyaspreadsheetortablethatshows requirementsandthelinkstotheirsourceandtracesthemthroughouttheproject lifecycle.
Creatingatraceabilitymatrixhelpsensureeachrequirementaddsbusinessvalueby linkingittothebusinessandprojectobjectives.Becauserequirementsaresoimportantto theProjectScopeManagementknowledgearea,properlyusingarequirementstraceability matrixcanprovideastructureformanagingchangetotheproductscope.Thematrixcan includethefollowing: ●
Requirementstobusinessneeds,opportunities,goals,andobjectives
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Requirementstoprojectobjectives,projectscope,andWBSdeliverables
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Requirementstoproductdesign,development,andteststrategy
Someoftheattributes(components)capturedinthetraceabilitymatrixincludea uniqueidentifier,adescriptionoftherequirement,therelationshiptootherrequirements, aswellastheowner,source,priority,version,andcurrentstatus(forexample,active, cancelled,deferred,added,approved,anddatecompleted).
TIP The PMBOK Guide refers to the requirements traceability matrix several times as both an output (of the Collect Requirements process) and input to two other processes (Verify Scope and Control Scope). Therefore, you are likely to see questions on the PMI exams related to this matrix.
Managing Requirements Oncetherequirementsareverifiedandapproved,thejobofmanagingtherequirements shouldbefocused—unless,ofcourse,thereisturnoverintheprojectsponsors,team, projectfunding(budget),oroverallexpectations.Therearetimeswhenaprojecthas alongdurationresultinginchangestotherequirementsorexpectedresults.Thisis wherethechangecontrolprocessisextremelyimportanttocombatscopecreepor scopeleap.
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2. Define Scope Process TheDefineScopeprocessinvolvesthedevelopmentofadetaileddescriptionofthe projectandtheexpectedproduct,service,orresult.Thisprocessisgroupedwiththe Planningprocessgroup. Thescopedefinitionmaybeaniterative(evolutionary)process,startingwitha preliminaryscopestatementandgrowingindetailastheprojectprogressesandmore informationisknown.Infact,theapprovedscopedefinitionisthebaseline(pointof reference)fortheprojectandshouldnotbetakenlightly.Someprojectmanagersare abitreluctantorshyaboutsettingtheprojectbaselineforschedule,cost,orscope.If youareusingMicrosoftProjectasaschedulingtool,thefirstquestiontheapplication sometimeswillaskwhenyousaveafileis,“Doyouwanttosavethisfileasabaseline?” Unfortunately,themajorityofthetimeweclickNo.Bigmistake....
TIP The quicker you establish an approved baseline, the easier it is to manage to that baseline. I have seen case after case where a customer complains the project is behind schedule, only to find there were many approved changes that moved out the target completion date and the PM didn’t establish or update the baseline. The customer often only remembers the original target date, and so what if there were approved changes that moved the project end date? Because the PM didn’t set the baseline, the customer viewed the original completion date as being missed.
Define Scope Inputs, Tools and Techniques, and Outputs NotethattheinputstotheDefineScopeprocess(showninTable5-4)aretheoutputsof previousprocesses(shownpreviouslyinTable5-3)andthattheoutputsfortheDefine Scopeprocessbecometheinputstothenextprocess(CreateWBS). TheinputstotheDefineScopeprocessaresimilartomanyoftheprocessesinthe PMBOK,exceptinthiscasetherequirementsdocumentationandprojectcharter(which areoutputsofpreviousprocesses)arekeyinputstoconsiderforthisprocess.
Inputs
ToolsandTechniques
Outputs
Project charter
Expert judgment
Project scope statement
Requirements documentation
Product analysis
Project document updates
Organizational process assets
Alternatives identification Facilitated workshops
Table5-4
Inputs, Tools and Techniques, and Outputs for the Define Scope Process
Chapter5: ProjectScopeManagement ThetoolsandtechniquesfortheDefineScopeprocessincludeexpertjudgmenttohelp analyzetheinputs.Inthiscase,weshouldalsotakeacloserlookattheproductanalysis andanyalternativesorworkshopfindingsthatshouldbeconsideredpriortothescope statementbeingfinalized. Theoutputsforthisprocessarestraightforward.TheprimaryoutputoftheDefine Scopeprocessistheprojectscopestatement.However,projectmanagementisallabout realizingthataswegofurtherintotheprojectlifecycle,welearnmore.Afteralmost everyprocesscomesmoreknowledgeandaclearerviewofwhatneedstobedoneonthe project.Withtheclearervision,itisimportanttoreviewandupdateprojectdocumentsas appropriate.ThistiesbacktothePMItermprogressiveelaboration,whichisatechnique forincreasingtheaccuracyofplandocumentsandestimatesasmoreandmoreinformation becomesavailable.
NOTE PMI is big on the concept of progressive elaboration as a way to effectively manage a project. If you are planning to take a PMI exam, take note of this concept.
Project Scope Statement AccordingtoPMI,“Theprojectscopestatementdescribes,indetail,theproject’s deliverablesandtheworkrequiredtocreatethesedeliverables.Theintentistoprovide acommonunderstandingoftheprojectscopesothereisnoconfusionbetweenproject stakeholders.”[3] Thescopestatementservesasaguidetotheprojectmanagerandteamduringthe executionoftheproject.Itshouldbeusedasa“workingdocument,”notkeptinadrawer orcabinet.Itcanbeusedforteammemberorientationtotheproject,tohelpanswer questions,andforauditswhentheyoccur. Theprojectscopestatementisalsoanagreementamongtheprojectteam,theproject sponsor,andkeystakeholders.Itrepresentsacommonunderstandingoftheprojectfor thepurposeoffacilitatingcommunicationamongthestakeholders.Thescopestatement includesrelatingtheprojecttobusinessobjectives,anddefiningtheboundariesofthe projectinmultipledimensionsincludingapproach,deliverables,milestones,andbudget. Thebestwaytodevelopascopestatementistouseatemplatefromaprevious, similarprojectorfromanexperiencedPMsource.Anumberofgreattemplatesare availableontheInternet(forexample:CVR/ITConsultingLLCathttp://www.cvr-it.com/ PM_Templates/)toassistyouindefiningthescopeoftheprojectandensuringyouhave theimportantcomponentsidentifiedtorenderthescopestatementusefulinthescope managementprocess.
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PMPCertification:ABeginner’sGuide Hereareexamplesofsomekeycomponentsofascopestatement: ●
Executivesummary Abriefsummaryoftheprojectusingtheprojectcharteror workauthorizationasthebasisforthesummary
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Businessorprojectobjectives(businessneed/opportunity) Thepurposeofthe project
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Projectdescription Whatisin(andnotin)thescopeoftheproject ●
Proposedsolution,deliverables,andcompletioncriteria
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Risks,constraints,dependencies,assumptions,andsuccessfactors
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Rolesandresponsibilities(criticalskills,high-levelstaffingplan)
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Targetdateforcompletion
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Projectplannedapproach Methodologytobeusedandimplementationstrategy
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Projectestimates Duration,cost,resources,hours,andsoon
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Projectcontrols Howtheprojectwillbemeasured,tracked,andmanaged(change control,riskmanagement,issuemanagement,andcommunications)
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Authorizations Projectsponsor/owner,approvers,versioncontrol,andreviewers
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Scopestatementapprovalsignatures
TIP In many cases the contract, work order, or statement of work (SOW) will have all the pertinent information needed to identify the project and its major deliverables, key contacts, and constraints, to the point where these documents may serve as (or replace the need for) a separate scope statement.
Case Study: Scope Statement Let’slookatourcasestudyandhowthescopeoftheprojectisdefinedandmanagedby BEC.Theyusea“TechnicalDataSheet”sometimescalleda“contractrider”thatcomes fromtheartist/performer/manager/agent.Itisaround20pagesonaverageanddetailsthe requirementsfortheevent,includingdates,plannedequipmentneeds,stageconfiguration, dressingrooms,andotherspecialneeds.Thesedetailsarereviewedand,onceaccepted,are thenputintothe“EventsDataSheet,”whichservesmanypurposes,suchastheall-in-one contract,scopestatement,scheduleofevents,outlineofspecialneeds,andsoon. Figure5-4,shownattheendofthischapter,providesanexampleofascopestatement fora“RockOn”concertevent/project.
Chapter5: ProjectScopeManagement
3. Create Work Breakdown Structure (WBS) Process WhatisaWBS?ThePMIansweris,itisa“deliverables-oriented”decompositionofthe worktobeperformedontheproject.InplainEnglish,theWBSisatoolthathelpsthe projectteamdocumentthework(activities/tasks)neededtobuildordeveloptheidentified andapproveddeliverablesoftheproject. TheCreateWBSprocessislocatedinthePlanningprocessgroupandworksbestat thebeginningoftheproject.
TIP The WBS is a useful tool, and PMI views it as an important part of project planning and management. Therefore, you can expect a number of questions on the PMP exam regarding the WBS.
HerearesomekeypointstorememberabouttheWBS: ●
Itshouldbeusedoneveryproject(andcanbereusedonsimilarprojects).
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Itidentifiesalltheworkoftheproject.(PMIfeelsthatiftheworkisnotintheWBS,it isnotpartoftheproject;therefore,youshouldviewtheWBSasthefoundationofthe project.)
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Itshowsthehierarchyoftheproject(groupingsorcategories).
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Itisdeliverablesoriented(shouldbealignedandfocusedonprojectdeliverables).
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Itforcesyouandtheteamtolookatallaspectsoftheproject.
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Itshouldnotshowdependencies(thatcomeslaterintheProjectTimeManagement processes).
Creating the WBS CreatingaWBSistheactofsubdividing(decomposing)theprojectintomanageable chunks(orcategories)ofwork,oftencalled“workpackages,”toaccomplishthedefined andapprovedprojectdeliverables.ThisiswhytheWBSisreferredtoasa“deliverablesoriented”hierarchicaldecompositionoftheworktobeperformedontheproject.Itshould befocusedonandcreatedaroundtheprojectdeliverables.
TheWBSWorkPackage Theworkpackageisconsideredtobethelowestlevel managedbythePMintheWBS.Aworkpackagemaycontainmultipleactivities.The benefitforthePMtomanageattheworkpackagelevelasopposedtotheactivitylevelis thattheycanbettermanagethesummaryworkaspackages.ItrequireslessofthePM’s timetomanageattheworkpackagelevelbecausemanyprojectsendupwithhundredsif notthousandsofactivities.Ifyoumanageattheactivitylevel,youaretoodeeplyinvolved
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PMPCertification:ABeginner’sGuide inthedetailstoeffectivelymanagetheoverallproject.Youalsoneedtogivetheteam memberssomecreditandallowthemtomanageattheactivitylevelandreportstatusat theworkpackagelevel. Attheworkpackagelevel,itisalsoeasiertoschedulethework,assignowners, performcostestimates,makedurationestimates,andcontrolthedeliverablesand phasesthroughoutthelifecycleoftheproject.BecausetheWBSisdevelopedaround deliverables,milestones,andprogress,reportingismuchsimpleraswell. TheWBScanbecreatedandshowninanumberofdifferentways: ●
Usingmajordeliverablesoftheprojectasthefirstlevelofdecomposition
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Usingprojectphasesasthefirstlevelofdecomposition,withproductandproject deliverablesshowninsubsequent(secondandthird)levelsoftheWBS
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AsalistedWBSusinganumberingsystemtoshowtherelationshipandhierarchy,as opposedtousingadiagramview(whichlooksmuchlikeanorganizationchart)
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Asafishbonediagram,inthefiveprocessgroups,asanoutline,orothermethod
Example of a WBS and Work Packages Figure5-1showsahigh-levelWBSwithseveralworkpackages.Eachworkpackagecan thenbeexpandedlateronbyaddingoneormoreactivities. Activitiesshouldbemanagedbytheprojectteammemberassignedtoaparticular workpackage,andtheprojectmanagershouldfocusonthestatusattheworkpackage level(seeFigure5-2). Plan Concert Event
Figure5-1
Obtain Event Contract
Event “Show” Advancement
Event Labor Scheduling
Develop Marketing / Sales Plan
Verify Production Requirements
Begin Event Staffing
Build Ticket Manifest
Initiate Conversion / Changeover Project
Arrange First Responder Staffing
Detailed Event Budget/Staffing
Set Up “Show” Catering
Assign and Manage Staff
Show Settlement Final Billing
Create Event Data Sheet
Clean Up and Close Event
A WBS and work packages shown as a diagram
Chapter5: ProjectScopeManagement
Subprojects
Create BEC Event Offerings
Manage Concerts Gather requirements Staff the team
Manage Rodeos
Project
Manage Ice Events
Work Packages
Changeover facility •1.1.1 *Set up lighting and sound •1.1.2 *Build stage Activities (use 8-80 hour rule) •1.1.3 *Test sound and lighting •1.1.4 *Obtain sign off acceptance *Tip - Use action words (verbs)
Figure5-2
Sample WBS with activities
Manyprojectmanagementauthorstalkaboutthe8-to-80-hourrule(orsimplythe 80-hourrule),whichstatesthatworkshouldbebrokenintoactivitiesorgroupsof activitiesthatcanbeperformedwithin8to80hours(whichtranslatesintooneday minimumandnotmorethantwoweeks).Thishelpsensureworkisgroupedinawaythat iseasiertotrack,report,andmanage.Thisheuristicmethod(ruleofthumb)issimplya guideorrecommendationtothinkabouttheworkoftheprojectinawaythatallowsyou togrouptheworksothatitiseasytoassign,andeasiertoestimatedurationandcost. Ifanactivitytakeslessthaneighthours,itisbeingtrackedtoalevelfartoogranular forthePMandperhapseventheteammemberresponsibleforthework.Ifittakesmore than80hours,itwillspanalongerdurationandpotentiallyslipthroughthecracksifnot trackedmoreclosely(andthereforeisnotbeingmonitoredandmanagedinaresponsive timeframe).
NOTE Keep in mind the 80-hour rule is just a “rule of thumb” recommendation; if the activities take more than 80 hours or less than 8 hours, then use logic and assign the realistic estimated time needed and disregard this rule.
Creating the WBS Should Be a Team Sport ThebestwaytocreatetheWBSistogettheteamtogetherandbrainstormusingsticky notes,preferablyplacedonflipchartpaper(youcantapeseveralpagestogetherifyou needalargerspace).Thisalsomakestheworkportableasyoucanrollupthechartsand takethemwithyou.
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PMPCertification:ABeginner’sGuide Startwiththedeliverablesfromthescopestatement,projectcharter,and/orcontract. Afterthedeliverablesarelisted,continuethebrainstormingsessiontoidentifythework (activities)oftheprojectforeachofthedeliverables.Grouptheminalogicalorderthat willhelpyouandtheteambettermanagetheworkoftheproject.Youcangroupby product,byprojectphase,orbyfunction(forexample,design,develop,test,implement, andprojectclosure).Ifyouareworkingonaconstructionproject,youcouldcreatethe WBSbystage,suchaspourthefoundation,framethestructure,installtheplumbing, installtheelectrical,finishthetrim,andsoon. Thegoodnewsis,thereisnosetruleonhowyoucreateaWBS.Theonly recommendationisthatyoucreateitinawaythatmakessenseandworksbestforyouand theprojectteam.
Have Some Fun Creating the WBS TheprocessofcreatingtheWBScanbefunandagreatwaytogettoknowtheteamina relaxedenvironment. OnetimeonaprojectforaFortune50companyinCincinnati,Ohio,weinitiatedthe CreateWBSprocessinacustomer’shomeonhisdiningroomwall.Thedaythecontractwas signed,severaloftheprojectteamleadsmetfordinnerandafterwardwentbacktothehost’s homeandcreatedaWBSbyfillinghisdiningroomwallwithstickynotes.Weevenused differentcolorsforthedifferentkeyareasoftheproject.Wehadagoodtimeandwereable togetagreatstartontheproject.Wethencapturedtheworkfromthediningroomwallintoa well-knownschedulingtool(applicationsoftware)forportabilityandforfutureupdates. Next,weshowedthepreliminaryWBStotheteamandrolledtheworkpackagesinto theschedulingtool.Wethenworkedtheprojectfromtheschedulingtool.Asalaststep, weassignedtheworkpackagesanddeliverablestotheappropriateteamleadsandkey subjectmatterexperts.Theyagreedtoaddtheactivitiestotheworkpackages,tracktothe detailedactivitylevel,andreporttothePMweeklyattheworkpackagelevel.
Another WBS Story: Butterflies on the Floor Severalyearsago,IwascalledintohelpjumpstartaprojectinsouthernCalifornia.Thelead projectmanagerandIagreedthebestwaytostartthisprojectwasbycreatingtheWBS. Weusedstickynotestoidentifytheactivities(workpackages)neededonanewStrategic Outsourcing(SO)contract.Weworkedforaboutninehoursthefirstdayandfilledhis officewallwiththestickynotesandusedanumberingsystemtoidentifytheactivitiesand deliverables.Whenwewereatagoodstoppingplace,wecalleditaday. Thenextmorningwhenwearrived,wefoundthestickynoteswerealllyingonthe floor.Asitturnedoutthepaintontheofficewallwasoldandthestickypartofthesticky
Chapter5: ProjectScopeManagement noteswasunabletohold.Therewasourworkfromthedaybeforerestinglikebutterflies onthefloor.Icouldenvisionthenotesslowlyreleasinginthenightonebyoneanddrifting tothefloor.Theonlythingthatsaveduswasthenumbersonthenotes,whichallowedusto reconstructtheWBSinaboutanhour(thistime,however,weusedtaped-togethersheetsof flipchartpaper,sowecouldrolleverythingupandtakeitwithusattheendofeachday).
TIP It is best to put the results of the Create WBS process into a scheduling tool or some other digital media prior to going home to ensure you don’t lose the work. I have seen cases where the WBS was created on a white board or on a conference room wall and the cleaning people erased it that night (or in one case, they cleared the wall of sticky notes … ouch!).
WBS Dictionary TheWBSdictionaryisanoutputoftheCreateWBSprocess.Justasyouwouldthink, aWBSdictionaryisadocumentgeneratedbythisprocessthatsupportstheWBS.The dictionaryprovidesamoredetaileddescriptionoftheactivitiesintheWBS.Itprovidesa cleardescriptionoftheworktobedoneforeachWBSworkpackageandhelpsmakesure theresultingworkbettermatcheswhatisneeded.Therefore,theprojectmanagerusesthis tooltopreventscopecreep.Herearesomeofthecomponentsthatcanbebuiltintothe WBSdictionary: ●
Numberidentifierandrelatedcontrolaccount(fortrackingandcost)
●
Workpackagedescription
●
Resourcesassigned(whoisresponsiblefordoingthework)
●
Deliverablesfortheworkintheworkpackage
●
Assumptions,interdependencies,andexpectedduration
●
Schedulemilestones(majorevents)
●
Duedateandapprovedbysignaturefield
TheWBSdictionaryincludesworkpackagesandcontrolaccounts.Itcaninclude accountcodes(numberingsystemorachartofaccounts)thatidentifyworkpackages andadetaileddescriptionofthework;insomecasesitevenidentifiestheresponsible organization,eventhoughthatcomponentusuallyfallsintotheOrganizationBreakdown Structure(OBS).Itmayalsohavealistofschedulemilestones,qualityrequirements,and technicalreferencesalongwithkeycontactinformationasitrelatestotheWBS. Figure5-3showstheWBSdictionaryrelationshiptotheWBS.
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WBS
Control Accounts
Work Packages
Activities
Figure5-3
WBS Dictionary
WBS dictionary relationship to the WBS
Ithasbeenmyexperiencethatthereal-worldapplicabilityoftheWBSdictionary isthatitisusedmoreoftenonlarger,morecomplexprojectswithmanydifferent applicationsandtheneedformoredetailattheworkpackagelevel.However,theWBS dictionarycanbeusedonprojectsofallsizes.AccordingtoPMPExamPrep,Sixth Edition,byRitaMulcahy,“Itcanbeusedaspartofaworkauthorizationsystemto informteammembersofwhentheirworkpackageisgoingtostart,schedulemilestones andotherinformation.Itcanthenbeusedtocontrolwhatworkisdonewhen,toprevent scopecreepandincreaseunderstandingoftheeffortforeachworkpackage.TheWBS dictionaryhelpstheprojectbyputtingboundariesonwhatisincludedintheworkpackage [andwhatisnot].”[4]
4. Verify Scope Process TheVerifyScopeprocessfocusesonformalizingacceptanceofthecompletedproject deliverables.Oneimportantaspectisverification,whichincludesreviewingthescopeand deliverablesoftheprojectwiththecustomerorsponsortoensuretheyareinagreement withwhatneedstobecompletedattheendoftheproject.PMIisreallybigonformal acceptance(andyoushouldbe,too).Inmanycasesprojectcompletionlettersareobtained withsignedacceptancebythecustomertoshowthattheyagreetheprojectisofficially endedandalldeliverableshavebeenmet. Oncethescopeisclearlydefined,itisuptotheprojectmanagerandteamtoverify ittoensureeveryoneisfullyawareofthecontent.Scopeverificationistheprocessof comparingtheworkagainsttheprojectmanagementplan,theprojectscopestatement,
Chapter5: ProjectScopeManagement
Ask the Expert Q: Everyoneonourprojectteamknowsthescopeoftheproject,sowhydoIneedto botherwithscopeverificationandformalsignofffromthecustomer?
A: Ifthescopeisclearlyunderstood,thengettingverificationandsignofffromthecustomer
orsponsorshouldbeeasy.However,withthedynamicsofmostprojects,therefrequently aredeliverablesthatwerenotclearlyunderstoodorcommunicatedtotheprojectmanager. Theremayalsobesubprojectsoractivitiesthatthecustomerisexpectingfromyouthat werenotpartoftheoriginalscope.Thesesometimessurfaceonlywhenyouaskforformal signofforverificationfromthecustomerorprojectsponsor. Thebestwaytoapproachthecustomer/sponsortoobtainscopeverificationistoset upameetingwhennooneisrushedfortimeandinacomfortablelocationwithminimal distractions.Besuretohaveaconciseprojectscopestatementandreportshowingthe statusofthedeliverables.Itisalsobesttoprovideasignatureanddatelineonthescope document.Ifyouhavedoneyourhomework,thecustomershouldnotraiseanyconcerns andwillbemorethanhappytosignoffonthescopeoftheproject.Notethatyoushould retainthisverificationdocumenttomeetyourcompanyrecordretentionorauditreadiness requirements.
andtheWBS,andthenmeetingwiththecustomerand/orprojectsponsortoobtainformal acceptanceofthescope.Youwouldbesurprisedhowoftenthisstepisnotperformed. Oftenweareeithertooembarrassedtoaskforconfirmation(itwillmakeuslooklike wewerenotlistening)ortoobusytostopandconfirmthescopeoftheproject.Thenif youaddinchangingorunrealisticcustomerexpectations,itmakesforamovingtarget. Theresultisafailedprojectduetounclearorunverifiedscope.Weendupbuildingthe wrongproductortherightproductwiththewrongfeatures.
Verify Scope Inputs, Tools and Techniques, and Outputs Table5-5liststheinputs,toolsandtechniques,andoutputsfortheVerifyScopeprocess. Alsonotethatthesingletoolandtechniqueforthisprocessisinspection.Thisisasimple wordthatcanrequiresignificanttimeandresources,dependingonthenumberofdocuments thatneedtobereviewedandverifiedpriortofinalizingthelistofaccepteddeliverables. Theoutputsareclearandextremelyimportant,becauseifthereisconfusion,incomplete results,orpoordocumentation,youarewideopenforscrutiny.Theprimaryoutputis accepteddeliverables.Thebestapproachforthisistobeorganizedandkeepcopiousrecords
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Inputs
ToolsandTechniques
Outputs
Project management plan
Inspection
Accepted deliverables
Requirements documentation
Change requests
Requirements traceability matrix
Project document updates
Validated deliverables
Table5-5
Inputs, Tools and Techniques, and Outputs for the Verify Scope Process
onthestatusandacceptanceofeachofthedeliverablesandphasesignoffsthroughoutthe project.Thisissomethingyoushoulddothroughouttheprojectlifecycle,notjustattheend oftheproject.
TIP The PMP exam focuses more on situations rather than definitions and may describe a situation that relates to scope verification without actually using the term. With this in mind, it is a good idea to be familiar with alternative phrases that potentially describe scope verification—for example, conducting inspections, reviews, and audits; determining whether results or work products are completed according to (or conforming to) approved requirements; and gaining formal signoff.
Itisalsoimportanttonotethatscopeverificationisaclosecousintoqualitycontrol. Theonlyrealdifferenceisthatqualitycontroltendstobemoreproductspecific, whereasscopeverificationisattheoverallprojectscopelevel.Thereisahugeriskinnot beingabletosuccessfullyclosetheprojectiftheVerifyScopeprocessisnotformally accepted—nottomentionthatyouwilllikelymissthetargetunlessyouareclearonthe scopeanddeliverablesoftheproject(don’twaituntilneartheendoftheprojectandfind outyoumissedthetarget).
5. Control Scope Process Theonlywaytoeffectivelycontrolaprojectistocontrolthescopeoftheproject;these gohand-in-glove(youcan’thaveonewithouttheother).TheControlScopeprocessis accomplishedbymonitoringthestatusoftheprojectandproductscopeandthensetting abaselinetomeasureagainstandmanagetothroughouttheprojectphases.Itinvolves constantlylookingattheimpactofchangestothescopeoftheproject.Asaproject manageryouneedtobeveryproactiveincontrollingprojectscope. TheControlScopeprocessisgroupedwiththeMonitoringandControllingprocess group.Ifdoneproperlythisprocesshelpsensureeffectivecontroloftheprojectscope.
Chapter5: ProjectScopeManagement Thisisaccomplishedbymanagingallrequestedchangesandtakingormakingrecommended correctiveorevenpreventativeactionasneededtokeeptheprojectscopealigned. Theprojectmanagerneedstofocusonseveralkeyactivitiesduringthisprocess.The bestwaytoeffectivelymanageandcontrolscopeistomakeitpartofthediscussionand putitontheagendaduringmeetingsandprocessesassociatedwiththefollowingfocus areas: ●
Steeringcommitteemeetings
●
Monthlystatusreports
●
Riskmanagement
●
Issuemanagement
●
Changemanagement
●
Communicationmanagement Here’sasamplecommunicationplanforpresentingscopemanagementstatus:
1.Theprojectmanagerpresentstheprojectscopestatustotheprojectowneronaweekly
basis.
2.Ad-hocmeetingsareconductedatthePM’sdiscretionasissuesorchangecontrolitems
arise.
3.Theprojectmanagerprovidesawrittenstatusreporttotheprojectowneronamonthly
basisanddistributestheprojectteammeetingminutes.
4.Theprojectownerwillbenotifiedviae-mailonallurgentissues.Issuenotificationwill
includetimeconstraintsandimpacts,whichwillidentifytheurgencyoftherequest.
5.Theprojectteamwillhaveweeklyupdate/statusmeetingstoreviewcompletedtasks
anddeterminecurrentworkpriorities.Minuteswillbeproducedfromallmeetings.
6.Theprojectmanagerwillprovidetheprojectsponsorswithprojectteammeeting
minutesandsteeringcommitteestatusreports. Anotherconsiderationistoestablishaprojectwebsite(orteamroom)toprovide accesstotheprojectdocumentationbyanyoneincludinggeographicallydispersed projectmembers.AdditionaldetailsoncommunicationsarecoveredinChapter10of thisbook.
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What Is Scope Creep? Ifyouhavebeenaroundprojectmanagementforevenashorttime,youhavesurelyheard theterm“scopecreep.”Scopecreepisaseeminglysillyyetfrighteningphrasethatcan turntheprojectmanager’sworldupsidedown.Thisiswhenthescopeoftheproject takesonadifferentsize,shape,orcomplexityovertimeandrequireschangesinscope, schedule,orcostontheproject. Scopecreepisoftenaresultofuncontrolledchangeandintoday’sworld,scopecreep tendstogrowquicklyinto“scopeleap,”whichisthebigbrotherofchangeonaproject. Scopeleapoccurswhenthefinalproduct,service,orresultissignificantlydifferentfrom howitstartedoutintheoriginalscope.Thisiswhyclearprojectdefinitionandeffective changemanagementareneededtomanagescopeontheproject.Wikipedia.comoffersthe followingdefinitionofscopecreep: “Scopecreep(alsocalledfocuscreep,requirementcreep,featurecreep, andsometimeskitchensinksyndrome)inprojectmanagementrefersto uncontrolledchangesinaproject’sscope.Thisphenomenoncanoccurwhen thescopeofaprojectisnotproperlydefined,documented,orcontrolled.It isgenerallyconsideredanegativeoccurrencethatistobeavoided.Typically, thescopeincreaseconsistsofeithernewproductsornewfeaturestoalready approvedproductdesigns,withoutcorrespondingincreasesinresources, schedule,orbudget.Asaresult,theprojectteamrisksdriftingawayfromits originalpurposeandscopeintounplannedadditions.[…]Thus,scopecreep canresultinaprojectteamoverrunningitsoriginalbudgetandschedule.”[5] If,throughchangecontrol,thebudgetand/orscheduleareadjusted(upordown)along withthescope,thechangeisusuallyconsideredanacceptablechangetotheproject,and theterm“scopecreep”isnotused. Scopecreepcanbearesultofthefollowing: ●
Poorchangemanagementorscopecontrol(orboth)
●
Lackofproperidentificationofwhatisrequiredtomeetprojectobjectives
●
Weakprojectmanagementdisciplineorweakexecutivesponsorship
●
Poorcommunicationbetweentheproject’sPM,sponsor,andotherstakeholders
Scopecreepisaverycommonriskinmostprojects,isdifficulttoovercome,and remainsadifficultchallengeforeventhemostexperiencedprojectmanagers.
Chapter5: ProjectScopeManagement
How to Prevent Scope Creep (or Scope Leap) Thebestwaytopreventscopecreepistostartwithaclearlydefinedscopestatementand haveformalchangecontrol,asmentionedearlier.However,controllingscopecreepis easiersaidthandone.Changehappens;projectsaredynamicinnatureanddon’tjuststand stilloverthecourseoftheproject.ManyPMsequatetheattempttomanagescopemuch liketryingtoherdcatsinanopenfield. “ManagingscopecreepisoneofthemoredifficultpartsofaProjectManager’s job,butsoliddocumentation,clearcommunicationanddetailedinformation willminimizeanyrisktotheprojectandtheclientrelationship.Whenindoubt, drawontheexpertiseofyourteamtodetermineafewoptionsyourclientcan choosefrom.Intheend,thiswillhelpensureyourprojectsaredeliveredon budgetandontime.”[6]
HowDoYouIdentifyScopeCreep? Inordertoidentityscopecreep,aproject managermustbeabletoprovethatagivenitemfallsoutsidetheoriginalagreement.The bestwaytodothisistoreferencetheprojectplan,projectcharter,statementofwork,or othersimilardocumentation.Thismeansprojectdocumentationneedstodefinethework effortofaninitiativeordeliverableinaveryprecisemanner.Moreimportantly,exclusions andassumptionswillalsosupporttheidentificationofscopecreepbyclearlyspellingout anyitemsthatareconsideredadditionalwork(outofscope).[7] WhatDoYouDoWhenScopeCreepOccurs? Whenyouareconfidentthattheclient orprojectteamhasrequestedachangethatisoutofscope,it’simportanttoimmediately raisetheflagbydocumentingthechangeandinitiatingthechangeprocess.Thissendsa messageandsetsexpectationsthatthechangemustbehandledasanout-of-scopechange request. Aspartofthedocumentation,youshouldclearlystatethereasontherequestisoutof scopeandwhattheimpactmightbetotheprojectifyoumoveforwardwiththechange. Notethatthespecificimpactmayrequirefurtherevaluationanditcouldbecostlytoperform thisanalysis;therefore,aspartofthechangeprocess,theclientmustagreetotheadditional timeandcosttoreviewandrespondtothechangerequestevenifthechangeisnot approvedattheendofthereview. Ideally,youwanttobeabletogobacktotherequesterandclearlyarticulatetheimpact oftherequestedchange.Youmayalsowanttolookatalternativesolutionsthatmightyield thesamebenefitswithlowercostorscheduleimpacttotheproject.Anotherapproachisto recommendapostponementoftherequestedchangetoalaterdateorphaseoftheproject
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PMPCertification:ABeginner’sGuide toallowyoutostayfocusedonthedeliverablesandscheduleathand.Regardlessofthe solution,beveryclear,andworkwithyourteamandcustomertocometoagreementon thesolution.Thendocumenttheoutcomeinthechangelogandcommunicatetheresultsto theteam.
Seven Steps for Avoiding Scope Creep Scopecreepcanoriginatefromseveralsourcesandisaleadingcauseofprojectfailure whenhandledpoorly.Youmusttakemeasurestocontrolprojectembellishmentandto ensurethatyouandyourteamdon’tfallvictimtoitsunsavoryresults—deadlinedelay andbudgetshortage. Controllingthescopeofyourprojectbeginsbeforethefirstlineofcodeiswritten (orthefirstdesigndocumentbegins).Eachdevelopmenteffortshouldhaveacorresponding projectplanorprojectagreement,regardlessofthesituation.Evenifyou’rejustone developertryingtomakethebosshappy,you’llbenefitgreatlyfromdocumentingyour effortsbeforeyoubeginthem.Usethefollowingguidelines(from“Sevenstepsforavoiding scopecreep”byShelleyDoll)tosetyourselfuptosuccessfullycontrolthescopeofyour project:
1.Thoroughlyunderstandtheprojectvision,objectives,andstakeholderexpectations.
Meetwiththeprojectsponsorandprovideanoverviewoftheprojectasawholefor theirreviewandapproval.
2.Understandprojectpriorities.Makeanorderedlistforreviewthroughoutthe
projectlifecycle.Itemsshouldincludebudget,deliverables,targetmilestonedates, andcompletiondate.Qualitymetrics(forexample,features,functions,customer satisfactionmeasurement,andemployee/teamsatisfaction)shouldalsobeusedto determinepriorities.
3.Definethedeliverableswiththeprojectteam.Deliverablesshouldbedescriptionsof
functionalityandspecificfeaturesoftheproduct(s)tobecompletedduringtheproject.
4.Breaktheapproveddeliverablesintoactualworkrequirements.Therequirements
shouldbeasdetailedasnecessaryandcanbecompletedusingasimplespreadsheet.
5.Breaktheprojectdownintomajorandminormilestones.Whateveryourmethodfor
determiningactivityduration,leaveroomforcontingency,especiallywhenworking withanunfamiliarstaff.Ifyourscheduleistight,reevaluateyourdeliverables.
6.Onceaschedulehasbeencreated,assignresourcesanddetermineyourcriticalpath.
Yourcriticalpathmaychangeoverthecourseofyourproject,soit’simportantto
Chapter5: ProjectScopeManagement evaluateandreevaluateitfairlyoften.Managethecriticalpathtodeterminewhich deliverablesmustbecompletedontime(moredetailswillbeprovidedinChapter6).
7.Expectthattherewillbescopecreep.Implement“changeorder”(request)formsearly
andeducatetheprojectstakeholdersonthechangeprocess.Achangeorderformwill allowyoutoperformacost-benefitanalysisbeforeschedulingchanges. “Ifyoucanperformallofthesestepsimmediately,great,however,evenifyoustart withjustafew,anythatyou’reabletoimplementwillbringyouthatmuchcloserto avoidingandcontrollingscopecreep.Thatway,youareinabetterpositiontocontrol yourproject,insteadofyourprojectcontrollingyou.”[7]
TIP There is a strong connection between scope control and integrated change control covered in Chapter 4. Also, keep in mind there are many types of changes and they tend to come from many different (and seemingly innocent) sources. The best bet is to run all changes through the change control process using the steps shown in the next section on change management. The change procedures, if used properly, will take out a lot of the emotion and personal decision making, putting final decisions in the hands of the change review board.
Additional Information on Change Management Thechangemanagementprocedures(listedhere)shouldbefollowedandshouldbe consistentwithyourprojectmanagementmethodologyandoverallprojectintegrated changecontrolprocess:
1.Achangerequestlogshouldbeestablishedearlytotrackallchangesassociatedwith
theprojecteffort.
2.Allchangerequestsshouldbeassessedtodeterminepossiblealternativesandcosts.
3.Changerequestswillbereviewedandapprovedbytheprojectowner.
4.Theeffectsofapprovedchangerequestsonthescopeandscheduleoftheprojectwill
bereflectedinupdatestotheprojectplan.
5.Thechangerequestlogwillbeupdatedtoreflectthecurrentstatusofchangerequests.
Thebestwaytoensureformalchangecontrolproceduresareenforcedistoestablish aChangeControlBoard(CCB).
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Change Control Board TheCCBshouldbeamixedpaneloforganizationalandprojectrepresentativesandworks bestifitismadeupofasmallgroupofdecisionmakerswithappropriateauthorizationto approvechangerequeststhatcanimpacttheoverallproject.Itisalsobestifyouhavean oddnumberofCCBmembersbecauseoccasionallyyouwillneedatiebreakertomove forwardoncertainchanges. PMIdefinesaCCBas“aformallyconstitutedgroupofstakeholdersresponsiblefor reviewing,evaluating,approving,delaying,orrejectingchangestoaproject,withall decisionsandrecommendationsbeingrecorded.”[8]
The Importance of Solid Project Scope Management Likethesayinggoes,“Whenit’sright,youknowit,”andwhenyouhaveaclearly definedandapprovedscopeforyourproject,youknowitandaremorelikelytohitthe target.Managingscopeeffectivelyonyourprojectislikegettingastrikeinthegameof bowling—thepointsaddupalotquicker.Ican’temphasizeenoughtheimportanceof havingclearlydefined,documentedandapprovedscopestatement,completioncriteria, andsolidmanagementofthescopeofyourprojecttoincreaseyourchancesofsuccess.
Chapter5: ProjectScopeManagement
SAMPLE PROJECT SCOPE STATEMENT Note: Any work not explicitly included in the Project Scope Statement is implicitly excluded.
ProjectName:
RockOnConcert,featuringSuzyB.Singer
ProjectManager:
Mr.RockyRoad
VersionHistory(insert rows as needed): Date Version
(MM/DD/YYYY)
Comments
1.0
6/1/2009
First draft completed and sent for review
1.1
6/7/2009
Review completed by Director of Events (Shane C.)
1.ExecutiveSummary The purpose of this project is to promote Suzy B. Singer, a national artist with outstanding rock music and crowd-pleasing entertainment, to the northern Colorado region. Ms. Singer has risen to new heights in the “Rock On” world of music, continues to draw “full-house” crowds, and will be a great addition to the BEC event schedule.
2.BusinessObjectives(ProductandProject) 2.1ProductDescription(Solution) To provide a safe and exciting concert that will promote Rock On music to a broader audience and promote the BEC as a convenient and memorable entertainment venue for events of all types. This project will also produce a revenue-generating opportunity to assist in the annual operating budget.
2.1Business/ProjectObjectives To provide quality entertainment and sell the BEC to 100% capacity and showcase the facilities at The Ranch to attract repeat business by those attending. Also to provide excellent and efficient staffing and service as the host venue to the concert promoter and artist. • • • •
Provide a unique, rock music genre quality oriented experience. Honor rock music genre heritage of Northern Colorado. Promote a sense of community (increase awareness of the BEC facility for future events). Conduct a safe, secure and comfortable environment (0 injuries and 0 incidents).
Additional details are available on the BEC website at http://www.budweisereventscenter.com/.
Figure5-4
Sample Scope Statement for BEC Concert Event (continued )
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3.ProjectDescription Rock On Concert Event
3.1ProjectScope Includes: Facilities, security, box office and merchandise sales, audio and lighting, fire and ambulance support
DoesNotInclude: Transportation for the band, hotels, or “backline” (band-provided music gear and equipment)
3.2ExternalDependencies • • •
Media partners (newspaper, television and radio), police officers, medical staff, and fire marshal Contracted staff for event security, parking attendants, stagehand labor, and post-event cleanup Production equipment vendors, concessions volunteers, and subcontracted concessions vendors
3.3Assumptions/Constraints All advancing to be initiated three weeks prior to the event start date of 7/3/2009 (right-to-left planning)
4.ProjectMilestones 4.1EstimatedSchedule ProjectMilestone
TargetDate (MM/DD/YYYY)
•
Public advancement of the concert (no later than three weeks from event day)
6/12/2009
•
Ticket “on-sale”
6/15/2009
•
Advertisement/marketing campaign
6/15/2009
•
Staffing, scheduling, event details planning, building conversion, and setup
6/19/2009
•
Event day activities and closing/cleanup
7/3/2009
5.ProjectApproach A phased approach is used to break the project into more manageable categories.
5.1PrimaryPlans The Event Data Sheet and marketing plan will serve as the primary plan documents to direct this project. The Advancing document (rider) from the artist serves as the project scope and deliverables document.
Figure5-4
Sample Scope Statement for BEC Concert Event
Chapter5: ProjectScopeManagement
5.2ScheduledMeetings Three weeks prior to the event, the event manager will lead a meeting with all building staff. This weekly meeting will provide all advanced information from the band, as well as all instructions on building requirements and setup for the concert. Review meetings will be held weekly for clear communications.
5.3StatusReports The primary status report and plans for BEC is the Event Data Sheet (EDS). This document provides very specific details regarding the particular concert, including show timeline, key contacts for each department, arena setup, power requirements, etc. Updated EDS to be reviewed in weekly status meetings.
5.4IssueManagement Issues will be addressed as needed: ■
■ ■
Project-related issues will be tracked, prioritized, assigned, resolved, and communicated in accordance with the BEC event management process. Issue descriptions, owners, resolution, and status will be maintained in an issues log. Issues will be addressed with event manager and communicated in the weekly status report.
5.5ChangeManagement The change control procedures to be followed will be consistent with the project management methodology and consist of the following processes: ■ ■
A change request log will be used by the event manager to track and manage changes. Change requests will be reviewed and approved by the event manager and the EDC updated to reflect changes.
5.6CommunicationManagement The following strategies have been established to promote effective communications: ■
■
The event team will have weekly update/status meetings to review completed tasks and determine current work priorities. Minutes will be produced from all meetings. The event director will provide a status report to the project sponsors on a monthly basis.
6.ProjectScopeStatementApproval/Signatures ProjectName:
Rock On Concert Event
EventDirector:
Shane C.
IhavereviewedtheinformationcontainedinthisProjectScopeStatementandagree: Name
Role
Signature
Date
Suzy B. Singer
Client / Artist
6/7/2009
Shane C.
Event Director
6/7/2009
Figure5-4
Sample Scope Statement for BEC Concert Event
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References
1.Evans,Gary.“ProjectDescription—ScopeStatementTemplateInstructions,”CVR/IT
ConsultingLLC,section3.1–3.3,page4.
2.Morrison,Terri,WayneA.Conaway,andGeorgeA.Borden,Ph.D.Kiss,Bow,orShake
Hands(AdamsMediaCorporation:Avon,MA),1994.
3.AGuidetotheProjectManagementBodyofKnowledge(PMBOK®Guide),Fourth
Edition,(PMI–ProjectManagementInstituteGlobalStandard:NewtownSquare,PA), 2008,page115.
4.Mulcahy,Rita.PMPExamPrep,SixthEdition(RMCPublications,Inc.),April2009,
page165.
5.Wikipedia,http://en.wikipedia.org/wiki/Scope_creep.
6.Lijoi,Gina.“HowtoManageScopeCreep,”http://www.pmhut.com/how-to-manage-
scope-creep.
7.Doll,Shelley.“Sevenstepsforavoidingscopecreep,”http://articles.techrepublic.com
.com/5100-10878_11-1045555.html.
8.AGuidetotheProjectManagementBodyofKnowledge(PMBOK ®Guide),Fourth
Edition,(PMI–ProjectManagementInstituteGlobalStandard:NewtownSquare,PA), 2008,page420.
Chapter
6
Project Time Management
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KeySkills&Concepts ●
Thetruemeasureofsuccessonaproject
●
Theimportanceoftime/schedulemanagement
●
Thesixtime-managementprocesses
●
Managingtheschedule(settingabaseline)
●
Theimpactofconstraintsonaproject
●
Forwardpass,backwardpass,andfloat
●
Howtofindthecriticalpath(CP)
●
Precedencediagrammingmethod(PDM)
●
Activity-on-arrow(AOA)networkdiagram
●
Typesofdependenciesandrelationships
●
Typesofreportsandcharts(PERTandGantt)
W
henyoureadprojectmanagementtradejournals,magazines,andbooks,onetrue measureofsuccessthat’softendiscussedisbringingtheprojectin“ontime.”The othermeasureofprojectsuccess,asyoumayhaveguessed,isbeing“onbudget”(atopic that’scoveredinChapter7).Thesetwoareas(timeandcost)aretightlylinkedandarethe primaryconstraints(orchallenges)projectmanagersencounteronaday-to-daybasis. Ithasalsobeensaidthatthehighestsourceofconflictonaprojectistheschedule. Moreprojectsmisstheirtargetscheduledatesthananyonewouldliketoadmit.The missesareoftenduetochangestoscopeordeliverablesthataffecttheproject’sscheduled completiondate. Timemanagement,inabroadsense,involvesbothplanningandexecution.Time, unlikemoney,oncespent,isgoneandcannotbeearnedback.Thatiswhatmakestime managementanimportantknowledgearea.Thebadnewsis,thereisnouniversally agreed-uponwaytomanagetime.Howtimeismanagedandhowactivitiesareprioritized dependontheindividualprojectmanager.Thegoodnewsis,therearesomestandard processes(discussedinthischapter)that,iffollowed,canhelpinthisarea.
Chapter6: ProjectTimeManagement Toeffectivelymanagetimeonaproject,itisrecommendedthatyouuseatime management(TM)system.ATMsystemisadesignedcombinationofprocesses,tools, andtechniquesthatallowtheprojectmanagerandteamtoidentify,analyze,sequence, andestimatethedurationforallprojectactivities.Oneoftheimportantcomponents isanetworkdiagram.Anetworkdiagramcanbecreatedinanumberofways,aswe willdiscusslaterinthischapter.Theimportantthingtorememberisthatthetool,type, andformatyouchooseshouldmakesensetoyouandtheteamandmusthelpyouwith managingtheschedule.Toooftenwetrytofittheprocesstothetool.Thetoolyouuse mustworkforyou,notagainstyou.
Time Management System ATMsystemusuallyincludesaresourcecalendar,resourceassignmentmatrix(RAM), andanetworkdiagramtohelpidentifytheoveralldurationandcriticalpathactivitiesof theproject(allofthesecomponentsarediscussedindetailthroughoutthischapter). Timemanagementasaknowledgeareainvolvesasignificantnumberofconcepts, toolsandtechniques,andmethodsthatchallengeeventhemoreexperiencedPMs.This chapterisdesignedwithboththebeginnerandtheexperiencedPMinmindandwill addressreal-worldprojectmanagementandtipstohelpifyouareplanningtopursuePMP certification.
TIP For readers not planning to pursue PMI’s PMP or PMI-SP (Scheduling Professional) exam in the near future, I recommend you scan this chapter as a high-level overview and not for detailed comprehension. You can always come back to this chapter later when you are ready to prepare for PM certification. The good news is, many of the calculations for time management are performed by today’s high-tech PM software tools; however, it is still important to learn the concepts.
Acoupleofthingstorememberintimemanagement:First,itisateamsport.Second, fiveofthesixtime-managementprocessesareplanningprocesses.(RememberthatPMIis bigonplanning—20ofthe42processesinthePMBOKareinthePlanningprocessgroup.)
Managing the Schedule Togiveyouanideaofthepotentialsizeandbreadthofschedulemanagement,consider thatPMIhasaseparateindependentcredential(withitsownexam)calledScheduling Professional(PMI-SP)thatfocusesondevelopingandmaintainingprojectschedules.
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PMPCertification:ABeginner’sGuide EventhoughthereisaseparatePMIcredentialforschedulemanagement,don’tbe confusedbetweentimemanagementandschedulemanagement.Thetwogohandin hand—youcan’thaveonewithouttheother.TheyaresynonymousintheeyesofPMI. Thischapterisaboutmorethanhowtomanagetimeonyourproject.Itisallabouthow tomanagetheprojectscheduletobringyourprojectinontime.Whatisthedifference,you mightask?Mostpeoplethinkoftimemanagementashowtogetbetterorganizedsothey havemoretimeintheirdaytodootherthings—howtofocusonthe“A-list”ofto-dosand notgetdistractedbythesmallstuffthattendstoeatupeverysparemoment.Isubmitto youthattimemanagementisaboutlearninghowtobettermanagethescheduleofevents andactivitiesonyourproject. Managingthescheduleinvolvesgettingfocusedontheimportanceofsupply-and-demand concepts.Itisaboutmakingsurewehaveeverythingweneed—resources,people,tools, materials—togetthejobrollingandkeepitrollingtobringtheprojectinontime.
Project Time Management Processes Youhaveprobablyheardthesaying“timeismoney.”Thissayingisespeciallytruewhen youaremanagingaproject.Projecttimemanagementistheareathatisleastunderstood bymanyprojectmanagersandmostoftenmissed(underestimated)whenitcomestimeto managetheschedule. Timemanagement,asakeyknowledgearea,includessixprocessesthatcenter aroundeffectivelymanagingtheproject’sworkpackagesandactivities(theactualwork oftheproject).Theultimategoalistobringtheprojecttosuccessfulcompletionontime accordingtotheapproveddeliverydate.Onethingthatmakestimemanagementdifficult isthattimeisconstantlymoving,andlikethemanydynamicswefaceonourprojects,the milestonesandtargetdatescanbemovingtargets. HerearethesixprocessesoftheProjectTimeManagementknowledgearea: ●
6.1:Defineactivities(Planningprocessgroup) Thisinvolvesidentifyingspecific activitiesneededtoproducetheapprovedprojectdeliverables.
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6.2:Sequenceactivities(Planningprocessgroup) Thisinvolvesidentifyingand documentingrelationships(forexample,predecessorandsuccessor)betweenthe projectactivities.
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6.3:Estimateactivityresources(Planningprocessgroup) Thisinvolves estimatingthetypeandquantitiesofmaterial,people,equipment,orsuppliesneeded toperformeachactivity.
Chapter6: ProjectTimeManagement ●
6.4:Estimateactivitydurations(Planningprocessgroup) Thisinvolves approximatingthenumberofworkperiodsneededtocompleteindividualactivities withtheestimatednumberofresourcesavailable.
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6.5:Developschedule(Planningprocessgroup) Thisinvolvesanalyzingthe activitysequences,durations,resourcerequirements,andscheduleconstraintsto createtheprojectschedule.
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6.6:Controlschedule(MonitoringandControllingprocessgroup) Thisisthe processofmonitoringtheprogressoftheprojecttoupdatestatusandmanagechanges totheschedulebaseline.
Thisknowledgeareahasasignificantnumberofinputs,toolsandtechniques,and outputs,andtheyarebestshownastheyappearinthePMBOK(inFigure6-1onpage131). InthischapterIshowafewtablesastheyrelatetothekeyprocessesinthetimemanagement knowledgearea;however,Idonotintendtoduplicatethemanydetailedchartsinthe PMBOK.
TIP PMP exam takers find time management one of the more difficult knowledge areas. The reason is usually lack of experience creating, planning, and executing network diagrams, including understanding the forward and backward pass, calculating float, and identifying activities on the critical path. We tend to rely on software tools to do the calculations for us. Well, it is time to smell the coffee because there are a few things you need to know before you take the PMI exam. Read on....
Nomatterthesizeortypeofproject,theoneconstantseemstobe“timeisofthe essence.”Thefeelingseemstobe—especiallyintoday’senvironment—to“getitdone fast.”Afterall,thefasterwegettheprojectcompleted,thelessitwillcost.Betweenour lackofpatience,theever-pressingconcernofthebudgetgoingaway(sometimesinthe middleoftheproject),andthenumberofchanges,projectmanagersandteammembers alikeseemtoberunningon“fastforward.” AprojectmanagerfriendofminefromAustraliaflewtotheUnitedStatesto participateinaprojectplanningsessionseveralyearsago,andattheendoftheweek-long planningsessionIaskedherwhatshethoughtoftheU.S.Herresponsewasabruptbut, notsurprising,whensheproclaimed,“YouYanksaresoimpatient,andyouneverwant totakethetimetoplanthedetailsoftheproject.Youjustwanttojumpinandstartthe activitiesevenifyouarenotsurewhatneedstobedone.”Doesthissoundfamiliar?It soundsalotlikethe“Ready,fire,aim”dilemmamentionedinChapter2.
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PMPCertification:ABeginner’sGuide Tofurtherinvestigatemyfriend’sstatement,Iraisedthesamequestiontosomeof myprojectteammembersfromJapanandacoupleofmyAsianstudents,theirresponses werethesame.Mostothercountriesactuallyspendtimeplanningtheirprojects(on averagetheysaidtheyspendaround60percentto70percentoftheprojecttimeplanning, comparedtolessthan10percentintheU.S.).Tofurthersubstantiatethis,Dr.Likerin theToyotaWayFieldbookusesthephrase,“Ready,aim,aim,aim,aim,fire”todescribe Japaneseprojectteams.TheJapaneseapproachtendstobetheotherextremefromthatof theU.S.,anditreallyshowstheneedforahappymediumwhenitcomestimetoplanour projects.Planningisessentialtoeffectiveprojectmanagement. Thefollowingisfromthesection“HowWeUseTime”intheWikipediapagefortime management: “Timeissimilartomoneyinhowweuseit:Wespendtime;wesavetime; weinvesttime.Whenwespendtime,thereisnoimprovementinefficiency, productivity,oreffectiveness.Thetimeisgonewithoutreturn.Wesavetime whenweperformtasksinlesstimeorwithlesseffortthanpreviously.We useshortcutsandprocessesthatstreamlineactivities.Weinvesttimewhen wetaketimenowtosavetimelater... Delegationisavaluableinvestmentofourtime.Whenwedelegate,weteach someonetoperformtasksweusuallyperform.Whilethetrainingprocess takestimerightnow,theinvestmentpaysofflatersincewefreeourtimeto performhigher-payoffactivities.Thegoalistolookforwaysapersoncan saveandinvesttime.”[1]
1. Define Activities Process DefineActivitiesistheprocessofidentifyingthespecificactions(activities)tobe performedtoproduceprojectdeliverables.TheCreateWBSprocessperformedinChapter5 (ifdoneproperly)shouldhavealreadyidentifiedthedeliverablesandthemajorityofthe activitiesneededtocompletetheprojectsuccessfully. ThebestplacetostartwiththeDefineActivitiesprocess,otherthantheWBS,isto gobacktothescopebaselineandotherinputssuchasorganizationalprocessassetsand environmentalfactors.Activitiesfromprevioussimilarprojectshelpprovidegreatinsight intotheactivitiesneeded(whyreinventthewheel,right?).Theresultingactivitylistis oneoftheimportantoutputsofthisprocessandissometimesreferredtoas“activity attributes.”
Chapter6: ProjectTimeManagement TIP In the real world, the Define Activities process is often either bypassed or fast tracked (done in parallel) with or as part of the WBS-creation process. Many project managers prefer not to get involved with this process because the activities may be far too detailed and difficult to manage in a network diagram. The tendency is to go directly to the scheduling software and enter only the work packages, not all the activities. The best approach is to use what works best for you and the team to identify all the activities now rather than after project execution begins.
Somecommonmistakesorshortfallswhendefiningprojectactivitiesinclude underestimatingthetimeinvolvedinmanagingtheoverallproject.Youshouldtrytothink outsidetheboxtoidentifypossiblerisks(“knownunknowns”and“unknownunknowns,” whichwillbediscussedinmoredetailinChapter11).
Define Activities Inputs, Tools and Techniques, and Outputs Theinputs,toolsandtechniques,andoutputsintheDefineActivitiesprocessarelistedin thissection.Notethatoneofthekeyinputsisthescopebaselineandthateachofthetools andtechniquesisdesignedtoassistusinclearlydefiningtheprojectactivitiestodeliver totheapprovedscopeoftheproject. Inputs: ●
Scopebaseline
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Enterpriseenvironmentalfactors
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Organizationalprocessassets
ToolsandTechniques: ●
Decomposition
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Rollingwaveplanning
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Templates
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Expertjudgment
Outputs: ●
Activitylist
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Activityattributes
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Milestonelist
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Milestone Lists ThebestwaytoorganizetheworkoftheDefineActivitiesprocessiswithamilestone list.Amilestone,asyoumayrecallfromChapter5,isamajoreventontheproject.Think ofthemilestonelistasanoutline(high-levelview)ofthedeliverablesoftheproject.The milestonelistwillhelptheteamfocusonthedeliverablesidentifiedintheCreateWBS process,andithelpspromotediscussionandsynergyfromtheteamtogetyoutothe nextlevelofdetail(activities).ItalsoservesasaveryeffectiveinputtoolforthePMto generateamonthlymilestonereport.Themilestonereportcanbeusedtocommunicate successorconcernsofoverallprogressontheprojecttoupper-levelmanagers.Additional detailsareprovidedonthemilestonereportandotherreportsinChapter10. Themilestonelistshouldalsoidentifywhetherthemilestoneismandatory(suchas thoserequiredbycontractorbyoutsideagencies)oroptional(suchasthosebasedon similarprojectsorhistoricalinformation). Takeaconstructionprojectasanexample,wherethemilestonelisttiestothemajor handoffs(changeovers)betweenthedifferentsubcontractors.Itisimportanttobekeenly awareofthescheduledcompletionofamajormilestone,suchasthefoundationbeing completeandreadyfortheframer.Inourexample,suchhandoffsrequirecityinspections andsignoffspriortotheprojectgoingtothenextphase.Ifyoudon’treceivesignofffrom theinspectorfortheframeworkofthebuilding,youcannotmoveontotheelectricaland plumbingphases.Youmaylosevaluabletime,nottomentiongetabadreputation,ifyou arenotabletokeeptheprojectonschedule(seeTable6-1). Milestone
Scheduledate Comments
Approved blueprints
April 15
Dependencies: Client/sponsor and city building permit office review and approval. (M)
Foundation complete
April 30
Dependencies: Land surveyed and marked, forms set, cement poured and cured, and city inspection (signoff). (M)
Framing complete
May 25
Dependencies: Materials available for crew to begin as scheduled. Building framed according to approved blueprints, rough plumbing installed, and all must meet building code inspection. (M)
Roof decked and frame structure “dried in” against weather
June 15
Dependencies: Roofing crew complete decking according to design, windows & doors installed, and signoff from city inspector. (M)
Electrical and plumbing complete
June 28
Dependencies: Wiring and plumbing installed according to design and building codes and signoff complete. (M)
Patio piped for gas grill
July 15
Dependencies: Customer signed work order. (O)
Table6-1
Sample Milestone List (M=Mandatory, O=Optional)
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ID
Figure6-1
March
Milestone
April
May
June
1
Start
2
Blueprints approved
3
Foundation complete
4
Frame complete
5
Structure complete “dried in”
6/15/09
6
Electrical and plumbing complete
6/28/09
7
Finish work complete
8
Final Inspection (OC) complete
July
3/30/09 4/15/09 4/30/09 5/25/09
7/10/09 7/30/09
Sample milestone chart
TIP Milestones are usually shown in the scheduling tool or on a network diagram as a diamond-shaped event that has zero time duration and uses zero project resources. For example, an inspection on your construction project is performed by a city or county employee who is not part of the project team and who doesn’t charge time or money (well, not directly) to the project.
Whenreportingmilestones,thePMoftenusesamilestonechart.Figure6-1showsthe milestonechartfortheconstructionprojectdetailedinTable6-1.
Activity List and Attributes Thefinishedactivitieslistandtheassociatedattributesshouldcompriseacomprehensive listthatincludesallscheduleactivitiesrequiredtosuccessfullycompletetheproject.
ActivityList TheactivitylistisanoutputoftheDefineActivitiesprocessandincludes alltheworkactivities(andonlytheworkactivities)tobeperformedontheproject.The listshouldbealogicalextensionofthescopestatementandshouldbefocusedonwhatit takestoproducethedeliverablesoftheproject.Remember,astheprojectmanageritisup toyoutokeeptheteamfocusedontheapprovedworkduringthisprocess.
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PMPCertification:ABeginner’sGuide Thecreationoftheactivitylistreliesonthecombinedknowledge,skills,andexperience ofyouandtheteamaswellasallcompletedandapproveddocumentsgeneratedthusfaron theprojecttouseasaguide.Thisincludesdocuments(inputs)suchasthefollowing: ●
Theprojectcharter
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Thescopestatement
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TheWBSdictionary
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Theprojectmanagementplan
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Enterpriseenvironmentalfactors(companyculture,existingsystems,buildingcodes, andsoon)
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Organizationalprocessassets(procedures,templates,standardforms,company policies,andhistoricalinformation)
ActivityAttributes Activityattributesextendthedescriptionofanactivitybyidentifying themanycomponentsassociatedwiththeactivity.Attributesarethecharacteristicsof scheduleactivities,andtheycanbeorganized,sorted,orsummarizedaccordingtothe attributecategories.Forexample,ameasureoftheelapsedtimerequiredtocompletean activityisanattribute.[2] Othertypesofactivityattributesareanymeasureofcapacity,costdrivers,cycletime, andothersuchcostandperformancecharacteristics,suchasinstallingincreasedmemory inacomputer.Theactivityisinstallingthenewmemorychip,andtheattributeisthesize ofthememorybeinginstalled(forexample,4GBofmemory). Duringtheinitialphaseoftheproject,activityattributesmayincludetheactivity identification(ID)number,WBSIDnumber,activityname,activitycodes,andlogical relationships.Astheprojectprogresses,theattributestendtoevolveintomorecomplex descriptions,resourcerequirements,locationsofthework,andactivitytypes,suchas levelofeffort(LOE),discrete(independent)effort,andapportioned(spreadovermultiple activities)effort(AE). Thenumberofattributesvariesbyapplicationarea.
NOTE According to the Wideman Comparative Glossary of Project Management Terms, level of effort (LOE) is usually “work that does not result in a final product (such as liaison, coordination, follow up, or other support activities) and which cannot be effectively associated with a definable end product process result. Level of effort is measured only in terms of resources actually consumed within a given time period.”[3] Once you and the team have defined the project activities, the next step is the team beginning the “what needs to be done and when” relationship placement on the schedule. This is where the Sequence Activities process comes into the picture.
Chapter6: ProjectTimeManagement
2. Sequence Activities Process Nowthatyouhaveidentifiedthemilestones,activities,andattributes,youneedtostart thinkingaboutthesequenceoftheactivities(thatis,theorderinwhichtheworkwillbe performed).Sequencingiswhenyoustart“connectingthedots”betweenwhichactivities comefirst,second,third,andsoon.Certaintermsinthisprocesstendtothrowpeoplefor aloop—termssuchaspredecessorandsuccessorrelationships,leadandlagtime,notto mentionfloat,totalfloat,slack,PERTcharts,andmore.Allofthisshouldbealotclearer bythetimeyougettotheendofthechapter. Thegoodnewsis,severalgreatprojectmanagementsoftwareapplicationsare availablethatdoalotoftheworkforyou.Thebadnewsis,youstillneedtohavea fundamentalunderstandingofthetermsandconceptstobeabletoeffectivelyusethese softwareproducts;otherwise,you’llfallbackintothe“garbagein,garbageout”situation.
TIP Don’t fall into the trap of thinking the scheduling tool takes the place of the overall project management plan. I have been asked by a number of PMs to review and provide suggestions on their “project plan” only to have them send me a project schedule. I will be the first to admit the scheduling tools today do a lot more than help track and manage the schedule, but they should not take the place of having an overall project management plan. The scheduling tool is part of the overall management plan.
What Is the Critical Path? Beforewegetintothedetailsofscheduleactivitysequencingandnetworkdiagrams methods,itisimportanttomentionthattheprimarypurposeforthiseffortistobeableto determinewhichactivitiesareonthecriticalpath.Inotherwords,whichactivities,ifnot completed,willdelaytheoverallprojectenddate? Thecriticalpath(CP)isdefinedasthelongestpaththroughthenetworkthat representstheshortestamountoftimetocompletetheproject.Themostimportant elementofdeterminingthecriticalpathisaccurateactivitydurationestimates. Whyisitimportanttoknowwhichactivitiesareonthecriticalpath?Becausethisis whereyougetthemostbangforthebuck(returnoninvestment)whenitcomestimeto compressoradjusttheschedule.Knowingthespecificactivitiesonthecriticalpathgivesyou adirectlinetowhereyouneedtofocustoensureagainstslippage(delays)intheschedule. Thebestknownmethodforfindingthecriticalpathonaprojectiscalledthecritical pathmethod(CPM).CPMisaschedulenetworkanalysistechniquetodeterminetheamount offlexibility(calledfloatorslack)foreachofthepathsinthenetworkdiagram.Additional detailsonthehistoryofCPM,howitisused,anddefinitionsoffloatandslackareprovided laterinthischapter.
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Methods Used to Draw Project Network Diagrams Acouplecommonmethodsareusedtodrawprojectnetworkdiagrams(PNDs): ●
Precedencediagrammingmethod(PDM),alsoknownasactivity-on-node(AON)
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Arrowdiagrammingmethod(ADM),alsoknownasactivity-on-arrow(AOA)
PDMisthemostcommonandseemstobethemethodofchoiceintoday’sworldof projectmanagement.ItalsotendstomakemoresensevisuallythanADM. Todevelopanetworkdiagram,startbygettingtheteamtogetherandthenusethe diagramfromaprevioussimilarproject,standardtemplates,ortheschedulingtools availablefromyourorganizationprocessassets.Themessagehereis:neverreinventthe wheelifyoucanhelpit.Youwillsavevaluabletimeifyouhavetried-and-truework samplesandtemplatesfromwhichtobegin.
PrecedenceDiagrammingMethod Theprecedencediagrammingmethoddisplays theactivitiesinnodes(boxes)tovisuallyshowtherelationshipsbetweenactivities.PDM showstheserelationshipsbyusinglinesorarrowstodepictwhichactivityshouldcome first(predecessor)andwhicharedependentactivities(successors).PDMisalsoreferred toasanactivity-on-node(AON)networkdiagram(seeFigure6-2). Anyprojectnetworkdiagramdrawninsuchawaythatthepositioningandlengthof theactivityrepresentsitsdurationisalsoknownasatime-scalednetworkdiagram. Theprecedencediagrammingmethodisalsousedinwhatisknownasthe“critical pathmethod,”wherethenetworkdiagramandactivitydurationestimatescanbeusedto determinetheactivitiesonthecriticalpathoftheproject. PDMusesfourdifferenttypesofdependenciesbetweenactivities(seeFigure6-3). Thesedependencies,listednext,arecalled“relationships”: ●
Finish-to-start(FS) Thisisthemostcommonlogicalrelationshipandshowsthata predecessoractivity(or“from”activity)mustfinishbeforethesuccessoractivity(or “to”activity)canstart.Thisrelationshipissequentialinnature.
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Start-to-start(SS) Apredecessoractivity(A)muststartbeforethesuccessor activity(B)canstart.Thisrelationshipmeansthetwoactivitiescanrunintandem; however,activityAmuststartbeforeactivityBcanstart. D Start
Figure6-2
A
B
Sample precedence diagram method (PDM)
C
End
Chapter6: ProjectTimeManagement A
B
A B A
Figure6-3
Finish-to-Finish (FF) – B can’t finish until A finishes. Start-to-Start (SS) – B can start after A has started.
B A
Finish-to-Start (FS) – Activity B can’t start until A is finished.
B
Start-to-Finish (SF) – B can’t finish until A starts (not often used).
Sample activity relationships (dependencies)
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Finish-to-finish(FF) Apredecessoractivity(A)mustfinishbeforethesuccessor (B)canfinish.Thisrelationshipisoftenusedatdinnertime,whenyouwouldlike allthefoodtobeputonthetableatthesametime(finish-to-finish).Thisistricky becauseeachtypeoffood(activity)takesmoreorlesstimetoprepareandmustbe scheduledcloselytocompleteatasnearthesametimeaspossible.Anotherexampleis awebsitefororderingticketsforanevent.Thewebsitemustbeupandrunningatthe sametimetheticketsareprintedandreadytosell(finish-to-finish).
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Start-to-finish(SF) Apredecessoractivity(A)muststartbeforethesuccessor (B)canfinish.Thisrelationshipisrarelyused.Itisalsoknowasjust-in-time(JIT) schedulinginmanufacturing,eventplanning,andconstruction.Forinstance,fora concerteventproject,youwouldbackintotheactivities’starttimesbasedonwhenthe curtaingoesup(finishtime).Forexample,youmusthavethelightingandsoundset upandtestedpriortoconcertstarttime,soyoustartthoseactivitiesearlyenoughto allowtheteamadequatetimetocompletethempriortothe“curtainup”time.
Thebestwaytodeterminetherelationshiptouseortofindtherightlinkbetweentwo activitiesistodecidewhichoneisdrivingorpositioningtheotheractivity.Thedriving activity(ortask)isthepredecessor;theother(driven)activityisthesuccessor. Youalsoneedtobeawareofthefollowingtypesofdependencies: ●
Mandatory(alsoknownashardlogic) Dependenciesthatarerequiredbycontract orinherentinthenatureofthework.Theseofteninvolvephysicallimitations;for example,thefoundation(cement)mustbesetbeforethestructurecanbebuilt.
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Discretionarydependencies(preferredlogic) Theprojectteamdetermineswhich dependenciesarediscretionary(thosethatcanwaitorthosethatshouldproceed)and thepreferredlogicsequenceforbestresults.
●
Externaldependencies Thesedependenciesincludeactivitiesthatareproject related(forexample,thetestingofsoftwareisdependentonthehardwarebeing received,installed,andrunningpriortoinstallationofthesoftwareapplication).Or,in somecases,outsidetheproject(forexample,theprojectcan’tbeginuntilthebuilding materialsarereceivedonsitefromthelumberyard).Otherexternaldependencies mightbegovernmentregulationsthatmustbemetorspecialreportingsuchaswith regulatoryorganizationsliketheOccupationalSafetyandHealthAdministration (OSHA)ortheSarbanes-Oxley(SOX)Act(forfinancialreporting).
ArrowDiagrammingMethod Thefirstthingtorememberaboutthearrowdiagramming methodisthattheactivityisshownontheline(orarrow),notinabox(seeFigure6-4). AOA(activity-on-arrow)islesscommonthanAON(activity-on-node).Also,AOAhasno formalrelationshipsotherthantheplacementoftheactivitiesinthediagram.UnliketheAON networkdiagram,whereyoucanshowanyrelationshipsbetweenactivities(FS,SS,FF,and SF),theAOAnetworkdiagramcanonlyshowFS(Finish-to-Start)placementofactivities. TheAOAapproachisnotaspopularasAONbutdefinitelyhasitsplaceincertain industriesorapplications.AswithAON,AOAcanbecreatedmanuallyorviaasoftware applicationtoolortemplateinyourProjectManagementInformationSystem(PMIS). AnotherfeatureofAOA(notfoundinAON)isthe“dummyactivity.”Adummyactivity indicatesadependencybetweentwoactivitiesandisshownasadashed(ordotted)line. Dummyactivitiescarryzerotimeduration.
End D
F E Start
Figure6-4
A
*G B
C
*Dummy activities are shown as dotted lines “G” and have zero (0) resources and zero (0) duration assigned
Sample arrow diagram method (ADM/AOA)
Chapter6: ProjectTimeManagement
PERT and Gantt Charts PERTandGanttchartsaretoolscommonlyusedbyprojectmanagerstovisuallyshow activitiesandthetimerelationshipsoftheactivitiesforcontrollingandadministeringthe projectschedule. TheGanttchartandthePERTchartareprobablythetwobestknownchartsinproject management.Eachofthesecanbeusedforscheduling,butbecauseGanttchartsdon’t illustratetaskdependencies(relationshiplinesorarrowsbetweenactivities),theycanbe confusing.SomePMsusebothtypesofcharts.ThecriticalpathcanbefoundusingCPM oneitherPERTorGanttcharts.
TIP Network diagramming is a fairly simple process once you get the hang of it. According to Joseph Philips, in his book PMP Project Management Professional Study Guide, Second Edition, “Network diagrams may also be known as PERT charts, though this term may be slightly inaccurate. PERT, Program Evaluation and Review Technique, is a specific network diagram using weighted averages.” [4] (Don’t worry—PERT has been dropped from the PMBOK.)
PERTCharts APERT(ProgramEvaluationReviewTechnique)chartisaproject managementtoolusedtoschedule,organize,andcoordinatetaskswithinaproject.PERT isamethodologydevelopedbytheU.S.Navyinthe1950stomanageverylarge,complex projects,suchasthePolarissubmarinemissileprogram,whichhadahighdegreeofintertask dependency.Asimilarmethodology,thecriticalpathmethod(CPM),wasdevelopedfor projectmanagementintheprivatesectorataboutthesametime.ClassicalPERTchartingis usedtosupportprojectsthatareoftencompletedusinganassembly-lineapproach.ThePERT methodextendsthecriticalpathmethodbyconsideringtheuncertaintyinestimatingactivity durationinordertoestimatetheprobabilityoffinishingaprojectinagiventime.[5]
TIP Some scheduling softwares refer to the PERT chart as a “Gantt chart” (see Figure 6-5). This is not completely accurate because the Gantt chart is more of a bar chart and usually does not have relationship lines between activities. Also, it is important to know that even though PERT is similar to CPM, PERT uses Expected Value, which is calculated using the three-point (weighted value) estimate shown later in this chapter (in Figure 6-10).
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Figure6-5
Sample PERT chart (referred to as a “Gantt chart” in this scheduling program)
GanttCharts(OftenShownasBarCharts) TheGanttchart,developedbyCharles Ganttin1917,focusesonthesequenceofactivitiesnecessaryforcompletionoftheproject. EachactivityonaGanttchartisrepresentedasasinglehorizontalbaronanX–Ychart. Thehorizontalaxis(X-axis)isthetimelineoftheprojectandthelengthofeachactivity (ortask)barcorrespondstothedurationoftheactivity.TheY-axisshowsthelistofWBS activities(seeFigure6-6).AGanttchartisalsoausefultoolforplanningandscheduling projectsandishelpfulwhenmonitoringandreportingprogress.
NOTE Essentially, the Gantt chart is a “time-scaled network diagram” shown as a bar chart with no lines to indicate relationship between activities. As mentioned, some scheduling software tools inappropriately show Gantt charts with relationship lines between activities, much like a PERT chart.
Chapter6: ProjectTimeManagement Project Development Schedule Qtr 1 Jan
Project Steps:
Feb
Qtr 2 Mar
Apr
May
Qtr 3 Jun
Jul
Aug
Qtr 4 Sep
Oct
Nov
Dec
Explore Market Need Develop Concept for Product Begin Development Cycle Develop Graphical User Interface User Interface Test Evaluation Alpha Version Release Quality Assurance Testing Phase 1 Fix Outstanding Problems from Alpha Beta Version Release Quality Assurance Testing Phase 2 Fix Outstanding Problems from Beta Design Box and CD Labels Begin Advance Advertising Campaign First Customer Ship Preparation Final Quality Assurance Testing First Customer Ship Release Production and Packaging Development
Marketing
QA Testing
Box Art
Figure6-6
Milestones
Sample Gantt chart
Other Charts Used in Schedule Management Avarietyofotherchartsandmethodsareavailabletotheprojectmanagerandproject teamforpresentingscheduleprogress.InthissectionIintroducejustafewofthem: ●
Milestonechart Aspreviouslymentioned,thesetypesofchartsaregreatforproject sponsor/executive-levelreportingonschedulestatus(referbacktoFigure6-1foran exampleofamilestonechart).
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Dashboard Typicallyasingle-pagesummary-levelreportofcompressedproject informationusuallydisplayedwith“trafficlight”(red,yellow,green)indicators. Theindicatorsshowoverallstatusoftheprojectanditskeymetrics(measurement components).Thedashboardservesasa“heads-updisplay(HUD)”tosponsorson thescheduleandotheraspectsoftheproject,suchascost,deliverables,andrisk(see Figure6-7).Usingthedashboardreportalsorequiresalegendtoclearlyshowcriteria foreachcategory(red,yellow,green)rating.
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Overall Status:
Weekly Status: Project Name Executives: list sponsors names Leads: other PMs you’re working with in the program
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Figure6-7
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Sample dashboard
Burnchart Showsthestatusandprogressoftheprojectandistheconceptual equivalenttoearnedvaluereports.ThesetypesofchartsarecommonlyusedinAgile projectmanagementmethodologiessuchasScrumandExtremeProgramming(XP). Burnchartscanbeausefuladditionoralternativetomoreconventionalcharts.(For moredetailsonburncharts,Agileprojectmanagement,orothertermsmentionedhere, IrecommendyouperformanInternetsearch.)
Regardlessoftheprocessortypeofchartyouusetoreportprojectschedulestatus, therearesomebasictermsandtechniquesyoushouldbefamiliarwith,suchasleadtime, lagtime,andhammocks(notthekindyouswingin).
Leads and Lags Leadandlagaretermsortechniques(includingvalues)usedtocontrolthetimingof activities.Forexample,iftheworkpackageistopaintthelivingroomofyourhouse,you mustfirstpreparethesurfacetobepaintedbyremovingpictures,sanding,andsoon.
Chapter6: ProjectTimeManagement Oncethewallsarepainted,youmustwaitforthepainttodrypriortohangingthepictures backonthewall.Thisislagtime.Leadtimeisnegativelag.Forexample,youmightpreheat theovenpriortocookingaturkeydinner;thus,theactivitytopreheattheoveninvolveslead time(startingtheactivitysoonerthanitsassociatedactivity—cookingtheturkey). Ifyouneedtoaltertherelationshipbetweentwoworkpackagesoractivities,you woulduseleadorlagtime.Leadtimeremovestimefromthestartoftheactivity,allowing anaccelerationofthesuccessoractivity,whereaslagtimeaddstimetothestartofthe activity(allowsadelayinthesuccessoractivity).Leadtimeisusuallyshownasanegative number,andlagtimeisapositivenumber(seeFigure6-8). Theconceptsortechniquestomanagetimeonyourprojectschedulearebetter understoodviaexamples. First,let’susetheBECcasestudyforanexampleofleadtime.Whilefinalizingthe changeoverprojectplanandstaffingrequirementstoconvertfromaconcerttoarodeo,the projectmanagerneedstheEventDataSheetatleasttwoweekspriortotheevent.Thiswould beshownasleadtimeonthenetworkdiagram.ThiscommonlyshowsasaFinish-to-Start relationshipwithatwo-weeklead(FS–2weeks). Second,lagtimeisbestdescribedasaforcedorplanneddelay,suchasina constructionprojectwherewecanbeginrestoringeachroom(hangingpictures,replacing thefurniture,andsoon)oncethepainthasdried(inassembly-linefashion).Lagtimecan beshownasaFinish-to-Startrelationship,wherethepaintingendswithonedaylagtime forthepainttodrypriortotheroombeingrestored.Anotherexampleoftenusediswhen pouringconcrete;youmustwaittwodays(lagtime)toremovetheformsaftertheconcrete hasdried(FS+2days). • Finish-to-Start with lag time FS+1d LAG
A Paint the wall
B Hang the pictures
1d = One Day • Finish-to-Start with lead time A FS-1d LEAD B Remove pictures
Figure6-8
Sample lead and lag time relationship
Paint the wall
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Groupingdissimilaractivitiesthatleadtoanoverallcapability,suchaspreparations underasummarylabel;forexample,“projectinitiationorconstructionsite preparation”
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Groupingunrelateditemsforthepurposeofasummarysuchasacalendar-based reportingperiod;forexample,“Firstquarterplans”
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Groupingongoingoroverheadactivitiesthatrunthelengthofaneffort;forexample, “projectmanagement”
TIP Remember, change is inevitable. As you and the team are working the details of the Sequence Activities process, you will discover the need to make changes to the project plan, WBS, and perhaps other project documents. Requested changes can surface at any time by any stakeholder. Watch for the changes and manage them as part of the integrated change process, as mentioned in Chapter 4.
Toemphasistheimportanceofnetworkdiagramsandhowtheycanhelpyouasa projectmanager,let’sdiscusstheirbenefits.
Ask the Expert Q: Howdoesanetworkdiagramhelpmeasaprojectmanager? A: Networkdiagramscanhelpwithschedulemanagementinthefollowingways: ● ●
Theyprovideavisualrelationshipoftheworktobeperformedontheproject. Theyshowinterdependenciesofallactivitiesandtheworkflowfromonetothenext. ● Theyhelpintheprojectplanning,organizing,andtrackingprogressoftheproject. ● Theyidentifyactivitiesonthecriticalpathforimprovedscheduleawarenessandcontrol. ● Theyidentifyactivitiesonthenoncriticalpath(youcantemporarilyreassignresourcesto helpexpediteanactivityonthecriticalpathtopotentiallyeliminateascheduleoverrun).
Chapter6: ProjectTimeManagement
3. Estimate Activity Resources Process Nowthatyouhaveidentifiedthemilestonesandactivitiesonyourproject,itistimeto estimatetheresourcesneededtoperformthework.Rememberthatresourcesincludenot onlythepeople(labor)butalsomaterials(supplies)andequipment(tools). TheEstimateActivityResourcesprocessinvolvestheestimatingoftypesandquantities neededtoperformeachactivity.ThisprocessshouldbecloselycoordinatedwiththeEstimate CostsprocessintheProjectCostManagementknowledgearea(Chapter7). Thisisthetimewhereyoustartgettingverymuchinvolvedwiththedetailsof thetypesofskillsandexperienceneededtocompletetheworkoftheproject.Unique capabilitiesmaybeneeded,andyoumustbegintolookatthetimeandcosttoacquire, train(ifneeded),andorganizetheresourcestoaddresstheactivitiesyouandtheteamhave identified.Asyouaddmorepeopletotheteam,yourjobasthePMgetsmorecomplicated, especiallyintheexecutionphase.Onconstructionprojects,youneedjourneyman-level skills,peoplefamiliarwiththebuildingcodes,andarealisticviewofthetimeittakesto movefromoneactivity(orprocess)tothenext.
Resource Calendars and Resource Leveling Inprojectmanagement,theteamisthenumberoneasset.Theonlywaytomanage theteam,theindividualsontheteam,andotherkeyresourcesiswithorganized scheduling.Knowingwhoneedstobewhereandwhenislikebeinganairtraffic controller.Withouttheschedulingtoolsofresourcecalendarsandresourceleveling, youwillhaveconflicts.
ResourceCalendars Asaprojectmanager,youliveanddiebythecalendar.Youneed toknowwhoisavailableonyourteamatalltimes.Aresourcecalendarisagreatwayto dothis. Inatighteconomytheremaybeovertimerestrictionsorteammembersonyourproject whoarealsoworkingotherprojects.Thiscanbeespeciallytrueinmatrixmanagement andfunctionalorganizationstructures.Theproblemoccurswhenyouneedworkdone onyourprojectandtheteammembersarenotavailable.Therecanbemanydistractions andconstraintswithgettingandkeepinghighlyskilledpeoplefocusedonyourproject. Thetypeofinformationthatwouldgointoaresourcecalendarincludes,butisnotlimited toname,skillset,availability(timeperiodavailabletotheproject),plannedvacation schedule,backupperson,andmanagername.
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TryThis
Who’s on First? (Knowing the Schedule)
YouarethePMonaglobalprojectthatrequires“allhandsondeck”availabilityduring acriticaltestofanewcallcenterscheduledtogoliveaftertheLaborDayweekend(a holidayintheU.S.onthefirstMondayduringthemonthofSeptember).Themajorityof theprojectpreparationworkeffortistooccurduringthemonthofAugust.Oneofyour teammembersinAsiacasuallymentionsthatmostoftheAsianteammemberswillbeout honoringreligiousholidaysmostofthemonthofAugust.Whatdoyoudo?Takeafew minutestojotdownpossiblesolutionsbeforereadingthefollowinganswer. Answer:Ifthescheduleissetandthedeliverableisfirm,useteammembersfromother countrieswhodon’trecognizethesameholidays,orpayhigherratestothepeoplewho areavailableandwillingtoworkovertheholidayperiodtokeeptheprojectonschedule. Toeffectivelymanageresources,youneedtodoyourresearchaheadoftime.You needtoknowthatmanycountriesinbothAsiaandEuropehavemajorholidays/vacations duringthemonthofAugust.Therefore,youshouldplanaccordingly.Usefultoolsincludea resource/responsibilityassignmentmatrix(RAM)(seeFigure6-9)and,ofcourse,aresource calendarforquickreferencetoseewhoisassignedtocriticalactivitiesandwhethertheyare availablewhenneeded.
Theresourcecalendarcanbeusedtoidentifyrisks,scheduleduration,andneededbackup skills.Italsoservesasanegotiationtoolwhencriticalpathactivitiesareatrisk.Thisiswhere thePMneedstobefocusedandusealltheresourcesavailabletothefullestextentpossible. ThePMmustkeeppeopleinformed,assigned,focused,engaged,andchallengedaswellas continuetoreinforcethevalueofeachpersontotheteamandtheirrollontheproject.
ResourceLeveling Resourcelevelingdoesnotmeanknockingpeopleover(likeonthe footballorrugbyfield),eventhoughthelargeworkloadmanyofusfacetendstoknockus overattimes.Resourcelevelingiswhenyoubalancetheworkacrosstheworkersandnot overloadourfriendtheoverachiever. Activity Plan party
Mary
Serve the food
Bob
P S
S P
P
S
Legend: P = Primary, S = Secondary
Figure6-9
Sue
P
Purchase food Decorate office
Joey
Sample resource assignment matrix (RAM)
Chapter6: ProjectTimeManagement Fromaprojectmanager’sperspective,resourcelevelingisaprocessusedtoexamine aprojectforanunbalanceduseofresources(usuallypeople)overtimeandforresolving conflictsinworkeravailabilityoroverallocationofworktohelpprevent“burnout.” Wikipediaoffersthefollowingonresourceleveling: “Whenperformingprojectplanningactivities,the[project]managerwill attempttoschedulecertaintaskssimultaneously.Whenmoreresourcessuchas machinesorpeopleareneededthanareavailable,orperhapsaspecificperson isneededinbothtasks,thetaskswillhavetoberescheduledconcurrentlyor sequentiallytomanagetheconstraint.”[6] Duringprojectplanning,thePMandtheteamneedtolookcloselyatresourceleveling toresolvepotentialconflictsearlyintheprojectlifecycle.Notethatthisprocessisone thatshouldbeusedoverthecourseoftheproject;otherwise,youwilllikelyimpactoneof thekeyconstraints(time,cost,andscope). Whenyouuseprojectschedulingsoftware,resourcelevelingisafeaturethatcanhelp youtocalculatedelays.However,don’tlettheschedulingsoftwarerunamuckbymaking assumptionsforyou.Realresourcelevelingmightrequiredelayingtasksuntilresources aretrulyavailable. Inanycase,levelingcouldresultinalaterprojectfinishdate,especiallyifthe activitiesaffectedareonthecriticalpath.
TryThis
The Overachiever (“Pick Me, Coach!”)
Duringtheprojectkickoffmeeting,oneofyourteammemberswhoisknowntobean overachiever(OA)keepsvolunteeringformorework.TheOAhasalwaysbeenquick tosignupforextrawork.Youthinktoyourself,“Whatateamplayer!”Asyouquietly wishyouhadawholeteamofOAs,youentertheassignmentsinthesoftwarescheduling toolandclickthe“ResourceLeveling”buttontoverifytheworkisbalancedacrossthe team.YourheartstopswhenyouseetheOAhassignedupfortwoyearsworthofwork onaone-yearproject.Whatdoyoudonow?Takeafewminutestojotdownapossible solutionbeforelookingatthefollowinganswer. Answer:YoupullOAaside(one-on-one)andthankherforherwillingnesstotakeon theextrawork.Thenyouhavetoexplaintherearenotenoughdaysinayearforher tocompletealltheworkshesignedupfor.Lastly,yougothroughtheworkpackages togethertofocusonthebestuseofOA’stimeandreassigntheextraworktootherteam membersasequablyaspossible.
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Make-or-Buy Decision Sometimesitisbesttodotheworkinternaltoyourprojectteamormakeaproductin-house ifyouhavethetoolsandthetalent.Thentherearetimesyouneedtogooutsidetheproject teamtobuytheexpertiseorproductsneeded.Themake-or-buyanalysisisawaytohelp ensureyouandtheteamarefocusedonthosethingsyoucandointernallyandallowsyou increasedflexibilitywhenyouarebetteroffgoingoutsidefortheskillsorproductsneeded. Thisoptioncanworkwellormayaddrisktoyourschedule.Thisriskwillbediscussed moreintheProjectRiskManagementandProjectProcurementManagementknowledge areas(Chapters11and12,respectively).
4. Estimate Activity Durations Process Congratulations.Bythistime,youandtheteamhaveidentifiedthework,whatneedstobe accomplished,andwhoisgoingtodothework.Nowitistimetogettheteamtogetheragain andperformtheEstimateActivityDurationsprocessforalltheactivitiesontheproject. Ican’temphasizeenoughtheimportanceofthisprocessbeingateamsport.Thisis wheretheteamhastoprovidetheirinputandexpertiseinestimatingthedurationofthe workactivities.Youwillhaveabetterchanceofgettingbuy-inifyouworkthisprocess asateam.Besides,twoheads(ormanyheads)arebetterthanone.Thesynergyand brainstormingwillprovideyouamorecompletepackagewhentheprocessisfinished. Ishouldalsomentionthatdurationestimatingisusuallymeasuredindays,asopposed to“effort,”whichisusuallyestimatedinhours.Durationestimatingisthelengthoftime theactivitywilltake,whereaseffortisthelaborappliedtotheactivity.Durationestimating shouldtakeintoaccountmeetings,unscheduledinterruptions,andprojectmanagement activitiesotherthanhands-onwork,whichtendstoalwaystakelongerthanexpected. Effort(orlevelofeffort)estimatingisusedmoreextensivelyinestimatingcost, whereyouareonlychargedfortheactualtimespentontheproject.Thesetwotypesof estimatingusuallygooutthewindowifthepersonisassignedtoyourprojectfulltime (dedicated)andyouwillbepayingforthemfull-time,regardlessofthespecifichours spentindirectsupportoftheproject.
NOTE Let’s say we are working on our painting project. The team has determined it will take 80 hours to complete painting the house. Now if we have two people painting, we can complete the job in 40 hours. Therefore, the estimate based on resources available is 40 hours (or one business week). If we add two more people to the project, we should be able to complete the job in 20 hours duration; however, we are still expending 80 hours of effort.
Chapter6: ProjectTimeManagement Otherdynamicsneedtobeconsideredwhenestimatingactivityduration.Forexample, ithasbeenmyexperiencethattheactualtimetocompleteanactivitygoesupwiththe morepeopleyouassigntoit.Whenyouputmorepeopleontheproject,theretendsto bemoredistractions,theworkspacemaybecomelimiting,andtheworkerscanbecome counterproductive.Therefore,insteadof80hours,theactivitycouldverywelltake100hours. Anothercommonproblemoccurswhenmakingtheteamworkmoreovertime.At somestage,youreachthepoint(orlaw)ofdiminishingreturnswhenthrowingmore overtimehoursatanactivity.Theresultofthisdilemmaisadecreaseinquality,more mistakes,andpotentialinjuriesduetoemployeefatigue.
Estimate Activity Durations Inputs, Tools and Techniques, and Outputs Therearealargenumberofinputs,toolsandtechniques,andoutputsassociatedwiththe EstimateActivityDurationsprocess.Alsonoticethemanytypesoftoolsandtechniques (seeTable6-2)thatcanassistthePMandteaminestimatingactivitydurations.Let’stake acloserlookatsomeofthem.
Types of Duration Estimating PMIrecognizesfivetoolsandtechniquesforestimatingthedurationoftheactivities identifiedduringthepreviousprocesses: ●
Expertjudgment Thisisthepreferredtechnique,especiallyifyouhaveworked withtheprojectteambeforeandyouknowwhotocallonforthebestanswersto certainquestions.Forexample,ifyouareestimatinghowlongittakestochangeover fromanicehockeyarenatoarodeoattheBEC,youcallonJakeorMattwhohave donethisactivityahundredtimesormoretotellyouhowlongittakes.Youmight alsowanttoqualifytheestimatebasedonskilllevelrequired(forexample,theexpert candothingsquickerthananoviceemployee).
Inputs
ToolsandTechniques
Outputs
Activity list
Expert judgment
Activity duration estimates
Activity attributes
Analogous estimating
Project document updates
Activity resources requirements
Parametric estimating
Resource calendars
Three-point estimates
Project scope statement
Reserve analysis
Enterprise environmental factors Organizational process assets
Table6-2
Estimate Activity Durations Process Inputs, Tools and Techniques, and Outputs
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PMPCertification:ABeginner’sGuide TIP When using expert judgment, the tendency is for the expert to provide a “one-time estimate” (one estimate per activity). There are advantages and disadvantages to a one-time estimate. The advantage is you get the estimate directly from the expert, and usually this is the most accurate. The disadvantage, especially if the activity is new or not frequently performed, is you tend to get “padding” in the time estimate. The best solution is to have the team members participate in creating the WBS and then work from it for the best estimates possible. ●
Analogousestimating Thisisaformofexpertjudgmentthat’salsocalled“top-down estimating.”Itinvolvestakinghistoricalestimatesfromprevious,similarprojects(an analogy).Thisestimationtechniqueisusedtodeterminethedurationwhenthedetailed informationabouttheprojectisnotavailable,usuallyduringtheearlystagesofthe project.
TIP PMI seems to prefer analogous estimating due to the use of historical information from previous, similar projects and tends to lean toward this type of estimating on the exam questions. ●
Parametricestimating Thistypeofestimatingusesa“costperunit”(quantifiable/ mathematical)model,suchascostpersquarefoot(foraconstructionproject), costperlineofcode(forasoftwaredevelopmentproject),andunitsperhour(for amanufacturingproject)todeterminehowlonganactivitywilltake.Yousimply multiplythecostperunit(price)bythequantity(P*Q)togettheestimatedamountof worktodeterminetheoverallcost.
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Three-pointestimate Intherealworld,theprobabilityofcompletingaprojecton asetdate(especiallywhenchangeisinevitable)isprettylow.Therefore,thebestway todeterminetherangeofestimatingaccuracyistoestimatetheprobabledateusinga three-pointestimate.Aweightedaverageisusedtoestimatethethreetimes(orcosts). Hereishowitworks:Asubjectmatterexpert(SME)whoisveryfamiliarwiththe activityestimatesthebest(optimistic=O),worst(pessimistic=P),andmostlikely (ML)timeorcosttoperformtheactivity.Thenyouusethefollowingformulato calculatethethree-pointestimate: (P+(4*ML)+O)/6 NotethatPMIreferstothethree-pointtimeestimateasaPERTestimatealongwith twootherformulasthatmayappearonthePMPexamforactivitydurationandcost estimating(seeFigure6-10).Itwouldbeagoodideatomemorizethem.Alsonote thatPMIhaschangedthelookoftheformulanottheconcept(seePMBOKpage150).
Chapter6: ProjectTimeManagement
Three-point estimate for an activity:
Standard deviation of an activity:
Variance of an activity:
(P + 4ML + O) 6
P–O 6
P–O 6
2
Note: To estimate duration for the project, you need to add up the activity estimates on the critical path and because statistically you can’t add standard deviations, you must calculate the variances for the activities.
Figure6-10
TryThis
Pert formulas
Using Three-Point Estimate for Travel Time
Youhavedriventhesameroutetoworkforthepastthreeyears,soyouaretheSMEon howlongthetriptakes.Youhavedeterminedittakesyou45minutestogettoworkon agood(optimistic)day(withgoodweatherandminimumtraffic).Onapoor-weatheror heavy-trafficday,ittakesaslongas75minutes.However,themostlikelydrivetimeis onehour(60minutes).Pluggingthesenumbersintoathree-pointformularesultsinthe following: (45+(4*60)+75)/6,or(45+240+75)/6,or360/6=60 Therefore,knowingthethree-pointformula,whatdoyouget? Answer:Itwilltakeonehour(60minutes)onaveragetodrivetowork.
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Reserveanalysis Thistechniqueisusedtoestimatethecostofprojectactivities. Dependingontheresultsofthereserveanalysis,dollarscanbesetaside(called contingencyormanagementreserves)tobeusedtocoverriskeventsthatarelikelyto affectscheduleandcost.ThistopicisdiscussedinmoredetailinChapter7.
5. Develop Schedule Process Scheduledevelopmentiswheretherubbermeetstheroad,sotospeak.It’swherethe schedulemanagementworkreallybegins,andtheresultsofthisprocesswillhaveahuge impactonyourprojectmanagementcapabilityandcredibility. Onceyouhaveanetworkdiagramandactivityandresourcesestimates,itistime toputtheinformationintoaschedule.(Thedifferencebetweenatimeestimateanda scheduleisthatthescheduleiscalendarbased.)
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Ask the Expert Q: Isthereachecklistthatcanhelpmeandmyteamdevelopascheduleforourproject? A: Yes,thereis.ThisisoneIhaveusedthatseemstoworkprettywell. ●
S tartwithaclearunderstandingoftheworkrequiredontheproject(scopestatement, charter,stakeholderpriorities,expectations,timeframe,deliverables,andsoon). ● Clearlydefinetheactivities(WBS,WBSdictionary,andactivitylist)andalternatives. ●
Haveaclearideaoftheorderofhowtheworkshouldbedone(activitysequencing).
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Obtainanestimateoftheresourcesneeded(activityresourceestimating).
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Obtainanestimateofthedurationofeachactivity(activitydurationestimating).
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O btainacompanycalendaridentifyingworkingdaysandnonworkingdays(thisvaries bycountry)aswellaskeystakeholder(teammembersandsponsor)vacationdays.
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Identifyimposeddates(deadlinesormajordeliverabletargetdates).
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Identifyandverifymilestonesanddependencies(internalandexternalagents).
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Identifyanddocumentassumptions(inscopeandoutofscopeexclusions).
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Identifyconstraints(time,costlimitations,leadtimes,lagtimes,anddependencies).
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Identifyotherpotentialimpactstotheschedulesuchasresourceavailability.
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Obtainformalstakeholderacceptanceoftheschedule.
AccordingtoPMI,theDevelopScheduleprocessinvolvesanalyzingactivity sequences,activitydurations,resourcerequirements,andscheduleconstraintstocreatea projectschedule. So,howdoyoueffectivelydeveloptheprojectschedule?Thisprocessstartswith theoutputsfromotherpreviousprocesses.Withyourteam,focusonactivityduration estimatestohelpensurethescheduleisbothrealisticandachievable. Thequestionthatmustbeansweredattheendofthisprocessis,howlongwillthe entireprojecttaketocomplete?Armedwiththeactivitydurationestimates,yourteam,and theoutputsalreadycollected,youworkverycloselywithallthestakeholderstodevelop theprojectschedule.Aswithallprojectmanagementprocesses,italwayshelpstohavea plannedapproach.Herearesomethingstoconsiderwhendevelopingyourprojectschedule: ●
Asalways,firstandforemost,remembertomakethisateamsportbygettingallthe information,constraints,andexpertjudgmentyoucan.Attheendoftheprocess,you shouldhavebuy-infromtheteamandotherkeystakeholders.
Chapter6: ProjectTimeManagement ●
Next,youneedtofullyunderstandtherequirementsandstakeholderpriorities(don’t beafraidtoaskandverifythesekeycomponents).
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Beopen-mindedandlookatvariousoptions.Also,documenttheoptionsevenifthey arenotusedrightaway.Thiswillgiveyouaheadstartonriskmanagementplan development(seeChapter11).
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Lookacrosstheentireproject(chartertoclose),asmentionedinChapter4,tosee howtheprojectcanimpact(orbeimpactedby)otherprojects—forexample,limited resources,changesinpriorities,andshiftinsponsors(turnover)orbudgetdollars.To thisend,youmightwanttogetmanagerstoprovideyouwith“lettersofcommitment” forkeyresourcestoensurethepeoplewillbeavailableonyourprojectforthetime neededwithoutinterruptionsfromotherworkorprojects.
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Lastly,whenthescheduleisdeveloped,youmustcontinuouslymanageit.Neverput thescheduleinadeskdraweroronashelf.Itshouldbeaworkingdocumentthat’s reviewed,worked,andrevised(throughchangecontrol)earlyandoften,asneeded,to beuptodateandaccurate.
Also,itisimportantforyoutouseprogressiveelaboration(iterativeprocessing) toapplythethingsyouhavelearnedasyouprogressfurtherintotheprojectlifecycle toupdatethescheduleandotherdocuments.Asmuchaswewouldliketo“lockin” onthescheduleatthebeginning,aphenomenoncalled“discovery”surfacesasweget deeperintotheproject.Aswelearnmoreabouttheproject,weneedtomakeupdatesto theschedule.Thisisoftencalled“hindsight”(whichpeoplesayis20/20).Thismeans historicalinformationisagoodthing.
TIP Be very aware of project constraints, limitations, or barriers that can cause you and the team to stumble and fall. It is extremely difficult to see all the constraints at the beginning of the project. This is why you need to be aware of possible constraints and the possible impact to the project throughout the life cycle. Constraints can appear in many forms; some are self-inflicted and in some cases can be turned into real opportunities. A good example of a project with a schedule constraint is the Olympics: It doesn’t matter whether or not the paint is dry on the stadium seats; the torch is to be lit at a specific time on a specific date.
Impact of Project Constraints Constraintsareimposedonprojectsfrommanysources—evenfromwithin(self-inflicted). Supposeyouareputtingactivitiesintoyourschedulingsoftwaretoolandyoudecidethe dateforaparticularactivityisfixed(forexample,“muststarton”or“mustfinishon”). Whatdoyouthinkthisdoestotheschedulingsoftwarethatworkssohardtocalculatefloat,
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Types of Schedule Constraints ThefourcommontypesofscheduleconstraintsarelistedanddescribedinTable6-3.The twousedmostoftenare: ●
StartNoEarlierThan
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FinishNoLaterThan
Itisimportanttorememberthatconstraintscanbetiedtoindividualprojectactivities and/ortheentireproject.Also,constraintsareoftentieddirectlytoamilestone,which maybeoutsidetheprojectteam.Remember,milestonesaremajoreventsontheproject andrequirezeroresources(fromtheprojectteam)andcarryzeroduration. Constraint
WhattheConstraintDoes
Examples
Start No Earlier Than (SNET)
The constraint sets when an activity can begin based on a predetermined date or time, often because of a dependency (usually customer imposed).
Setting up the church for a wedding. This activity cannot begin until Monday after the Sunday evening church service has been completed. The electrician on a construction project can start no earlier than when the milestone of the building inspector signing off on the roof decking is complete.
Start No Later Than (SNLT)
The constraint indicates the activity must start prior to a predetermined deadline. This is also known as “right-to-left scheduling.”
A changeover project to convert the events center from a rodeo to a concert takes two weeks; therefore, the changeover can start no later than June 1 to be ready for a June 15 concert date.
Finish No Earlier Than (FNET)
This constraint requires the activity to be in progress up until a predetermined date.
The tests for software are required to run continuously until June 15 to obtain adequate results.
Finish No Later Than (FNLT)
This constraint states that an activity or project must finish on a predetermined date.
Federal income taxes must be mailed (postmarked) no later than April 15.
Table6-3
Schedule Constraints
Chapter6: ProjectTimeManagement
Reporting Schedule Status Differentstylesfordifferentstakeholdersisaneasywaytothinkaboutthetypeofreport touse(aswellasformatandfrequency)whenreportingtheprojectschedule.Thistopic willbediscussedinmoredetailinChapter10.Thereareafewthingstothinkabout beforeyousetupyourstatusreports. Someprojectmanagerswhenasked,“Areweonschedule?”aresodetailorientedthey arequicktotellyouhowtobuildawatchratherthanjusttellyouthetimeofday.Too oftenwefeeltheneedtotellthewholestoryratherthantheonly-the-factsversion.Thisis especiallytrueonprojectstatusreports—keepthemshortandtothepoint.Thisiswhere milestonechartsaregreatforreportingstatustomiddle-orexecutive-levelmanagers. Remembertherearetimeswhen“lessismore.”Lessinformation—aslongasitisthe rightinformation—isoftenmorethanenoughdetailtogetthemessageacross.Thekeyis toknowyouraudience—knowwhattheirinterestsareandbesuretoworkonproviding therightinformation,asneeded,inasuitableformat.Forexample,a“dashboard”report providesagreatwaytoshowhigh-levelstatus. Itisdifficulttostayfocusedontheoverallprojectscheduleifyouaretryingto managetimeonly.Youmustbeabletomanagebothtimeandtheoverallprojectsequence ofactivitiestobringtheprojectinonschedule.
Types of Schedule Reports Asyouknow,anumberofreporttypesandstylesareavailabletopresentthestatusofa projectschedule.MostPMssendthecurrentcopyoftheirprojectscheduleasaMicrosoft Project(.mpp)file.Thisiseasytodo;however,noteveryoneontheteamoryoursponsors willhavelicensedsoftwaretoviewMicrosoftProjectfiles.Thisoranyotherscheduling softwarecanbeexpensive.Fortunately,mostsoftwareproductstodayallowyoutosave thefileinHTMLorotherviewableformats,suchasexportstoMicrosoftExcelorother softwarethatallowsyoutoviewfilesfromotherapplications.
Ask the Expert Q: WhenshouldIbaselinetheprojectschedule? A: Thesooneryoubaseline,thebetter(asmentionedinChapter5).Thelongeryouwait,the
morechangeswilllikelyoccur,thusmakingthescheduleenddateamovingtarget.When therearemanychanges,youneedtodocument,verify,andobtainformalacceptanceofthe targetdate.Oncethetargetdateisapproved,youshouldbaselinethescheduleandusechange control,whichwillgiveyouanopportunitytorenegotiateanewadjustedtargetdateand re-baselinetheschedulewhenchangesarelikelytomoveouttheprojectcompletiondate.
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Critical Path Method (CPM) Asmentionedearlier,thecriticalpath(CP)isdefinedasthelongestpaththroughthe networkthatrepresentstheshortestamountoftimetocompletetheproject.Theactivities ontheCPhavethebiggestimpactontheprojectenddate.ThewaytocalculateCPisby usingthecriticalpathmethod. Thecriticalpathmethod(CPM),aspartoftheprecedencediagrammingmethod,helps youdeterminewheretheflexibility(orlackofflexibility)resides.TheCPMinvolves calculatingtheearlieststart(ES)date,earliestfinish(EF)date,lateststart(LS)date,and latestfinish(LF)dateforeachactivityinthenetworkdiagram.Soundsprettyominous. However,itismucheasierdoneasateamexercise,andaddsvalidity(buy-in)tothetime ittakestocompletetheproject. InChapter5,wediscussedcreatingtheWBSandtheuseofstickynotestoidentify activities.ForarecommendedlayoutofCPMactivitiesandhowtouseastickynoteto assistwiththecalculationofforwardandbackwardpassandfloat,seeFigure6-11. Itisalsoimportanttorememberthatactivitiesonthecriticalpathtypicallyhavezero float.Float(orslack)timeisdeterminedbyperformingaforwardandbackwardpass throughthenetworkandcalculatingtheamountoftimeanactivitytakesinrelationship totheotheractivities.Thegoalistoidentifyactivitiesthatwillpotentiallyimpactother activitiesortheoverallprojectenddateifdelayed(detailsandexampleswillbediscussed laterinthischapter). Youshouldalsobeawarethatthecriticalpathcanchangeifdelaysoccur,orifmilestones ordependenciesaremissed.Also,anapprovedscopechangeoratriggeredriskmaycause youtohavetorecalculatethecriticalpath.
Basic Scheduling Terms Hereareseveraltermsyoushouldbefamiliarwithpriortocalculatingthecriticalpath: ●
ForwardpassandBackwardpass Thesetermsarerelatedtowaysofdetermining theearlyorlatestart(forwardpass)orearlyorlatefinish(backwardpass)foran activity.Forwardpassisatechniquetomoveforwardthroughadiagramtocalculate activityduration.Backwardpassisitsopposite.
●
Predecessor Anactivity(A)thatexistsonacommonlogicpaththatoccursbefore anotheractivity(B).
●
Successor Anactivity(B)thatexistsonacommonlogicpaththatoccursafter anotheractivity(A).
●
Freefloat Theamountoftimeanactivitycanbedelayedwithoutdelayingtheearly startofanyimmediatelyfollowing(successor)activities.
Chapter6: ProjectTimeManagement
Early Start
ID #
Early Finish
Activity (verb) Late Start
Figure6-11
Duration (days)
Late Finish
Sample sticky note layout
●
Float Alsocalled“totalfloat”or“slack.”Theamountoftimeanactivitycanbe delayedfromitsearlystartwithoutdelayingtheprojectfinishdate.
●
Nearcriticalpath Thepaththroughthenetworkwiththelowesttotalfloat(if changesoccurtothenetwork,thenearcriticalpathmaybecomethecriticalpath).
●
Lagtime Fixeddelaybetweenthestartandfinishofoneactivityandthestartor finishofanother(forexample,lettingthepaintdrybeforehangingthepictures).
●
Leadtime Modificationofafixedrelationshiptoacceleratethestartofasuccessor activity(forexample,preheatingtheovenpriortothe“cooktheturkey”activity).
●
Dangler Anunintendedbreakinthenetworkpathoranactivityinthenetwork diagramthatismissingadependencyfromitspredecessororsuccessoractivity.
●
Loops Circularrelationshipsthatwon’tallowanactivitytoend(forexample,a softwaretestcyclethatcontinuouslyidentifiescorrectionsandenhancementsthatare neverending).
Calculating the Critical Path Todeterminethecriticalpathdurationofaproject,youmustfirstperformaforward passandthenabackwardpass.Thisprocesswillallowyoutocalculatethefloatofeach activity.Theactivitiesthathavezerofloatarethoseactivitiesthatdeterminethecritical path.Yousimplyaddthedurationofeveryactivitywithzerofloatacrossthenetwork,and thatwillconfirmtheoverallprojectduration.Thismeansthatanyactivity,ifchanged,that impactstheprojectenddateislikelytobeonthecriticalpath. Byidentifyingallpathsinthenetworkandaddingtheactivitydurationsalongeach path,youcandeterminewhichpathisthelongestduration—andthatisthecriticalpath. Thisprocesswillalsohelpidentifyifyouhavemorethanonecriticalpath.(Yes,youcan havemorethanoneCPonaproject.)Itisalsoimportanttoknowthepaththatisnearest tothecriticalpathincasetheCPchangesforsomereason.
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PMPCertification:ABeginner’sGuide Thereareseveralstepsindeterminingthecriticalpathofthenetworkdiagram. Thefollowingsummarylevelchecklistcanbeusedasaguidetohelpyouthroughthis process:
1.Allnetworkdiagramsshouldhaveastartactivity(zeroduration)andcanstartat
dayzeroordayone(mostPMsliketostartatdayone;however,thereisnohard ruleonthis).
2.Identifyallactivitiesthatcanbeginimmediately.Thesemaybecomethedifferent
paths.
3.Identifythenextdependentorassociatedactivitytocontinuethelogicalrelationshipof
thenetworkpath.
4.Completetheprocessuntilallpredecessorsandsuccessorshavebeenidentified
(withnodanglers).
5.Identifytheactivitiesthatsignifycompletionoftheproject(alwayshavean“end”
activity).
6.Calculatetheforwardpass.Notethatwhenmultipleactivitiesconvergeintoasingle
activity,youshouldselecttheactivitywiththehighestearlyfinish(EF)tocarryforward totheearlystart(ES)ofthesuccessoractivity(seedetailsandFigure6-12,laterinthis chapter).
7.Findthelatestearlyfinishdatesoftheproject.Thiswillgiveyouanideaoftheoverall
lengthoftheproject.
8.Calculatethebackwardpass.Notethatwhenmultipleactivitiesconvergeintoasingle
activity,youshouldselectthelowestlatestart(LS)tocarryovertothelatefinish(LF) single-predecessoractivity(seedetailsandFigure6-13,laterinthischapter).
9.Calculatethefloat.Notethatthetotalfloatiswithinthebox,andfreefloatisoutside
thebox(onthelinebetweenactivities).
10.Identifythecriticalpath(orcriticalpaths)andthenearcriticalpath.
11.Validatethenetworktoensurethatitiscorrectandcomplete.
12.Becomefamiliarwiththecharacteristicsofthenetwork.
13.Verifythattheworkcanbedonewiththeavailableresources.
14.Takeactionstoadjustthescheduleasneeded.
15.Besuretoincludeprojectmanagementactivities.
Chapter6: ProjectTimeManagement
Activity Convergence and Divergence Othertermsyouneedtobeawareofwhencalculatingtheforwardandbackwardpassare activityconvergenceandactivitydivergence: ●
Activityconvergence Occurswhendeliverablesoftwoormorepredecessor activitiesarerequiredforthestartofasingleactivity(successor).Onaforwardpass, whenconvergingactivitiesintoasingleactivity,youshouldalwaysusethelargest oftheearlyfinishdatesofthepredecessoractivitiesastheearlystartdateofthe successoractivity.Onabackwardpass,alwaysusethesmallestlatestartdateasthe latefinishdateofthesuccessoractivity(seeFigure6-12).
●
Activitydivergence Occurswhendeliverablesofoneactivityarerequiredforthe startoftwoormoreactivities.Onaforwardpass,whendivergingasingleactivity intomultipleactivities,youshouldusetheearlyfinishofthepredecessoractivity astheearlystartdateofeachofthesuccessoractivities.Onabackwardpass,when divergingasingleactivityintomultipleactivities,usethelatestartofthepredecessor activityasthelatefinishdateofeachofthesuccessoractivities(seeFigure6-13).
TIP Here are a couple tips to help when you are running the forward and backward pass: “Mind the line,” which means pay close attention to the relationship lines (convergent paths, finish-to-start, and so on). “Mind the sign (+/–),” which means watch for lead and lag times. Lag is a delay (+ time) going forward; however, it’s a minus sign (–) coming back on the backward pass. Lead time is “negative” lag—that is, minus sign (–) on the forward pass and a plus sign (+) on the backward pass. These tips will make more sense as you work through your own network diagrams.
Forward pass Convergence
Figure6-12
Sample converging paths
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Figure6-13
Sample diverging paths
Steps to Calculate the Forward Pass Theforwardpassiswheretheactivitydurationestimatecomesinandiscrucialtothe accuracyofthecriticalpathcalculations.Thedetailedstepstocalculatetheforwardpass areasfollows:
1.Calculatingtheforwardpasswilldeterminetheearlystart(ES)andearlyfinish(EF)
daysforeachactivity.TheESandEFnumbersgointheupper-left(ES)andupperright(EF)corners,respectively,ofeachactivity(refertoFigure6-11).
2.TheESforthefirstactivity(A)isusuallyzero(placethatnumberintheEScornerof
thestickynote).
3.TheEFofActivityAiscalculatedbyaddingthedurationofAtoitsearlystart(early
start+duration=earlyfinish).PlacethisnumberintheEFcornerofthestickynote.
4.TheearlyfinishofActivityAthenbecomestheearlystartforthenextactivity.
5.AddthedurationoftheactivityyouarecalculatingtotheESnumbertogettheEF
numberforthatactivity,andsoon.
6.Completetheforwardpassfortheentireprojecttodeterminethetotalprojectduration
(thisnumber,onceconfirmed,representstheoverallexpecteddurationoftheproject). Table6-4isusedasinputtohelpdemonstratetheforwardandbackwardpasses.Using theinformationinTable6-4,Figure6-14showshowtheforwardpassmightlook.
Steps to Calculate the Backward Pass Thebackwardpass,ifcalculatedproperly,shouldgetyoubacktotheoriginalstartingday (0or1,dependingonwhichyouusedatthestartbox).Thebackwardpassprovidesthe numberstohelpyoucalculatefloat.Toperformthebackwardpass,usethelatestart(LS)
Chapter6: ProjectTimeManagement
Activity
Predecessor
Duration
Start
—
0
A
Start
7
D
A
2
C
A
8
B
D
3
H
D
5
E
C
5
F
B, H
6
G
E
1
I
F, G
9
End
I
0
Table6-4
Sample Table Used to Calculate Forward and Backward Pass
Forward Pass ES 9 ES 7
0 Start
ES 0
EF 7
A 7 days
B 3 days
EF 9
D 2 days
ES 9
EF 14
* Always take the larger number (12, 14*) ES *14
EF 20
F 6 days
H 5 days ES 7
EF 15
C 8 days
ES 15
ES = Early Start
Figure6-14
EF 12
Sample forward pass
EF 20
E 5 days
ES 20
EF 21
G 1 day
EF = Early Finish
(20, 21*) ES EF *21 30 I 9 days
30 End 30
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PMPCertification:ABeginner’sGuide inthelower-leftcornerboxandthelatefinish(LF)inthelower-rightcornerboxofthe stickynoteforeachactivity(seeFigure6-15). ●
Latestart(LS) Thelatestdateanactivitymaybeginaslogicallyconstrainedbythe network
●
Latefinish(LF) Thelatestdateanactivitymayfinishaslogicallyconstrainedby thenetwork Thedetailedstepsinvolvedwithcalculatingthebackwardpassareasfollows:
1.Doingthebackwardpasswilldeterminethelatestart(LS)andlatefinish(LF)duration
timesforeachactivityintheproject.
2.Startingwiththefinalactivityandworkingbackward(righttoleft),subtracttheduration
ofthelastactivityfromitsLFtoarriveatitsLStime(LateFinish–Duration=LateStart).
NOTE Always take the lowest number when multiple paths converge going back through the network diagram.
* Always take the smaller number 7
0 Start 0
0
7 A 7 days 0 7* LS LF (8, 7*)
9 D 2 days 8 10* LS LF (12, 10*)
7
15 C 8 days 7 15 LS LF LS = Late Start
9
12 B 3 days 12 15 LS LF 9
14 H 5 days 10 15 LS LF 15
20 E 5 days 15 20 LS LF
14
20 F 6 days 15 21 LS LF 21
20
21 G 1 day 20 21 LS LF
30 I 9 days 21 30 LS LF
LF = Late Finish Backward Pass
Figure6-15
Sample backward pass
30 End 30
Chapter6: ProjectTimeManagement
3.Whenmorethanoneactivitysucceedsagiventask,theearliestoftheLSdatesofthe
successoractivitiesisselectedtobecometheLFdate.
4.TheLFisthelatestthatagivenactivitymayfinishwithoutdelayingthecompletionof
theproject.
5.Completethebackwardpassfortheentireprojectandcalculatefloattodeterminethe
criticalpath.
Float and Slack Thegoodnewsis,mostprojectmanagementsoftwarewillcalculatefloat(synonymous with“slack”).Tomakesureyouhaveanideaofwhatisgoingon(orshouldbegoingon) inthesoftwareandtobeabletocheckthesoftwareresults,youshouldhaveatleasta fundamentalunderstandingofthesecalculations(seeFigure6-16). ●
TotalFloat(slack) Theamountoftimeanactivitycanbedelayedwithoutdelaying theprojectenddateoranintermediarymilestone.Tocalculateataskoractivity’s float,usethefollowingformula: (LateStart–EarlyStart)or(LateFinish–EarlyFinish)=Float ES 9
0 Start 0
Figure6-16
ES 0
EF 7
A 7 days 0 7 LS LF 0
ES
EF
7
9
D 2 days 8 10 LS LF 1
EF 12
B 3 days 15 12 LS LF 3 ES 9
EF 14
H 5 days 10 15 LS LF
*Float = EF − LF (20 − 21 = 1 day float) ES 14
EF 20*
F 6 days 15 21* LS LF 1
1 ES 7
EF 15
C 8 days 7 15 LS LF 0
ES 15
EF 20
E 5 days 15 20 LS LF 0
Sample float and slack calculation
ES 20
EF 21
G 1 day 20 21 LS LF 0
ES 21
EF 30
I 9 days 21 30 LS LF 0
30 End 30
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PMPCertification:ABeginner’sGuide ●
Freefloat(slack) Theamountoftimeanactivitycanbedelayedwithouttheearly startdateofitssuccessor.Here’stheformulatouse: (EarlyStartB–EarlyFinishA)=FreeFloatofA
●
Projectfloat(slack) Theamountoftimeaprojectcanbedelayedwithout delayingtheexternallyimposedprojectcompletiondaterequiredbythecustomeror managementorthedatecommittedtobythePM.
Asanimportantreminder,activitiesonthecriticalpathhavezerofloat.Afterfloathas beencalculated,youtaketheactivitieswithzerofloat,andthosearetheactivitiesonthe criticalpath(seeFigure6-17).
6. Control Schedule Process TheControlScheduleprocessinvolvesmonitoringthestatusoftheprojectandreporting progressonthescheduletowardprojectcompletion.Remember,allprojectshaveanend date(ortheyshould),socontrollingthescheduleistheonlywaytogettheprojectto successfulcompletion. ES 9
0 Start 0
ES 0
EF 7
A 7 days 0 7 LS LF 0
ES
EF
7
9
D 2 days 8 10 LS LF 1
EF 12
B 3 days 12 15 LS LF 3 ES 9
EF 14
H 5 days 10 15 LS LF
ES 14
F 6 days 15 21* LS LF 1
1 ES 7
EF 15
C 8 days 7 15 LS LF 0
ES 15
EF 20
E 5 days 15 20 LS LF 0
*Critical Path = 30 Days Float = 0
Figure6-17
EF 20*
Sample critical path
ES 20
EF 21
G 1 day 20 21 LS LF 0
ES 21
EF 30
I 9 days 21 30 LS LF 0
*30 End 30
Chapter6: ProjectTimeManagement
Progress Reporting Manyformsandtemplatesareavailabletoreportprogress.Irecommendperformingan Internetsearchon“projectprogressreports”foraplethoraofreal-worldexamples.
TIP For reporting high-level progress to top and middle managers and executives, you should use a dashboard or milestone charts to show major accomplishments without all the details. Also, there are ways to produce summary-level charts directly from your PM software tools using filters and such. For example, Microsoft Project has reporting options such as Overview, Current Cost, Assignments, Workload (Resource Leveling), Earned Value (EV), and Custom Reports.
Aprogressreportisausefulmethodtocontrolthescheduleandcosts.Manyproject managersdeterminehowmuchworkhasbeenaccomplishedbyaskingteammembersfor anestimateof“percentcomplete”foreachworkpackageoractivity.Onprojectswhere workcannotbemeasured,thisestimateisasimpleguess.Thisistimeconsumingand almostalwaysacompletewasteoftimebecauseaguessdoesnotprovideaconfident estimateoftheactualpercentcomplete. IfaprojecthasbeenplannedusingaWBS,andworkpackagesrequireabout80hours ofwork,therearealternativestopercentcomplete.Becauseworkpackageswillbe completedfasterandmorefrequently,wecanforgetpercentcompleteanduseoneofthe followingrules: ●
50/50rule Anactivityisconsidered50-percentcompletewhenitbeginsandgets creditforthelast50percentonlywhenitiscompleted.
●
20/80rule Anactivityisconsidered20-percentcompletewhenitbeginsandgets creditfortheother80percentonlywhenitiscompleted.
●
0/100rule Anactivitydoesnotgetcreditforpartialcompletion,onlyfullcredit whencomplete.[7]
TIP The PM must work with the team to get consensus to ensure that all team members have the same expectation of what 20 percent or 50 percent complete really means so that schedule updates are reported consistently throughout the project.
Managing the Schedule (Compression) Therearetwowaystomanage(compress)theprojectschedule.Oneis“fasttracking” (doingthingsinparallel)andtheotheris“crashing”(bringinginadditionalresources). Bothmethodshelpgetyoubackonschedule.Aswithanyformofcompression,thereare
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PMPCertification:ABeginner’sGuide increasedrisksand/ortradeoffs,suchasincreasedcost(forexample,thecostofreworkor trainingiftheaddedresourcesarenotexpertsintheactivity). Withfasttracking,youaddriskbydoingmultiplethingsatthesametime(aformof multitasking),andwhenyoubringmorepeopleontheproject(crashing)youaddcost. Therefore,youmightwanttouseacombinationofcompressiontechniques,asneeded, tominimizecostandriskwheneverpossible. Onewaytoremember“crashing”istothinkofaparty.Someonewhoarrives uninvitedissaidto“crash”theparty(likelyeatingupmorefoodthanthehosthad planned).Althoughsilly,thismemoryticklerusuallyworks(accordingtomystudents). Therefore,rememberthatcrashingthescheduleinvolvesbringingmorepeopletothe party,anditusuallyalwayscostsmorethanplanned.
TryThis
Out-of-Control Schedule
Thecustomercomestoyou(thePM)inthehallwayandsays,“Thedatefortherockconcert hasbeenmovedup(sooner)bytwoweeksandtheywantadditionalpyrotechnicsandlighting changes.Ineedtoknowifthereisanywayyoucanmovethisprojectaheadtomeetthenew dateandadditionalrequirements.”Whatdoyousay?
A. Sure,wecandothat!Noproblem.
B. Iwillneedtogetwiththeteamandseewhatouroptionsareandthelevelofriskif
wecompresstheschedulebytwoweeks.Givemeadayortwotoworkthisout.
C. Iwillbehappytoworkwithyoutobetterunderstandthechangestothescheduleand
willhelpinitiatetherequestaspartofoururgentchangecontrolprocess.
D. Sorry,ifwemovethescheduleahead,theteamwillhavetoworkovertime.Weare
cominguponvacationtimeandwillbeshortonstaff. Answer:C.Youshouldalwaysmanagetheschedulebyusingadocumentedandapproved changecontrolprocess.
Work the Plan (Project Execution) Attheendoftheday,itisallaboutexecution.Youcanhavethebestplanandthebest scheduleever,butifyoucan’teffectivelyexecute(work)theplan,youmightaswell updateyourrésuméandmoveon.Theprimaryjobofprojectmanagersistobeableto putourmoneywhereourmouthisanddeliverwhatwesaidwewould,ontimeandon budget.EffectivetimemanagementenablesyoutoperformyourjobasthePMwith confidenceandsuccessfulresults.
Chapter6: ProjectTimeManagement
References
1.Wikipedia,http://en.wikipedia.org/wiki/Time_management.
2.Answers.com,http://www.answers.com/topic/activity-attributes.
3.WidemanComparativeGlossaryofProjectManagementTerms,http://www.maxwideman
.com/pmglossary/PMG_L01.htm.
4.Philips,Joseph.PMPProjectManagementProfessionalStudyGuide,SecondEdition
(McGraw-Hill,SanFrancisco),2008,page222.
5.SearchSoftwareQuality.comat:http://searchsoftwarequality.techtarget.com/sDefinition/
0,,sid92_gci331391,00.html
6.Wikipedia,http://en.wikipedia.org/wiki/Resource_Leveling.
7.Mulcahy,Rita.PMPExamPrep,SixthEdition(RMCPublications,Inc.),April2009,
page240.
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Chapter
7
Project Cost Management
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KeySkills&Concepts ●
Theroleoftheprojectsponsor
●
Theimportanceofcostmanagement
●
Thethreecostmanagementprocesses
●
Managingthebudget
●
Typesofestimates
●
Rangeofaccuracy
●
Earnedvaluemanagement(EVM)
●
TipsonhowtorememberEVMformulas
●
Reserveanalysis(contingency)
●
Typesofreports
●
Lifecyclecost
C
ostmanagementisoneofthekeyprojectmanagementmeasurements.Rememberthe projectconstraints?Costisoneoftheprimaryfocusareaswhenmanagingprojects. Inanyeconomy,managingcostcanmeanthedifferenceinwhetherornotaproject cansurvive.Companiesaresometimesforcedtocutbudgets(ormovetoothersuppliers ormarkets)tostaycompetitive.Theprojectsthatcostthemostorarenotmovingas quicklyasthecompanyfeelstheyshouldaretheonesthatarefrequentlyterminated.The endresultis,projectsliveanddiebythealmightydollar(orpeso,euro,yen,andsoon). Ifyouhavemanagedprojects,evenbriefly,chancesareyouhavehadoneterminated duetobudgetproblems.Iwascaughtbysurprisefivemonthsintoasix-monthproject inNewYorkwhenmybosscalledandinformedmetheprojectIwasworkingonwas justcancelledduetobudgetcuts.Itisafactoflife,sowhatcanyoudo?Theansweris prettyclear:Youmanagethebudgetascloselyasyoucan.Youmustget(andstay)cost consciousandmanagethebudgetasifitwereyourownmoney.Iftheprojectgoesaway, yourpaycheckmaygoawaywithitifyoudon’tmanagecostwisely.
Chapter7: ProjectCostManagement Ifmanagingabudgetwaseasy,anyonecoulddoit.Afterall,itislikebalancingyour checkbook,right?Youhaveabudget,andyouhavecostsandexpensesthatbleeddown thebudget.Intheworldoffinance,wecallthisa“two-linechart”(budgetversusactual cost).Intheworldofprojectmanagement,youneedtobefamiliarwithadditionaltools andtechniquestomoreeffectivelyestimate,manage,andreportprogressagainstyour projectbudget. Oneofthetoolsformanagingcostasaprojectmanagerisearnedvalue(EV),which inPMItermsisthevalueoftheworkperformed.Iliketocallita“three-linechart” becauseEVlooksbeyondthebudgetandactualdollarsspent.EVtakesareallookatthe workthathasbeencompletedandallowsyoutoputthataccomplishmentintodollars andcentssoyoucanshowthetruefinancialhealthandperformanceofyourproject.The objectiveistogiveyouabetterunderstandingofthebenefitsofperformancetrackingas opposedtojustlookingatthedollarsspent. Manyprojectmanagersareeitherunfamiliarwithearnedvalueorsimplychoosenot touseitbecauseittakessometimetoincorporateandmanageit.AnotherreasonPMs shyawayfromthefinancialaspectsofaprojectisalackofafinancialbackground.For example,howmuchfinanceoraccountingexperiencedoyouhave?Ifnotthatmuch, don’tworry.Thischapterprovidessomeeasytipsandtrickstohelpyoumanagecoston yourprojectandtohelpyouremembertheformulasneededtoanswertheearnedvalue management(EVM)questionsonthePMPexam.MoredetailsareprovidedonEVMlater inthischapter.
TIP There are usually only a few questions (approximately 6–10) on earned value on the PMP and CAPM exams and the formulas are pretty easy to remember.
An Offer I Couldn’t Refuse In1984IwasinvitedtointerviewforabigpromotioninChicago,andthecompanytruly mademeanofferIcouldn’trefuse.IacceptedthepromotionasaTechnicalProgram Manager.Afterthemove,andwithonlyonemonthonthejob,mybosscameintomy officeandintroducedmetomynewmanagerinthefinancedepartment. Iwasstunnedandpromptlymadewhatcouldhavebeenacareer-limitingannouncement: “Inever,everwantedtobeabeancounter,”Ideclared.“Well,”mybosssaid,“youare one.”ThereasonIreceivedthis“opportunity”wasbecauseIhadpersonalcomputer (PC)experience.Ihad,infact,purchasedaPCin1983,onlytwoyearsafterPCswere introducedin1981.TheoneIboughtdidn’tevenhaveaharddrive(onlydualfloppy 5¼"disks).BecauseIhadtakenthetime(withmentoringfrommypreviousbranch
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PMPCertification:ABeginner’sGuide managerwhohadsaid,“ThePCisthewaveofthefuture!”)tolearnhowtosetupbasic spreadsheetsandgraphs,Iwasnowa“FinancialAnalyst.” Itturnsoutthatgettinginvolvedwithfinanceforthecompany’s26branchofficesand tworegionalofficesintheChicagoareawasoneofthebestthingsthathappenedtome.It forcedmetolearnabouttheworldoffinanceandhowtosetbudgetsaswellastrackand reportperformancemoreeffectively.Ialsobelievethisexperiencehelpedmemanagemy projectsandmyownfinancialsmoreeffectively.Thanks,boss.
How Do You Spell “$ponsor”? Ofallthestakeholdersonaproject,themostimportantisthesponsor.Itellmystudents thatwhentheythinkofthesponsor,theyshouldvisualizeadollarsignasthefirstletterof thewordtohelprememberwhotherealcustomerisandwhoisfundingtheproject. InmyChicagodays,Ioftensaid,“Fundingisfun.”Notthattheprocessisfun,butwithout fundingtheprojectdoesn’texist.Thus,nofundingequalsnoproject,andthatisnofun! TheprojectselectionprocessandhowprojectsarebornwasdiscussedinChapter3. Wellbeforethefirstdiaperispurchasedforanewproject,youneedasponsor.Moneyis whatmakestheprojectemerge.Someone,somewhereisauthorizingtheproject,andthat takesmoney.
How Cost Management Ties into Time Management Assumingatthispointyourprojectispartofthebusinessstrategyandhasbeenrecognized asessential(andisthereforefunded),let’slookathowcostmanagementtiesintothework youjustcompletedinthepreviouschapterontimemanagement. WeleftoffinChapter6onthetopicofcontrollingtheschedule,whichisthelast processintimemanagement.Thegoodnewsis,allthetimeandworkyouandtheteam investedinestimatingtheresourcesanddurationofeachactivity(orworkpackage)will beakeyinputinconvertingtheseitemsintocosts. Costestimatingisasimpleprocessinmostcases.Youtaketheactivityduration(usually innumberofdays)andfurtherdecomposethisintoestimatedhoursofworkeffortbyactivity. Onceyouassigntheactivitiestodifferentpeopleyoucanusethissimpleformula P*Q wherethequantity(Q)ofhoursismultipliedbytheprice(P)orhourlyrateofthedifferent peopleworkingontheprojecttodeterminecostoflabor.
Chapter7: ProjectCostManagement NoticethatIstartedwithlaborinthecostestimatingprocessbecauseitrepresents thehighestsourceofcosttoyourproject.Thereareexceptions(equipmentandmaterials canbehigh-dollarcosts),butalmostalwaysthecostoflaboristhetopofthelist(usually around80percentoftheoverallcosttotheaverageproject). Therestofthecostestimatingcanbeprettyeasybecausethecostofmaterial, equipment,leases,supplies,andsucharewhattheyare.Youcanshoparoundandnegotiate forthebestpricesforthesethings(evenlaborratesinsomecases),buttheamountquoted isusuallystraightforward.Clearly,otherfactorsneedtobeconsideredincostestimating andmanagement,andtheseotherfactorscancomeatyouinmanyways.Forexample; changesinprojectscopeaswellasunexpectedeventsanddelays(suchasbadweatherona constructionproject)maydriveupovertimeorcauseaturnoverinpersonnel(whichinturn drivestrainingcostsup).Also,naturaldisasterssuchashurricanescandriveupthecost ofbuildingmaterialsandsupplies.Ifanyofthesecasesmentionedoccur,theoriginalcost estimategoesoutthewindow.Thisiswhyyoualsoneedtoplanforrisk(seeChapter11 formoredetailsonriskmanagement).Manydynamicsmustbeconsideredwhenplanning, estimating,andmanagingthecostsforyourproject.
Project Cost Management Processes Projectcostmanagementincludestheprocessesneededtoestimate,budget,andcontrol costssothattheprojectcanbecompletedwithintheapprovedbudget.Costmanagement isprimarilyconcernedwithdevelopingaplanandstickingtoitbytrackingactual spendingandtheimpacttothebudget.Threeprimaryprocessesareassociatedwithcost management: ●
7.1:Estimatecosts(Planningprocessgroup) Theprocessofdevelopingan estimationofthemonetaryresourcesneededtocompleteprojectactivities.
●
7.2:Determinebudget(Planningprocessgroup) Aggregatingtheestimatedcosts ofeachactivityorworkpackagetoestablishanapprovedcostbaseline.
●
7.3:Controlcosts(MonitoringandControllingprocessgroup) Monitoring projectstatustoupdatethebudgetandmanagechangestothecostbaseline.
Intherealworldofprojectmanagement(andespeciallyonsmallerprojects),cost estimatingandcostbudgetingaretightlylinkedandmaybeviewedas,orevencombined into,asingleprocess.
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PMPCertification:ABeginner’sGuide Asyoumayhavenoticed,twoofthethreecostmanagementprocessesarePlanning processes,withthelastonefallingintotheMonitoringandControllingprocessgroup. Clearly,thefocusisonplanningthecost,howtotrackandmanageit,andthetoolsand methodsavailabletoensuretheprojectisontracktocomeinatorundertheapproved budget. Inordertocreateanaccuratecostestimate,youneedtoconsidertheinputs(whichare oftenoutputsfrompreviousprocesses).Theseincludetheprojectscopestatement,WBS, projectconstraints,theschedule,companypolicies,existingsystems,standardtoolsor procedures,andlessonslearnedfrompreviousorsimilarprojects.Historicalinformation isalwaysagreatplacetostart.Youalsoneedanapproved,documentedplan. Acostmanagementplancannotbecompletewithoutmeasurementsandrulesof engagement,suchasprocurement;preferredvendors(suppliersorsellersaswellas purchaseorderprocessingprocedures);andtrackingtools,techniques,andmethods.The costmanagementplanshouldbepartoftheoverallprojectplanandneedstohaveaclear setofestimates,measurementstobetracked,andreportingstatustoshowthatyou ●
Areincontroloftheprojectcostandbudget.
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Candemonstrateyouroverallcapabilitythroughaccurateforecastingtobringinthe projectatorbelowtheapprovedbudget.
Asaprojectmanager,youmayhavetheauthoritytonegotiateforresources(people, equipment,andmaterials).However,manyofusworkinacentralizedprocurement organization,meaningwehavetoengageandworkcloselywithpurchasingandaccounts payabledepartments.Thesedepartmentsmayhavestrictrulesthatyouneedtobeaware ofpriortospending(orcommitting)moneytoobtaingoodsandservices. Aspartoftheplanningprocess,youandtheteamshould,asearlyaspossibleinthe projectlifecycle,determinewhichprocessesortoolsyouwillusetomanagecostonyour project.Onceyoudecidehowyouaremanagingtheprojectcostsandhowyouaregoing totrackandreportprogress,youneedtoincludethesecomponentsinyourprojectcost managementplan.Thecostmanagementplanshouldaddressthefollowingareas: ●
Typeofestimateused.(Moredetailonspecifictypeswillbeshownlaterinthechapter.)
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Levelofaccuracyneededforestimates(forexample,±10percentwithinbudgetor withindeliveryschedule).
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Unitsofmeasure(hours,currency,costpersquarefoot,numberofwidgetsproduced inanhour,costperwidget,hoursperdayworked,costperhouroflabor,andsoon).
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Typeoftracking(forexample,planversusactual,milestones,trends,andearnedvalue).
Chapter7: ProjectCostManagement ●
Typeofreporting(forexample,format,frequency,anddistributionofreports).
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Recordretention(wheretheyarestoredandforhowlong)andwhohasaccess.
Theseareonlyafewofthethingsyoumightincludeinacostmanagementplan.It canbeformalorinformal,providelotsofdetail,orjustbebasic.Attheendoftheday, however,theplanneedsbeinplacetohelpyoumanagethecostoftheprojectwithan acceptablelevelofcontrolbasedontheneedsoftheproject.Theplanneedstomeetthe needsofthestakeholderrequirementsforcapturingandreportingprojectcosts. Whenplanningforcost,keepinmindthatitiscommontoseealotofmoneybeing chargedtoaprojectatthebeginningwithoutmuchtoshowforit.UnlessthePMmanages thestartupcarefully(usingentrancecriteria,withagoodorientationonwhatisneeded versuswhattheymayhavedoneonsimilarprojects),theycangooverbudgetvery quickly.
TIP It is important to tie the cost of the project to its expected life cycle. As you can imagine, the lowest costs will be at the ends (starting and closing), with the highest cost occurring during the execution phase, when you are fully staffed and using the most equipment and materials. Also, you want to plan for some residual costs after the project is shut down for “punch list” or warranty corrections.
1. Estimate Costs Process Theonequestionthatcomesupforeveryproject(especiallynewprojects)is,Howmuch willitcost?Theonlythingthatcanmakethisquestioneasiertoanswer(unlessyou haveareallyclearandaccuratecrystalball)istoutilizeasimilarprojectthathasbeen completedrecentlyforanactualcostcomparison.Thisiscalledtop-downoranalogous estimating.WetalkedaboutitinChapter6andwilldiscussitfurtherinthischapter—it isoneofseveralestimatingtoolsandtechniquesfordeterminingtheestimatedcostto runyourproject. Thecost-estimatingprocessinvolvesdevelopingabestguess(approximation)ofthe resourcesneededtocompleteprojectactivitiesandtheirassociatedcosts.Theestimates shouldberefinedduringthecourseoftheprojectasmoreinformationbecomesknown throughprogressiveelaboration. Asyouprogressthroughtheprojectlifecycle,youlearnmoreabouttheproject,so theaccuracyofyourcostestimatewillincreaseaccordingly.Thecostestimatesshouldbe refinedbasedontheadditionalinformationyouhavegained(thisisaniterativeprocess fromonephasetothenext).
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Range of Estimating Accuracy AccordingtoPMI,thetwoprimaryrangesofaccuracy,whichcanbeusedatdifferent timesduringtheprojectlifecycle,areroughorderofmagnitude(ROM)anddefinitive estimate(seeTable7-1). Thedecisionofwhentouseeachrangedependsonthedegreeofconfidenceinthe dataavailableandthetimingoftheestimateduringtheprojectlifecycle.Forexample, duringtheinitiatingphase(earlyintheprojectlifecycle),therearemanyunknownsanda lotofuncertaintyconcerningthecostandinformation.Theprojectteammaybeneworthe projectmaybeunique;thisisthetimetousearoughorderofmagnitude(ROM)estimate.
NOTE ROM is sometimes called order of magnitude (OM) and carries a wider range of accuracy to estimate the cost of a project early in the life cycle.
Asyougetfurtherintotheprojectlifecycle,youshouldhavemoreaccurateinformation andyourconfidencelevelwillincreasetothepointwhereyoumaychoosetouseanarrower range(definitiveorbudgetlevel)ofaccuracy.Ineithercase,thedecisionisuptoyouand yourteamastotherangeofaccuracyyoufeelisappropriateforyourestimate. Themainthingtorememberwhendeterminingthetypeofestimateandrangeofaccuracy istodocumenttheassumptionsmade,thetypeofestimatingyouused,andthepercentage ofexpectedaccuracy(canbe±10percent,±30percent,or±50percent).Itisyourcall. Oncetheteamagrees,youdocumentandcommunicatetheinformationtotheappropriate stakeholderstominimizeanyconfusionastothedegreeofconfidenceintherangechosen.
TIP There are times when a project sponsor will come to you and say, “I just need a best guess as to the estimated cost before I can agree to start the project.” And far too often the number you provide gets “poured in concrete” and the sponsor wants to hold you accountable for that guess without giving you time to conduct a proper estimate. This would be a great time to use a ROM estimate and document the type of estimate used and the range of accuracy you predict based on your (and the team’s) confidence level.
TypeofEstimate
AccuracyRange WhenUsed
Rough order of magnitude (ROM)
±50 percent
Early in the project life cycle or when confidence is low concerning the information available (for example, for a new and unique project)
Definitive estimate (sometimes a budget-level estimate can be used from -10 to +25 percent).
±10 percent
Later in the life cycle or when confidence is high concerning the information available (for example, for a repeat project)
Table7-1
Range of Estimating Accuracy
Chapter7: ProjectCostManagement Asalways,thebestplacetostartthecost-estimatingprocessistolookatthework (inputsandoutputs)collectedandcreatedthusfarfrompreviousprocesses.However, youneedtolookattheinformationfromaslightlydifferentperspective—forexample, dollarsandcentsastheytietowork(time,resources,deliverables,andsoon)asopposed todescriptions.Forexample,insteadoflookingatthescopestatementasawaytodefine thedeliverables,lookatitforsignsofthecostofthedeliverablestotheproject.You shouldalsolookforlanguagethattranslatesintoadirectorindirectcosttoyourproject, suchas“SecurityserviceswillcontinuetobeprovidedbyWatchdog,Inc.”Thismeans youareforcedtouseasecurityresourceandarelikelyboundbyanexistingcontract forpredeterminedcosttotheproject.WhilereviewingthecontractforWatchdog,Inc., youalsoseeitisafive-yearcontractwith5percentcostoflivingadjustment(COLA) increaseseveryyearoverthelifeofthecontract.SeewhatImean?Nowyouarelooking atthedollarsandcentsofcostmanagement.Thismakesabigdifference.
TIP More and more companies are requiring that the project manager calculate the project costs and factor the ROI (return on investment) and other cost benefit models into the project product. The goal is to see the value of the project once its deliverables are in operation.[1]
Costvs.Pricing Keepinmindthatcostandpricingaretwodifferentthings.Costisan expenditureofmoney,time,andlabortoacquireorprovidegoodsand/orserviceswhereas pricingisthecostplusprofitmargin. ProfitMargin Profitisimportanttoacompany’sabilitytostayinbusiness.Profit margin(ornetprofit)isameasureofprofitabilitythatiscalculatedbyfindingthenet profitasapercentageofthecompany’srevenue(seeFigure7-1). Alowprofitmarginindicatesalowmarginofsafety:Theriskishigherthatadecline insaleswilleraseprofitsandresultinanetloss. Forexample,supposeacompanyproducesaproductthatsellsfor$10.Thecostto producetheproductis$6,andthecompanyalsohastopay$2intaxes.Thatmakesthe company’snetincome$2.Becausetherevenueis$10,theprofitmarginwouldbe(2/10) or20percent.
Net profit margin =
Figure7-1
Net profit margin formula
Net profit (after taxes) × 100 Revenue
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PMPCertification:ABeginner’sGuide Wikipediaprovidesthefollowingdefinition: “Profitmarginisanindicatorofacompany’spricingpoliciesanditsability tocontrolcosts.Differencesincompetitivestrategyandproductmixcause theprofitmargintovaryamongdifferentcompanies.”[2]
Estimate Costs Inputs SixinputsareidentifiedfortheEstimateCostsprocess: ●
Scopebaseline Thefocushereisonthecoststotheproject.
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Projectschedule Specificallytheactivitiesandworkpackagesconvertedfrom durationindays(mostlikely)tohoursandcost.
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Humanresourceplan Staffingiskeytolaborcosts,includingsubcontractors, vendors,suppliers,hourlyrates,costofemployeebenefits(sometimescalledaburden rate),costofofficespace(occupancy),andequipment(phones,desks,PCs,andsoon).
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Riskregister Thecosttomitigateriskevents,shouldtheyoccur,andthecostof inspectiontoensureagainstrisk.
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Enterpriseenvironmentalfactors Thecostofinformation,impactofmarket conditions,andsoon.
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Organizationalprocessassets Cost-estimatingpolicies,templates,historical information,andcosttostoretheprojectdocuments.
Types of Estimates Thecostofwork(activities)shouldbeestimatedusingthesametoolsandtechniques introducedinChapter6,suchasone-cost,analogous,parametric,andthree-point estimates,withanadditionaltypecalledbottom-upestimating.
Things to Know about Estimating Cost Asprojectmanagers,welovechecklists;hereisalistthatIfindespeciallyhelpful (excerptedfromRitaMulcahy’sPMPExamPrep,SixthEdition): ●
ThecostestimatesshouldbebasedontheWBStoimproveaccuracy.
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Thecostestimatesshouldbedonebytheperson(orpersons)doingthework(get accuracyandbuy-in).
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Usehistoricalinformationwhenavailablefromsimilarprojects.
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Acostbaselineshouldbesetandonlychangedafterapprovedchanges.
Chapter7: ProjectCostManagement ●
Thebudgetshouldbemanagedtothecostbaselinefortheproject.
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Estimatesaremoreaccurateiftiedtoworkpackagesratherthanathigherlevels.
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Correctiveactionorpreventiveactionshouldberecommendedwhencostproblems occur(aswithothertypesofproblemsaroundscope,schedule,quality,andsoon).
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Aprojectmanagershouldalwaysanalyzerequirementsandnotjustacceptthemas deliveredbymanagement(theyshouldberealisticandachievable).
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Paddingisnotanacceptableprojectmanagementpractice.
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Theprojectmanagermustmeetanyagreed-uponestimates(needtokeepestimates realistic).[3]
Types of Cost Anumberofdifferenttypesofcostcanbeassociatedwithprojectmanagement.This isalsoconsistentwithotherreal-worldapplicationsbesidesprojectmanagement.The categoriesarelistednext.Itisrecommendedyoustudythemandbeabletodifferentiate onefromtheotherforthePMPorCAPMexam: ●
Variablecosts Coststhatchangewiththeamountofworkorproduction(for example,thecostofsalaries,supplies,equipment,andmaterials).
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Fixedcosts Fixedcostsdon’tusuallychange(forexample,fixedmonthlyfeefor maintenanceagreementoncomputers,monthlyleasepayments,andrent).
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Directcosts Coststhataredirectlyassociatedwiththeproject(forexample, material,projectlabor,travel,cellphones,orotherdiscretionarycosts).
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Indirectcosts Coststhatareincurredacrossmultipleprojects.Thiscaninclude facilities,ProjectManagementOffice(PMO)costs,employeebenefits,and overheadcosts.
Things to Consider When Estimating Costs Valueanalysisandriskareoftennotconsideredwhencostingaproject.Asmentioned earlier,projectmanagersusuallydoagoodjobatestimatingdirectcost;however,they oftenunderestimate(ormissaltogether)someofthekeyingredients(components),such asthefollowing: ●
Costofmanagingtheproject(thePM’stime,meetings,documentation,andsoon)
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Costofquality(costofnonconformance;rework,scrapcost,andsoon)
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Trainingorcompany-relatedmeetingsnotrelatedtotheproject
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Officeexpensesforspace,phones,computers,raisedfloor,andnetworkcosts
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EstimatedprofitandROI(returnoninvestment),ROA(returnonassets),orROS (returnonsales)
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Overhead(indirectcosts)
Estimate Costs Tools and Techniques ThelistoftoolsandtechniquesforcostestimatingaresimilartotheEstimateActivity DurationsprocessfromChapter6,withjustafewdifferences.Wewillfocusonafewof theitemsinthefollowinglistingreaterdetailinthissection: ●
Expertjudgment
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Analogous(top-down)estimating
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Parametricestimating(unitofmeasure)
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Bottom-upestimating
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Three-pointestimating
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Reserveanalysis
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Costofquality(COQ)
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Projectmanagementestimatingsoftware
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Vendorbidanalysis(coveredinChapter12)
Bottom-upEstimating Bottom-upestimatingisconsideredveryaccuratebecausethe estimateisprovidedbythesubjectmatterexpert(SME)orpersondoingthework.The estimatescollectedfromtheteamarethenrolleduptomaketheaggregatecostestimate fortheproject.Theaccuracyofthecostcanbeinfluencedbythesizeandcomplexityof theindividualactivityorworkpackage. ParametricEstimating Parametricestimatingusesastatisticalrelationshipbetween historicaldataandothervariablestocalculateanestimateforactivityparameters,such ascost,budget,andduration.Thistechniqueusuallyprovidesahighdegreeofaccuracy becauseyouhavehistoricalinformationtodrawfrom.Asalways,youcanusethis estimatingmethodwithothermethods,asneeded,toreachalevelofconfidenceinthe accuracyofyourcostestimatefortheentireproject.
Chapter7: ProjectCostManagement
TryThis
Parametric Estimating
Yourmanagerisawareofa“GreenDataCenter”inBoulder,Colorado,andasksyouto contactthecompany(IBM)toobtainacostestimatetosetupfivemainframesystemsand 300serversintheircenter.Whatdoyoudo? Answer:YoucontactIBMandasktheDataCenterManagerforaparametriccost estimate(costpersquarefoot)forhostingyoursystemsandservers.Whenyoureceivethe costestimate,youprovidethisandotherpertinentdetailstoyourboss.
Three-PointEstimates IntroducedinChapter6,thethree-pointestimateaddsa degreeofaccuracyovertheone-pointestimate(whichisthemostcommon).Youmay recallthethree-pointestimateisaPERT(ProgramEvaluationandReviewTechnique) thattakesinputfromasubjectmatterexpert(SME).BasedontheSME’sunderstanding ofanactivity(inthiscase,thecost),theyapplytheirbestestimatesforoptimistic(O), pessimistic(P)andmostlikely(ML,sometimesshownasM)andworkthroughthe formulatodetermineexpectedcost.ThePERTformulacanbeshownindifferentways, Figure7-2duplicateshowitisshowninthefourtheditionofthePMBOK. ReserveAnalysis Contingency:Whatisitandwhydowecare?Contingencyisa reserveaccomplishedbysettingasidemoneyeitherinsidetheprojectbudget(called “contingencyreserves”)oroutsidetheprojectbudget(called“managementreserves”). Contingencyreservesareusedtocoverthoseriskeventsthatyouandtheteamhave identified(known)thatarelikelytooccurontheproject.Managementreservesareheld atthemanagementlevel(outsidetheprojectbudgetformanycompanies)forunknown riskeventsthatarenotidentifiedorforeseenatthespecificprojectlevel.Management reservesarenotusuallyprojectspecificandcanbeusedacrossmultipleprojects,as
CE =
CO + 4CM + CP 6
Legend CE (Cost Estimate) CO (Cost Optimistic) 4CM (4 × Cost Most Likely) CP (Cost Pessimistic)
Figure7-2
Three-point estimate formula
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CostofQuality(COQ) Costofquality(COQ)isthecostofworkneededbythePM andteamtoensurequalitymanagementispartoftheproject.Intherealworld,COQis alsoameasurementusedforassessingthewasteorlossesfromsomedefinedprocess (machine,productionline,plant,department,company,andsoon). TheCOQmeasurementcantrackchangesovertimeforoneparticularprocess,oritcan beusedasabenchmarkforcomparisonoftwoormoredifferentprocesses(forexample, twomachines,productionlines,sisterplants,competitorcompanies,andsoon). MostCOQsystemsaredefinedusingcategoriesofcosts.TheinformationinTable7-2 comesfromProcessQualityAssociates,Inc. COQsystemsaresometimesassistedbyspeciallydesignedCOQsoftwareandare helpfulintheidentificationandtrackingofCOQ.
COQ Category
TypicalDescriptions(MayVaryBetween DifferentOrganizations)
Internal
Costs associated with internal losses (for example, within the process being analyzed).
External
Costs external to the process being analyzed Customer complaints, latent defects found by the customer, (for example, occur outside, not within). These costs are usually discovered by or affect third warranties parties (for example, vendors or customers). Some external costs may have originated from within or have been caused, created by, or made worse by the process being analyzed. They are defined as “external” because of where they were discovered, or who is primarily or initially affected.
Preventive
Costs associated with the prevention of future losses (for example, unplanned or undesired problems, lost opportunities, breakdowns, work stoppages, and waste).
Planning, mistake-proofing, scheduled maintenance, and quality assurance
Assessment
Costs associated with measurement and assessment of the process.
Key performance indicators (KPIs), inspections, quality checks, dock audits, third-party audits, measuring devices, reporting systems, data-collection systems, and forms
Table7-2
Categories of Cost of Quality (COG)
Examples Off-cuts (waste), equipment breakdowns, spills, scrap, yield, and productivity
Chapter7: ProjectCostManagement
Ask the Expert Q: Howiscostestimatingandcostmanagementdoneintherealworld? A: Aprojectmanagerintherealworldfirstmustaskoneveryimportantquestionofthe
projectsponsor:“Howaccuratedoyouwantmetobe?”Theanswershouldbebasedon thetimeallotted,theinformationandresourcesavailable,andthedegreeofaccuracythe sponsorneedstoselltheproject(forexample,gettingthefunding/budgetapproved).Then thePMshouldlookatthescopeanddeliverablestodeterminewhichestimatingtoolsand techniquestousebasedonthetypeandcomplexityoftheproject.Itisalsoimportantto knowifasimilarprojecthasbeendonebefore.ThenthePMtakesallthisinformationinto considerationandusuallyrollsthedetailsintoasoftwareestimatingtool,ifoneisavailable.
TIP If you are planning to take the PMP exam, not only should you know the different types of estimating tools and techniques, but you should also be able to identify the advantages and disadvantages of each. Examples are provided in Tables 7-3 and 7-4.
Estimate Costs Outputs HerearethethreekeyoutputsfromtheEstimateCostsprocess: ●
Activitycostestimates Quantifiableassessmentsoftheprobablecostrequired tocompletetheworkoftheproject.Thecostestimatescanbepresentedinvarious forms—forexample,atthesummarylevelorinabillofmaterials(BOM)withcost brokendownintodetailsoflabor,facilities,equipment,materials,IT,travel,andso on.Itcanbeinaspreadsheetdistributedovertimebymonth,byprocessgroup,or phaseoftheprojectlifecycle.
AnalogousEstimatingAdvantages
AnalogousEstimatingDisadvantages
Quick and easy
Less accurate than bottom-up estimating
Don’t need to estimate at activity level
Less detail based on limited information
Less costly to create
Requires higher experience to do well
Higher level of management expectation
Difficult for projects with a lot of uncertainty
Based on historical information of similar previous projects
Doesn’t consider project differences and requires accurate history from previous projects
Table7-3
Analogous Estimating
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Bottom-upEstimatingAdvantages
Bottom-upEstimatingDisadvantages
More accurate than most other methods
Takes more time to create and is more expensive.
Gains buy-in from the team members because There is a tendency for team members to “pad” the they create the estimates estimates to provide a comfort zone. Developed based on detailed analysis
Requires the scope and activities to be clearly defined and understood by the team members.
Provides a level of detail that should be easier to monitor and control
Requires more time to perform the details as they relate to the WBS activities and work packages.
Table7-4
●
●
Bottom-up Estimating
Basisofestimates Thisiswhereyoushouldshowthetypeofestimatingtoolsand techniquesusedaswellasothersupportingdetails,suchasthefollowing: ●
Documentedbasisofhowthecostestimatewasdeveloped—bottom-up,top-down (analogous),parametric,andsoon—andaclearlydocumentedrangeofexpected accuracy(forexample,±50percentor-10percentto+25percent).
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Thelistofassumptionsmadebyyouandtheteamtocomeupwiththeestimate.
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Theknownconstraints(time,cost,resources,permits,compliance,andsoon).
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Anindicationoftheconfidencelevelofthefinalestimate(forexample,high, medium,orlow)andthereasonsforyourconclusion.
Projectdocumentupdates Updatestothescopestatement,WBS,WBSdictionary, schedule,riskregister,andcommunicationsplanbasedonfindingsduringthisprocess.
Reporting Formats and Frequency of Delivery Theformatandfrequencyusedtoreportprogressshouldbeapplicabletothetypeand complexityofyourproject.Thereportsandwhentheyarepresented(andinwhatformat) mustmeettheneedsandexpectationsofthesponsorandotherkeystakeholders.You shouldfitthereporttotheneed.Forexample,forexecutive-levelreporting,keepitsimple andconcise.Irecommendusingamilestonereportformiddle-tohigh-levelmanagersand customersjusttoshowthestatusandprogressonmajorevents. Weeklystatusreportsshouldprovideadequatedetailsfortheteamtounderstandthe specificsneededandpotentialdelaysduetodependenciesandsoon. Formonthlyfinancialreports,suchasearnedvaluemeasurementsandothersponsorlevelinterests,keeptheformatfocusedondollarsandcentsandshowaccurateforecastsif possible(withsupportingassumptionsandjustificationdata).
Chapter7: ProjectCostManagement
2. Determine Budget Process TheDetermineBudgetprocessiswhereyoucombinealltheestimatesfromtheEstimate Costsprocessintooneoverallprojectcostbudget.Youalsoaddinanycostcontingency, usuallyinconjunctionwithriskmanagement(forexample,thoseriskeventsthathavea highprobabilityofimpactingtheprojectiftheyoccur).Remember,contingencyreserves shouldbeincludedaspartoftheoverallprojectbudget.Collectivelytheprojectbudget shouldconsistoftheapprovedfundstobeginexecutingtheproject.
TIP There will be times when only a portion of the project budget will be authorized for a particular phase; for example, the concept phase may be funded to cover the costs of prototyping the solution so you can demonstrate the solution will work prior to the total project being funded.
Oncethebudgetisauthorized,youneedtoestablishandconfirmthekeymeasurements. Thesemeasurementswillneedtobetrackedandreportedonaregularbasis(usually monthly)totheprojectsponsor(s)todemonstrateyouaremanagingtheprojectbudget.
Budget Estimating and Measuring Project Health Theprojectstatus(thatis,thehealthoftheproject)canbemeasuredinanumberofways. Toperformany“healthchecking,”youmustfirsthaveanagreed-uponcostperformance baseline.YoushouldrememberbaselinesfromChapter5.Earnedvalue(EV)isagood waytomeasureprogressandtheoverallhealthofyourproject.Itwillbecoveredinmore detaillaterinthischapter.
Cost Performance Baseline Thecostperformancebaselineisanauthorizedtime-phasedbudgetatcompletion(BAC). BACisoneofthekeycomponentsincalculatingearnedvalue(EV). Insettingthecostperformancebaseline,youmustfirstlookatthescopebaseline toensurethecostisalignedwiththescope.Thecostbaselineshouldalsotakethe scheduledactivitiesandworkpackagesintoconsiderationbecausethisiswherethe budgetwillbespent. Otherkeyconsiderationsshouldbetheprojectcontract,theSOW,andspecific performancerequirementsofthesedocuments.
Sample Cost Performance Baseline Overview Eachprojectshouldhaveaformallyapprovedandcommunicatedperformancebaseline (PB)thatdescribestheintegrationofthetechnicalobjectivesandrequirementswiththe scheduleandcostobjectives.
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PMPCertification:ABeginner’sGuide Herearethemainreasonsforestablishing,approving,controlling,anddocumenting aperformancebaseline: ●
Toensureachievementofprojectobjectives
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Tomanageandmonitorprogressduringprojectexecution
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Todefinetheprojectforapprovalandauthorizationbytheofficeofmanagement
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Toensureaccurateinformationonthefinalconfiguration(as-builtdrawings, specifications,expenditures,andsoon)
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Toestablishperformance-measurementcriteriaforprojects
Accordingto“PerformanceBaselineDevelopmentandValidation,”bytheU.S. DepartmentofEnergy,“DevelopmentofthePBbeginswiththeplanningcost,schedule estimate,andthepreliminaryscopeincludedinthemissionneedstatement,andisfurther definedinconceptualdesigndocuments.”[4]
3. Control Costs Process Nowthatyouhaveanapprovedbudget,whichisthemainoutputoftheDetermineBudget process,youneedtobethinkingabouthowtocontrolcosts. Thekeytoeffectivecostcontrolisthemanagementoftheapprovedperformance baselineandthechangestothatbaseline.Itiscommontoresettheperformance baseline,especiallyonlargerprojects,andthisshouldonlybedonethroughproper changecontrol. Projectcostcontrolincludesthefollowing: ●
Ensuringallchangerequestsarerespondedtoinatimelymanner
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Reviewingpossibleimpacttotheproject(cost,time,scope,risk,andsoon)
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Managingtheactualchangeswhenandastheyoccur(documentandcommunicate)
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Preventingunapprovedchangesfromimpactingtheprojectandbudget
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Managingthecostexpenditurestonotexceedtheapprovedfundingbyperiodandin totalfortheproject
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Monitoringcostperformancetoisolateandunderstandvariances
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Monitoringworkperformance(valueofworkperformed,orEV)againstapproved budgetandtime
Chapter7: ProjectCostManagement ●
Accuratelyreportingtoappropriatestakeholdersallapprovedchangesandcosts
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Managinganycostoverrunswithintheacceptablelimits(consistentwithapproved contingencyreserves)
Thebottom-lineintentofprojectcostcontrolistoeffectivelymanagetheapproved budgetandseekoutpotentialimpactvariances(bothpositiveandnegative)againstthe budget.Thebestwaytoensurecostcontrolisthrougheffectivechangemanagementand closemonitoringandreportingofearnedvalue.
TIP For readers not planning to pursue PMI’s PMP exam in the near future, I recommend you scan this section for a high-level overview and not for detailed comprehension. You can always come back to this chapter later when you are ready to prepare for PM certification.
Control Costs Tools and Techniques PMBOK,FourthEditionshowssixtoolsandtechniquesforthisprocess,whichwillbe discussedinthissection.Thefirsttobediscussedisearnedvaluemanagement(EVM). EVMisgrowinginpopularity,especiallyinlargecompaniesandongovernmentprojects. Somecompaniesevenhaveanearnedvalueanalyst(EVA)workingwiththeproject managersandteamsacrossmultipleprojects,trackingandreportingontheirEVstatus usingaconsistentformatandfrequency.
NOTE Earned value management involves a number of concepts, calculations, and methods that are performed by today’s high-tech PM software tools. Even the more experienced project manager is often not completely comfortable with EV tracking because it requires extra time and a degree of judgment on when/how to report the completion and progress of activities.
Earnedvaluemanagementcanbeusedinvariousways.EVMismostoftenusedas amethodofmeasuringprojectperformanceindollarsandcents.TheprincipleofEVMis usedtodevelopandmonitorthreekeydimensions(components)foreachworkpackage (oratthecontrolaccountlevel).TomanageEV,youcollectkeydataatregularintervals (forexample,weeklyormonthly,dependingonthesizeanddurationoftheproject)to
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PMPCertification:ABeginner’sGuide establishacheckpoint(snapshot)intimetomeasureprogressonyourproject.Thekey dimensionsofEVMareasfollows: ●
Plannedvalue(PV) Thisistheauthorizedbudgetassignedtotheworkplanned tobeaccomplishedbasedonhistoricalorexpertknowledgeforactivitiesorwork packages.Plannedvalueistheamountyouplannedtospendatagiventimeonthe project.Ifnothingchanges,theoriginalPVaddsuptobethebudgetatcompletion (BAC)attheendoftheproject.
●
Actualcost(AC) Thetotalcostactuallyincurredandrecordedfortheworkperformed.
NOTE Tracking and reporting actual cost can be somewhat elusive in the case of delayed invoices from suppliers, allocated costs that are apportioned across multiple projects, and missed or hidden charges. ●
Earnedvalue(EV) Thevalueoftheworkperformed(forexample,thoseactivities orworkpackagesthatarecompleteandshouldreceiveappropriatecreditforthe expecteddollarvaluetheyareassigned).EVmustbecomparedtothePVbaselineand actualcost(AC)todeterminescheduleandcostvariance.
TIP Earned value should clearly show not just how much of your budget has been spent (AC) against what you thought you were going to spend (PV), but it should also show the value of work completed (EV). EV is becoming more widely used, especially in large companies and government projects.
WhenreportingtheprogressofworkperformedandEVindollarsandcentsfora particularactivityorworkpackage,usetheprogress-reportingrulesintroducedinChapter6: ●
50/50rule Fiftypercentcreditforthevalueofanactivitywhenitbeginsand 50percentwhencomplete
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20/80rule Twentypercentcreditforthevalueofanactivitywhenitbeginsand 80percentwhencomplete
●
0/100rule Zeropercentcreditwhentheactivitybeginsand100percentcreditwhen itiscomplete
NOTE It is important to discuss and ensure a clear understanding of which rule (or rules) you plan to use when measuring and reporting EVM with the team to minimize any confusion.
Chapter7: ProjectCostManagement
Acronym
Term
Interpretation
PV
Planned Value
As of today, what is the estimated value of the work planned to be done?
EV
Earned Value
As of today, what is the estimated value of the work actually accomplished?
AC
Actual Cost
As of today, what is the actual cost incurred for the work accomplished?
BAC
Budget at Completion
How much did we budget for the total project?
EAC
Estimate at Completion
What do we currently expect the total project to cost (a forecast)?
ETC
Estimate to Complete
From this point on, how much more do we expect it to cost to finish the project (a forecast)?
VAC
Variance at Completion
As of today, how much over or under budget do we expect to be at the end of the project?
Table7-5
EVM Terms and Interpretations
Earned Value Formulas Youshouldbefamiliarwithseveralformulas(especiallyifyouareplanningtotakethe PMPorPMISchedulingexam)toenableyourselfandtheteamtoeffectivelyperformand understandEVM.Youshouldalsobefamiliarwiththedefinitionorinterpretationofeach ofthekeycomponentsofEVM,asdetailedinTables7-5and7-6.[5]
How to Remember the EVM Formulas AfewtipsaregoingaroundthePMworldconcerninghowtoremembertheEVM formulas.Theyareasfollows: ●
Variancesarealways“minus.”Forexample,EVminus(–)eithercost(AC)or schedule(PV).
●
Indexes(CPI,SPIandTCPI)arealways“divide.”Think“I=divide.”
●
EVisalmostalwaysfirstintheformula(theexceptionsareEAC,ETC,andVAC).
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Name
Formula
InterpretationandTips
Schedule Variance (SV)
SV = EV – PV
Cost Variance (CV)
CV = EV – AC
Schedule Performance Index (SPI) Cost Performance Index (CPI)
SPI = EV PV
To-Complete Performance Index
TCPI = (BAC – EV) (BAC – AC)
Ahead or behind schedule. Minus (negative) is behind schedule, and plus (positive) is ahead of schedule (good). Ahead or behind budget. Minus (negative) is over budget (bad), and plus (positive) is under budget (good). The project is currently progressing at _____% of the rate originally planned. (Note: < 1.0 is good.) Currently getting $_____ worth of work out of every dollar spent. Budget is or is not being spent wisely (> 1.0 is good). CPI is an index showing the efficiency of the utilization of the resources on the project. Projection of cost performance needed to achieve the original budget.
Estimate to Complete (ETC) Estimate at Completion (EAC)
ETC = EAC – AC
CPI = EV AC
There are several ways to calculate EAC, depending on the assumptions made. EAC = AC + Bottom-up ETC Note:This formula is most often asked for on the exam. BAC EAC = Cumulative CPI EAC = AC + ETC
EAC = AC + (BAC – EV)
EAC = AC +
Variance at Completion (VAC)
Table7-6
[(cumulative(BACCPI–xEV)cumlative SPI)]
VAC = BAC – EAC
EVM Formulas
Note: If the resultant number is higher than 1.0, the chances of getting back to the original budget (BAC) is extremely difficult. How much more do we expect the project to cost from this point forward? At this time, how much do you expect the total project to cost? (See the formulas to the left and below.) This formula calculates actual plus a new estimate for the remaining work. Used if no variances from BAC have occurred or if you plan to continue at the same spend (burn) rate. Actual cost plus the new estimate to complete remaining work. Used when original estimate is not appropriate. Actual to date plus remaining budget. Used when current variances are thought to be atypical (it is essentially AC plus the remaining value of work to be performed). Actual to date plus remaining budget modified by performance. Used when current variances are thought to be typical (representative) of the future. EAC is the manager’s projection of total cost of the project at completion. How much over or under budget do we expect to be at the end of the project?
Chapter7: ProjectCostManagement
Ask the Expert Q: Howdoweknowwhereweareintheproject?Canyoushowanexample? A: Earnedvaluemanagementisagoodwaytotellwhereyouareonyourproject.The
importantthingtorememberifyouareplanningtouseEVMisthatyouneedtosetitup earlyintheprojectlifecycle.Youneedtodeterminewhichprogress-reportingrule(or rules)mentionedearlierinthischapteryouplantouse.Also,youneedtobeconsistentin howyoucredittheworkperformedandhowyoureporttheprogress.Thismaytakesome educationforbothyouandyourprojectteam.SeeFigure7-3foranexampleofhowthe earnedvaluekeycomponentswouldmapoutinachart. Cumulative Cost Curve
EAC BAC
VAC
Schedule Variance
$ PV Cost Variance
AC EV Slippage
Time Now • Point in time checkpoint
Figure7-3
Sample earned value chart
Animportantaspectofcalculatingearnedvalueisthatitistypicallyapointintime checkpoint,andtobeeffectiveitshouldbecheckedonaregularbasis(earlyandoften). Let’stakethechartshowninFigure7-3anddothemath.
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TryThis
Earned Value Example Using BEC Case Study
YouarethePMonanewprojecttobuildthesidewalls(protectivebarrier)foranice hockeygame.TheassumptionsusedtocalculateEVforthisprojectareasfollows: ●
Youhavefourdaystobuildfourwallsfortheicearena.
●
Thedurationestimateindicatesitwilltakeonedaytobuildeachsideofthearena.
●
Theestimatedcost(plannedvalue)is$1,000perwall.
●
AcheckpointatDay3showsyouhaveonlycompletedtwo-and-a-halfsidesoftheice arena. Theinformationinthequestions,tables,andanswersthatfollowwillguideyou throughtheprocessofdeterminingearnedvalueonthisproject. Question1:Whataretheearnedvaluemanagementkeycomponentvalues?(Forthe answer,seeTable7-7.)
EVMComponent FormulaorResults
Comments
Planned Value (PV)
Checkpoint at Day 3 of a four-day project. Planned value/cost at $1,000 per day is as follows: PV = 3 * $1,000 = $3,000
$3,000 PV = Day 1 PV + Day 2 PV + Day 3 PV or PV = $1000 + $1000 + $1000
Actual Cost (AC)
You would only know this from the $2,900 AC = dollars spent at this time. For example: hours worked by the team times, the cost per hour, and of course Labor ($1,500) the actual cost of equipment and + Materials ($800) building materials spent. + Equipment ($600)
Earned Value (EV)
$2,500 EV = Day 1 EV + Day 2 EV + Day 3 EV (EV = $1000 + $1000 + $500) or
Two and a half sides of the ice arena are completed by Day 3. Therefore, the value of the work performed (completed) is $2,500.
EV = 2.5 * $1,000 = $2,500 Budget at Completion (BAC)
Table7-7
$4,000 Four sides at $1,000 per side, BAC = 4 * $1,000 = $4,000
Key Components for Earned Value Management
The BAC is usually set at the beginning of the project and can only change through approved change control.
Chapter7: ProjectCostManagement
EarnedValue Variances
FormulaandResults
Interpretation
Schedule Variance (SV) SV = EV – PV Negative means you are behind schedule (the $2,500 – $3,000 = –$500 project is delayed) or the schedule was not estimated accurately. Cost Variance (CV)
Table7-8
CV = EV – AC Negative means your have overspent the budget $2,500 – $2,900 = –$400 or underestimated the cost of the project.
Schedule and Cost Variance Calculations
Question2:Istheprojectonscheduleandonbudget?(SeeTable7-8fortheanswers.) Answer:Inthiscase,theprojectisbehindscheduleandthebudgetisoverspent.
OtherkeycomponentsofEVMareCPIandSPI;theseindexeshelpyouforecastthe remainingcosttoyourproject.Usingtheinformationprovidedintheprecedingearned valuecasestudyexample,calculatetherunrate(CPIandSPI)toseeifyouaregettingyour money’sworthofperformanceforthemoneyspentonsettingupthewallsattheicearena. Question:WhataretheCPIandSPIfortheicearenaproject,andareyoureceivingthework performanceorcostperformanceyouhadplannedfor?(SeeTable7-9fortheanswer.) Answer:Basedontheresultsinthetable(andtheinterpretation),theansweris“no”on bothcounts,whichmeansyouwillmissyourtargettocompleteaswellasmissingyour budget.
EarnedValue Variances
FormulaandResults
Interpretation
Schedule Performance SPI = EV / PV Index (SPI) SPI = 2,500 / 3,000 = 0.83 (Note that 0.83 is rounded. If the calculation uses more decimal places, the results will vary.)
Less than 1.0 means you are getting less performance than planned against the schedule; in other words, you are performing at a rate that is 83 percent of your target schedule.
Cost Performance Index (CPI)
Less than 1.0 means you are getting less cost performance for each dollar spent (for example, in this case, you’re getting 86 cents for every dollar spent).
Table7-9
CPI = EV / AC CPI = 2,500 / 2,900 = 0.86 (Note that 0.86 is rounded. If the calculation uses more decimal places, the ETC results will vary.)
SPI and CPI Calculations
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PMPCertification:ABeginner’sGuide Nowthatyouhavekeyinformationaboutyourproject,youcanusetheresultsof theEVMcalculationstoapplytheresultsofCPIandSPItowardthefuture.Herearethe keyquestionsthatneedtobeansweredbeforeyouforecastthefuturecostandschedule performancefortheremainderoftheproject: ●
IstheCPI(sometimescalled“runrate”or“burnrate”)representativeofwhatthe projectwillcost?
●
IstheSPIatruerepresentationoftheperformanceyoucanexpectasyougoforward withtheproject?
Theanswertothesequestionswillhelpyoudecideifyouneedtoadjusttheschedule orcostduetounforeseenproblemsorifyouneedtotakecorrectionactiontogettheteam andbudgetbackontarget. ThenexttoolandtechniqueintheControlCostsprocessisforecasting.Itisimportant toforecastthefuturecostandperformanceearlyandthroughouttheprojectlifecycle.The componentsofearnedvalueforforecastingare ●
Estimatetocompete(ETC),whichanswersthequestionof“whatistheremaining costfromthispointforwardtofinishtheproject?”
●
Estimateatcompletion(EAC),whichanswersthequestionof“whatwillbethetotal costoftheprojectbebasedonournewETC?”
●
Varianceatcompletion(VAC),whichanswersthequestionof“whatistheamountover orundertheoriginalbudgetatcompletion(BAC)basedonthelatestcostinformation?”
SeeTable7-10fortheforecastcalculationsfortheicehockeyarenawallproject. EVMComponent
FormulaorResults
Comments
Estimate at Completion (EAC)
EAC = BAC / CPI $4,000 / 0.86 = $4,651
The new estimated budget at the completion of the project based on EVM at this time. Note: There are several ways to calculate EAC (see Table 7-5), and the decision should be based on the level of confidence in the actual cost (AC) and other factors.
Estimate to Complete (ETC)
ETC = EAC – AC $4,651 – $2,900 = $1,751
How much do you anticipate you need to spend to complete the project?
Variance at Completion (VAC)
VAC = BAC – EAC $4,000 – $4,651 = –$651
Based on the information available, you expect to be $651 over budget at the end of the project. Again, minus is bad.
Table7-10
Estimating Future Cost (ETC, EAC, and VAC)
Chapter7: ProjectCostManagement Inthecaseofouricehockeyproject,withtheestimatedcosttocomplete(ETC)of $1,751addedtowhatwehavealreadyspent(AC)of$2,900,wecanforecastthenew estimateatcompletion(EAC)fortheentireprojecttobe$4,651.Theoverrunvarianceat completion(VAC)is$651dollars. Thenextstepistopresentthestatusandforecastamountstotheprojectsponsoralong withyouractionplantoeithergetbackontrackorthejustificationforadditionalfunding. Asyouwouldexpect,theproject’sforecastgetsmoreandmoreaccuratetheclosertothe endoftheproject.(Gofigure.Theregoesthatprogressiveelaborationagain.)
TIP Accurate forecasting is essential to managing the costs on your project. Some companies go so far as to hold the PM accountable for an accurate project forecast (within ±10%, for example). The reason is clear—the more accurate the forecast for each project, the more accurate the financial department can forecast across all their projects. You can see this at the corporate level each quarter when stock analysts predict (forecast) a company’s earnings. It doesn’t matter if the company made a profit and grew their revenue, if they missed the analysts’ forecasts (expectations), especially if the number is lower than expected, then the company’s stock will often go down.
To-Complete Performance Index (TCPI) ThenexttoolandtechniqueintheControlCostsprocessisTCPI.Basically,TCPIprovides awaytocalculatehowmuchworkitwouldtake(futurerequiredcostefficiencyneeded toachievetheoriginalapprovedbudgetatcompletion).IftheTCPIcalculationisgreater than1.0lateintheprojectlifecycle,thismeansthechancesofbeingabletogetbacktothe originalbaselinebudgetarenotlikely. AsshowninthepreviousTable7-6thiscanbecalculatedusingthefollowingformula: TCPI=(BAC−EV) (BAC−AC)
Performance Reviews Performancereviewscomparecostperformanceovertimeaswellasscheduleactivities orworkpackagesthatareeitherrunningoverorunderthebudget.Theyalsoestimatethe fundsneededtocompletetheworkinprogress.Theperformancereviewisanothertoolin theControlCostsprocess.IfusedwithEVM,itappliesthefollowinginformation: ●
Varianceanalysis Comparesactualprojectperformancetoplannedorexpected performance.Costandschedulevariancesarethemostfrequentlyanalyzed.
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Trendanalysis Examinesprojectperformanceovertimetodeterminewhetheritis improving.Manygraphicaltoolsareavailablethatcanvisuallyshowtrendson theproject.
●
Earnedvalueperformance EVPcomparesthebaselineplantotheactualschedule andcostperformanceandlooksatthevalueofworkperformedtoshowthetruestatus oftheproject.
Variance Analysis ThelastofthetoolsandtechniquesintheControlCostsprocessfocusesoncostperformance measurement(CV,CPI)andisusedtoassesstheextentofvariationtotheoriginalcost baseline.TheresultsofvarianceanalysisprovidethePMandteamvaluableinformation oncostperformanceandhelpthemdecideifcorrectionorpreventativeactionisrequired. Asalways,PMsoftwarecanbeusedtoassistwiththemanytoolsandtechniquesto helpyoucontrolcostsonyourprojects.
Other Terms and Concepts in Cost Management Afewothertermsandconceptsareassociatedwithcostmanagementthatyoushould befamiliarwith.Iwillonlybrieflytouchonthesetopicsbecausetheyarenotused extensivelyinprojectmanagement,unlessyouareonaprojectselectionboard,for example,votingonwhichprojectsshouldbeselectedandfunded.
Ask the Expert Q: Whataretherealgoalsofcostmanagement?AndhowdoIknowifthecostisthe normorananomaly(one-off)?
A: Thegoalsofcostmanagementaresimple: ●
Focusontheendcostresults(deliverables,scope,schedule,products,andsoon).
●
Usethetoolsandresourcesavailabletodeterminewhattheprojectshouldcost.
●
Workasateamtoensureyouarecontrollingcosttothebestofyourabilityandare reportingitaccurately.
IamnotsureIhaveeverseenaprojectthatis“normal.”Afterall,thatiswhatmakes eachprojectunique.Therefore,watchfortheanomaliesbecausetheretendtobemany; besuretoadjustaccordingly.Notethatthesethreegoalsshouldsoundfamiliar(theyalign withthethreetakeawaypointsfromChapter2).
Chapter7: ProjectCostManagement PresentValue Presentvalue(PV)isthevaluetodayoffuturecashflowsandcanbe foundbyusingthefollowingformula: PV=FV/(1+r)n where ●
PV=Presentvalue
●
FV=Futurevalue(seeFVformulas,next)
●
r=interestrate
●
n=numberoftimeperiods
YoucanthinkaboutPVas“howmuchmoneydoyouneedtoputinthebanktoday (PV)atrpercentinterestifyouwanttoreachafuturecashflowofFVinnyears?”
TIP The good news is present value is usually only mentioned once or twice on the PMI exam and you will not likely have to remember the formula. You should know that present value is “less” than the amount of cash flow you receive in the future. In other words, if you see a question that asks for PV of $300,000, the answer would be a number less than $300,000.
NetPresentValue(NPV) NPVisusedincapitalbudgetingtoanalyzetheprofitability ofaninvestmentorproject.FinAid.orgoffersthefollowingdefinitionofnetpresent value(NPV): “NetPresentValue(NPV)isawayofcomparingthevalueofmoneynow withthevalueofmoneyinthefuture.Adollartodayisworthmorethana dollarinthefuture,becauseinflationerodesthebuyingpowerofthefuture money,whilemoneyavailabletodaycanbeinvestedandgrow....Calculating NPVisdifficult,inpart,becauseitisn’tclearwhatdiscount(interest)rate shouldbeused,norisitclearhowtoprojectfuturechangesinthediscount rate.”[6]
TIP For the PMP exam, you will not likely have to calculate NPV. You just need to know that the project with the highest NPV provides the more favorable financial investment. In addition to the formula, net present value can often be calculated using tables and spreadsheets.
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PMPCertification:ABeginner’sGuide Generally,ifNPVispositive,theinvestmentchoiceisagoodone.NPVinsimple termsisthesumofPVfortheperiodmeasuredminustheinvestmentcostsforthose sameperiods. Forexample:TocalculateNPVonaproject(projectA),usethesampledatain Table7-11.First,calculatethepresentvalueforincome/revenuebasedontheinterestrate asshowninthethirdcolumn.Then,calculatethepresentvalueofcostoverthenumberof periodsasshowninthefifthcolumn.Last,takethetotalpresentvalueofincome/revenue minusthetotalcostsandyougetthenetpresentvalue.Inthisexample,NPV=481–290 =191. Here’showthishelpsintheprojectselectionprocess.Taketheexamplewherethe NPVofprojectAis191andcomparethistoanotherproject(B)thathasanNPVof120. WhichprojecthasthemostfavorableNPV?EventhoughtheyarebothpositiveNPV,you wouldrecommendprojectAtoyoursponsor;ithasthehighervalue,ifallotherthingsare equal.
FutureValue Futurevalueisthevalueofanassetorcashataspecifieddateinthe futurethatisequivalentinvaluetoaspecifiedsumtoday.Therearetwowaysto calculateFV: ●
Foranassetwithsimpleannualinterest: originalinvestment*(1+(interestrate*numberofyears))
●
Foranassetwithinterestcompoundedannually: originalinvestment*((1+interestrate)^numberofyears)
Time Period
Income/ Revenue
PresentValueofIncome/ Revenueat10%InterestRate Costs
PresentValueofCost at10%InterestRate
0
0
0
200
200
1
100
90
100
90
2
200
166
0
0
3
300
225
0
0
Total
Table7-11
481
Sample NPV Calculation
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Chapter7: ProjectCostManagement ConsiderthefollowingexamplesfromInvestopedia.com: ●
$1,000investedforfiveyearswithsimpleannualinterestof10percentwouldhave afuturevalueof$1,500.
●
$1000investedforfiveyearsat10percent,compoundedannually,hasafuturevalue of$1,610.51.[7]
Thesecalculationsdemonstratethattimeliterallyismoney—thevalueofthemoney youhavenowisnotthesameasitwillbeinthefuture,andviceversa.Therefore,itis importanttoknowhowtocalculatethetimevalueofmoneysothatyoucandistinguish betweentheworthofinvestmentsthatofferyoureturnsatdifferenttimes.[8]
InternalRateofTurn(IRR) Theinternalrateofreturn(IRR)isacapitalbudgeting metricusedbyfirmstodecidewhethertheyshouldmakeinvestments.Itisalsocalled discountedcashflowrateofreturn(DCFROR)orrateofreturn(ROR).IRRisan indicatorofthe“efficiency”orqualityofaninvestment,asopposedtonetpresentvalue (NPV),whichindicatesvalueormagnitude. Here’saneasywaytorelatethistoprojectmanagement:Say,forexample,youhave tochoosebetweenprojectsAandB.ProjectAhasanIRRof20percent,andprojectBhas anIRRof10percent.Whichdoyouchoose? Answer:YouwouldchooseprojectAbecauseithasahigherefficiency(internalrateof returnonthedollarsinvested).
PaybackPeriod Paybackperiodisthenumberoftimeperiodsittakestorecoveryour investmentinaprojectbeforeyoustartmakingaprofit.Forexample,projectAhasa paybackperiodoftenmonths,andprojectBhasapaybackperiodof24months.Which wouldyouchoosetofund? Answer:YouwouldchooseprojectAbecauseithasashorterpaybackperiod(sometimes knownas“break-evenpoint”).
OpportunityCost Opportunitycostanalysisisanimportantpartofacompany’s decision-makingprocessbutisnottreatedasanactualcostinanyfinancialstatement. Here’sanexampleofopportunitycost:Ifapersoninvests$10,000inaparticular stock,theyaredenyingthemselvestheinteresttheycouldhaveearnedbyleavingthe $10,000inabankaccountinstead.Theopportunitycostofthedecisiontoinvestinstock isthevalueoftheinteresttheywouldhavemadebyleavingthemoneyinthebank. Notethatopportunitycostisnotthesumoftheavailablealternativeswhenthose alternativesare,inturn,mutuallyexclusivetoeachother.Theopportunitycostofthe
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PMPCertification:ABeginner’sGuide city’sdecisiontobuildahospitalonitsvacantlandisthelossofthelandforothervenues, suchasaneventscenter,orthemoneythatcouldhavebeenmadefromsellingtheland, becauseuseforanyoneofthosepurposeswouldprecludethepossibilitytoimplement anyoftheotheropportunities. Here’sanotherwaytolookatopportunitycost:Itisthecostspent(givenup)by selectingoneprojectoveranother.Thegoodnewsis,nocalculationsareneeded.For example,projectAhasanNPVof$45,000,andprojectBhasNPVof$85,000.Whatis theopportunitycostofselectingprojectB? Answer:$45,000.
SunkCosts Simplyput,theseareprojectcoststhathavebeenexpended(spent).Be awarethataccordingtogeneralaccountingstandards(andtheysaythisisusuallytruein projectmanagementaswell),sunkcostsshouldnotbeconsideredwhendecidingwhether tocontinueorterminateatroubledproject.Thisisahardonebecauseclearlyyoudon’t wanttothrowgoodmoneyafterbad. Say,forexample,yourcompanyhasapproved$10,000tofundaprojecttobuild aprototypemedicalproductcalledHeartBeatII(HB2).Twomonthslateryouseea competitorhasjustannouncedtheverysameproductforalowerperunitpricethanyou wereestimatingtosellyours.Nomattertheoutcomeoftheproject,themoneyalready spentis“sunkcost.”Thelogicaldecisionmightbetoterminatetheproject.However,your companyseesawaytoreduceproductioncostandanticipatesveryhighdemandforHB2. Thedecisiontocontinuebuildingtheproductshouldnotbemadebasedonsunkcostbut ratheronthebusinessneed,themarketabilityandpotentialbenefitstoyourcustomer,the lawofdiminishingreturns,andofcourseprofit. Depreciation Mostpeoplearefamiliarwiththedifferenttypesofdepreciation,butjust incaselet’stalkaboutacoupleasarefresher. Insimpleterms,wecansaythatdepreciationisthereductioninthevalueofanasset duetowearandtear,obsolescence,depletion,orotherfactors. Inaccounting,depreciationisatermusedtodescribeanymethodofspreadingthe purchasecostofanassetacrossitsusefullife,causedbynormalwearandtear. Straight-linedepreciationisthesimplestandmostoftenusedtechnique,inwhichthe companyestimatesthesalvagevalueoftheassetattheendoftheperiodduringwhichit willbeusedtogenerateincome(usefullife).Itwillexpenseaportionoftheoriginalcost inequalincrementsoverthatperiod.Thesalvagevalueisanestimateofthevalueofthe assetatthetimeitwillbesoldordisposedof;itmaybezero.Salvagevalueisalsocalled “scrapvalue.”
Chapter7: ProjectCostManagement Anothertypeofdepreciationisaccelerateddepreciation.Ithastwoforms,andboth declinefasterthanusingtraditionalstraight-linedepreciation: ●
Doubledecliningbalance Themostcommonrateofaccelerateddepreciationused isdoublethestraight-linerate.Forthisreason,thistechniqueisreferredtoasthe doubledecliningbalancemethod.
Toillustrate,sayabusinesshasanassetwith$4,000originalcost,$100salvagevalue, andfiveyearsofusefullife.First,calculatethestraight-linedepreciationrate.Because theassethasfiveyearsofusefullife,thestraight-linedepreciationrateis20percent peryear(100%/5years).Withthedoubledecliningbalancemethod,asthename suggests,youwoulddoublethatrate(40-percentdepreciationrate)forthefirsttwo yearsand20percentisusedthethirdyear.Youmightuseanaccelerateddepreciation onanassetthathasashorterlifespan.
Bookvalueatthebeginningofthefirstyearofdepreciationistheoriginalcostofthe asset.Atanytimebookvalueequalsoriginalcostminusaccumulateddepreciation.
BookValue=OriginalCost–AccumulatedDepreciation
Bookvalueattheendofoneyearbecomesthebookvalueatthebeginningofthenext year.Theassetisdepreciateduntilthebookvalueequalsthesalvagevalue(orscrap value).
●
Sumoftheyearsdigits Sumofyearsdigitsisadepreciationmethodthatresults inamoreacceleratedwrite-offthanstraightline,butlessthanthedoubledeclining balancemethod.Underthismethod,annualdepreciationisdeterminedbymultiplying thedepreciablecostbyascheduleoffractions. DepreciableCost=OriginalCost–SalvageValue BookValue=OriginalCost–AccumulatedDepreciation
Forexample,ifanassethasanoriginalcost$1000,ausefullifeoffiveyears,anda salvagevalueof$100,howdoyoucomputeitsdepreciationschedule?
First,determinetheyears’digits.Becausetheassethasusefullifeoffiveyears,the years’digitsare5,4,3,2,and1.Next,calculatethesumofthedigits(5+4+3+2+ 1=15).
Depreciationratesareasfollows:
5/15forthefirstyear,4/15forthesecondyear,3/15forthethirdyear,2/15forthe fourthyear,and1/15forthefifthyear.[9]
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Cost Management Summary Asmentionedatthebeginningofthischapter,costmanagementisoneoftheprimary constraintsonprojects,andcostsshouldbemanagedasifyourownmoneywas beingused. Studiesshowthatcostoverrunsaverageover45percentoforiginalbudgets! AccordingtoaSoftwareMagazinearticle,costoverrunsin1994equaled189percent overtheoriginalestimate.Thiswasreducedto69percentin1998andfurtherreducedto 45percentina2000study.[10]Someofthelikelyreasonsarepoorinitialcostestimates, unrealisticbudgets,poorfinancialmanagement,andchangesinscope,anyofwhichwill likelyyieldalowerthanexpectedreturnoninvestment(ROI). Thegoodnewsisthatalotofgoodtoolsandtechniquesareavailabletohelpyou managecost.Thebestwaytomanagecostonyourprojectisto ●
Stayalertandfocusedonprojectcosts.
●
Usethetoolsandresourcesavailabletoeffectivelyestimate,monitor,reportand managecosts.
●
Workwiththeprojectteamtoensureeveryoneisdoingtheirparttoprovideaccurate costestimates,developandmonitorbudgets,andhelpmanagecashflow.
Also,youwanttouseearnedvalueanalysis(EVA),whenpossibleandasappropriate, toensurethattheproject’sreturnoninvestment(ROI)isachieved. Onethingthatispainfullyclearisthatifyouandtheprojectteamarenotdiligentin managingcostandreportingstatusinatimelymanner,youareatriskwhenitcomesto costmanagement.Anotherthingtorememberis,asaprojectmanageryouneedtolook beyondidentifyingpotentialcostproblemsandmakesoundrecommendationstokeepthe gaps(misses)fromshowingupinthefuture.
References
1.Phillips,Joseph.PMPProjectManagementProfessionalStudyGuide,SecondEdition,
(McGraw-Hill,SanFrancisco),2008,page267.
2.Wikipedia,http://en.wikipedia.org/wiki/Profit_margin.
3.Mulcahy,Rita.PMPExamPrep,SixthEdition(RMCPublications,Inc.),April2009,
page232.
Chapter7: ProjectCostManagement
4.U.S.DepartmentofEnergy.“ProjectManagementPractices:PerformanceBaseline
DevelopmentandValidation,”June2003,http://oecm.energy.gov/Portals/2/ PBDevValidation.pdf.
5.Mulcahy,Rita.PMPExamPrep,SixthEdition(RMCPublishing,Inc.),April2009,
pages241–242.
6.FinAid,http://www.finaid.org/loans/npv.phtml.
7.Investopedia,http://www.investopedia.com/terms/f/futurevalue.asp.
8.“UnderstandingtheTimeValueofMoney,”Investopedia,http://www.investopedia
.com/articles/03/082703.asp.
9.Wikipedia,http://en.wikipedia.org/wiki/Depreciation. 10.Johnson,Jim,KarenD.Boucher,KyleConnors,andJamesRobinson.“Collaboration:
Development&Management:CollaboratingonProjectSuccess,”Software Magazine(February/March2001),http://www.softwaremag.com/archive/2001feb/ collaborativemgt.html.
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Chapter
8
Project Quality Management
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KeySkills&Concepts ●
Definitionofquality
●
Howtomeasurequality
●
Theimportanceofmanagingprojectquality
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Plan-Do-Check-Act(PDCA)cycle
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IntroductiontoSixSigmaandLean
●
Threequality-managementprocesses
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Continuousimprovement
●
Costofqualityconformanceandnonconformance
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Typesofreportsandcharts
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Determiningwhetheraprojectmeetstherequirementsandexpectations
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Qualityterms
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Statisticalsampling
H
owdoyoureallyknowwhataqualityproductorserviceis?Asaprojectmanager, howdoyouknowyouhavedeliveredaqualityproject? Theanswerissimple:Qualityisintheeyesofthecustomer.Afterall,thecustomeris payingfortheproduct,service,orresultoftheproject.Thecustomerneedstofeeltheproject isdeliveredtotheirspecificationsandthattheprojectdoeswhatitwasintendedtodo. Thetoughpartofmeasuringqualityattheprojectlevelisthatittendstobeelusive andinmanycasesisamovingtarget.Somethingsareextremelydifficulttomeasure becausethequalitiesareintangible.Ifyouask100projectcustomerswhattheirideaof qualityis,youwilllikelygetwellover100differentanswersbecausetheircurrentviews orexpectationsvarydependingonwhenandhowyouaskthequestion(face-to-face interview,survey,e-mail,byphone,andsoon). Earlyintheprojectlifecyclethecustomermightsimplysaytheywanta“fullfunctionwebsitetopromotetheirproductsorservices.”Inthemiddleofthelifecycle whenthecustomerseeswhatfunctionsandfeaturesarebeingdeveloped,theyarelikely
Chapter8: ProjectQualityManagement tochangetheirmindregardingthelookandfeelofthewebsite.Theymayendupwanting somethingtotallydifferentattheendoftheproject. Asyouworktheproject,youandtheteamwillgathermoredetailsfromthecustomer andreachahigherdegreeofunderstandingastowhattheywantthewebsite(theproduct oftheproject)tolooklike.Thisshouldbeaccomplishedthroughclosecommunications anddocumentedacceptancecriteria. Onceyouhaveanapprovedacceptancecriteriabasedonwhatthecustomerwants,the teamcanbegintodeveloporprototypethewebsite.Thisprototypewillgivethecustomer anopportunitytotestthesitetoseehowitrespondsandwherethelinkstakethem. Thecloseryougettotheendoftheproject,themoretheproductshouldalignwiththe customer’sneedsandexpectations. Asaprojectmanager,theidealsolutionisalwaystogetaclearunderstandingofwhat thecustomerwantsasearlyinthelifecycleaspossible.Thisiseasiersaidthandone, especiallywhenthecustomerisnotcompletelysurewhattheywantorwhattheyexpect attheendoftheproject. Iamsureyouhaveexperiencedanunclearscopedefinitionononeormoreofyour projects.Thesituationusuallygoessomethinglikethis:Yourbossorthecustomersimply says,“Buildanewwebsitesoshopperscanbuyourproductsonlinequickerandeasier.” Ormaybetheysay,“Wehavehadtoomanyproblemsonourdatabaseserverslately.Puta teamtogethertofixtheproblems.” Occasionallyyougetmorepreciseprojectdirection,suchas“Weneedtoreach a15-percentincreaseinsystemsavailabilityofourdatabaseservers”or“Toreachour revenuegoalsweneedtoincreaseticketsalesby10percent.”Asclearastheexpected resultsmaybe,theactualdetailedrequirementsareusuallyasclearasmud.Thereasonis thatwhenitcomesdowntotheactualrequirements,inmostcasesthecustomerdoesn’t knowhowtoarticulatetheirneedsandexpectations.Thatiswhytheyarepayingyouas theprojectmanagerto“justfixit.” Attheendoftheproject,theonlywayyouwillmeettheexpectedresultsisifthe requirementsareclear,verified,documented,andmostimportantlyapproved.And, ofcourse,thatisjustthestartingpoint(thepriceofadmission,sotospeak).Thenext importantstepistogeta“qualified”teamtogetherandkeepthemfocusedonthe approvedscope.Allofthesestepsareessentialtoachieveprojectquality.
How to Achieve Customer Satisfaction Theonlywaytoachievecustomersatisfactionistointerviewthecustomerandgainan understandingoftheirneedsandexpectations.Whenyouthinkyouarecrystalclearon whatthecustomerwants,documentit.Takethedocumentedrequirementsbacktothe
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PMPCertification:ABeginner’sGuide customerforverification.Customerverificationcanbeconductedbysimplyaskingthem, “Isthiswhatyouhadinmind?”Onceverified,younowhave“formalacceptance”from thecustomeronwhattheprojectshoulddeliver. Onceyouhaveformalacceptance(agreement)oftherequirementsfromthecustomer, youtaketheserequirementstotheprojectteamtobeevaluatedfor“do-ability.”Thatis, cantheprojectdeliverwhatthecustomerwantsaccordingtotheirspecifications? Ifthecustomerexpectationsarerealistic,theprojectteamiscapableofmeeting thoseexpectations,andtheprojectisofficiallyaccepted(chartered),thenthework ofmanagingtheprojectcanbegin.WhenIsay“managingtheproject,”thisincludes managingcustomerexpectationssotheirrequirements(needsandexpectations)aremet. Thisnecessitatesacombinationofconformancetorequirements(sotheprojectproduces whatitisintendedtoproduce)andfitnessforuse(theproductorservicemustsatisfythe customer’sneeds). Becausequalityisintheeyesofthecustomer,thebestthingtodoastheproject managertohelpdeliverqualityonyourprojectisfollowthesefivesteps:
1.Youmusthaveaclearunderstandingofwhatthecustomerwants.
2.Youmustensurethedeliverablesoftheprojectarereasonable(doable),documented,
andapprovedbythecustomer.
3.Youmustclearlycommunicatethecustomerexpectationsanddeliverablestothe
projectstakeholders(especiallytheperformingprojectteam).
4.Youmusthaverealisticmeasurementstoallowfortrackingandreportingtheprogress
oftheproject.
5.Youmusteffectivelymanagechangesonyourproject.
NOTE Following the five steps above will help you achieve customer satisfaction on your project.
How Do You Measure Quality? Foranaccountant,themeasureofqualityisprettyclear—theledgerbooksmustbebalanced. Whatdoesitmeantosaythebooksarebalanced?Itmeansallbookentries(debitsand credits)areinorderandproperlycodedinaccordancewithapprovedaccountingpractices. Allreceiptsarefiledproperlyandavailableincaseofanaudit.Thebankstatementsmatch thetrackingreports(spreadsheets,financialstatements,andsoon).Theclientreceivesreports inatimelymannerandisclearontheaccountbalancesandpotentialfinancialexposures.
Chapter8: ProjectQualityManagement
Ask the Expert Q: Whatisagoodmeasureofqualitywhenmanagingprojects? A: Iftheproductoftheprojectmeetsthespecified(approved)requirementsandiftheproduct doeswhattheprojectdefinitionsaysitshoulddo(fitnessofuse),thenyouhavemetthe qualitystandardsfortheproject.
Whenyou’remanagingprojects,whatyoumeasureandwhenyoumeasureitarenot alwaysasclearastheyareinaccounting.So,whatisagoodmeasureofqualityinproject management? Anytimeyoumeasurequality,youmusthaveabaselineorreferencepointtomeasure against.AsimpleapproachIliketouseiswhatIcallthe“TexasThree-Step.”Afteryou haveabaseline,youaskyourselfandyourteamthesethreequestions: ●
Wherearewetodaycomparedtowhereweshouldbe? Yourememberearned valuemanagement(EVM)fromChapter7;thisisagoodwaytoconfirmcurrent status,butyoualsoneedtolookinrealterms,notjustdollarsandcents.
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Howdidwegethere? Takealookat“theroadjusttaken.”Wasittheroadorpath youhadplannedtotake?Ordidyouhaveroadbumps(potholes)thatimpactedthe projectandhadtotakeadifferentpath?Lessonslearnedareagreattoolforhelping youunderstandwhatworkedandwhatdidn’tworkthewayitshouldhave(wemust learnfromouractionsand/orourmistakes).
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Wheredowegofromhere? Lookingforward,whatcoursecorrectionsdoyouneed totaketokeeptheprojectontrack(ortogetitbackontrack)?
Whenitcomestomeasuringquality,theproblemisandalwayswillbe,“whatis importanttothecustomer?”
Case Study: Sample Quality Measurements Forareal-worldexampleofqualitymeasurements,let’stakealookatourBECcase study.Foriceskatingevents(suchasicehockeyandperformanceshowsonice),theice hastobesetuptomeetveryrigidspecificationstobeconsideredsafefortheskaters. Iftheiceistoowarm,itbecomesspongyandslow,andtheskatershaveadifficulttime
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Thepaintistobeappliedasclosetotheconcreteaspossiblewithoutdrips,drifting lines,and“pearling”ofthewhitebasecoat.
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Ice“slab”temperaturemustbemaintainedat18–19degreesFahrenheit(F).
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Surfacetemperatureat1"mustbemaintainedat21degreesF.
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Theicehastobeatadepththat’sthickenoughsotheskaterscan’tdigdowntothe concrete(forexample,2½inchesforicehockey).
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Edgesaretobeconditionedtoeliminateroughedgesurface.
QualityAssuranceandControl: ●
Dryandwetcutsmustbeusedtokeeptheiceconditionedandsmoothafterpractice.
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DepthchecksareperformedandrecordeddailyaftereachZamboniconditioningto trackandcontrolqualityoftheice.
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Protectiveglass(barriersaroundtheice)istobewalkedpriortoeverygametoensure it’ssecure,thusreducingthechanceofglasspoppingoutduringagame.
Importance of Quality Howimportantisquality?Mostpeoplewouldsayitisextremelyimportant.Infact,the wordisoftenusedinadvertisingslogans.Herearesomeexamplesofclassicslogansthat beginwith“quality”: ●
Qualityatyourfeet(BrownShoe).
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Qualityfirst...fromAmerica’sfirstpenmaker(EsterbrookPen).
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Thequalitygoesinbeforethenamegoeson(Zenith).
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Thequalitynameinrefrigerationandairconditioning(York).
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Qualityrunsdeep(Rustoleum).
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Qualitytoyswithapurpose(Tinkertoy).
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Qualityyoucantrust(CrownCentralPetroleum).[1]
Chapter8: ProjectQualityManagement Sometimestalkischeap.Themainquestionis,doesthecompanyreallyknowwhat weascustomerswantwhenitcomestoquality?Dotheyknowwhatisbrokenandwhat todotofixit?
What Is Broken and How Do We Fix It? Throughouttheyears,manyofuswokeuptothefollowingnews: ●
Fordrecalled10,0001999Cougarsbecauseofadoorproblem,and3,800Mercury Villagerminivansbecauseofaproblemwithfueltankretentionstraps.
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Ford’sVolvodivisionannouncedarecallofmorethan122,6001998modelsfora glitchwithpassenger-sideairbagsandanadditional114,8501998and1997carsfor afaultyheadlightswitch.
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DaimlerChryslerrecalled227,2831991–94ShadowsandSundancesbecauseofarisk thatthedriver’sseatcouldsuddenlybreak.
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GeneralMotorsrecalled6,5841999ChevyCavaliersandPontiacSunfiresbecauseof thepossibilityofaninstrumentpanellightmalfunction.
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Morethan11,0001999LandRoverDiscoverysportutilityvehicle(SUV)ownerswere havingproblemswiththeAntilockBrakeSystem(ABS)alarm.[2]
OnerecallinparticularwasthegastankontheFordPinto(1971–1980).Thefollowing isfromCNNMoney.com: “Theissuewasn’tjustthecaritself,however,buttheallegeddecision-making processwithinFordMotorCo....Thecompanywaswilling,itseemed,tolet acertainnumberofpeopledieratherthanspendafewdollarspercartomake therepairs....Inretrospect,itturnsoutthataboutasmanypeoplediedinfiery crashesinPintosasinotherpopularcarsofthattime,althoughcrashtests indicatedthegastankproblemwasgenuine.”[3] Inresponsetothesequalityproblems,Fordrenewedtheirfocusonqualityinthe1980s. Youprobablyremembertheirslogan“QualityIsJob1.”Fordrecentlydroppedthisslogan after17yearsbecauseoftheperceptionthatintoday’smarketplace,highqualityisagiven andisnolongeranimportantmarketingvariable.Qualityisexpected,itisnotanoption. Asalways,otherinfluencingfactorsareatworkwhenitcomestoensuringquality. Coulditbethateventhoughqualityisimportant(agiven),therealfocusoncostoverrides quality?Intheinterestofbeingcompetitive,companiesseemtobemoreconcernedwith thecostofqualitythantheyarewithprovidingqualityintheirproductsorservices.
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PMPCertification:ABeginner’sGuide Noonegoestoworkinthemorningwantingtodoabadjob.However,howmany peopledoyouknowwhogotoworkeachdayandjustdoenoughtogetby?Itseems peoplejustwantajobandarenotasinterestedinacareerlikeintheolddays.Ihaveseen entiredepartmentsofpeoplewho“jumpedship”fromonecompanytoanotherforafew bucksmoreperhourorforasigningbonus.Itseemstheloyaltyoftheworkforcehas diminishedthelastfewyears.Mostunhappyemployeesfeelitistheshiftofworktoother countriesorcompaniesthatoutsourceworktothelowestbidderthathascausedthisdrop inemployeeloyalty. Withtheshiftofworkorworkreduction,theretendstobeanincreasedlevelof uncertaintyamongtheemployees.Uncertaintycausesdistractionsonthejobandwill affectthequalityofworkbeingperformed.Thiscanbeseeninmanyindustries,evenin professionalsports,whereathletesaretradedfromoneteamtoanother,causingadropor changeinperformance.Ifyoudon’tknowwhereyouwillbeworking(orplayinginthe caseofanathlete)nextmonth,ornextyear,itismuchhardertoestablishasoundattitude towardquality.Peoplewanttodoagoodjob;however,theprioritiesseemtohaveshifted, anddoingqualityworkisnotashighofapriorityintoday’sworkforce(inmanycases). Thefollowingisfromanarticletitled“QualityIsJob...?”byGaryS.Vasilash: “Therearenoeasyanswerstoanyofthis[situationsdescribedpreviously]. Iftherewere,thentherewouldn’tbetheproblems.Butatanindividuallevel weshouldallunderstandthatgettingbyisn’tgettingahead,andthatquality stillcounts,evenifthosedoingthenumbersmayhaveforgotten.”[4] EveninJapan,wherethe“jobforlife”conceptwentoutthewindowseveralyears ago,thequalityofworkisstillthere.Qualityisanattitude.
How Do We Fix the Quality Problems? Everythingwesayanddoaffectsourreputation.Thereisanoldsayingthatittakesa lifetimetobuildareputation,andonesecondtodestroyit.Perfectionmaynotbefully attainable;however,wecanperformourjobswithexcellence.Todoso,itjusttakesa littlemorefocus,afewextraminutes.Forexample,tryreviewinganoteonemoretime beforeyousenditoutortryverifyingthespreadsheettotalsbeforedistributingareport. Howmanytimeshaveyouspenthoursdoing“damagecontrol,”orhavingtoexplainwhat youmeanttosayorwhyyoure-mailsaidthemeetingwasat2:00A.M.insteadof2:00P.M. Youmaysavealotoftimeandhaveamuchbetterchanceofmaintainingagood reputationforqualityifyouplanaheadanddon’trush.Alwaysdouble-checkyourwork. Attheendoftheday,qualityisamatteroftimeandattitude.
Chapter8: ProjectQualityManagement TIP It is no surprise we are not at our best after working long hours “burning the midnight oil.” It has been my experience that if I send an e-mail after midnight, the quality is not as good as when I am rested. Therefore, my recommendation is, do not send an e-mail after midnight. Wait until the next morning and read it one last time before you send it (especially if the note is to your customer or your boss). You should always double-check for errors before you send important documents—maybe have a friend, coworker, or even your spouse (if they are willing) read over the e-mail to check for errors. This could save the day and your reputation.
Definition of Quality and How It Changed Thedefinitionofqualityhaschangedthroughtheyears,dependingonwhoyoutalkto. PMI’sdefinitioninthefirsteditionofthePMBOKwas,“Thetotalityofcharacteristics ofanentitythatbearonitsabilitytosatisfystatedorimpliedneeds.”Mywifealmost felloutofherchairwhenIreadthattoherin1998asIwaspreparingforthePMPexam. Thegoodnewsis,inthelatesteditionofthePMBOKthedefinitionismucheasier torememberandmoreapplicable:Qualityis“thedegreetowhichasetofinherent characteristicsfulfillsrequirements.” AccordingtoBusinessDictionary.com,qualityisa“measureofexcellenceorstate ofbeingfreefromdefects,deficiencies,andsignificantvariations.TheISO8402-1986 Standarddefinesqualityas‘thetotalityoffeaturesandcharacteristicsofaproductor servicethatbearsitsabilitytosatisfystatedorimpliedneeds.”Inmanufacturing,quality is“strictandconsistentadherencetomeasurableandverifiablestandardstoachieve uniformityofoutputthatsatisfiesspecificcustomeroruserrequirements.”[5]
Gurus of Quality Therearemanyqualitytheorists(orgurus,astheyareoftencalled)intheworldof projectmanagement.Thegurusyouneedtobefamiliarwithwhohavemadesignificant contributionstoqualityinprojectmanagement(andmayappearonPMIexams)arethe following: ●
JosephM.Juran Dr.Jurandefinedqualityas“fitnessforuse,”anddeveloped the80/20principleandadvocatedtopmanagementinvolvement.Hemademany contributionstothefieldofqualitymanagementinhis70+activeworkingyears.He wasthefirsttoincorporatethehumanaspectofqualitymanagement,whichisreferred toasTotalQualityManagement(TQM).Hisclassicbook,QualityControlHandbook, firstreleasedin1951,isstillthestandardreferenceworkforqualitymanagers. Table8-1outlinesthemajorpointsofDr.Juran’squalitymanagementideas.[6]
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QualityCategories Steps Quality Planning
● Identify who are the customers. ● Determine the needs of those customers. ● Translate those needs into our language. ● Develop a product that can respond to those needs. ● Optimize the product features so as to meet our needs and customer needs.
Quality Improvement
● Develop a process that is able to produce the product. ● Optimize the process.
Quality Control
● P rove that the process can produce the product under operating conditions
with minimal inspection.
● Transfer the process to Operations.
Table8-1
Juran’s Quality Trilogy
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W.EdwardsDeming Dr.DemingadvocatedqualityimprovementusingthePlanDo-Check-Act(PDCA)cycleanddeveloped14StepstoTotalQualityManagement. AccordingtotheWikipediaentryforDr.Deming’smanagementtraining,he“taught thatbyadoptingappropriateprinciplesofmanagement,organizationscanincrease qualityandsimultaneouslyreducecosts(byreducingwaste,rework,staffattrition andlitigationwhileincreasingcustomerloyalty).Thekeyistopracticecontinual improvementandthinkofmanufacturingasasystem,notasbitsandpieces.”[7]
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PhilipCrosby Popularizedtheconceptof“Doitrightthefirsttime.”Hebelieved managementshouldtakeprimaryresponsibilityforquality,andworkersshouldfollow theirmanagers’example.HedefinedtheFourAbsolutesofQualityManagement:
1.Qualityisconformancetorequirements.
2.Qualitypreventionispreferabletoqualityinspection.
3.“Zerodefects”isthequalityperformancestandard.
4.Qualityismeasuredinmonetaryterms—thepriceofnonconformance.[8]
Key Quality Terms Beforewegetintoalotofdetailssurroundingthequalityprocesses,therearesometerms anddistinctionsthatareimportantforyoutoknow(especiallyifyouareplanningtotake thePMIexam).
Chapter8: ProjectQualityManagement
Quality vs. Grade Qualityandgradearenotthesame: ●
Qualityisthedegreetowhichthecharacteristicsoftheproductmeetitsspecified requirements.Takemeat,forexample.Severalfactorsgointodeterminingthe qualityofthemeat,includingmaturity,firmness,texture,color,andtheamountand distributionofmarbling.
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Gradeisacategoryassignedtoproductsorserviceshavingthesamefunctionaluses butwithdifferenttechnicalcharacteristics.Lookingatmeatagain(canyoutellit isgettingclosetomealtime?),therearedifferentapplications(uses)anddifferent grades(forexample,Prime,Choice,Select,andStandard).Seethefollowingtable foradescriptionofbeefqualitygradesaccordingtoMeatQualityandSafety,Purdue UniversityAnimalSciences:[9]
Grade
Characteristics
SuggestedUse
Prime
Has abundant marbling and is Prime roasts and steaks are excellent for roasting, generally sold in restaurants and hotels. broiling, and grilling (dry heat methods).
Choice
Has less marbling than Prime grades, but is still high quality.
May be cooked with dry heat. Be careful not to overcook roasts from rump, round, and blade chuck. A meat thermometer can be helpful in cooking to a safe temperature.
Select
Leaner than the higher grades. Fairly tender but may lack some juiciness and flavor of higher grades.
Only the loin, ribs, and sirloin should be cooked with dry heat. Other cuts should be marinated before cooking or cooked with moisture.
Standard
Has no marbling. Will lack juiciness and flavor of higher grades.
May be sold as ungraded or “store brand” meat.
Precision vs. Accuracy Precisemeansthattheproductisexact,asinperformance.Itisrepeatableandgetsthe samemeasureeverytime.Accuracy,ontheotherhand,meansthemeasuredvalueis veryclosetothetruevalue(hittingthebull’seyeonatarget),meaningameasurement isaccurateifitcorrectlyreflectsthesizeofthethingbeingmeasured.Precision measurementsarenotnecessarilyaccurate.Averyaccuratemeasurementisnot necessarilyprecise.Seethefollowingexamples: ●
Intargetshooting,ahighscoreindicatestheclosenesstothebull’seyeandisa measureoftheshooter’saccuracy.
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Intargetshooting,precisionisthetightnessofthepattern(cluster)whenbulletshitthe targetclosetogether.Ifthepatternisscattered(lotsofspacebetweenthehitsonthe target),itisnotprecise.Thesmaller(ortighter)thepattern,thehighertheprecision, evenifthebullethitsarenotclosetothebull’seye.
Prevention over Inspection Manyqualityexpertsfeelthatqualityhastobe“builtin”(prevention)throughplanning anddesign,not“inspectedin.”Thereisusuallyalargecost(notjustmonetary)associated withinspection.Ifqualityisbuiltin,youarelikelytosavealotoftimeandmoney(and yourreputation)overthecostofinspection. Inspectingqualitymeansthatyouarenotfixingtherootcauseoftheproblem.Ifyou arerelyingoninspectiontoensurequality,forexample,ifyouarespot-checkingcarparts onanassemblyline,howmanypartsgothroughthelinethatarenonconforming?You can’tinspecteverypart,sointhiscaseyouarelettingbadpartsgettothecustomer. Ifyoufixthepartbybuildingqualityin,youeliminatethewaste,scrap,andrework, whichwillsavetime,effort,andmaterialsandimproveyourreputationaswellasthe profitmargins. Youhaveprobablyheardthestatement“Doitrightthefirsttime,”fromPhillipCrosby, manytimesbefore.Toensureyouhavelong-termqualityproducts,processes,orservices, youneedprevention.Preventiongoesfarbeyondjust“doingitrightthefirsttime.”The PMandteamneedtoconstantlylookforwaystoimprovetheprojectoveritslifecycle.
Continuous Improvement ThePlan-Do-Check-Act(PDCA)cycleisthebasisforqualityimprovement,asdefined byWalterShewhartandlatermodifiedbyW.EdwardsDeming.ThePDCAcycleis aboutcreatingacontinuouslong-termimprovementcycle.Thedetailsofthecycleareas follows:
1.Plan Fromthetopoftheorganization(orevenacrosscompanies,astheydoin
Japan),establishtheobjectivesandprocessesnecessarytodeliverresultsinaccordance withtheexpectedoutput.Thegoalistoensureconsistencyinprojectmanagement toolsandmethods.
2.Do Implementthenewprocesses.Everyoneontheteamisencouragedtolook
atinnovativewaystoimprovetheprocessflow,identifyproblems,andimplement solutions(forexample,stoptofixtheproblemwhenitoccurs).
3.Check Measurethenewprocessesbycollectingactualprocessdataandcomparethe
outcomeagainsttheexpectedresultstoverifythatthetargetisbeingmet.
Chapter8: ProjectQualityManagement
4.Act Analyzethedifferencestodeterminetheircause.Thenmakenecessary
adjustmentstosolutionsandupdateactionplansasneeded.Also,identifyfuture stepstomakesuretheproblemdoesn’tresurface.Thenyoustartthecycleagain,thus continuingimprovement.
NOTE Each PDCA step will be part of either one or more of the other PDCA steps.
ISO (International Organization for Standardization) AnorganizationyoushouldbefamiliarwiththathelpsensurequalityistheInternational OrganizationforStandardization(ISO).Foundedin1946,ISOisaninternational organizationcomposedofnationalstandardsbodiesfromover75countries—forexample, AmericanNationalStandardsInstitute(ANSI)isamemberofISO.ISOhasdefineda numberofimportantcomputerstandards,themostsignificantofwhichisperhapsOSI(Open SystemsInterconnection),astandardizedarchitecturefordesigningnetworks.AlthoughISO definesitselfasanongovernmentalorganization,ithastheabilitytosetstandardsthatoften becomelaw. HerearesomeexamplesofISOstandards: ●
ISO9000referstoasetofthreestandards(ISO9000,ISO9001,andISO9004).All threearereferredtoas“qualitymanagementsystemstandards.”Forexample,ISO 9004providesasetofguidelinesandisusedtodevelopqualitymanagementsystems. TheISO9000standardsapplytoallkindsoforganizationsacrossmanyindustries, includingmanufacturing,processing,forestry,electronics,steel,computing, legalservices,financialservices,accounting,banking,recycling,aerospace,and construction.
●
TheISO14000familyofstandardsaddressesvariousaspectsofenvironmental management.Theveryfirsttwostandards(ISO14001:2004andISO14004:2004) dealwithenvironmentalmanagementsystems(EMS).
Theotherstandardsandguidelinesinthefamilyaddressspecificenvironmentalaspects, includinglabeling,performanceevaluation,lifecycleanalysis,communication,andauditing.
Six Sigma, Lean, and Kaizen Initiatives SixSigmaandLeanaretwoqualityinitiativesthathaveemergedathigherlevelsof interestingovernmentandcommercialorganizations.Thesenewinitiatives,combined withthepreviousfocusonKaizen(continuousimprovement),tendtoaddconfusionto
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Ask the Expert Q: IsthisaSixSigma,Lean,orKaizenproject?WhichconceptshouldIuse? A: Accordingtothearticle“IsThisaSixSigma,Lean,orKaizenProject?”byTerenceT.
Burton,“Thisisafamiliarquestionthatisoften[raised]byorganizations.Infact,it’s thewrongquestion.Theseconceptsarenothingmorethantoolsinyourmanagement toolbox.Youdon’tfixawatchwithahammer,andyougetthesameresultswhenyou deploySixSigma,Lean,andKaizenincorrectly.Thefactis,abusinessproblemisa businessproblem,anditneedstobefixed.Understandingtheapplicationofthesetoolsto variousimprovementopportunitiesisthekeytosuccess.”[10]Withanytool,theapplication orusedependsonthesizeandcomplexityoftheprojectaswellastheavailabilityand affordabilityofthetoolormodeltouse. Beforeanyonecanaccuratelyanswerthequestionofwhichinitiativeortooltouseon yourspecificproject,youneedabetterunderstandingofthedefinitionofeach.Otherwise, youruntheriskofseeingeachqualityissueasanail,thuslimitingyourselftousingonly onetool(ahammer).
peopletryingtoimproveprojectorproductquality.Aquestionthatoftencomesupfrom clientsandstudentsalikeis,“Whichconcept(orinitiative)shouldweusetoimprove qualityonourprojects?”
What Is Six Sigma? SixSigmaisamanagement-drivencompanywidebusinessinitiativetogeneratebreakthrough (innovative)resultsinbusinessperformance.SixSigmaisafocusonqualitythatstrivesfor nearperfection.Itisadisciplined,data-drivenapproachandmethodologyforeliminating defectsbydrivingtowardsixstandarddeviationsbetweenthemeanandthenearest specificationlimitofaproductorprocess.SixSigmacanbeappliedacrossbusinessesand industriesfrommanufacturingtoservices.Hereareacoupleofexamples: FordMotorCompanybeganitsSixSigmapushin1999whenthedirectorofquality forFord’sglobaltruckbusinessbeganlookingfornewwaystoimprovequality.Other companieswerequicktojumponthebandwagon. AccordingtoanIBMBusinessValueStudy,“AtCaterpillar,stagnantrevenuegrowth promptedthecompanytoundertakeamassivetransformationinJanuary2001.Throughits SixSigmainitiative,thecompanydevelopedastrategicvisionthatoutlinedaroadmapfor changebasedonfact-basedanalysis.Caterpillar’sinitiativealsoledtoproductinnovations
Chapter8: ProjectQualityManagement likeitsphenomenallysuccessfullow-emissionsdieselengineandtoredesignedprocesses includingastreamlinedsupplychain.By2005,revenueshadgrownby80percent.”[11] TheworkprocessestiedtoSixSigmaareDefine,Measure,Analyze,Improve,and Control(DMAIC).ItisimportanttonotethatSixSigmaisabusinessinitiative,notaquality initiative.Thetheoryisthatifyouimprovebusinessprocessesandworkflow,thenquality willfollow.
What Is Lean? Lean(theterm)wasfirstcoinedinthelate1980(or1990,dependingonwhicharticle/ bookyouread).Leanisasystem(orsetoftools)thatthrivesonchangeandflexibilityand focusesonreducingwasteintheworkplace.Leancanbeusedfororganizingandmanaging projects,productdevelopment,ongoingoperations,andsupplierservices.Manycompanies andorganizationsuseLeanprinciplestoreducedefects,streamlineprocesses,reduce manufacturingspace,andimproveemployeeperformance. Specifically,Leanseekstoeliminatewaittimebetweenproductionstations,over processing(forexample,toomanystepsintheprocess),andreduceexcessinventory. Leanalsoseeksoutemployeecreativitytohelpsolveproblemsandincreaseproductivity. AccordingtotheLeanEnterpriseInstitutewebsite,“Manyofthekeyprincipleswere pioneeredbyHenryFord,whowasthefirstpersontointegrateanentireproduction system,underwhathetermed‘flowproduction.’FollowingWorldWarII,theToyota MotorCompanyadaptedFord’sprinciplesasameansofcompensatingforitschallenge oflimitedhuman,financial,andmaterialresources.TheToyotaProductionSystem (orTPS),whichevolvedfromthisneed,wasoneofthefirstmanagerialsystemsusing leanprinciplesthroughouttheenterprisetoproduceawidevarietyofproductsatlower volumesandmanyfewerdefectsthancompetitors.”[12]
TryThis
Go Lean Project
Yourmanagercomestoyouandsayshewantshisdepartmentto“GoLean,”andyouhave beenselectedtobetheprojectmanagertoimplementthequalityinitiative.Theverynext questionfromyourmanageris,“Whatistheexpectedcompletiondateforthisproject?” Whatisyouranswer?
A Sixmonthsfromtoday.
B Youneedmoreinformation.Forexample,isthisprojectpartofanoverall
companywideinitiative?
C Oneyearfromtoday.
D OntheMondayafterEaster.
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PMPCertification:ABeginner’sGuide Answer:B.YouneedmoreinformationbecauseLeanmusthavetopmanagement sponsorshipwithcompanywideoperational-levelcommitment,notjustcommitment fromasingledepartment.Leanimplementationlooksatqualityproblemsthroughout theoperation.Itrequiressystemwidefocusandshouldbeimplementedacrosstheentire organization.
Leanshouldbeviewedasaculturechange(developedovertime).Leanisthe setof“tools”thatassistintheidentificationandsteadyeliminationofwastedtime, lostproductivity,scrap,orrework.Whenwasteiseliminatedqualityimproveswhile productiontimeandcostarereduced.Examplesofother“tools”areValueStream Mapping,FiveS,andKanban(pullsystems). NotethatLeancanonlyhappenwithplanning,organization,andhigh-level managementcommitmenttoprovidetheresourcesneededtosucceed.
What Is Kaizen? KaizenisaJapanesewordmeaning“continuousimprovement.”Itcomesfromthewords kai,whichmeans“change,”or“tocorrect,”andzen,whichmeans“good.”Kaizenisused inLeanmanufacturing,theToyotaProductionSystem(TPS),JustInTime(JIT)inventory, andothereffectivemanufacturingstrategies. ForKaizentoworkcorrectlyitshouldinvolveeveryemployee—fromuppermanagement tothecleaningcrew.Everyoneisencouragedtocomeupwithimprovementideas(nomatter howsmall)andmakesuggestionsonacontinuousbasis.Theideasarebasedonmakingsmall changesalongthewaytoimproveproductivity,safety,andefficiencytoreduceextrasteps andwasteintheworkplace. Anotherqualityprogramyoumaybeawareof(sofarnotonthePMIexam)isthe FiveSprogramfoundpredominantlyinmanufacturingandothertypesofbusinessessuch asretail,warehouses,andevenhospitals.TheFiveSprogram,usuallypartofKaizen,is designedtoaestablishacleanVisualWorkplace.TheFiveSprogramfocusesonhaving visualorderandstandardization.TheFiveS’sare ●
Sort Thefirststepinmakingthingscleanedandorganized
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SetinOrder Organize,identify,andarrangeeverythinginaworkarea
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Shine Regularcleaningandmaintenance
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Standardize Makeiteasytomaintain—simplifyandstandardize
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Sustain Maintainingwhathasbeenaccomplished
Theresultsyoucanexpectareimprovedprofitability,safety,andefficiency.
Chapter8: ProjectQualityManagement
Project Quality Management Processes Qualitymanagementmustbeplannedintotheprojectfromthebeginning.Qualitymust beensuredbytheteam.Thismeansqualitymustbeclearlydefinedanddocumentedin bothqualitativeandquantitativeterms,anditshouldbereviewedbyallthestakeholders tomakesureitwillsatisfytheneedsforwhichitwasdeveloped.Oncethisisdefinedand agreedtobytheprojectteam,qualitymeasurementsmustbeimplementedaccordingto theapprovedguidelines.Andlastbutnotleast,theteammustcontinuetomonitorquality toensuretheprojectdeliverablesmeettheplannedqualityperformancerequirements. Monitoringqualitytomeetrequirementsisonething;however,thePMandentire teamshouldalsocontinuallyseekwaystoimprovequalityontheproject.Tohelp accomplishthiscontinuousimprovement,thePMandteamneedtobeawareofand exercisequalitymanagementprocesses. Qualitymanagement,accordingtoPMI,includestheprocessesandactivitiesto enabletheprojectmanagerandteamtoeffectivelymanagethequalityoftheproducts (deliverablesoftheproject),andtheoverallprojectresultsusingprovenproject managementprocesses,toolsandtechniques,andoutputs.Truequalityisachievedwhen thePMandteamdemonstrateprovenresultsthroughtracking,reporting,andmanaging qualityovertheentireprojectlifecycle. Herearethethreeprojectqualitymanagementprocesses,accordingtoPMI: ●
8.1:Planquality(Planningprocessgroup) Includesidentifyingquality requirementsandstandardsfortheproject,determiningtheproductoftheproject,and managingthedocumentationtoensurequalitycompliance.
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8.2:Performqualityassurance(Executingprocessgroup) Theprocessof inspectingorauditingqualityrequirementsandtheresultsfromqualitycontrol measurementstoensureappropriatequalitystandardsandoperationaldefinitionsare beingused.
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8.3:Performqualitycontrol(MonitoringandControllingprocessgroup) Involves monitoringandrecordingresultsoftheexecutionofqualityactivitiestoassess performanceandmakenecessarycorrectiveactionsthroughthechangecontrolprocess.
TIP An easy way to remember the three processes for quality is to think of them as coming in a “three-PAC” (Planning, Assurance, and Control). When you’re preparing for the PMP exam, acronyms like this often make the memorization a little easier.
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1. Plan Quality Process ThepurposeofthePlanQualityprocessistoidentifyrequirementsandstandardsforthe productoftheprojectandtoprovideanddocumenthowtheprojectwillcomplywiththe definedqualityrequirements. AswithmanyofthePMprocesses,thePlanQualityprocessshouldbeperformedin parallelwithotherkeyprojectplanningprocesses,especiallyriskandthechangecontrol processes.ManytoolsandtechniquesareusefulduringthePlanQualityprocess.Here’s asummarylistofthem(manyofthesewillbediscussedinfurtherdetaillaterinthis chapter): ●
Cost-benefitanalysis
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Costofquality(COQ)
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Controlcharts
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Benchmarking
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Designofexperiments(DOE)
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Statisticalsampling
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Flowcharting
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Proprietaryqualitymanagementmethods
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Additionalqualityplanningtools
Cost-Benefit Analysis Mostprojectsrequireabusinesscaseorcostcasetohelpjustifytheneedforthem.Costbenefitanalysisisarelativelysimpleandwidelyusedtechniquefordecidingwhetherto makeachange(forexample,stayingwithanexistingprocessortoolorgoingwithone projectversusanother).Asitsnamesuggests,yousimplylistthebenefitsofaparticular courseofactionaswellasthesavingsorimprovementsrealizedandthensubtractthe costsassociatedwiththataction.Hopefullythebenefitsfaroutweighthecost,thus makingtheprojectaneasysell.Cost-benefitanalysisreallyhelpsdecisionmakerschoose theprojectstheywant(orneed)tosponsor.
Details of Cost of Quality (COQ) Costofquality(COQ)referstothetotalcostofalleffortsrelatedtoqualitythroughoutthe productlifecycle.Thedecisionsmadeduringtheprojectcanimpacttheoperationcostsof qualityaswell(forexample,thetypeofequipmentormaterialusedtobuildtheproduct maynothavealonglifecycleormayrequirehighermaintenanceinthelongrun).
Chapter8: ProjectQualityManagement WhencalculatingCOQ,youalsoneedtoconsiderfailurecost(costofpoorquality), potentialcostofrework,costofscrap,lostproductivity(workstoppage),andsoon. Costscanusuallybebrokenintooneoftwocategories:costofconformanceorcostof nonconformance. Herearesomeexamplesofthecostofconformance: ●
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Preventioncosts(moneyspentduringtheprojecttoavoiddefectsorfailures) ●
Training
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Documentprocesses
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Equipment
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Timeto“doitrightthefirsttime”
Appraisalcosts(toassessqualityoftheproduct) ●
Testing
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Destructivetestingloss(forexample,carsafetytesting)
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Inspections
Andherearesomeexamplesofthecostofnonconformance: ●
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Internalfailurecosts(failuresfoundbytheproject) ●
Rework
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Scrap
Externalfailurecosts(failuresfoundbythecustomer) ●
Lostbusiness
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Warrantywork
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Liability
Control Charts Controlchartsareagreattooltodetermineifaprocessorproductisperformingto expectedlevels.Theycanbeusedtotrackavarietyofproducts,repetitiveactivities,cost andschedulevariances,volumeofoutput,andeventheimpactofchangestotheproject. Controlchartsorgraphscanbeusedtoshowspecifictargetswithupperandlowercontrol limitstiedtotheacceptablerequirementsoftheproduct. Iftheproductisnotmeetingtheacceptablerange(withinapprovedcontrollimits)in thespecifications,theremaybefallout(throwaway)partsand/orpenaltiesassociatedwith
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PMPCertification:ABeginner’sGuide theout-of-limitpartsorproducts.Thecontrol(specification)limitsusuallyrepresentthree standarddeviationsoneithersideofthecenterline(ormean)ofanormaldistributionof dataplottedinthecontrolchart(seeFigure8-1). Whenaprocessiswithinacceptable(controlorwarning)limits(generally±3sigma), itissaidtobe“incontrol”anddoesn’tneedtobeadjusted.Whentheprocessisoutside thecontrollimit,itshouldbemonitored.Ifyouseea“run”(sevenconsecutivepoints oreventsoutside,aboveorbelow,thecontrollimit),thatindicatestheprocessisoutof controlandadjustmentsmayberequired.
Standard Deviation Whenmanagingqualityonaproject,youmayencountertheterm“standarddeviation.” Peoplewhohavetakenastatisticsclassinschoolarefamiliarwiththetermandmight evenunderstandit.Standarddeviation(orsigma)isameasureoftherangeorareaofa normaldistribution(bellcurve)fromthemean(average).Sigmaistakenfrombothsides ofthemeanandshowsasaminus(–)ontheleftsideandaplus(+)ontherightside (seeFigure8-2).ThefollowingexplanationcomesfromWikipedia: “Instatistics,standarddeviationisasimplemeasureofthevariabilityor dispersionofadataset.Alowstandarddeviationindicatesthatthedata pointstendtobeveryclosetothesamevalue(themean),whilehighstandard deviationindicatesthatthedataare“spreadout”overalargerangeofvalues. Forexample,theaverageheightforadultmenintheUnitedStatesisabout 70inches,withastandarddeviationofaround3inches.Thismeansthat mostmen(about68%,assuminganormaldistribution)haveaheightwithin 3inchesofthemean(67inches–73inches),whilealmostallmen(about 95%)haveaheightwithin6inchesofthemean(64inches–76inches).Ifthe standarddeviationwerezero,thenallmenwouldbeexactly70incheshigh. Ifthestandarddeviationwere20inches,thenmenwouldhavemuchmore variableheights,withatypicalrangeofabout50to90inches.”[13]
TIP Remember that half of a normal distribution curve is on the left side of the mean and half is on the right side of the mean. If you are planning to take the PMP exam, you should memorize the following ranges: ±1 sigma (or standard deviations) = 68.26%, which is the percentage of data points (occurrences) that fall between the two control limits ±2 sigma (or standard deviations) = 95.46% ±3 sigma (or standard deviations) = 99.73% ±6 sigma (or standard deviations) = 99.99985%
Chapter8: ProjectQualityManagement Warning limits are two standard deviations either side of the average, so 95.4% of points are within these limits Upper Warning Limit (UWL)
UCL UWL Average
Lower Warning Limit (LWL)
LWL LCL
Figure8-1
Sample control chart
Benchmarking Benchmarkingisaprocessthatusesstandardmeasurementsforcomparingvarious thingssuchasthecycletime,qualityofaprocessorprocedure,ormethodagainstan industrystandardorbestpractice.Benchmarkingprovidesasnapshotofhowyour businessororganization’sperformancecomparestothesestandards.
m − 3s
m − 2s
m − 1s
m 68.26% 95.46% 99.73%
Figure8-2
Sample standard deviation chart
m + 1s
m + 2s
m + 3s
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PMPCertification:ABeginner’sGuide Certaingroupsconductresearchandprovideindustrystandardsthatcanbeused forbenchmarking.TheseincludeTheGartnerGroup,BenchmarkingPartners,andthe BenchmarkingNetwork,Inc.,justtonameafew.
Design of Experiments (DOE) Designofexperiments(DOE)isastatisticalmethodorframeworkforidentifyingwhich factorsmayinfluencevariablesofaproductorprocess.Thisisgenerallyusedduringthe quality-planningprocesstodeterminethenumberandtypeofteststhatmayneedtobe runtoensurequalityandthepotentialcostoroutcomeassociatedwiththetests. AnexampleofDOEcouldbethestudyofrain,sun,andfertilizeronagricultural productsforbestgrowingconditions,orwhenadrugcompanyconductsaseriesoftests onvolunteersrepresentingasamplegroupmeetingcertaincriteria(forexample,age group,andleveloffitness)usingdifferentdoses,differentfrequencies,orevenplacebos tocollectresultsandtodeterminewhichdesignofexperimentsyieldsthemostfavorable resultsfortreatinganillness.
Statistical Sampling Statisticalsamplingisawaytoobtaindatawithoutspendingthetimeandmoneyto observe,orsurveyanentirepopulation.Wikipediaoffersthefollowingdefinition: “Typically,thepopulationisverylarge,makingacensus...ofallthevalues inthepopulationimpracticalorimpossible.Thesamplerepresentsasubsetof manageablesize.Samplesarecollectedandstatisticsarecalculatedfromthe samplessothatonecanmakeinferencesorextrapolationsfromthesampleto thepopulation.Thebestwaytoavoidabiasedorunrepresentativesampleis toselectarandomsample[…]. Arandomsampleisdefinedasasamplewheretheprobabilitythatany individualmemberfromthepopulationbeingselectedaspartofthesample isexactlythesameasanyotherindividualmemberofthepopulation.”[14] Surveyweightingfactorsareoftenappliedtothedatatoadjustforthesampledesign ortonormalizethedatainsomeway.Thesamplingprocessiscomprisedofseveralsteps: ●
Definingthepopulationofinterest
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Selectingasamplingsetofitemsoreventspossibletomeasure
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Determiningasamplingmethod(forexample,interviews,observations,surveys, andsoon)
Chapter8: ProjectQualityManagement ●
Determiningthesamplesize
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Implementingthesamplingplan
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Samplinganddatacollecting
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Reviewingthesamplingprocess
Flowcharting Aflowchartisagraphicalrepresentationofaprocessusuallyshowingrelationship betweensteps,thustheterm“flow.”Differentdesigntechniquesandsoftwaretoolsare availabletomakethisprocesseasier.Theflowchartcanbeusedtoshowactivitiesonthe project,decisionpoints(shownasadiamond-shapedimage),andtheorder(orsequence) tofollow.Theuseofarrowshelpsdirecttheviewerdownthepathbasedondecisionsor answerstocertainquestions.Figure8-3showsasampleflowchart.
Start
Design
Coding
Testing
Yes
No
Design Errors? Yes
Figure8-3
Sample flowchart
Errors? No End
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Outputs of the Plan Quality Process HerearethefiveprimaryoutputsfromthePlanQualityprocess: ●
Qualitymanagementplan(QMP) Describeshowtheprojectteamwillimplement theapprovedqualitypolicies.TheQMPisakeycomponentofandprovidesinputsto theoverallprojectmanagementplan.TheQMPcanbeformalorinformal,anditcan beverydetailedorahigh-levelsummary,dependingontheneedsoftheproject.
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Qualitymetrics Describesoperationaldetailsinveryspecifictermsastotheproduct oftheprojectaswellasitsfeatures,functions(sometimescalled“productattributes”), allowabletolerances,andsoon.ThequalitymetricsareusedasinputstothePerform QualityAssuranceandPerformQualityControlprocesses.Examplesofqualitymetrics arefailurerates(meantimebetweenfailure)ofparts,budgetorschedulecontrol, on-timeperformance,defectfrequency,andresponsetimetofixproblems.
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Qualitychecklists Usuallyveryspecificandusedtoverifythatasetof requirementsisbeingmet.Thechecklistcanbecomplexorsimple,againdepending onthesize,type,andcomplexityoftheproject.
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Processimprovementplan Asubsetoftheoverallprojectmanagementplan thatdetailsthestepsforanalyzingtheprocessoractivitiestostreamlineorreduce redundancyorwastedsteps.Theimprovementplananswersthequestion“What arewegoingtodotomaketheprocessbetter(faster,moreefficient,ormore productive)?”
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Projectdocumentupdates Asalways,youwanttouseprogressiveelaborationto ensuretheprojectplanandoutputdocumentsareupdatedalongthewaywhennew informationislearnedoraschangesoccur.Examplesofdocumentsthatmightneedto beupdatedaretheresponsibilityassignmentmatrix(RAM)andtheriskregistry.
2. Perform Quality Assurance Process ThePerformQualityAssuranceprocessisintheExecutingprocessgroupanduses datacreatedduringthePerformQualityControlprocess.Itinvolvesauditingthe qualityrequirementsandtheresultsfromthequalitycontrolmeasurementtoensureall appropriatequalitystandardsarebeingmet. Alotofcompaniesandorganizationshaveaqualityassurancerepresentative ordepartmentaspartoftheirmanagementstructure.Thebenefitofthispersonor departmentisthattheyhelpreducewasteandhelpensurethatqualitymeasuresare accurateandcommunicatedtotheprojectstakeholders.
Chapter8: ProjectQualityManagement Qualityassuranceprocessesshouldbeclearlydocumentedandincludedinthequality planaswellastheoverallprojectmanagementplan.
Quality Control Measures Qualitycontrolmeasures,alongwithqualitymetrics,theprocessimprovementplan,and performanceinformation,areallthingsthatneedtobeconsideredasinputsduringthe qualityassuranceprocess. Qualitycontrolmeasuresaretheresultsofqualitymanagementactivities.Theyare usedtoanalyzeandevaluatequalitystandardsasestablishedandapprovedattheproject managementoffice(PMO)andattheorganizationallevel.
Quality Audits OneofthetoolsandtechniquesusedinthePerformQualityAssuranceprocessisquality audits.Auditstypicallyarestructured,independentreviewstodeterminewhetherproject activitiescomplywithorganizationalandprojectpolicies,processes,andprocedures.Here arethereasonsforqualityaudits: ●
Toidentifybestpracticesthatcanbesharedacrosstheorganization
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Toidentifygapsorshortfallsforfollow-upaction
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Toproactivelyassistinimprovingtheimplementationofapprovedprocesses
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Tostriveforcontinualimprovementbyidentifyingwaysfortheteamtoincrease efficiencyandperformance
3. Perform Quality Control Process ThePerformQualityControlprocessinvolvesmonitoringandrecordingtheresultsof projectexecution.Qualitycontrolshouldbeperformedearlyandoftenthroughoutthe projectlifecycle.Thisprocessisoftenperformedbyaqualitycontrolrepresentative ordepartmentwithinanorganization.Theirgoalistohelpensurequalityisbeing performedtotheapprovedtolerances,accordingtothespecifications.Thisteamisin placetopreventerrorsfromreachingthecustomer.Theyperformthisfunctionthrough oversightandsampling,inspections,andothertechniquestohelpensurequalityis controlled. Theprojectteamisresponsibletocomplywithallqualitystandards,processes,and procedures.Qualitycontrol(QC)isaccomplishedthroughtheimplementationofregular testingproceduresaccordingtotheapprovedprojectdefinitionsofqualityandmore
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PMPCertification:ABeginner’sGuide specificallytherefinementoftheseproceduresbytheproject/qualitycontrolteamusing thefollowingsteps: ●
Planningstructuredtests
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Followingapproveddocumentedspecifications/requirements
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Conductingformalcontrolledtestingaccordingtostandards
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Actingontheresultsofthetests(lessonslearned)
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Updatingdocumentation,processes,andprocedures
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UsingQualityCircleorsimilarreview/implantationforums
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Followinguptoensurecontinuousimprovement(Plan-Do-Check-Act)
Successfulcompaniesandprojectmanagersplacegreatemphasisonqualitycontrol. In“QualityManagementPrinciples,”KristerForsbergstatesthefollowing: “Withgrowingglobalcompetition,QualityManagementisbecoming increasinglyimportanttotheleadershipandmanagementofallorganizations. QualityManagementPrinciplesprovideunderstandingofandguidanceon theapplicationofQualityManagement.ByapplyingfollowingeightQuality ManagementPrinciples,organizationswillproducebenefitsforcustomers, owners,people,suppliersandsocietyatlarge.”[15] HereisasummaryofForsberg’squalitymanagementprinciples: ●
Principle1:Customer-focusedorganization Organizationsdependontheir customersandthereforeshouldunderstandcurrentandfuturecustomerneeds,meet customerrequirements,andstrivetoexceedcustomerexpectations.
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Principle2:Leadership Leadersestablishunityofpurpose,direction,andthe internalenvironmentofanorganization.Theycreateanenvironmentinwhichpeople canbecomefullyinvolvedinachievingtheorganization’sobjectives.
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Principle3:Involvementofpeople Peopleatalllevelsaretheessenceofan organizationandtheirfullinvolvementenablestheirabilitiestobeusedforthe organization’sbenefit.
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Principle4:Processapproach Adesiredresultisachievedmoreefficientlywhen relatedresourcesandactivitiesaremanagedasaprocess.
Chapter8: ProjectQualityManagement ●
Principle5:Systemapproachtomanagement Identifying,understanding,and managingasystemofinterrelatedprocessesforagivenobjectiveallcontributetothe effectivenessandefficiencyoftheorganization.
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Principle6:Continualimprovement Continualimprovementisapermanent objectiveoftheorganization.
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Principle7:Factualapproachtodecisionmaking Effectivedecisionsandactions arebasedonthelogicalandintuitiveanalysisofdataandinformation.
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Principle8:Mutuallybeneficialsupplierrelationships Mutuallybeneficial relationshipsbetweentheorganizationanditssupplierenhancetheabilityofboth organizationstocreatevalue.Actpromptlytoresolvecustomerconcerns.Enclose abriefsurveyformwiththefinalinvoicerequestinginformationonthecustomer’s opinionsandexpectations.Listenwithgreatcaretoeveryoneofyourcustomer’s ideasandsuggestions,andthankthemfortheirinput.
Fortheseprinciplestobeeffective,allbusinessexecutivesandmanagershaveto firstunderstandandthenagreethatqualitymanagementisessentialtothesuccessofthe business.Oncethatagreementhasbeenreachedandyouhavefullsponsorshipatthe highestlevelintheorganization,thecommitmentmustbecommunicatedandenforcedall thewaydowntoeachandeveryemployee.Allemployeesandmanagersmustbeinvolved intheprocess.Alltoooften,employeesarereluctanttoreportqualityproblems,feeling thattheywouldbe“rockingtheboat”orseenascriticizingcoworkers(whistleblowers) tomanagement.Everyemployeemustunderstandthattheirjobandtheprosperityofthe companydependonqualityproductsandservices,andthatteamworkandcooperationare essentialtoensurequality.
Tools and Techniques for Performing Quality Control Manytoolsandtechniquesareusedforqualitycontrol.Someofthemarelistedinthis section.Checksheetsaresometimesreferredtoasatoolusedforqualitycontrolaswell; theyaresimplesheetsusedforcollectingdatainrealtime.Theseventoolslistednextare knownasIshikawa’ssevenbasictoolsofqualitycontrol: ●
Cause-and-effectdiagrams ThesearealsoknownasFishboneorIshikawadiagrams.
●
Controlcharts WalterShewhartbeganusingcontrolchartsin1924.
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Flowcharts Theseareusedtoidentifyfailingprocessstepsandusedinriskanalysis.
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Histograms Theseareverticalbarcharts,wherethetotalareaofahistogramalways equals1.
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Paretocharts Thesechartsusethe80/20principleandshowthenumberofdefects bytypeorcategory.
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Runcharts Thesearelinegraphssimilartocontrolcharts,onlywithoutcontrol limits.
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Scatterdiagrams Theseshowtherelationshipbetweentwovariables. Here’salistofsomequalitycontroltechniques:
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Statisticalsampling
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Inspection
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Approvedchangerequestsreview
Pareto Diagram (Pareto’s Law) NamedafterVilfredoPareto,thisdiagramisusedinqualityassuranceandisaspecialtype ofbarchartwherethevaluesbeingplottedarearrangedindescendingorder.Thegraph isaccompaniedbyalineonthegraphthatshowsthecumulativetotalsofeachcategory fromlefttoright. ParetodiagramsareconceptuallyrelatedtoPareto’sLaw(youhaveprobablyheardof thisasthe80/20RuleorPrinciple),whichstatesthatarelativelysmallnumberofcauses (20percent)willtypicallyproducethemajority(80percent)oftheproblemsordefects. TheParetodiagramisaformofhistogram(seeFigure8-4).
Lessons Learned Witheveryproject,welearnmoreaboutwhatworkedandwhatdidn’t.Agoodproject managerwilldocumentthoselessonsandusetheinformationgainedtoimproveonthe nextprojectandthenext,whichiswhylessonslearnedaresuchavitalcomponentin qualitycontrol.
14 Principles of the Toyota Way Wehavelearnedagreatdealfromthepioneersofquality,thetheoristsandgurus mentionedinthischapter,andfromthemanyqualityreferencesshownaswell.Another greatreferenceforlessonslearnedisTheToyotaWay:14ManagementPrinciplesfrom theWorld’sGreatestManufacturer,byDr.JeffreyK.Liker(McGraw-Hill,2004).These principlesexemplifyqualityandhavepropelledtheToyotaMotorCorporationintothe
Chapter8: ProjectQualityManagement Causes for Being Late to Work
Frequency
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100%
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90%
134
80%
118
70%
101
60%
84
50%
67
40%
50
30%
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20%
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Figure8-4
Traffic
Accident
Public Transportation
Weather
Overslept
Child Care
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Sample Pareto diagram
“world’slargestautomobilemanufacturer,”asreportedJanuary22,2009byBloomberg NewsService:
1.Baseyourmanagementdecisiononthelong-termphilosophy,evenattheexpenseof
short-termfinancialgoals.
2.Createcontinuousprocessflowtobringproblemstothesurface.
3.Use“pull”systemstoavoidoverproduction.
4.Levelouttheworkload(hijunka).(Worklikethetortoise,notthehare.)
5.Buildacultureofstoppingtofixproblems,togetqualityrightthefirsttime.
6.Standardizedtasksarethefoundationforcontinuousimprovementandemployee
empowerment.
7.Usevisualcontrolsonoproblemsarehidden.
8.Useonlyreliable,thoroughlytestedtechnologythatservesyourpeopleandprocesses.
9.Growleaderswhothoroughlyunderstandthework,livethephilosophy,andteachitto
others.
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10.Developexceptionalpeopleandteamswhofollowyourcompany’sphilosophy.
11.Respectyourextendednetworkofpartnersandsuppliersbychallengingthemand
helpingthemimprove.
12.Goandseeforyourselftothoroughlyunderstandthesituation(knownasgenchi
genbutsu).
13.Makedecisionsslowlybyconsensus,thoroughlyconsideringalloptions;then
implementdecisionrapidly.
14.Becomealearningorganizationthroughrelentlessreflection(hansei)andcontinuous
improvement(kaizen).
Managing Change Requests Youhaveheardmesaythisseveraltimesbefore,butwhenitcomestoqualitycontrol, itisworthrepeating:“Changeisinevitable,exceptfromavendingmachine.”Inquality management,change,ifmanagedproperly,canbeyourfriend.However,ifit’snot controlled,itcanbeyournumber-oneenemy.Therefore,planforchange,monitorit,and manageittothebestofyourability.
Quality Management Summary Asmentioned,qualityisanattitude;itisnotoptionalifyouandyourcompanyintend tobesuccessful.Whenyoutrulylistentothecustomerandunderstandwhat’simportant tothem,youhaveamuchbetterideaofwhattomeasure.Whenyoumeasuretheright thingsandmatchtheproductoftheprojecttothecustomer’sneedsandexpectations,you aredemonstratingthatyouandtheteamarefocusedonquality.Whenyouarefocusedon qualityresultsandusingallthetoolsandresourcesavailabletoproducequalityproducts andservicesonyourproject,itshouldbeclearthatyouhavetherightprioritiesandthe rightattitude.
References
1.StickySlogans,http://www.stickyslogans.com/qualityslogans.html.
2.Vasilash,GaryS.“QualityIsJob...?”FieldGuidetoAutomotiveTechnology,http://
www.autofieldguide.com/columns/1299stic.html.
Chapter8: ProjectQualityManagement
3.“Tagged:10carswithbadreputations,”CNNMoney.com,http://money.cnn.com/
galleries/2007/autos/0708/gallery.questionable_cars/3.html
(Thiswebsitehasotherlinks.Forexample,seehttp://www.cs.rice.edu/~vardi/ comp601/case2.htmlandhttp://www.fordpinto.com/blowup.htm.) 4.Vasilash,GaryS.“QualityIsJob...?”FieldGuidetoAutomotiveTechnology,http://
www.autofieldguide.com/columns/1299stic.html.
5.BusinessDictionary.com,http://www.businessdictionary.com/definition/quality.html.
6.SkyMark,http://www.skymark.com/resources/leaders/juran.asp.
7.Wikipedia,http://en.wikipedia.org/wiki/W._Edwards_Deming.
8.SkyMark,http://www.skymark.com/resources/leaders/crosby.asp.
9.PurdueUniversityAnimalSciences,MeatQualityandSafety,BeefQualityGrades,
http://ag.ansc.purdue.edu/meat_quality/consumer_grading.html.
10.Burton,TerenceT.“IsThisaSixSigma,Lean,orKaizenProject?”http://www
.isixsigma.com/library/content/c020204a.asp.
11.IBMInstituteforBusinessValueStudy,Drivingoperationalinnovationusing
LeanSixSigmahttp://www-935.ibm.com/services/uk/index.wss/ibvstudy/igs/ a1027370?cntxt=a1006791.
12.LeanEnterpriseInstitute,http://www.lean.org/WhatsLean/History.cfm.
13.Wikipedia,http://en.wikipedia.org/wiki/Standard_deviation.
14.Wikipedia,http://en.wikipedia.org/wiki/Sample_(statistics).
15.Forsberg,Krister.“TheQualityManagementPrinciples,”http://www.kristerforsberg
.com/qmp/about.html.
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Chapter
9
Project Human Resource Management
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KeySkills&Concepts ●
Definitionofhumanresourcemanagement
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Theimportanceoftheteam
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TheroleofthePMinHRmanagement
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FourHRmanagementprocesses
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Stagesofteamdevelopment
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Typesofteams(includingvirtual)
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Skillsneededtomanageprojectteams
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Managingconflict
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Problemsolving
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Managementandleadershipstyles
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Negotiationskills
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Fivekeypeopleskills
U
ntilnow,wehavespentmostofourtimeinthePlanningprocessgroup(referto Table3-1inChapter3).Wearenowshiftinggears,andthischapteriswherethe executionworkoftheprojectreallybegins.Most(threeoffour)oftheHRmanagement processesareintheExecutingprocessgroup. BeforewejumptoodeepintotheExecutingprocessgroup,allowmetosetthestagea bit.YoumayrecallthefirstprocessintheExecutingprocessgroupfromreadingChapter4. Asareminder,ProjectIntegrationManagementistheonlyknowledgeareainthePMBOK thatcrossesallfiveprocessgroups.ThespecificprocessIamreferringtois“4.3:Direct andmanageprojectexecution.”Thepurposeofthisprocessistocarryouttheproject plan.Thisiswhenyoubeginprojectexecution(workingtheplan),andtheonlywayto dothatiswithpeople(oftenreferredtoas“humanresources”).Itissafetosaythatpeople aretheheartbeatoftheproject.Theyperformtheactivities,andtheyinteracttocomeup withideasandsolutions.Asaprojectmanager,youwillneedtodirectandmanagethese extremelyimportantresourcesinordertosucceed.
Chapter9: ProjectHumanResourceManagement AgoodplacetostartiswithabriefdefinitionofwhatprojectHRmanagementis.So let’srollupourshirtsleevesandgetstarted.
What Is Project Human Resource Management? AccordingtoPMI,humanresourcemanagement(HRM)includestheprocessesthat organize,manage,andleadtheprojectteam. HRMinmanycaseshasreplacedtheterm“personnelmanagement”andisconsidered theplannedstrategicapproachtomanaginganorganization’smostvaluedassets—thepeople workingonprojectstomeettheobjectivesofthebusiness.HRM,bydefinition,includesthe processesinvolvedinmanagingpeopletomeetbusinessandorganizationalneeds.
TIP Most of the questions on the PMP exam regarding HR management come from everyday PM experiences. It is worth noting that PMI views HR management as falling into two general groups: Administrative People who help organize the communications and documents of the project. Behavioralmanagement Management of team members. This group is covered in more detail later in this chapter.
Role of the Project Manager in HR Management Whenyouhaveateamofanykind,youarelikelytohaveconflictoratleastdifferences ofopinion.Thiscanbehealthyifhandledproperly;forexample,itcanfacilitate constructivealternatives,thesharingofideas,andopen-mindedness.Butitcanalsobe disruptive,distracting,andcounterproductive. ThesuccessoftheprojectisdirectlytiedtothePM’sabilitytoleadandbringindividuals togethertoformacohesive,productiveteam.ThePMlivesanddiesbytheteam;thismeans you,asthePM,needtodemonstratestrongorganizationalandcommunicationskills.You needtobesupportive(acheerleader,adenmother,acoach,andanadvocate)fortheteam. Keepingtheteamfocusedonthedeliverablesoftheprojectandworkingtogetherto ensureagainstdistractionsandconfusionisanextremelyimportantroleofthePM. Astheprojectmanageryouneedtodothefollowing: ●
Bekeenlyawareoftheimportanceoftheteam.
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Identifytheteammembersandotherkeystakeholdersontheproject.
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DeveloptheHRandstaffingplan(includingskillsandscheduling).
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Negotiateforskilledresourcesontheteamasneeded.
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Obtainfunding,adequateworkspace,andtoolsfortheteam.
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Gettoknoweachteammember’sstrengthsandweaknesses.
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Establishtrustandconfidencewithteammembers.
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Evaluateteammemberperformanceandprovidefeedback.
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Recognizeandrewardgoodperformers.
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Helpdeveloptheteamthroughstrongleadershipandguidance,includingmentoring, education,andon-the-jobtraining.
Astheprojectmanager,itisyourroleandresponsibilitytoeffectivelyobtain,develop, andmanagetheteam.Todothiswell,youneedtounderstandtheprocessesthatwillassist youinthiseffort.
Project Human Resource Management Processes Fourprocessesareusedmostoftentomanagehumanresourcesonaproject.Eventhough thesefourprocessesseemindependent,they,infact,overlap.Developingtheteamisan ongoingprocess,and,ofcourse,thereisalwaysturnoverinstaff.Onaverage,depending ontheproject,youshouldplanforatleast10-percentturnoverinprojectteammembers. Thismeansthecyclebeginsagainandagainasnewteammembersrotateonandoffyour project.Itisuptoyoutogetthenewmembersuptospeedquicklysotheycanbecome productivecontributorstotheteam. ThefourHRmanagementprocessesaccordingtoPMIareasfollows: ●
9.1:Develophumanresourceplan(Planningprocessgroup) Identifying anddocumentingprojectrolesandresponsibilities,requiredskills,organizational relationships,andcreatingastaffingplan.
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9.2:Acquireprojectteam(Executingprocessgroup) Verifyingtheavailability oftheprojectteamhumanresourcesandacquiringtheteamnecessarytosuccessfully completetheproject.
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9.3:Developprojectteam(Executingprocessgroup) Improvingtheinteractionand theteam’scompetencytoperformbetteraspartoftheoverallprojectteam.
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9.4:Manageprojectteam(Executingprocessgroup) Trackingindividualteam memberperformance,providingfeedback,managingandresolvingissues,andmanaging changestooptimizetheteam’sperformance.
Chapter9: ProjectHumanResourceManagement
1. Develop Human Resource Plan Process TheHRplanningprocessisveryimportantbecauseifyoudon’tplanproperlyfortheright skills,intherightplaceandattherighttime,youwillendupmissingtheboat.You’ll experiencescheduleslips,peoplewillbeoverworked,orthequalityoftheworkwill sufferduetolackofproperskillsorfatigue. PlanningincludesdeterminingthefiveW’s(who,what,when,where,andwhy).The whyisespeciallyimportantbecauseyouwillneedtojustifywhyyouneed15people insteadof10,oryoumayhavetoprovewhyyouneedonepersonoveranother,especially iftheyareinahigherpaygradeorareworkingonanotherproject. EquallyimportanttothefiveW’sistheage-oldquestion,Howmuchistheproject expectedtocost?Typically,HRMandlaboraccountforthehighestcostontheproject (anaverageof80percent).ThisiswhereHRmanagementoverlapswithscope,schedule, andespeciallycostmanagement. Thecostofthepeopleassignedtotheprojectisdeterminedbyseveralthings,suchas whentheteammemberscomeonboard,atwhatsalaryrate,andwhenwilltheyneedto cycleofftheproject.HRorlaborplanningusuallyismeasuredinhoursofeffortatfirst, andwillvarydependingonthetypeandsizeoftheproject.Forexample,onasmallproject youhavefewerpeopletospreadtheworkamong,andtheyendupbeingcross-functional. Theybecomelessspecializedandhavetoperformworkinmanydifferentareas(maybe evenoutsidetheirareaofexpertise).Later,thePMoftenhastotranslatethehoursinto dollarsandwillfallbacktocostmanagement(discussedinChapter7)todeterminethe overallcostofprojectlaborandothercoststoensureadequatefundingfortheproject budget. You’llrecallthatthreeofthefourHRmanagementprocessesareintheExecuting processgroup.Thismeansthebulkoftheworkoccursduringtheexecutionphaseand thereforethelion’sshareofthebudgetwilltypicallybespentduringthisphase.The reasonforthehighercostisbecausethefullprojectteamisonboardandperforming theactivitiesoftheproject(fullspeedahead).Thecostoflabor(numberofpeopleand typesofskills)typicallycomeswithanaddedcostforthetoolsandequipmentneededto allowtheteammemberstoperformtheirdutiesontheproject(forexample,workspace, computers,softwarelicenses,phones,andsoon).Thesecostsareatfullflowduringthis phasetokeeptheteamproductive.
TIP You will likely see a question on the PMP exam similar to the following: During which phase of the project is the majority of the budget spent? The best answer should be “During the execution phase of the project.”
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Ask the Expert Q: Iamtheprojectmanageronanewprojectandhavequicklypulledateamof12highly skilledpeopletogetherandhaveflownthemtothecustomer’sofficetojumpstartthe project.Theteamarrivedsafely,butthelaptopcomputersandsoftwarethatwere orderedforthemdidnot.WhatdoIdo?
A: Isuggestyouapproachthecustomerandconfidentlysuggestthatbecausetheproject
teamwillbeworkingatthecustomerlocationandwillneedtocommunicatewiththe customer’semployees,theteamshouldusethecustomer’sstandardequipmenttoolsand configuration.Askifthecustomercanprovideadozenloanerlaptopcomputersloaded withthecustomer’sstandardsoftwaresotheteamcanplugintotheprojectimmediately. Tryit.Itneverhurtstoask—ithasworkedforme.
Nothingismorefrustratingthanhavingtheprojectteamonboard,readytowork, andnothavingtherighttoolstheyneedtodothejob.AspartoftheHRmanagement plan,youneedtoensureyouhavealltherightpeopleandrighttoolstogetthejobdone properly.Thisiswherethestaffingmanagementplanfitsin. Astheprojectmanageryouneedtogettheteamproductiveimmediately;otherwise, theyaresittingaround,thescheduleslips,andextracostsareincurred.
Staffing Management Plan Thebestwaytodeterminethestaffingneedsandultimatelythecostoftheresources isfirsttodeveloparesponsibility(orresource)assignmentmatrix(RAM).TheRAM willhelpidentifytheskillsneededandhelpwithworkassignments.Youcanstart withthejobrolesorskillsneededtodeveloptheRAMandthenaddthenamesofthe peopleperformingorfillingtherolesastheyareassigned.Intherealworldofproject management,youwilllikelyhearteammembersreferredtoinanumberofdifferent ways—resources,staff,heartbeats,headcount,personmonths,orfull-timeequivalents (FTEs).Whatmattersthemostisthatwhateveryoucalltheprojectteammembers,you musttreatthemwithrespectandasindividuals. Whencalculatinglaborhourspermonthoftheworkneededorperformedonthe project,mostPMsuseamonthlyestimateofsomewherearound140–160hoursper month/perperson.Thehourswillvarydependingontheproductivityrate(expectedtime worked)assumedfortheproject,countrylaborlaws,overtimeexpectations,andsoon. Thebestwaytosortoutwhoisdoingwhatonyourprojectistocreatearesponsibility assignmentmatrix.
Chapter9: ProjectHumanResourceManagement
Developing a Responsibility Assignment Matrix TheRAMisoneofthemanytoolsusedforHRmanagementaswellasriskand communicationsmanagementplanning.Thegoodnewsisthereisnofixedruleonhowto createaRAM.Youcanuseaspreadsheetortableavailableinthemanyavailablesoftware toolsoryoucanevenuseanotepad,justaslongasthetoolandformatworksforyouand theteam. TheresponsibilityassignmentmatrixshowninTable9-1isfortheBECcasestudy. It’sforaniceeventbasedonanestimatedattendanceof2,400people.
NOTE A responsibility assignment matrix can be turned into a resource assignment matrix to include the names of people next to their assignments.
AnotherRAMtableoftenusedistheRACIformat(Responsible,Accountable, Consulted,andInformed).ThisisshowninTable9-2. Toclarifythedifferencebetweenresponsibleandaccountable—youmayhaveone persondoingtheworkwhoisresponsiblefortheactivity;however,anotherpersonmay beheldaccountablefortheresultsofthework(forexample,thePMisaccountableinthat iftheworkfails,theprojectwillfail). ClearlytheRAM/RACIchartapproachworksbestiftheprojectteamisidentifiedand alreadyassignedtotheproject.Iftheprojectteamisnotalreadyassigned,youwillneed toacquiretheprojectteam.
2. Acquire Project Team Process Asmentionedearlierinthischapter,HRmanagementincludestheprocessesthatorganize, manage,andleadtheprojectteam.Ifyouhadtonarrowtheprojectdowntoasinglemost importantasset,whatwoulditbe?ConsiderthefollowingstatementfromPMPProject ManagementProfessionalExamStudyGuide,SecondEdition,byKimHeldmanetal. “Projectsareperformedbypeople,andmostprojectsrequiremorethanone persontoperformalltheactivities.Ifyouhavemorethanonepersonworking onyourproject,you’vegotateam.Ifyou’vegotateam,you’vegotawide assortmentofpersonalities,skills,needs,andthemix.”[1] Theprojectmanager(nomatterhowgoodtheyare)cannotsuccessfullycompletethe projectwithouttheprojectteam.Thismeansthenumber-oneassetonaprojectistheteam.
There Are Teams, and Then There Are Teams Teamscomeinallsizesandtypes.Forpurposesofprojectmanagement,wewillfocuson twotypesofteams:theprojectmanagementteamandtheprojectteam.
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Responsibility
Primary
Secondary/ Numberof Backup StaffNeeded Comments
Staff
1 supervisor
3 leads
Zamboni drivers
1
1
Event crew
2 for first show 1 and 1 for second show
1 staff to stay for 1–2 hours after each show for performer practice and lights.
Fire panel
1
1
Fire alarm monitoring and reset.
Sound/lights
1 supervisor
1
Cleaning
1 during event
Security
1
First responders (security)
1 sheriff
5 traffic 2 EMT
Local law enforcement and medical team.
Runners
1 lead
3 to 6
Depends on event.
Show call
1 steward
1 house electrician
Depends on event.
Setup & catering
1
1
5
Food service for crew only.
Audio/video mixers
1
1
2
Depends on event.
Load-out 8 riggers (loading and unloading trucks)
1 floater
4 loaders and 8 electricians
Breakdown: 6 up riggers and 2 down riggers.
Parking
1
1
10 (contract labor)
Pyro shooter
1
1
Merchandise
1 supervisor
1 lead
2 to 3 per booth
Stands open 1 hour before and 1½ hours into show time.
Box office
1
1
3
Varies by event.
Table9-1
Sample RAM
1
25
Various services. Ice events only.
21
6 carpenters, 3 properties, 4 wardrobe, 1 house light operator, and 7 spotlight operators.
10
10+ post-event.
7 for each show Staff will provide 1 loading dock, 2 dressing rooms.
For ice and concert events.
Chapter9: ProjectHumanResourceManagement
Activity
George
Pam
Candy
Dawn
Maverick
Collect requirements
A
R
C
I
I
Define code
R
A
I
I
C
Design code
I
A
R
C
I
Develop code
C
I
I
R
A
Code testing
I
I
A
I
R
Promote to production
R
A
C
I
I
Table9-2
RACI Chart
Theprojectmanagement(PM)teamiscomprisedofasubsetoftheoverallproject teamandincludesthepeoplewhodirectlyperformthemanagementactivitiesontheproject. Theyaresometimesreferredtoasthecoreteam,theexecutiveteam,ortheleadership team.Theyareresponsiblefortheoverallmanagementoftheproject,includingthefive processgroups’variousphasesoftheproject.Theprojectmanagementteamiseveryone specificallyresponsibleandaccountablefortheoutcome(deliverables)oftheproject. Theprojectteam,ontheotherhand,extendsbeyondtheprojectmanagementteam andincludesallstakeholders.YoumayrecallfromChapter2thatthedefinitionofa stakeholderisanyoneoranyorganizationthatispositivelyornegativelyimpactedbythe project.Theprojectteamcanbeextensive,evenonasmallproject,whenyouconsiderthe endusers,suppliers,supportmanagers,executives,thecommunity,government,andeven othercompanies. Thenumberandmixofstakeholdersdependsonthespecificneedsoftheproject. Becauseprojects(andprojectmanagers)areunique,manyfactorsshouldbeconsidered whenbuildingyourprojectteam.ThePM’sleadershipstyleisoneofthemanyfactors,as wellasexistingornewrelationships,thatplayanimportantroleinthesuccessrateofthe project. Beforewetalkaboutleadershipstyles,let’stakealookatthetypicalroleofthe projectmanagerwhenitcomestomanaginghumanresources.
Where Do Project Teams Come From? AkeyroleofthePMistoestablishtheprojectteam.OnnewerprojectsthePMmayhave fullownershipandresponsibilitytobuildoracquiretheteam.Whenformingateam, strongnegotiationskillsareaplustoensurethebestskillsnecessaryforaproductive
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What Are Virtual Teams? Theanswertothisquestionisfastbecomingthenormforprojectsallovertheworld. Virtualteamsaregroupsofpeoplewhoaregeographicallydispersedandworkacross time,space,andorganizationalboundaries. WiththeadventoftheInternet,emergingsoftware,andnetworkingtechnology, theabilitytoworkfromanywhereintheworldisnotonlypossiblebutpreferred bycompaniesandemployeesalike.Accordingtothe“ComputingandInformation Technology”sectionofthe“Virtual”entryonWikipedia,“Thesetechnologiesbuild theenvironmentforvirtualworkinteams,withmemberswhomaynevermeeteach otherinperson.Communicatingbytelephoneande-mail,withworkproductsshared electronically,virtualteamsproduceresultswithoutbeingco-located.”[2] Workingathomecansavemoneyandincreaseproductivity.Forexample,in1988, IwasworkingindowntownChicagoandlivinginHoffmanEstates,Illinois,amere three-hour(roundtrip)commuteeachday.Iwasworkingonaprojectthatrequiredalot ofcomputertime,andeventhoughIhadaPCathome,Iwasexpectedtobeintheoffice everyday.WhenIfoundoutIneededsurgerythatrequiredfiveweeksofrecoverytime, mybosswaslessthanexcited. Asitturnsout,acoupletechnicalgurusinmyofficehadstartedplayingaroundwith softwarethatwouldallowremoteaccesstoourofficecomputerandinternalmailsystem. IaskedifIcouldbetheirtestsubject,becausethiswouldenablemetoworkfromhome duringmyrecoveryperiod.Wetestedit,anditworked.Therefore,Iwasoneofthefirst employeesinourofficetoworkfromhomeonwhatwelatercalled“TheHomeOffice” program.Mybosslikedtheideaalot,andIwasabletokeepupwithmyprojectandwork fromthecomfortofmyhome,savinghoursoftraveltime.
Chapter9: ProjectHumanResourceManagement Mostcompaniesnowembracepartialorfull-timehomeofficeemployees.This practicesavesofficespaceandallowspeopletocollaborateonprojectsatanytimefrom anywhereintheworld.Eventhoughthesenewchannelsofcommunicationsmakevirtual teamingpossible,theyareoftenmoredifficulttomanagethananonsite(co-located)team becauseoftimezonedifferences,languagebarriers,andlackofoversightmanagement.
Negotiation Skills Whenacquiringaprojectteam,youoftenneedtoputyournegotiationskillstouse.
TIP You are likely to see negotiations referred to frequently on the PMP exam related to obtaining resources, reducing cost, improving quality, improving schedule, collecting input/requirements from the team, customer, and so on.
Whenitcomestonegotiationskills,theprojectmanagershouldbeawareofthe followingitems: ●
Thepurposeandpriorityoftheproject
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Theneedsoftheorganization,theteam,andthecustomer
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Usingthetoolsandresourcesavailabletoanalyzeandproveneedsbeforethe negotiations(includingpickingasuitablelocationatanacceptabletime)
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Therelationshipbetweenpartiesandhowtoapproachandnegotiateaccordingly
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Theimportanceofworkingwithdecisionmakers
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Notaskingforthebestresourcesifthey’renotneeded
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Understandingtheinfluencingfactorsinnegotiations
Onceyouhaveacquiredtheteammembers,youneedtodeveloptheirskillstohelp bringthemtogetherintoaproductivefull-functioningteam.
3. Develop Project Team Process Thisistheprocesswhereyoudon’twanttospinyourwheels.BythisImeanyoudon’t wantturnoverinpersonnelonyourproject.Ahighturnoverrateisanindicatorthat somethingiswrongonyourproject.Theremaybeextenuatingcircumstanceswhypeople movebetweenprojects—reorganizations,retirements,orresourceactions(RAs)where peoplearereleasedfromtheirjobs.However,turnovercanbedirectlyrelatedtoabad projectorbadprojectmanager.Eitheritsucksthelifeoutofaproject(withlosttime, lostmoneyusedtotrainthenewteammembers,andlostproductivity)oritrevitalizes
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PMPCertification:ABeginner’sGuide theprojectteamwithnewskills,newexperience,newideas,andanewfoundenergy. Hopefully,youexperiencethelatteronallyourprojects. Herearethetruebenefitsofsolidteamdevelopment: ●
Lessturnover
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Happy“campers”(happyprojectteammembers)
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Teamspirit(goodcommunications,collaboration,andcamaraderie)
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Efficientresults
Ways to Develop Your Team Teamworkisacriticalsuccessfactoronprojects.Itallstartswithgoodcommunications (moreonthistopicinChapter10).ItisuptothePMtocommunicateeffectivelyto minimizeconfusionandmaximizeresults.ThePMisresponsibleforbuildingasense ofteamwork(teamspirit)andformotivatingtheteammemberssotheywanttowork togetherforthegreatergoodoftheproject.Herearesomethingsyoucandothatwillhelp buildanddevelopyourteammembers: ●
Gettoknowyourteammembers(includingtheirstrengthsandweaknesses)andbe thereforthemiftheyhavequestionsorneedsupportorassistance.
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Useakickoffmeetingtosetthetone,communicateexpectations,andgeteveryoneon thesamepage.
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Scheduleandmanageregularteammeetingstokeeptheteaminformed(notjust meetingsforthesakeofmeetings;theymustbemeaningfulandinformative).
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Setupandcommunicateyourrecognition,award,orrewardprogram(wherethe incentivesmayincludeon-timedeliveryofactivitiesundertheperson’scontrol.
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Allowtimeforone-on-onediscussionsandforteambrainstormingfornewideas.
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Setthetoneforopendiscussionsandlistentoyourteam(verbalandnonverbalcues).
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Considerateamcharter(tosetthegroundrulesorrulesofengagementforteam members).Thiscanincludehowteammeetingswillbeconducted,voting(if appropriate),andescalations(iftherearedisagreementsordisputes).
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Providetimelyteamandindividualevaluationsandfeedbacksotherearenosurprises.
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Praisegoodperformancethroughyourestablishedawardsandrecognitionprogram.
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Bewillingtochangeifthingsarenotworkingasplanned.Forexample,don’thold ontoanemployeejustbecausehehasbeenthereforeverandisa“goodguy.”Sucha decisioncan’tbepersonal;ithastobebasedonprojectperformance.
Chapter9: ProjectHumanResourceManagement
Ask the Expert Q: ThereisaguynamedJackonmyprojectwhohasbeenamanagerformanyyears
andhasdecidedtostepdowninrankwhileremainingontheprojectteam.Heisnot usedtoactuallydoingthework,letalonetakingdirectionsfromsomeonewhoismuch youngerinage.Heisveryresistanttochange.WhatcanIdotogethimonboard?
A: YouneedtofirstsitdowninaquietplaceandthinkthroughhowbesttoapproachJack.Itis importanttohaveaone-on-onemeetingtosortthisout;makesureyouconductthemeeting inasuitable(undisturbed)place.Pickingthepropertime,place,andapproachisessential toabetteroutcome.Don’ttrytorushameetingwhileJackisdrivingyoutoacustomer location(likeafellowPMfriendofminedid).Youcouldbeletoutofthecartowalkback totheoffice!Duringthemeeting,takethetimetogettoknowJacktobetterunderstand hisconcernsorhissituationandthenaskforhisassistanceontheprojectbyappealingto hisknowledgeandexperience.Ifthatdoesn’twork,youmayhavetotakemoreaggressive measures.
Develop Project Team Inputs, Tools and Techniques, and Outputs Theinputs,toolsandtechniques,andoutputsthatneedtobeconsideredaspartofthe projectteamdevelopmentprocessareprettystraightforwardyetveryimportant.
Inputs ●
Projectstaffassignments
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Projectmanagementplan
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Resourcecalendar
ToolsandTechniques ●
Interpersonalskills
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Training
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Team-buildingactivities
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Groundrules
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Co-location(whenpossible)
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Recognitionandrewards
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Teamperformanceassessments
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Enterpriseenvironmentalfactorsupdates
Personally,Ifeeltheoutputsshouldincludehighteammorale,effectivecollaboration, andteamspirit,whichleadtoimprovedprojectresults. Onewaytoensuretheteamhastheproperfocusandthetoolsneededtoperformtheir jobswellistoprovidetherighttrainingandeducationtotheteammembers.
Importance of Training and Education Projectstendtobedynamic;theymovequickly.(Ioncehadaprojectmanagersayhe couldfeeltheearthmovebeneathhisfeetbecausehisprojectwasexperiencingchange almostdaily.)Theonlywaytokeepupwithchangeisthroughtrainingandeducation. Withallthenewtechnology,updatedsoftwaretools,newprocesses,andtechniques, changeisconstant.Infact,Iliketosaythattheonlyconstantis“change.”Thisisone reasonPMIrequiresprofessionaldevelopmentunits(PDUs)aspartoftheircontinuing certificationrequirements(CCRs).Otherorganizationshavesimilartypesofcredentials andrequirecontinuingeducationunits(CEUs),toensurewearekeepingupwiththe changesintheprofession.Stayingcurrentandconnectedwiththelatesttools,techniques, andmethodsisessentialtoyourabilitytomanageyourprojectteameffectively. Considertrainingandeducationaninvestmentinthefuture.Yourteammemberswill appreciatebeingviewedasimportantenoughthattheircompanyiswillingtospendthe money(andallowthemtimeofffromtheproject)tostaycurrentonnewtechnology,tools andtechniques,andprocessimprovements.Unfortunately,educationissometimesthe firstthingthatiscutwhentimesaretoughfinancially.
Team Building and the Five Stages of Team Development Teambuildingnotonlyinvolvestheformingoftheteambutalsomotivatingtheteam membersintoacohesivefunctioninggroupwiththetoolsandtalentneededtodeliverthe projectsuccessfully. Severalofthetoolsandprocessesalreadydiscussedare,inessence,team-building activities—forexample,theWBS,scopedefinitionandmanagement,timemanagement, costmanagement,andespeciallyriskmanagement(moredetailsonriskmanagementcanbe foundinChapter11). WetalkedearlierabouttheroleofthePMinHRmanagement.ThePM’sroleinteam buildingandskillsdevelopmentisalsoextremelyimportant.ThePMshouldstartwith obtainingtopmanagementsupport,gainingteammembercommitmentbycreatingateam
Chapter9: ProjectHumanResourceManagement identity,promotingtrustandconfidence,andfosteringfrequentopencommunications.The singlemostimportantstepabovecommunicationsistoestablishstrongleadershipskills.
TIP The true measure of success on a project is when team members come to you (the PM) at the end of the project and say they enjoyed working with you and offer to work with you on future projects. When they have trust and confidence in you as a project leader, you have a good solid team relationship.
Oneofthemostimportantskillsindevelopingateamishowtohandleprojectteam problems.Problems,issues,andconflictsarearealityandneedtobehandledindifferent ways,dependingonwhentheyoccurandthestakeholdersinvolved.Problemstendto surfaceatdifferenttimesandtovaryingdegreesofimpactontheteam.Insomecases conflictsarenormalwhenbuildingteams,soitisimportantfortheprojectmanagertobe awareofthefivestagesofteamdevelopment. Anumberoftheoristshaveconductedextensiveresearchonthetopicofteam development.However,onethattendstostandoutisDr.BruceTuckmanandhisfive stagesofteamdevelopment: “Dr.BruceTuckmanpublishedhisFormingStormingNormingPerforming modelin1965.Headdedafifthstage,Adjourning,inthe1970s.[…]Tuckman’s modelexplainsthatastheteamdevelopsmaturityandability,relationships establish,andtheleaderchangesleadershipstyle.Beginningwithadirecting style,movingthroughcoaching,thenparticipating,finishing,delegating,and almostdetached.[…]Thisprogressionofteambehaviorandleadershipstyle canbeseenclearlyintheTannenbaumandSchmidtContinuum—theauthority andfreedomextendedbytheleadertotheteamincreaseswhilethecontrolof theleaderreduces.”[3] Let’stakeacloserlookatDr.Tuckman’sfivestagesofteamdevelopment.
Stage1:Forming Highdependenceontheprojectleaderforguidanceanddirection; individualrolesandresponsibilitiesareunclear.Theprojectleadermustbepreparedto answerlotsofquestionsabouttheteam’spurpose,objectives,andexternalrelationships. Processesareoftenignored.Memberstesttoleranceofthesystemandtheteamleader. Stage2:Storming Decisionsdon’tcomeeasilywithingroups.Teammembersviefor positionastheyattempttoestablishthemselvesinrelationtootherteammembersandthe leader.Theremaybepowerstruggles.Theteamneedstobefocusedonitsgoalstoavoid becomingdistractedbyrelationshipsandemotionalissues.Compromisesmayberequired toenableprogress.Conflictamongtheteammembersisnotuncommoninthisstage.
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PMPCertification:ABeginner’sGuide Stage3:Norming Rolesandresponsibilitiesareclearandaccepted.Bigdecisionsare madebygroupagreement.Smallerdecisionsmaybedelegatedtoindividualsorsmall teamswithinthegroup.Commitmentandunityisstrong.Theteammayengageinfunand socialactivities.Theteamdiscussesanddevelopsitsprocessesandworkingstyle.There isgeneralrespectfortheleader,andsomeleadershipissharedbytheteam.Theproject leaderfacilitatesandenablestheteam. Stage4:Performing Theteamismorestrategicallyaware;theteamknowsclearly whatitisdoingandwhy.Theteammembershaveasharedvisionandareabletostandon theirownfeetwithnointerferenceorparticipationfromtheleader.Disagreementsoccur butnowtheyareresolvedwithintheteampositively.Necessarychangestoprocessesand structurearemadebytheteam.Theteamisabletoworktowardachievingthegoalofthe projectandthememberslookaftereachother. Stage5:Adjourning(Addedin1975) Adjourning,alsoreferredtoastheDeforming andMourningstage,isveryrelevanttothepeopleinthegroupandtheirwell-being. Adjourningisthebreak-upofthegroup(hopefullywhentheprojectiscompleted successfully).Teammemberspreparetomoveontonewprojectsandmayfeelasense ofinsecurityorthreatfromthischange.
Skills Needed to Manage Project Teams (Including Virtual Teams) Becausethenumber-oneassetonaprojectistheteamandbecausetheteamismadeup ofpeople,itisworthinvestinginunderstandinganddevelopingpeoplemanagement skills.Thefollowingisfromthearticle“KeyPeopleSkillsforVirtualProjectManagers,” writtenbyDr.GingerLevinandDr.ParvizRad: “Effectiveandsuccessfulprojectmanagersandleadersmustbeextremely peopleoriented.Theyneedtocreateanenvironmentthatisconduciveto innovation,productivity,andhighperformancebyusingtheirhumanskills, alongwiththeirtechnicalskillsinareassuchasscheduling,procurement, costestimatingandbudgeting,monitoringandcontrolling,andrisk management.Accordingly,theymustmaintaintheirtechnicalandfunctional skillsatthehighestpossiblelevel,whileenhancingtheirsofterskillstomeet thechallengesoftodayandtomorrow.”[4] Socialskillstakeongreaterimportancewithvirtualteams,andPMsneedtofacilitate andencouragesuccessfulinteraction.Itrepresentsadramaticchangeinhowweworkon
Chapter9: ProjectHumanResourceManagement projectsandcreatesnewchallengesfortheprojectteam.Whenmanagingprojectteams, especiallyvirtualteams,thePMneedsthefollowingimportantskills: ●
Networking Theabilitytoassessandbuildthequalityofworkingrelationships.
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Buildingtrustandrapport Developingapositiveattitude.
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Motivationskills Ensuringthateveryoneismotivatedontheteam.
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Communications(especiallylistening) Oneofthemostimportantskillstohave.
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Organizationalskills Showsorderandallowsforhigherproductivity.
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Counselingskills Usedtoovercomepersonalissues.
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Appropriateuseofpower Powerneedstobeusedappropriately.
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Delegation Abasicmanagementskillandvitalinprojectmanagement.
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Conflictmanagementandproblemsolving Conflictscanbeagoodthingwhen managedproperly.
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Negotiation Ittakesnegotiationskillstomakenecessarychanges.
Allofushavehadsituationswhereweletouremotionsrunwild,onlytofindwedidn’t haveallthefacts.Thatiswhyitisimportanttobesensitive,stayopen-minded,andlisten toyourteam.Thesignsmaynotbeclear,sodon’tbetooquicktojudge. ThebestwayIhavefoundtogetpeople’sattentionandtohelpinspirecreativityand improvedperformanceisbyprovidingrecognitionandrewards.
Recognize and Reward the Project Team and Individuals Evenifitisjustapairofnewsocks(youreadthatright),youneedtofindawayto recognizeandrewardgoodperformance.Youareprobablythinking,“Whatacheapskate!” Well,itworkedinonesituationononeofmymoredifficultprojects. Thestorygoeslikethis:Onceuponatime,therewasacomputerprogrammer(named Mark)workingformeonalargeprojectinPortland,Oregon.Markwasstayingatahotel forthedurationofthenine-monthprojectandhadputinsomanyhoursoneweekhedidn’t havetimetodrophislaundryoffatthefrontdeskforcleaning.Onedayhewasgetting dressedandhadnocleansocks,soMarkcameintoworkwearingnosocks.Weallkidded himabitandattheendoftheprojectIpresentedhimwithanewpairofsocksforhis dedicationtotheprojectandincludedanicecheckaswell.Hewasagreatsport,andthe teamgotahuge,endearinglaughoutthesocks.
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Ask the Expert Q: WhatshouldIdoastheprojectmanagerwhenateammemberisdistracted,sometimes fallsasleepinmeetings,isnottakingtheworkseriously,andistalkingback?
A: Pulltheindividualaside(one-on-one)andcalmlyandprofessionallyaskthepersonto
pleaseexplainthereasonfortheirbehavior.Ifthereisnologicaloracceptableresponse, youwillneedtobefirmandexplainthisactionisnotacceptable.Givespecificexamples ofhowitisdisruptingteammeetingsandisdistractingtheteam.Haveanactionplan documentedandinhandwithacceptableoptionsinmindtopresenttotheindividual.Here aresomesampleoptionsforthedistractedteammember:
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Anopenapologytoyouandtheteaminthenextmeeting
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Additionalworkbecausethispersonappearstohavesparetimeontheirhands
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Possibleperformanceratingreduction
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Movedofftheprojectorfired
Beawaretherearetimeswhenthepersonmayhaveagoodreasonfortheiractions, oratleasttheythinktheydo.Therefore,bepatientandlisten.Youmayfindtheyhave amedicalcondition,aregoingthroughapersonalsituation,orhaveawork-related reasonthatmayrequireyourcompassionorassistance.
TIP Don’t be too quick to judge. I once had a student who dozed off in class and would snore, which I found distracting and rude. I was getting upset and was considering how to reprimand him in class. Then I decided instead to give the class a 15-minute break so I could approach this student one-on-one. He explained to me that he was on heavy medication to prepare for a liver transplant. He was on the top of the recipients list and was expecting a call at any time to go to the hospital. Imagine how embarrassed I would have felt if I called him out in class and then learned the news. I am glad I didn’t make a fool of myself by jumping to the wrong conclusion.
Rewardsandrecognitioncancomeinmanyformsorflavors.Iknowanoutstanding projectmanagerwhoreceivedalargeaward(ofseveralthousanddollars)forsuccessfully completingachallengingprojectaheadofscheduleandunderbudget.Hismanagerasked himtosetupanawarddinnerforthewholeteam.Atthedinnerhismanagergaveout awardstoeveryoneontheteambutfailedtoannouncetheprojectmanager’saward,the
Chapter9: ProjectHumanResourceManagement largestofthemall.ThePMdidn’tgettheteamrecognition,onlyacheck.Eventhough theawardwassizable,itwasanticlimacticwhenitcamewithoutanannouncementtothe team.Somewouldsay,“Don’tgivemeapplause,justsendmoney.”Butattheendofthe dayweallliketheopenteamrecognition,evenifitsjustapairofsocks(givenintheright situation). Anotherexampleisofateammember(Jim)whowasinaprojectmeetingwhere Ihandedoutcommemorative,uncirculatedcoinsetstoseveraloftheteammembers. Afterthesecondonewashandedout,Jimcountedthefacevalueofthecoinsandboldly announcedthesetwasworthonlyafewdollars.Histunechangedwhenhereceiveda coinset,announcingthatthecoinsetwastrulypricelessandwouldbeworthalotof moneysomeday! Themoraltothestoryis,youcangetgreatresultsbyhandingoutrecognitionand awardsevenifthedollarvalueislow,aslongastherecognitionismeaningfulandcanbe appreciatedbytherecipientandtheteam.Alsorememberthatthehigh-dollarawardscan seemmeaninglessifnotpresentedinafavorablemanner.
4. Manage Project Team Process TheManageProjectTeamprocessisintheExecutingprocessgroup.Itinvolvesbeing involvedwiththeteamactivities,havingopencommunications,andmakingsuretheteam membersarefocusedandproductive.
Management and Leadership Styles Managingpeopleandbeingaleaderaretwodifferentthings.Theyhaveslightlydifferent motivationsandrequireslightlydifferentapproaches. Forexample,managerstendtolookatthedailyoperationsandarefocusedonthe following: ●
Theshort-termperspective
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Dideveryoneshowupforworktoday?
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Whathaveyoudonetoday?
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Howarewegoingtoaccomplishthis?
Leaders,ontheotherhand,lookforwaystodeveloptheteammembersandfocuson thefollowing: ●
Thelong-termperspective
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Isthereabetterwaytodothings?
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Coachingandmentoringtheteam
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Workingwiththeteamforbestresults
ManagementStyles EventhoughthesearenotinthePMBOK,youshouldbefamiliar withthedifferenttypesofmanagementstyles: ●
Autocratic Themanagermakesallthedecisions.
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Democratic Theteamisinvolvedinthedecision-makingprocess.
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Laissez-faire Theteamisself-led(asinAgileprojectmanagement).
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Exceptional Lookingatonlythetopandbottom10percentofperformers(thatis, whoisdoingwellandwhoisnot).
Muchlikeprojectmanagementskills,thegeneralmanagementskillsneededto effectivelymanagepeopleareasfollows: ●
Strongcommunicationsskills
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Organizationalskills
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Negotiatingskills
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Problem-solvingskills
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Leadingandinfluencingpeople
Beingagoodmanagerdoesn’tmeanthemanagerisagoodleader.Strongleaders demonstrateslightlydifferentstyles.
LeadershipStyles LeadershipstylesarenotinthePMBOKeither.However,youneed tobefamiliarwiththedifferenttypesofleadership.Yourstylewilllikelybeslightly differentfromotherprojectmanagers(ortotallyunique).Youneedtoincorporatethestyle thatworksbestforyouandtheteam.Beawarethatdifferentsituationsanddifferentteam memberswillcallfordifferentleadershipstyles.Itisbesttobeflexibleand“mixitup”to meetyourneedsandtheneedsoftheteam. Hereareafewleadershipstylesyoumayalreadybefamiliarwith: ●
Directing Tellingotherswhattodo(“mywayorthehighway”)
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Autocratic Sameasmanagementstyles(makingdecisionswithoutoutsideinformation)
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Facilitating Coordinatinginputfromotherstohelpsolveproblemsormakedecision
Chapter9: ProjectHumanResourceManagement ●
Coaching Instructingorinspiringothers
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Supportive Beinganadvocateandprovidingassistancetotheteamandindividuals
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Consultative Invitingideasfromothersandassistinginthedecisionprocess
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Consensus Groupdecision-makingprocessbasedongroupagreement
Asprojectmanager,youwilllikelyusedifferentstylesatdifferenttimes.Youwill probablyexhibitmoremanagementstyleonthefrontendoftheprojectandmorecoaching stylefurtherintotheprojectlifecycle.Alotwillalsodependontherelationshipandhistory youhavewithyourteammembers.
Know the Capabilities of the Team Members Knowyouteammembers’skills,experience,capabilities,andanylimitationstheymay have.Itcanbeembarrassingtoassignsomeonetoperformcertainactivitiesandthenfind theydon’thavetheknowledge,skills,oreducationtoperformtheseduties.
Problem Solving Whenyoueffectivelyusestrongprojectmanagementskills,youmaybeabletoavoid manyproblems.However,problemswilloccur.Therearevariouswaystosolveproblems, andthefirststepisalwaystotakethetimetoidentifyandunderstandtheproblem.Make sureyouarefocusedontheproblemandnotadownstreamresultoftheproblem.Hereis therecommendedprocesstohelpsolveproblems:
1.Identifythecauseoftheproblem(focusonthecauseandnotthesymptom).
2.Understandandanalyzetheproblem(useavailabletoolsandresourcestohelp).
3.Workoutanagreeablesolution(itmaybeatemporaryworkaroundatfirst).
4.Solvetheproblemtothebestofyourabilityusingtheresourcesavailable.
5.Monitorthesituationaftertheproblemhasbeenresolvedtoensureitdoesn’treoccur.
TIP For those of you planning to take the PMP exam, you can expect approximately 100 questions that require you to look at a situation (cost, schedule, HR, and so on) and make the best decision to help solve the problem.
Manage Project Team Inputs, Tools and Techniques, and Outputs Thereareanumberofinputstoconsiderduringthemanagingtheprojectteamprocess. Keepinmindthemainfocusisontheteam.Whenyouhavethestaffassignedaccording totheprojectmanagementplan,it’stimetomanagetheteamthroughuseofthevarious
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Inputs ●
Projectstaffassignments
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Projectmanagementplan
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Teamperformanceandreports
ToolsandTechniques ●
Observationandconversation
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Projectperformanceappraisals
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Conflictmanagement
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Issueslog
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Interpersonalskills
Outputs ●
Changerequests
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Projectmanagementplanupdates
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Updatestootherprojectdocuments
How to Motivate the Team Tohelpyousolveproblemsandconflictsonyourproject,itisalwayshelpfultoknow howtomotivateyourteam.Thisisagoodplacetolooktoprofessionalsportcoachesand peoplewhohaveprovensuccessinteammotivation.Theycanprovidegreatexamplesof waystogettheteamtofocusontheendresults,toworktogetherasateam,andtouseall thetoolsandresourcesavailable.(Soundfamiliar?Itshould,becausethisgoesbackto mythreetakeawaypointsinChapter2.Bythetimeyougettotheendofthisbook,you shouldbeabletorecitetheseinyoursleep.) Beingaprojectmanagerislikebeingacoach,teacher,ormentor.Herearesome quotesIpulledfromtheInternettohelpyoucoachandmotivateyourteam: ●
“Theachievementsofanorganizationaretheresultsofthecombinedeffortofeach individual.”–VinceLombardi
Chapter9: ProjectHumanResourceManagement
Ask the Expert Q: Pamwrites,“Iamanewprojectmanager,andmyboss,coworkers,andteamare
constantlystoppingbymyofficeatallhoursofthedayjusttointroducethemselves andtalk.Ienjoyedthisattentionatfirst,butnowitisbecomingdistractingandtaking timeawayfrommyproject.Idon’twanttoberude,butwhatcanIdotominimizethe distractions?”
A: ThefirstquestionIaskmyselfinsuchasituation(andithashappenedoften)is,“DoIhave
acandydishorothersnacksonmydesk?”Theanswerinmostcaseshasbeen“yes.”Ihate tosaythis,butpeoplecanseecandyasanopeninvitationtocomebyyourdesk.Ifthis isthecasewithyou,Irecommendoneoftwothings:Takeawaythecandydish,orhave someworkfoldershandywithtasksthatneedtobedoneandwhensomeonestopsbygive themthework.Afterashortperiodoftime,peoplewon’tstopbyasoften.Tryit—you’llbe surprisedhowwellitworks.Youmayalsowanttoconsiderthelocationofyourguestchairs. Tooclosetothedoorinvitespeopletocomeinandsit.Furtherawayrequiresthemtoask permission,atwhichpointyoucansay,“Wouldyoumindcomingbackin15minutes?Iwill finishwhatI’mworkingonandthenIwillbeabletoconcentrateonyourquestion.”
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“PracticeGolden-Rule1ofManagementineverythingyoudo:Manageotherstheway youwouldliketobemanaged.”–BrianTracy
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“Coacheshavetowatchforwhattheydon’twanttoseeandlistentowhattheydon’t wanttohear.”–JohnMadden
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“ProbablymybestqualityasacoachisthatIaskalotofchallengingquestionsandlet thepersoncomeupwiththeanswer.”–PhilDixon
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“Peoplewillexceedtargetstheysetthemselves.”–GordonDryden
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“Coachingis90percentattitudeand10percenttechnique.”–Authorunknown
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“Agoodcoachpassesoninformationquickly.Theydonotholdbackinformation thataffectsmyjob.”–ByronandCatherinePulsifer,from“People’sExpectationsofa Coach”
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“Yougetthebesteffortfromothersnotbylightingafirebeneaththem,butby buildingafirewithin.”–BobNelson[5]
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PMPCertification:ABeginner’sGuide FrompersonalexperienceIwilladdacoupleoftipsoncoachingaswell. ●
Taketimetolisten.(Thisoneisverydifficult,aswetendtobebusyformulatingour thoughtsfortheanswerandwedon’tfullyhearthequestion.)
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Lookatthesituationfromtheotherperson’spointofview.(Thisgivesyouanew perspective.)
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Thinkpositivelyandbeopen-mindedtonewideasandsuggestions.
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Trustyourteam—givethemroomtogrow.(Peopletendtorisetoyourlevelof expectation.)
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Recognizeeventhelittlethingsandofferpraiseearlyandoften.(Rewardsaregood.)
TryThis
Take Me Out to the Ball Game: Networking the Project Team
YouarethePMforalargeInformationTechnology(IT)systemssupportteam.The teamissolargeandphysicallydispersedacrossseveralstatesandcountriesthatyou areexperiencingdifficultygettingtheteammembersfocusedontheprojectactivities andschedule.Acriticaldatehasbeenmissed,andthecustomerisveryupset.Whatdo youdo? Answer:Taketheteam(includingthecustomer)toabaseballgame.Thatisexactlywhat agoodfriendofmine(andfellowprojectexecutive)did.Heinvitedasmanyoftheproject teammembers,includingthecustomer,thatwerewithinashorttravelingdistancetothe localbaseballstadium.Hereservedaclubroomthatenabledtheprojectteamtonotonly enjoythegame,butintermingle,talk,relax,andgettoknowoneanother.Theresultswere amazing. Granted,gettingtheteamtogether,evenonthephone,isnoteasyiftheyarespread outindifferentlocationsanddifferenttimezones,especiallyifyoudon’thavethebudget toalloweveryonetotraveltoabaseballgame.However,maybeyoucancoordinatea similarget-togetherfortheotherlocationsconcurrentlysoeveryonecanparticipateat somelevel.ItisalsogoodtogiveoutT-shirtsorbaseballhatswithateamsloganorlogo. Ihaveseenthisapproachworktimeaftertime,anditgoesalongwaytowardhelping buildtheteamspirit.
Chapter9: ProjectHumanResourceManagement
Types of Power Asleaderofateam,thePMneedstobeawareofdifferenttypesofpower.Gettingteam membersandstakeholderstocooperateissometimesdifficult,especiallywhenmanaging virtualteams.HerearethedifferenttypesofpoweryouasthePMcanuse(orbeawareof incaseothersareusingthesepowersonyou): ●
Formal(legitimate) Basedonaperson’spositionorlevelinthecompany.
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Reward Givingpeopleawardstogetthingsdoneorinrecognitionforajobwell done.
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Penalty(coercive) Theoppositeofreward.
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Expert Recognizedforknowledgeandexperience.
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Referent Referringtotheauthorityofsomeoneinhigherposition(namedropper). “Thevicepresidenthasmadeitclearthisprojecttakestoppriority.”
Thereisalwaysmorethanonewaytogetthingsdone.Beforeweexerciseourpower asaPM,itisgoodtobeawareofthedifferentmotivationaltheories.
Motivational Theory Onewaytogettheteammotivatedistounderstandwhatdrivesthem.Manybehavioral sciencetoolsandtechniquesareavailabletoassistyouinbetterunderstandingwhat motivatesindividualsorteams.HereareafewthatarenotinthePMBOKbutyoushould stillbeawareofthemifyouareplanningtotakeaPMIexam.
Maslow’sHierarchyofNeeds Accordingtothearticle“AbrahamMaslow’s HierarchyofNeedsmotivationalmodel”atBusinessBalls.com,“AbrahamMaslow developedtheHierarchyofNeedsmodelin1940–50USA,and[his]theoryremains validtodayforunderstandinghumanmotivation,managementtraining,andpersonal development.”[6] Thearticlegoesontoexplainhistheory: “Eachofusismotivatedbyneeds.Ourmostbasicneedsareinborn,having evolvedovertensofthousandsofyears.AbrahamMaslow’sHierarchyof Needshelpstoexplainhowtheseneedsmotivateusall. Maslow’sHierarchyofNeedsstatesthatwemustsatisfyeachneedinturn, startingwiththefirst,whichdealswiththemostobviousneedsforsurvival itself.
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Herzberg’sMotivator-HygieneTheory FrederickIrvingHerzberg(1923–2000) wasapsychologistwhowasalsoinfluentialinbusinessmanagement.Heismostfamous forintroducingtheMotivator-Hygienetheory,whichisalsoknownastheTwo-Factor TheoryofJobSatisfaction.Accordingtothistheory,peopleareinfluencedbytwofactors: motivationfactorsandhygienefactors.[8]
Self-actualization personal fulfillment
Esteem needs status, achievement, reputation, responsibility, etc.
Social needs family, affection, relationships, etc.
Safety needs protection, security, law, stability, etc.
Biological and Physiological needs basic life needs, e.g., food, water, shelter, sleep, etc.
Figure9-1
Maslow’s Hierarchy of Needs
Chapter9: ProjectHumanResourceManagement Here’salistofmotivationfactorsaccordingtoHerzberg’sMotivator-HygieneTheory: ●
Achievement
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Recognition
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Workitself
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Responsibility
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Promotion
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Growth Andhere’salistofsomehygienefactors:
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Payandbenefits
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Companypolicyandadministration
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Relationshipswithcoworkers
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Physicalenvironment
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Supervision
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Status
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Jobsecurity
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Salary
Hygienefactorsrelatetohowpeoplerespondtotheirenvironment.Becauseworkers incertaincountrieshavecometoexpectasafeandsuitableworkingenvironment,weare moreoftendissatisfiedbyabadenvironmentandseldomsatisfiedbyagoodenvironment. Wikipediastatesthefollowingaboutmotivationandhygienefactors: “Hygienefactorsoperateindependentlyofmotivationfactors.Anindividual canbehighlymotivatedinhisworkandbedissatisfiedwithhiswork environment. Allhygienefactorsareequallyimportant,althoughtheirfrequencyof occurrencediffersconsiderably.Hygieneimprovementstypicallyhave short-termeffects.Anyimprovementsresultinashort-termremovalof,or preventionof,dissatisfaction. Hygieneneedsarecyclicalinnatureandcomebacktoastartingpoint.This leadstothe‘Whathaveyoudoneformelately?’syndrome.”[9]
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PMPCertification:ABeginner’sGuide McGregorTheoryXandTheoryY InhisbookTheHumanSideofEnterprise (publishedin1960),DouglasMcGregorexaminedtheoriesonthebehaviorofindividuals atworkandformulatedtwomodels,knownasTheoryXandTheoryY.[10]TheoryX isbasedonmanagerswhobelievethatpeopleneedtobewatchedeveryminute;they areincapableandavoidworkwheneverpossible.ThisisopposedtoTheoryY,where managersbelievepeopleareself-motivatedandworkwithoutsupervision.Here’salistof assumptionsforthesetheories: TheoryXAssumptions ●
Theaveragehumanbeinghasaninherentdislikeofworkandwillavoiditiftheycan.
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Mostpeoplemustbecontrolledandthreatenedbeforetheywillworkhard.
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Theaveragepersonpreferstobedirectedanddislikesresponsibility.
TheoryYAssumptions ●
Peopleareself-motivated,andworkisasnaturalasplayorrest.
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Ifajobissatisfying,theresultwillbecommitmenttotheorganization.
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Theaveragepersonnotonlyacceptsbutseeksresponsibility.
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Workersuseimagination,creativity,andingenuitytosolveworkproblems.
ExpectancyTheory AnothertheorytobeawareofistheExpectancyTheory.Thismotivationtheorywasfirst proposedbyVictorVroomoftheYaleSchoolofManagementandisbasedontheexpectation byemployeesthattheirworkeffortswillleadtoresultsandthattheywillberewardedfor theireffort.ExpectancyTheoryisaboutchoice.Itexplainstheprocessesthatanindividual undergoestomakechoices. ExpectancyTheorypredictsthatemployeesinanorganizationwillbemotivatedwhen theybelievethefollowing: ●
Puttinginmoreeffortwillyieldbetterjobperformance.
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Betterjobperformancewillleadtoorganizationalrewards,suchasanincreasein salaryorbenefits.
TheoriesliketheExpectancyTheoryhelpusbetterunderstandwhatmotivates people;however,theonlywaytoknowhowyourteamisperformingistoassesstheir results.
Chapter9: ProjectHumanResourceManagement
Team Performance Assessments Teamperformanceassessmentscanbeinformalorformal.Thegoalistoevaluatethe team’sperformancetomakethemembersawareofwhatisworkingandwhatisnot. Overallresultsoftheprojectareinfluencedbyeachandeveryindividualonthe teamandshouldbelookedatfromboththeteamperspectiveandtheteammember perspective. Theperformanceofasuccessfulteamismeasuredinanumberofdifferentways, dependingonthenatureoftheproject.Forexample,iftheprojectistimeconstrained (scheduledependent),thenclearlyameasureofteamsuccessiswhethertheprojectis beingdeliveredontime. Teamassessmentisusedtodetermineteameffectiveness,andtheresultscanbe detailedandspecificorgeneral.Ineithercase,theassessmentshouldshowhowtheteam ismeasuringuptotheagreedscope,cost,andscheduleoftheproject.Herearesome examplesofteamevaluationpoints: ●
Istheteamworkingtogetherinaproductiveandcohesivemanner?
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Aretheimprovementsaresultofajointteameffortorindividualeffort?
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Whatistheoverallprojectteamturnoverrate?(Remember,thisisariskindicatoras towhetherornotthingsaregoingwellontheproject.Ifpeoplearenothappy,they willwanttomoveon.)
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IstheteamshowingrespectforthePMandprojectteamleads/members?
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Whatisthequalityoftheproductsbeingdeliveredbytheprojectteam?
Theresultsoftheteamperformanceassessmentshouldbeusedtoanalyzethesituation andmakeimprovements,asneeded,tohelpensurequalitywork.Anyactiontakenshould bedocumentedwithcause-and-effectdetails,includingactionplansforimprovements. Examplesofactionitemsincludesuggestingspecificeducationortraining,mentoring,and theassistanceofotherteammembers. Extracareshouldbegiveninassessingavirtualteambecauseyoucan’tseetheteam membersface-to-face.Youmayalsohavecontractperformanceclauses,countryprivacy issues,orotherlawsthatmustbeconsideredwhenmanagingvirtualprojectteams. Understandinghowyourteamisperformingwillalsohelpinmanagingyour customer’sexpectations.
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Managing Customer Expectations Thecustomerisapartoftheprojectteamandinmostcasespartoftheproject managementteam.Theyprovidereviewandapprovalforchanges.Theyarealso involvedinriskmanagementandcommunicationsmanagement.Theyshouldprovide requirementsofwhattheyexpectfromtheproject,thetargetcompletiondate,and whatspecificresultstheywanttoseeattheend.Aspartoftheteam,theyareprivy toinformationthatcancauseconcernsorconflicts.So,howdoyoumanagecustomer expectationsandconflict? Notethatconflictisnotalwaysbad;itcansometimesraiseopportunitiestoimprove thewayyoudothings.Youcanenhancetherelationshipwithyourcustomerandyourteam bylookingatconflictasahealthywaytolearnnewthings.Themainthingtoremember istobeopen-minded.Askthecustomerquestions.Makesureyouunderstandwhatis importanttothecustomerandwhattheirexpectationsareattheendoftheproject.Youmay besurprised,butbettertofindoutsoonerthanlaterandlosevaluableHRresources,time, andcostgoingdownthewrongpath.
Ask the Expert Q: IamthePMonasmallproject.Mycustomercalledrecentlywitharequesttomail
asurveyandinvoicestotheirclients.Theadditionalmailingrequestsareoutof scopeoftheproject.Therefore,Isetupameetingfor8:00A.M.thenextmorningto discusstheirrequests.Duringthemeeting,thecustomerdemandedthesurveygoout immediately.Icalmlyexplainedtherequestwasnotinscopeandthatiftheteamwas pulledofftheprojecttoperformtheextrawork,itwoulddelaytheoverallprojectby oneweek.Thecustomerwasveryupsetandthreatenedtocanceltheentireproject.A shoutingmatchensued.HowcouldIhavehandledthissituationbetter?
A: Whenthingsheatup,Isuggestyoutrytakingashortbreakandhavesomecoffeeandrolls
ordonutstocalmthesituation.Itmightmakeallthedifferenceintheworld.Thecustomer couldbecomemoreagreeableonceyoubothtakeaminutetorelaxandgetsomethingto eat.(Perhapsthecustomerisasingleparentwithasickchild,wasrunninglateforthe 8:00A.M.meeting,andhadskippedbreakfast.)Afteryouhaveyourbreak,youcanthen pursuesettlingyourdifferencesinamoreprofessionalmanner.
Chapter9: ProjectHumanResourceManagement
Signs of a Conflict Howdoyouknowwhenconflictislooming?Somecharacteristicsortriggersarelistedhere: ●
Teammembersareworkingexcessivehours(forexample,15+hoursperweekof overtimeforlongperiodsoftime).
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Thecustomerorteammembersaredefensiveduringmeetingsordiscussions.
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Relationsarestrained(thecustomerorteammembersareavoidingyou).
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Tempersflare(outbreaksofemotionsinmeetingsorone-on-ones).
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Thecustomerismicromanagingtheteam(lossofconfidence).
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Highturnoverofteammembers(asmentionedearlier).
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Lotsofextrameetings(meetingtoprepareformeetings).
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Significantnumberofchanges(dissatisfactionordisorganization).
Conflict Resolution Nowthatyouknowsomeofthesignsortriggersofconflict,thequestionis,Howcanyou resolveconflict?Thebestwaytoresolveconflictistounderstandit—whatitisandhow itwillimpacttheproject.Conflict,likechange,isinevitableintheprojectenvironment. Conflictisastateofdisharmonyoroppositionbetweenpeopleorforceswhenthey,with perceivedincompatiblegoals,seektoundermineeachother’scapabilityorobjectives. Therearemanysourcesofconflict,includinglackofskilledresources,scheduling conflicts,costconstraints,differentmanagementandleadershipstyles,communications problems,change,andriskevents. Whenconflictismanagedproperly,theresultsareimprovedproductivity,higherteam morale,andhigherqualityproductandprojectdeliverables. Hereareafewthingstorememberwhenitcomestomanagingconflict: ●
Don’ttakeyourselftooseriously.
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Don’ttaketheconflictpersonally.
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Youneedtoknowconflictisnormalandhelpsyoulookattheoptions.
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Itisateamissueandneedstoberesolvedearly.
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Keeptheconflicttoproblemsandissues,notpersonalities.
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Beawareoftherelativeimportanceandimpactoftheconflictontheproject.
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Beawareofthedownstreamresults(rippleeffects).
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Focusontherootcauseoftheconflictandnotthesymptoms.
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Helptheteamstayfocusedandmotivatethemtohelpresolveconflict.
Techniques to Help Resolve Conflicts Onewayofanalyzingandunderstandingaproblemisbyinterviewingthecustomeror partiesinvolved.Thereareanumberoftechniquesyoucanusetohelpresolveconflicts, aslistedhere: ●
Withdrawing/avoiding Retreatingfromtheactualorpotentialconflictsituation.
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Smoothing/accommodating Emphasizingareasofagreementratherthanareasof difference.
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Compromising Searchingforsolutionsthatbringsomedegreeofsatisfactiontoall parties.Thisisoftenviewedasalose/losesituationaseveryonegivesupsomething.
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Forcing Pushingone’sviewonothers(someonewinsandsomeoneloses).
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Collaborating Looksatmultipleviewsfromdifferentperspectives(leadsto consensus).
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Confronting/problemsolving Thisisawin/winsituationbecauseittreatsthe conflictasaproblemtobesolvedbylookingatalternatives(requiresgive-and-take approachbyallparties).
TIP PMI views confronting/problem solving as the best approach to resolve conflicts. You may even see a question or two concerning this technique on the PMP exam.
Nomatterwhatresolutionapproachyoutake,theendresultsdependonyourabilityto applysoundjudgmentandgoodinterpersonalskills,includingleadershipandtheability toinfluenceotherstohelpsolveconflicts.Conflictresolutionisateamsport;thePMcan’t succeedwithouttheteam,andtheteammustbeproductiveandfullyfunctionaltoprovide results.However,itisuptothePMtosetthestageandtoleadbyexample. Itisimportanttonotethatconflictresolutionbeginsathomeinyourprojectteamfirst. ThisiswhatHRmanagementisallabout.Herearetheotherkeysteps:
1.Makesureyouhavesponsorshipfortheproject(turnoverinexecutivesponsorscan
changethefocus,funding,andfunontheproject).
2.Makesureyouhaveaclearandconfirmedunderstandingofscope,targetdates,and
expectationsfromallkeystakeholders(especiallythecustomer).
Chapter9: ProjectHumanResourceManagement
3.Ensureclearcommunications,includinglisteningatalltimes(nonewsisnotalways
goodnews,anditleavesroomforspeculationanduncertaintyintheranks).
4.Manageyourhumanresources(allthepeopleonyourproject)withrespect.
5.Beflexibleandopen-minded.Befirmwhenneeded,butbecompassionateasappropriate.
IrealizetherearemanyvariableswhenitcomestoHRmanagement.Anytimeyou dealwithpeople,youhavefeelingsandemotionstoconsider.Thegoodnewsis,you canfindlotsofhelpinthewayofcourses,mentors,coworkers,family,andfriendsto collaboratewith.Thethingtorememberis,youwanttoinvestinthisskilltohelpyouand yourteamgrow.
HR Management Summary HRmanagementistrulythelifebloodoftheproject.Manyorganizationshavefound teamingtobeanextremelyeffectivewaytoaccomplishprojectgoalsandobjectives. Asaprojectmanager,havingtheknowledgeandskillstoeffectivelyacquire,develop, andmanageteamsisanecessity.Withtheuniquenessofprojectsandteammembers, thereisclearlyachallengeforthePMtokeepeveryonefocusedontheendresults.Deal withproblemsheadon,quickly,yetwithcompassionandrespectforallpartiesinvolved. Remember,theproblemwon’tgoawayonitsownandwilllikelygrowthelongeryou allowittoremainunresolved. WhenaskedwhatIlikemostaboutprojectmanagement,Ihavetosayit’sthepeople. Workingwithprojectteamsfromallovertheworldhasopenedmyeyestothebenefitsand barriersofmanagingdiverseprojects.Thetruemeasureofsuccessisthesizeandbreadth ofyournetwork,andyournetworkiswhatmakestheworldofprojectmanagementgo round.
References
1.Heldman,Kim,ClaudiaBaca,andPattieJensen.PMPProjectManagement
ProfessionalExamStudyGuide,SecondEdition(WileyPublishingInc.:Indianapolis, Indiana),2007,pages336and353.
2.Wikipedia,http://en.wikipedia.org/wiki/Virtual.
3.“BruceTuckman’s1965FormingStormingNormingPerformingteam-development
model,”http://www.businessballs.com/tuckmanformingstormingnormingperforming.htm.
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4.Dr.Levin,GingerandDr.ParvizRad.“KeyPeopleSkillsforVirtualProject
Managers,”http://www.allpm.com/modules.php?op=modload&name=News&file= article&sid=440.
5.CoachingQuotes.com,http://www.wow4u.com/coaching/.
6.“AbrahamMaslow’sHierarchyofNeedsmotivationalmodel,”http://www
.businessballs.com/maslow.htm
7.Ibid.
8.Wikipedia,http://en.wikipedia.org/wiki/Frederick_Herzberg.
9.Ibid.
10.“HumanRelationsContributors,”http://accel-team.com/human_relations/hrels_03_
mcgregor.html.
Chapter
10
Project Communications Management
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KeySkills&Concepts ●
Importanceofcommunications
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Fourcommunicationsmanagementprocesses
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Identifyingstakeholders
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Managingstakeholderexpectations
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Communicationsmodel
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Communicationchannels(includingformula)
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PercentageoftimePMspendscommunicating
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Communicationblockers(barriers)
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Informationdistribution
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Projectmanagementreports
T
here’scommunication,andthenthere’s(orshouldbe)effectivecommunication. Communicationisthesimpleexchangeofinformationbetweentwoormoreparties. Basicallythere’sthesenderofthemessage,thereceiverofthemessage,andthemessage itself.Thesearethreeofthesevencomponentsthatmakeupthecommunicationmodel. Forthecommunicationmodeltobeeffective,wemustaddafewmoreelements.For example,theinformationneedstobeencoded(translatedintothoughtsorideasthatcan beunderstoodbyothers)bythesender.Thesenderthenneedstoselecttheappropriate method(orvehicle)tosend(convey)themessage—forexample,amediumsuchase-mail, letter,textmessage,touch,orphonecall.Thenthereceiverneedstodecodethemessage (translatingitbackintounderstandablemeaningfulthoughtsandideas).Ideallythe receiverthenprovidesfeedbacktothesenderintheformofeitheranacknowledgement oradditionalquestionstoclarifythemessage.Theintentistohaveacommunication circleofaclearlyunderstoodactionableexchangeofinformation,ideas,ordirectionsthat producethedesiredresults(seeFigure10-1).
Chapter10: ProjectCommunicationsManagement Sender Encodes Message Input Information, data, ideas, directions
1. Encoded message is delivered using a type of medium (face-to-face, e-mail, phone, text)
*Noise (space, distance, blockers, distractions)
*Noise is anything that blocks or interferes with the clear transmission of the message
Figure10-1
2. Receiver decodes message and provides feedback to sender (acknowledgment or questions)
Receiver responds Output Action, Deliverables, Results
Communication circle
Nowlet’stalkabouteffectivecommunicationsonwhichtheprojectmanagerneedsto focus.CommunicationsinstructorMichaelStarlingoffersthefollowinginsight(froma 2009webcast): “Effectivecommunicationsisaconnectionbetweenpeoplethatallowsforthe exchangeofthoughts,feelings,andideas,whichleadstounderstanding.”[1] Forthecommunicationtobesuccessful,italsohelpsifallpartieshaveacommon languageandsimilarknowledgeofthetopic.Forthemessagetobeclearandunderstood, thereshouldbeminimalnoise(orinterference)withthetransmissionofthemessage. Examplesofnoiseincludeunfamiliarterms,lackofbackgroundinformation,distance (temporalorphysical),andenvironmentalfactors(phonesringing,crowedroom,andsoon). Becausecommunicationissoimportantinmanagingprojects,youarelikelytosee severalquestionsonthePMPexamconcerningcommunicationinareassuchasrisk management,scopemanagement,andstatusreporting.
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The Importance of Clear Communication Isawacutebirthdaycardrecentlythatreallysaysitallaboutcommunication.Thecard showsthreeelderlymenwalkingalongthebeach.Thefirstmansays,“It’sawindy day.”Thesecondmansays,“No,Ithinkit’sThursday.”Andthethirdmansays,“I’m thirsty,too.Let’sgohaveabeer.” Thiskindofconversationhappensfartoooften.Weonlyhearhalfofwhatissaid, andweretainevenless.
Torecap,herearethesevencomponentsofthecommunicationmodel: ●
Sender
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Encoding
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Message(includingthefeedbackmessage)
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Medium
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Minimalnoise
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Decoding
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Receiver
The PM’s Role in Communications Communicationsisanimportanttoolinprojectmanagement.Effectivecommunications isaskillthathelpsthePMtoinformtheteamandstakeholdersaboutallaspectsofthe project.ThePMmustdevelopthisskilltosuccessfullyemploythetoolaspartofthe ProjectCommunicationsManagementknowledgearea. Thegoodnewsis,thecommunicationsmodelissimpletouse;infact,weuseitfrom thetimewelearntotalk.Thebadnewsis,ifthemodelisnotusedeffectively,youwill sendorreceivethewrongmessage.Thus,theteamisoffbuildingthewrongwidgetatthe wrongtime,ortheyaresoconfusedtheydon’tknowwhatyouwantandmayjustchoose toignoreyou. Assimpleasthecommunicationmodelis,communicatingisoneofthemore difficultactivitiesinmanagingaproject.Talkingiseasy;communicatingisachallenge!
Chapter10: ProjectCommunicationsManagement Beingabletocommunicateeffectivelyisaskillthatisdevelopedandhonedyourentire life.Communicatingisnotjustaboutthesender.Itisaninteractive,two-waysession wherebothsenderandreceivercontinuouslyinfluenceeachotherasmessagesare cycledbackandforth,onsometimesnonverbal,barelyperceptiblelevels.
TIP To be prepared for your PMP exam, you need to know that PMs spend an average of 90 percent of their time communicating and that any questions on communications management will likely be intermingled with other topics. For example, the WBS is a communications tool, and scope and risk response strategy has to be clearly communicated to the team. As a PM, you communicate to yourself internally—and even in your sleep. During light sleep is when some of the best ideas come to mind, so keep a pad and pencil next to your bed to capture those great ideas or reminders.
Thereareamultitudeofreasonsforgood,clear,two-waycommunications.Hereare someexamples: ●
Toimproveourworkingrelationships
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Tobeabletoadapttochangeandenablepromptaction
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Tounderstanddifferentcommunicationstylesandtotakeadvantageoftherightstyle toeliminateconfusionandinfluencepositiveresults
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Toincreasetheoverallqualityoftheprojectteamandthedeliverables
Asyouprobablyalreadyknow,therearetwoprimarytypesofcommunication:verbal andnonverbal.Verbal(orauditory)communicationincludestalking,singing,tone,and thepitchofyourvoice.Paralanguage(sometimescalledvocalics)isthenonverbalcuesof thevoice.Paralanguagemaychangethemeaningofwords.[2]Nonverbalcommunication includesbodylanguage,signlanguage,touch,andeyecontact.
The Medium (How We Deliver the Message) Haveyoueverheardapersontellingajokemessupthepunchlineorputtheemphasison thewrongsyllable?Ortheynailedthepunchlinebuthesitatedatthewrongtimeorused thewrongword?Whenthishappens,thereceiverwilllikelysay,“Idon’tgetit,”orthey maygetthejokebutwillthinkitwasn’tfunny.Theonlywaytoimprovethedeliveryofa jokeoranyothercommunicationisthroughpractice. Someofthemorecommoncommunicationdeliverymethodsareface-to-face,written, andvirtual.Virtualisawholenewballgame,asweadapttoanewgenerationofhighly interactive,fast-paced,multitaskingprojectmanagers.
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PMPCertification:ABeginner’sGuide Thedeliverymethodcanbeformalorinformal,bothofwhichwillaffectthewayyou deliverthemessage.Animportantthingtorememberisthatyourmessageislikelytobe receivedincorrectlyorthemeaninglostdependingonyourdeliverymethod,thetiming, orthemoodinwhichyoudeliverthemessage.Thisisespeciallynoticeableintheface-tofacedeliverymethod.Forasummaryofdeliverymethods,seeTable10-1.
Virtual Communications (Wave of the Future) Anewmediumthathasemergedwiththeadventofcomputersisvirtualcommunications. Someexamplesincludethevirtualclassroomorvirtual“worlds”suchasSecondLife. Inthesevirtualworlds,apersoncanchooseanavatar(avirtualalterego)andwalk,
DeliveryMethod WhenUsed
Advantages
Comments
Face-to-face
For important meetings or conferences
Shows importance of the meeting or event and is great for networking, building trust and confidence, as well as improving relationships
Be aware of expressions and gestures; they can be distracting or even insulting. Generally, 55 percent of a message is conveyed by body language and only 7 percent in what is said; the remaining 38 percent is in tone, pitch, and volume
Written
For formal or informal, depending on the type of medium used
Works well in many ways to communicate to a broad diverse audience
Generally, two categories: formal (letters, contracts, and so on) and informal (e-mails, and texting, which is a whole new language in itself)
Haptics (nonverbal touching such as a handshake, hug, slap on the back, and so on)
Close proximity as appropriate
Can show sincerity and friendship
Not always accepted and can be offensive in some cultures
Virtual (more detail provided later in this chapter)
Physically dispersed team members or when travel is not possible
Broader team skills, allows for “follow the sun” coverage in different time zones, and saves on travel and other expenses
Can be challenging and can be distracting for some especially with language or other barriers
Table10-1
Communication Delivery Methods
Chapter10: ProjectCommunicationsManagement talk,orevenflyaroundinvirtualsettings.AccordingtotheSecondLife.comwebsite, “SecondLifeisafreeonlinevirtualworldimaginedandcreatedbyitsResidents.From themomentyouenterSecondLife,you’lldiscoverafast-growingdigitalworldfilledwith people,entertainment,experiencesandopportunity.”[3]
Project Communications Management Processes AccordingtoPMI,fiveprocessesareassociatedwithcommunicationsmanagement: ●
10.1:Identifystakeholders(Initiatingprocessgroup) Theprocessofidentifying allthepeopleandorganizationsimpactedbytheprojectanddocumentingrelevant informationpertainingtotheirinterests,levelofinvolvement,andimpacttothe successoftheproject
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10.2:Plancommunications(Planningprocessgroup) Determiningstakeholder informationneedsandapproachtoprojectcommunications
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10.3:Distributeinformation(Executingprocessgroup) Theprocessofmaking relevantinformationavailabletoprojectstakeholdersasplanned
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10.4:Managestakeholderexpectations(MonitoringandControllingprocess group) Workingwithallstakeholderstomeettheircommunicationneedsand addressingissuesastheyoccur
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10.5:Reportperformance(MonitoringandControllingprocessgroup) Collecting anddistributingperformanceinformation,includingstatusreports,progress measurements,andforecasts
1. Identify Stakeholders Process ThisisanewprocessjustaddedinthefourtheditionofthePMBOKthatisextremely importanttomanagingprojectsintherealworld.Itiscriticaltoidentifythestakeholders earlyintheprojectlifecycle(seeFigure10-2).Youneedtoknowwhothestakeholders areandtheirlevelofinterestorinfluenceontheproject(forexample,fundingsponsor, endusers,ormanagers).Ifyouneedarefresheronwhotheprojectstakeholdersare,see Chapter2.
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Sponsors Operation Managers
Directors
Support Managers
Marketing
End Users
Project Manager
Customers
Project Team
Suppliers
Volunteers
Contractors Vendors
Figure10-2
TryThis
Identify stakeholders
How to Plan Communications for Key Stakeholders
Sayforamomentyouaretheeventscentermanagerforanupcomingconcert.Howdo youplanforthecommunicationsneedsofthestakeholders,(sponsors,team,andsoon) forthisevent? Answer:Thebestwaytoplanforcommunicationsistobrainstorm.Getthecoreproject managementteamtogetherandmakealistofwhowillbeaffectedbythisproject. Iliketouseaspreadsheetortable(refertoFigures9-1and9-2inChapter9)forthe projectteamandthenaddtoitforadditionalstakeholders,includingtheirlevelofinterest orpower(thatis,decisionmaker,enduser,supportmanager,orcustomer).
Stakeholder Management Strategy Onceyouidentifythestakeholders,youneedtohaveastrategytohelpguidetheteamand yourselfinmanagingthosestakeholders.Stakeholdermanagementstrategyisanoutput
Chapter10: ProjectCommunicationsManagement oftheIdentifyStakeholdersprocess,anditshouldprovidedirectiononhowyouplanto effectivelymanageallthestakeholdersaffectedbytheproject. Becauseprojectsareuniqueandstakeholderschange,onethingiscertain:Youcan’t treatallstakeholdersalike.Forexample,youwouldtreatthesponsoroftheproject differentlythanameddlingmanager(who,forsomereason,wantsextradeliverables addedtotheprojecteventhoughtheyarenotadecisionmakerandhavenoauthority tomakethesekindsofdemandsorchanges).Togetanideaofthedifferentstakeholder interestsandtheflowofcommunicationtothevariousstakeholders,seeFigure10-3.
Upward Communications To senior executives • Major milestones • High-level issues, risks, and exceptions Tools used: • Milestone reports • Weekly status reports • Charts and graphs • Face-to-face reviews
To project team • Scope, schedule, key dates, changes, issues, risks, and project plans Tools used: • WBS, risk planning • Weekly status input • E-mail, phone, and face-to-face discussions Goal is to collect status, get buy-in from team, and achieve results Downward Communications
Figure10-3
Communications flow
• Involves negotiations for resources, time and cost management Tools used: • Communications plan, Statement of Work, work orders, contracts Goal is to get support – requires good relationship and diplomacy
Lateral Communications
Goal is to get buy-in, funding, and sponsorship
To client, vendors and support managers
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Identify Stakeholders Tools and Techniques Oneofthemoreimportanttoolsandtechniquesforidentifyingstakeholdersisstakeholder analysis.Threeprimarystepsareinvolved: ●
Identifyallpotentialprojectstakeholders,includingtheirroles,departments,levelof knowledge,andinfluenceontheprojectorinformation(orfunding)neededonthe project.Aretheydecisionmakersorsubjectmatterexpertsthatcanhelptechnically? Agoodwaytodothisistointerviewthestakeholdersandexpandyourlistbasedon thenewinformationgained.
●
Identifythepotentialimpactorsupportofeachstakeholderandprioritizethekey stakeholderstoensurecommunicationsflowappropriately. Aneffectivetoolinthiscaseisapower/interestgrid(seeFigure10-4).Thisallows youtogroupthestakeholdersbasedontheiractiveinvolvementorlevelofinfluence (power).Thisisasimplegridwithquadrants;ontheYaxisisPower(fromlowto high)andontheXaxisisInterest(fromlowtohigh).Thenasateam,youdetermine whereyourstakeholdersshouldbeplacedonthegrid.Forexample,fromlefttoright inthebottomquadrants,insertMonitor(MinimumEffort)andKeepInformed.Inthe toptwocorners,putfromlefttorightKeepSatisfiedandMonitorClosely.Then,it
Keep Satisfied
Manage Closely
Monitor Minimal Effort
Keep Informed
Power
320
Low
Figure10-4
Sample power/interest grid
Interest
High
Chapter10: ProjectCommunicationsManagement isamatterofcomingtosomeagreementasateamonanagreedplacementofeach stakeholder. ●
Assesshowkeystakeholdersarelikelytorespondindifferentsituationsinorderto betterplanhowtoinfluencethemintheirsupportandtomitigatepotentialnegative impacttotheproject.
Identify Stakeholders Outputs HerearethetwooutputsinthePMBOKfromtheIdentifyStakeholdersprocess: ●
Stakeholderregister Alogthatshouldincludeeachstakeholder’sname, organization,position(title),roleontheproject,contactinformation,andassessment information(suchasexpectationsorlevelofinfluence)
●
Stakeholdermanagementstrategy Howyouplantomanagethestakeholders
2. Plan Communications Process ThePMandteamneedtoworktogetherwhenplanningcommunicationsfortheproject. Youneedtostartwiththestakeholdersidentifiedinthepreviousprocess.Thislistwill helpyoudeterminethelevelofcommunicationsneeded,thefrequency,theformat,the reportsneeded,andsoon.
Sample Project Communications Plans Awell-plannedprojecthasawell-plannedcommunicationstrategy.Thefollowingtables provideexamplesoftwoprojectmanagementcommunicationplans. ThedetailedsamplecommunicationsplanshowninTable10-2isamodificationof PrincetonProjectCommunicationPlan.[4] What
Who/Target
Purpose
Initiation meeting.
All lead project management team members.
Gather information First. for initiation plan. Before project start date.
Distribute project plan.
All key stakeholders.* Distribute plan to alert stakeholders of project scope and to gain buy in.
Table10-2
Sample Communications Plan (continued)
When/Frequency Type/Method(s)
Before kick off meeting. Before project start date.
Meeting (co-located if possible). Document routed via hardcopy or electronically. May be posted on project team room or website. PM templates: Project Scope “Lite” and Initiation Plan
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What
Who/Target
Purpose
Project kickoff.
All key stakeholders.* Communicate plans and stakeholder roles/ responsibilities. Encourage communication among stakeholders.
When/Frequency Type/Method(s) At or near project start date.
Meeting.
Status reports. All stakeholders and project office.
Update stakeholders on progress of the project.
Regularly scheduled. Monthly is recommended for large/midsize projects.
Distribute electronically and post in team room or via Web. PM template: Status Report.
Team meetings.
Entire project team. Individual meetings for subteams, technical teams, and functional teams, as appropriate.
To review detailed plans (activities, resource assignments, and action items).
Regularly scheduled. Weekly is recommended for the entire team. Weekly or biweekly for subteams, as appropriate.
Meeting PM template: Detailed project plan and key project documents, as appropriate.
Project advisory group meetings (may apply only to larger projects).
Project advisory group (steering committee), PMO, and project manager.
Update project advisory group on status and discuss critical issues. Work through issues and change requests here before escalating to the sponsor(s).
Regularly scheduled. Meeting. Monthly is recommended.
Sponsor meetings.
Sponsor(s) and project manager.
Update sponsor(s) on status and discuss critical issues. Seek approval for changes to the project plan.
Regularly scheduled. Meeting. Recommended biweekly or monthly, or as needed when issues cannot be resolved or changes need to be made to the project plan.
Table10-2
Sample Communications Plan
Chapter10: ProjectCommunicationsManagement
What
Who/Target
Purpose
Executive sponsor meetings (may apply only to larger projects).
Executive sponsor(s) Update sponsor(s) and project manager. on status and discuss critical issues. Seek approval for changes to the project plan.
PO audit/ reviews.
Project office, project manager, select stakeholders, and possibly sponsors, if necessary.
Post-project review.
When/Frequency Type/Method(s) Scheduled as needed when issues cannot be resolved or when changes need to be made to the project plan.
Meeting.
Review status reports, issues, and risks. To identify and communicate potential risks and issues that may affect the project.
Monthly. Scheduled by the project office.
Meeting/report. The project office will produce the report using their (auditors) template.
Project office, PM, and key stakeholders (including sponsors).
Identify improvement plans, lessons learned, what worked, and what could have gone better. Review accomplishments.
End of project or end of major phase.
Meeting/report. The PM or project office will produce the report.
Quarterly project review.
Project office, project manager, and key stakeholders.
Review the overall health of the project and highlight areas that need action.
Quarterly, depending on size and criticality of the project. Scheduled by the project office.
Meeting/report. The project office will produce the report using an internal template.
Other.
To be determined by the project manager and team.
General communications.
As needed.
Group meetings, Lunch-n-Learns, e-mails, webinars, webcasts, postings in project team room or website, and so on.
* A key stakeholder is defined as a person whose support is critical to the project—if the support of a key stakeholder is withdrawn, the project may fail.
Table10-2
Sample Communications Plan
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Case Study: BEC Sample Communications Plan Forprojectsthataresimilarinnatureandcanberepeated,itisgoodtostreamlinethe communicationsplan.TakeourBECcasestudyforexample.Weeklymeetingsare conductedtostreamlinetheflowandfrequencyofcommunicationsfromthedirector ofeventstotheoperationsmanagers.Inthesemeetings,thedirectorusesanEventData Sheetshowingallthekeyinformationneeded—dates,times,expectedseatingcapacity, securityandlightingfortheevent,andsoon. Basedonthescopestatement,hereisabriefoverviewofthecommunicationsstrategy, followedbyatableshowingwheneachcommunicationshouldoccur,whotheassigned owneris,andabriefdescriptionofthecommunicationactivity. ●
Theeventteamwillhaveweeklyupdate/statusmeetingstoreviewcompletedtasks anddeterminecurrentworkpriorities.Minuteswillbeproducedfromallmeetings.
●
Theeventdirectorwillleadweeklymeetingstoreviewthepreviousevent’slessons learnedandtheupcomingeventsforteamawareness.AcustomizedEventDataSheet willbeusedanddistributedtotheprojectteamtoshowallpertinentinformation abouttheeventswithtimelines,departmentassignments,keycontacts,andother requirementsforeachevent.
Forthepurposeofthisexample,wewillfocusonour“RockOn”concert,introduced inChapter5.AstreamlinedcommunicationsplanforBECisshowninTable10-3. FrequencyofMeeting
Owner/ToolUsed
Description
As needed for project initiation (varies by event)
Event director and artist’s agent or sponsor / contract
This is the initial meeting to finalize the event contract and requirements.
Three weeks prior to event
Event manager / Event Data Sheet (EDS)
Meeting with all building staff to provide advanced information from the band and building requirements for the event.
Two weeks prior to event
Event manager / EDS
Distribution of the Event Data Sheet to start the planning.
One week prior to event
Operations manager / EDS
Review requirements and begin staffing and facility changeover staging for event week.
Week of event
Project or changeover manager / EDS
Use the Event Data Sheet as a guide for setup of the venue.
One week after event review
Full team / EDS
Review lessons learned.
Close the event communications
Sign-off by the project team and event manager
Document the results of the event, tickets sold, issues, and so on.
Table10-3
Sample Communications Plan for BEC
Chapter10: ProjectCommunicationsManagement
Plan Communications Tools and Techniques FourtoolsandtechniquesareassociatedwiththePlanCommunicationsprocess.Theyare discussedindetailinthefollowingsubsections.
CommunicationRequirementsAnalysis Toestablishacommunicationsplan,thePM andteamoftenneedtoperformacommunicationsrequirementsanalysis.Theanalysis variesdependingontheprojectandwillbemoredetailedfornew/first-timeprojects. OnethingwetendtooverlookasPMsisthecomplexityofthecommunications required.Evenonasmallproject,youcanhavedozensorevenhundredsofstakeholders toconsiderduringcommunicationsanalysis.Thenumberoflinesofcommunication growsexponentiallyasthesizeoftheprojectteamgrows. Say,forexample,youhavefourteammembersonyourproject.Theformula,then,is (n*(n–1))/2 wherenrepresentsthenumberofstakeholders.Forthesampleproject,theformulawould looklikethis: (4*(4–1))/2,or(4*3)/2,or12/2=6 Therefore,youhavesixcommunicationchannelsonyourproject.Thenumberoflinesof communicationbetweenthefourteammembersisshowninFigure10-5. Nowsupposeyouhavetenpeopleonyourteam.Thecalculationnowis (10*(10–1))/2,or(10*9)/2,or90/2=45 Thismeansyouhave45differentcommunicationchannels(orpaths)amongthetenteam members.That’salotoflinesofcommunication.Themorelinesyouhave,themoreroom thereisforabreakdownincommunication,wheresomeoneisnotclearanddoesthe wrongthing.Thiscouldbedevastatingtotheproject.Nowjustimagineifyouhave50or 100peopleontheprojectteam!
CommunicationTechnology Variousmethodsareusedtotransferinformationamong projectstakeholders.Youalsohaveanumberoffactorstoconsiderwhenselectingthe technologiesortoolsforthisprocess: ●
Theurgencyoftheneededinformation
●
Theavailabilityofthetechnology(bothphysicallyandfromanaffordabilityperspective)
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Figure10-5
Communication channels
●
Telephonyneeds(forexample,phones,systems,andtechnologycompatibility)
●
Thedurationoftheprojectandprojectenvironment(forexample,shortorlong termandvirtualorco-locatedteam)and,ofcourse,thesizeoftheteam.
CommunicationModel Wecoveredthecommunicationmodelearlierinthischapter. Doyourememberthesevencomponentsofthecommunicationsmodel?Ifnot,goback nowandreview. TheonepointIwanttoreemphasizehereisthenoisefactor.Don’tletnoisegetinthe wayofclearcommunications.Thisincludesphysicalnoise,temporaldistance,language barriers,poorphoneconnections,anddistractions. OnoneofmyprojectsontheWestCoast,theprojectofficeteamroomwasastorage closetofjustover50squarefeet.Attimesthereweresixtoeightpeopleintheroom,and formeetingsweoftenhadtogatherinthecafeteria,withallthetrafficanddistractions. Talkaboutlotsofnoise/interferenceintryingtocommunicatewiththeteaminthis environment.Itwasdifficultatbest.
Chapter10: ProjectCommunicationsManagement
Ask the Expert Q: CanyouprovideanexampleofthetypeofquestionthePMPexamasksregarding calculatingthenumberofcommunicationchannels?
A: ThePMPexamwilllikelyaskaquestionsimilartothefollowing: “Therearefournewteammembersaddedtoyourexistingteamoffive.How manyadditionalcommunicationchannelshavebeenadded?” Whenansweringaquestionlikethis,youwillneedtoremembertheformulausedto calculatethenumberofcommunicationchannels,whichis(n*(n–1))/2,andyouwill needtoreadthequestionclosely.Toarriveattheanswer,firstcalculatethecurrentnumber ofexistingcommunicationchannels:(5*4)/2=10.Thencalculatethenewtotalnumber ofteammembersiffourmoreareadded:5+4=9.Pluggingthisnumberintotheformula givesyouthefollowing: (9*8)/2,or72/2=36 Thenyousimplyneedtosubtractyourstartingnumberofchannels(10)from36,and youget36–10=26.Therefore,26additionalcommunicationchannelsarecreatedby addingfournewteammemberstothisproject.
CommunicationMethods Youneedtobeawareofseveralcommunicationmethods. Herearejustafew: ●
Interactivecommunications Communicationoccursbetweentwoormoreparties (one-on-oneorinmeetings).
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Pushcommunications Informationissenttospecificrecipientsorinbroadcast messages.
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Pullcommunications Usedforverylargevolumesofinformationorlargeaudience. Theinformationisdownloadedfromacentralrepositorywhenneeded.
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How to Conduct Effective Meetings Mostprojectsthatfailaredoomedbefore20percentoftheworkhasbeencompleted.One reason,amongthemanypossible,ispoorcommunications.Onewaytocommunicateto agroupofpeopleisthroughmeetings.Howwillyourunmeetingsasaprojectmanager (bothinternallyandexternally)?Seethefollowingsamplelistofthingstoconsiderwhen conductingmeetings.Remember,PMsspendanaverageof90percentoftheirtime communicating,andmeetingsareabigpartofprojectcommunications. ●
Preplanthemeeting.Whatisthepurpose/objective?Whoshouldattend?Whowill facilitate?Whowillpresent?Wherewillthemeetingbeheld?(Isthemeetingroom scheduled?Istheroomlargeenough?Doyouhavetheroomproperlysetupfor thetypeofmeetingyouaregoingtorun?)Aredistractionsminimized?Whowill documenttheminutesofthemeeting?Andwhowillfollowupon“to-dos”oraction itemsfromthemeeting?
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Alwayssetanagenda(clearlydocumentwhowillpresent,whattheywillpresent, andwhen).Makesurethepresentersareclearonthetimingandprovidepromptsor cuesiftheyareabouttorunovertheirallottedtime.
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Alwayssendtheagendaouttotheattendeesaheadoftime(usuallyatleastadayor twoaheadofthemeeting).Thiscanbeusedasaremindertoattendeesandtothe presentersthattheyarescheduled.
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Previewthepresentationsiftimeallows(dependingonsensitivityofmaterialand audience)justsothereareno(orfewer)surprises.
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Allowtimefornetworking(keepthisbetweenfiveandeightminutesatthe beginningorendofthemeeting).
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Maintainmeetingintegrity.Itshouldstartontimeandendontime.
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Managethemeeting.Iftherearedisruptions,suchassomeonespendingtoomuch timeonatopicorgettingcarriedawayinthediscussions,flagthetopicforfollowup.Besuretocapturethediscussionitemandbesuretofollowup;otherwise,you losecredibility.
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Takecontrolofthemeetingifthingsgetofftrackandrescheduleitifnecessary.
Chapter10: ProjectCommunicationsManagement
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Publishtheminutesintheprojectteamroominatimelymanner(usuallyoneortwo daysafterthemeeting).
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Considerputtingcaveats(qualifiers)intheminutes,suchas“Ifanythinghasbeen omittedormisstatedinthemeetingminutes,pleaseletme(hostofthemeeting) knowwithinfivebusinessdays.Noresponsetothisnoteimpliesacceptanceofthe minutesaswritten.”
3. Distribute Information Process Allofusatonetimeoranotherhavereceivedamessageore-mailthatwasnotmeantfor us.Ohwell,yousimplydeleteitandmoveon.Howaboutreceivingane-mailthatistoa castofthousandsandisaboutameetingthathasalreadytakenplace?Againyoumumble toyourselfanddeletethemessage.But,whatabouttherealslipups?Youknowtheones.... ●
Clickingthe“ReplytoAll”button TheRTAbuttonisapowerfultool.Talkabout instantgratification.It’saquick-and-easywaytotellalotofpeoplethatameetinghas beenrescheduledorthenewcontracthasbeensigned.Butbeverycarefulwithyour reply.Itcangetyouintoanembarrassingsituation.
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Respondingwithamessagethatdoesn’tmatchthequestion Thisisaresultof notreadingthewholee-mail.Iamguiltyofthisonemyself.Ihaveanswered e-mailstooquickly,onlytofindImissedtherealquestionandhadtosendfollow-up messagestoclearthingsup.
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Sendingstreaming(cascading)e-mail Thesearee-mailscontainingnotesfrom severalpeoplethatareforwardedtopersonafterperson.Halfthetimethemessage getssoconvolutedthatbythetimeitcomestoyou,itmakesnosenseatall.This happensfartoooftenandcanbequitecounterproductive.Oftenthee-mailisignored altogether.
TheDistributeInformationprocessinvolvesmakingrelevantinformationavailableto projectstakeholders.Thisprocessoccursthroughouttheprojectlifecycleandcancome inmanyforms,suchasformalrequestsforinformationfromanauditororsponsor,or informalrequestsfromanyoneatanytime. Sohowdoyoueffectivelydistributeinformation?Themainthingistodoyour homework.Youshouldalsomakesureyouhaveagoodideaofwhothestakeholdersare
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Ask the Expert Q: HowdoItellatopexecutivetheyresurfacedanolde-mailandareaskingforthe statusofaproblemonaprojectthatwasalreadyresolved?
A: Readthee-mail(allofit)carefully.Tactfullysummarizetheproblemandthesolutiontothe requestingexecutivewithassurancethattheissuehasbeenresolved. Thissituationactuallyhappenedtome.Ireceivedane-mailfromatopexecutive askingmetosetupameetingwithseveralVPstoreportthestatusofacertification projectthathadalreadybeenclosed.Inmycase,asIreaddownthroughthecascadeof eightmessagesthathadbeensentandforwardedandrespondedto,Inoticedsomething verypeculiar.Theoriginalnotewassentoverayearago,andthequestionhadalready beenaddressedbytheperson’smanager.Theproblemwasalreadysolved,andherewe wereabouttogeneratealotofworkandtieupalotofhigh-poweredexecutivesbecause thesenderdidn’tcarefullyreadtheoriginalmessage.Thatwasembarrassingandcould haveevenbeenworsehadIdonewhatthetopexecutiveaskedmetodo.Therefore, alwaysreadtheentiree-mailbeforerespondingandrespondinaprofessionalmanner.
andtheirlevelofinterestintheproject.Finally,haveaclearcommunicationplan.Always rememberthecommunicationsmodel.Makesureyouareclearonwhothespecific sendersandreceiversare,themessagethatneedstobereceived(actionstotake,response needed,andsoon),andhowtoensureopencommunicationchannelsforthefeedback looptoensurethemessageisinfactgettingthroughasintended. Nowyouneedtothinkabouthowyouaregoingtodistributetheinformation—what formattouse,whatdeliverymethodtouse,andthefrequencyofthedistribution.Hereare sometipstokeepinmind: ●
Telltherecipientupfrontthepurposeofthecommunication(FYIonly,projectstatus, decisionrequired,inputneeded,andsoon).
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Writethemessageasanewsreporterwould.Startwiththemostimportantinformation first,followedbydeeperlevelsofdetailorbackground.
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Haveaclearcommunicationsplanandsticktoit.
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Keepthemessagesimpleandconcise.Useactivevoiceinsteadofpassivevoice,and payattentiontoyourwritingstyle.Forexample,allcapitallettersseemslikeyouare yelling,alllowercaseseemslikeyouareeitheruneducatedordon’tcare.
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Sendtheinformationonlytothepersonwhoneedstotakeaction,andcopyonlythose peoplewhohaveaneedtoknow.
Chapter10: ProjectCommunicationsManagement ●
Avoidstreaming(orstacking)e-mailsthathavebeenforwardedandrepliedtoseveral timesalready.Deletethepreviousunnecessarymessageswhenyoureplytokeepyour responsecleanandtothepoint.
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Useanactionwordorphraseinthesubjectlineofthee-mail:ActionRequired,FYI Only,AtYourConvenience,ResponseDueBy,andsoon.
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AvoidusingtheReplytoAllbuttonunlessyouaresureeveryoneshouldknow.
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Avoidsendingandrespondingtoe-mailsaftermidnight.Theywilllikelymissthe pointorbeconfusing.
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Useeffectivemeetingmanagementtechniquesbysendingoutagendas,stayingon time,andcapturingandpostingtheminutestothemeeting.(Thisisveryimportant.)
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Workonyourpresentationskillsandfacilitationtechniquestobeeffectivewhen runningmeetings.
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Rememberthatanythingyousendbecomespublicrecordinstantly—evenifyou’ve sentitconfidentiallytooneperson.
Besureyousetsomegroundrules,communicatethemtotheteam,andthenmake sureyoufollowtheserulestosetagoodexample.Youshouldbefamiliarwiththemany dimensionsofthecommunicationactivity,whichincludethefollowing: ●
Internal(withintheproject)andexternal(clients,otherprojectteammembers,thepublic)
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Formal(reports,memos,briefings)andinformal(e-mails,opendiscussions,phonecalls)
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Vertical(upanddowntheorganization)andhorizontal(topeers,vendors)
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Official(newsletter,annualreport)andunofficial(off-the-recordcommunications)
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Writtenandoral(ortexted)
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Verbalandnonverbal(voiceinflections,bodylanguage)
Italkedearlieraboutbuildingyourskilltohelpyouimprovecommunication.Hereare somecommunicationskillsyoumaywanttodeveloporrefine: ●
Activelistening(effectivetwo-waycommunications)
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Questioningbyprobingideasandsituationssotheyarebetterunderstoodandmore effective(keepasking“Why?”untilyouhaveaclearunderstanding)
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Education,training,andmentoringtoincreaseknowledgeandawareness
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Fact-findingtoidentifyorconfirminformation
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Settingandmanagingexpectations
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Resolvingconflicttopreventdisruptiveimpactontheproject
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Summarizing,recapping,andidentifyingthenextsteps
Distribute Information Tools and Techniques ThePMBOKlistsonlytwotoolsandtechniquesinthisprocess: ●
Communicationmethods Forexample,individualandgroupmeetings, conferences,computerchats,texting,IMing,andotherremotemethods
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Informationdistributiontools Forexample,hardcopy,softcopy(electronic), reverse911calls,andwebsites
Distribute Information Outputs Outputsfromthisprocessincludeprojectreports,presentations,records,feedbackfrom stakeholders,andlessonslearneddocumentation.
4. Manage Stakeholder Expectations Process Thisprocess,ifnotdoneproperly,tendstocomebacktohauntyou.Ihavemanagedalot ofprojectsinmy30yearsinprojectmanagement,soIknowthisisanareathatonsome projectstakesthemosttime. Especiallyintoday’sworld,wetendtoexpectordemandinstantgratification. Managingstakeholderexpectationsisnoteasy.Theonlywaytohelpmakemanaging stakeholderexpectationseasieristoestablishagoodworkingrelationshipwiththekey stakeholders(remember,theteamisyournumber-oneassetontheproject).Youwantto keepthemhappy.Also,don’tforgetthesponsorswhoarefundingtheproject.Theymay needspecialcareaswell.Therefore,youneedtolearnhowtoplaywellwithothers, evenwhenemotionsrunhighandmoodswingsoccur.Alwayskeepyourresponses friendlyandprofessional.Don’traiseyourvoice,getcynical,orsarcastic.InAsiaand othercountries,raisingyourvoiceorshowingemotionisasignofweakness.Youwant tostayincontrolinallsituations.
TryThis
Managing Unrealistic Expectations
Imagineforamomentyouareanewprojectmanagerforasix-monthtransitionofIT servicesfromthecustomer’slocation(WestCoast)toBoulder,Colorado.Theprojectis tomirrorthecomputersystemasisbysimplysettingupacloneofthecurrentsystem’s operatingenvironmentinBoulder,copyingthesystemimageovertothenewsystem,and thenrunningthetests.Soundsprettysimple,right?
Chapter10: ProjectCommunicationsManagement Nowthrowinalittlechangeinthecustomerexpectations.Forexample,theclient decides(afterequipmenthasalreadybeenorderedbasedonoriginalapprovedand pricedconfiguration)toaddnewhumanresourceandfinancialapplicationsthatrequire asignificantincreaseinthesystem’sprocessingpower(doubletheusage).Alarger computersystemisneededandwillcostanother$500,000andthesoftwarelicenseswill costover$1million.Theimpacttomakethesechangeswillextendtheschedulebytwoto threemonths. Sothequestionis,Howdoyoumanageunrealisticexpectations? Answer:Meetwiththecustomertofullyunderstandtheirreasonforthechange.Then, armedwithallthefactsandfigures,explaintotheminaprofessionalmannertheimpact totheprojectbothintimeandcost.Hopefully,theclientwillbereasonableandallow theextratimeandadditionalpricingtomatchtheirnewexpectations.Ihaveseenthis gobothways,butinallcasesitstrainedtherelationship.Therefore,alwaysworkon establishingagoodrelationshipwithstakeholdersasearlyaspossible.Thatisthekey tosuccess.
Managingstakeholderexpectationsinvolvesfrequentinteraction,negotiations,regular meetings,andstatusreportstokeepthemintheloop.Theoldsaying“Nonewsisgood news”doesn’tholdtruehere.Ifyouarenotcommunicatingwiththestakeholders,they beginwonderingwhoisinchargeandwhetheryouarehidingsomething.Therefore,it isbesttocommunicateearlyandoften.Evenifthenewsisbad,youneedtokeepthe stakeholdersinformed.Thekeyistostayconnected,communicateanyproblems,and mostofallhaveanactionplan.Thekeystakeholdershavearighttoknowwhatisgoing onandhowyouaremanagingproblems.
Manage Stakeholder Expectations Tools and Techniques Thetoolsandtechniquesthatcanbeusedforthisprocessare ●
Communicationmethods(howyouplantocommunicatewiththestakeholders)
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Interpersonalskills(buildtrust,resolveconflictinatimelymanner,activelylisten)
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Managementskills(workonnegotiation,writing,andpresentationskills,evenpublic speakingtechniquesandstyle) Asyoucansee,thesearecloselytiedtorelationshipbuilding.
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Demonstrateintegrityandhonesty.
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Activelymanagetheirexpectations(interactivelyandproactively).
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Addressconcernsbeforetheybecomelargerissuesorproblems.
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Clarifyandtrackissuesusinganissue-trackinglogandresolvethemquickly.
What Happens When We Don’t Communicate Clearly? Haveyoueversaidsomethinganddidn’tgetthereactionyouthoughtyouwould?Or haveyousaidsomethingthatdidn’tcomeoutclearlyasplanned?Wehaveallexperienced thoseembarrassingmoments. HereareafewtipsfromMichaelStarlingtohelpyouavoidclassiccommunication blunders.Thefollowingarethingsyoudon’twanttodo: ●
Saytoolittle.The“I’mtheleader,justtrustme”linedoesn’tworkthesedays.People usuallydotrustyou,buttheywanttohearyourthinkingandreasoning.
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Saytoomuch.Youdon’thavetogiveeverydetailtoeveryperson.Formostpeople, keepthediscussionatahighlevel.
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Talktothewrongpeople.Youhavetotargetyourcommunication.Forexample,you don’twanttotellthesponsoraboutthetechnicaldetails(howtobuildthewatch);all theywanttohearisthecurrentprojectstatus(onscheduleandonbudget).
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Losesightofemotionalimpact.Remember,whenthingsarechanging,emotions runhigh.Statementscanbemadethathavelotsofenergy.Givepeopletimeto emotionallyadjusttothechange.
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Rushtheprocess.Becauseyouaretheleader,youprobablyhaveprocessedthe informationbeforeanyoneelse.Yourgrieforexcitementorpassionisbehindyou.It’s easytorushothersexpectingthemtocatchup.Givethemtime.
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Lookawayorlookuninterested.Yournonverbalactionsmustbeconsistentwithyour spokenmessage.RalphWaldoEmersonsaiditwell:“Whatyoudospeakssoloudly thatIcannothearwhatyousay.”
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Havebadtiming.Deliveringtherightsolutionatthewrongtimecangetyouin trouble.Itisliketellingajoke:Thepunchlinehastobeintherightplaceattheright timeforittobefunny.Thesameistrueinwhenandhowyoucommunicate.[5]
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Useunconsciousordistractingbodylanguage.Seethesidebar“FiveBodyLanguage TipsfromthePresidentialDebates.”
Chapter10: ProjectCommunicationsManagement
Five Body Language Tips from the Presidential Debates Theinformationinthissidebarcomesfromthearticle“FiveBodyLanguageTipsfromthe PresidentialDebates,”byCarolKinseyGoman,Ph.D.(http://hodu.com/debates.shtml). Watchingpoliticaldebatesprovidesanopportunitytolearnfrombodylanguage dosanddon’ts.Herearesometipsfrompresidentialdebatesthatyoucanapplyto yourroleasaPM.
Tip1:Withnonverbalcommunication,it’snothowthesenderfeelsthat’smost important;it’showtheobserverperceiveshowthesenderfeels. Afamous debatesignaloccurredin1992whenincumbentPresidentGeorgeH.W.Bushlooked athiswatchwhilehisopponent,BillClinton(whowouldwintheelection)spoke.Why helookedathiswatchdoesn’tmatter.Whatdoesmatteristhattotheviewingaudience, PresidentBush’sgestureconveyedboredom. Tip2:Watchthosefacialexpressions! Inthe2008presidentialdebates,both candidatesmadefacialexpressionerrors.Inmostofthedebates,SenatorObama minimizedhisemotionalreactionsandreinforcedtheimpressionthatheisremoteand “cold.”SenatorMcCain’sforcedgrinsandeyerollinginthethirddebatesentanegative signal(forexample,insincerity)thatwasreflectedinstantlyinpollsratinglikeability. Tip3:Don’tunderestimatethepoweroftouch. WhileSenatorObamashook handswithaudiencemembersafterthe2008debates,onlySenatorMcCaintouched anyoneduringadebate.Towardtheendoftheseconddebate,McCainwalkedintothe audienceandpattedaU.S.militaryveteranonthebackandthenshookhishand,which producedagenuinesmilefromtheveteran.McCain’sgesturewasexquisitelydoneand workedverymuchinhisfavor. TouchissopowerfulandeffectivethatclinicalstudiesattheMayoClinicshowthat prematurebabieswhoarestrokedgrow40percentfasterthanthosewhodonotreceive thesameamountoftouching.AstudyonhandshakesbytheIncomeCenterforTrade Showsshowedthatpeoplearetwiceaslikelytorememberyouifyoushakehandswith them.(Thusthereasonforcandidatestogetoutinpublicandshakealotofhandsand kissafewbabies.) Tip4:Whenyourbodylanguageisoutofsyncwithyourwords,people believewhattheysee. AnytimeSenatorMcCainwasspeakinginthefirstdebate ofthe2008campaign,SenatorObamaorientedhisbodytowardMcCainandlooked (continued )
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directlyathim.Indoingso,hesentanonverbalsignalofinterestandrespect.McCain’s decisiontoavoidlookingatObamaduringthatdebatewasnotonlydismissive,itwas countertoMcCain’sstatedpositionthatDemocratsandRepublicansneedtowork togetheronbehalfoftheAmericanpeople.
Tip5:Rememberthatyouarenever“offcamera.” Whenthesecond presidentialdebateof2008wasover,andtheirwiveswereonstage,SenatorMcCain tappedhisrivalontheback.SenatorObamaturnedaroundtoofferhishand,butitwas notreciprocated.McCain,instead,pointedtohiswife,Cindy—anactionthatmany viewerstookforanonverbalbrush-off.[6]
Communication Blockers/Barriers AccordingtoafellowinstructorMichaelStarling,“Vaguetermsaredeadlytoeffective communication.Peoplearefreetointerpretthingsaccordingtotheirownframesof reference(everyonehasdifferentfilters).”[7] ThevaguewordsinTable10-4cancreatehugemisunderstandingsandconflict. Howdoyouavoidusingvaguewords,terms,orphrases?Practicethinkingaboutwhat yousayandhowyousayit;thenworkonwaystosayitwithouttheuseofvagueterms.
5. Report Performance Process TheReportPerformanceprocessinvolvescollectinganddistributingperformance information,includingstatusreports,measurements,andforecasts. Performancereportsneedtoprovidethestakeholderswithanappropriatelevelof informationaccordingtotheirlevelofinvolvementintheproject.Onesizedoesn’talways fitallwhenitcomestoprojectreports.
Soon
Often
A Lot
Many
Better
Worse
Bad
Good
Like
Similar
Later
Difficult
Easy
More
Less
Faster
Efficient
Timely
Always
Never
Nice
Stuff
Things
Everyone
Guys
Table10-4
Vague Words
Chapter10: ProjectCommunicationsManagement
Ask the Expert Q: Myclientcontinuestoaskformoreandmorereports,moredetails,andinvarious
formats.Thishasrequiredmetoassignafull-timepersontogenerateallthereports formyproject.WhatcanIdotogetthisundercontrol?
A: Irecommendmeetingwiththekeystakeholdersanddeterminewhichreportsareessential
andwhicharejustnicetohave.Iftherearemixedresults,takeavoteor,worstcase,stop sendingwhatyouandtheteamviewasnonessentialreportsandseewhocomplains. Anotheroptionistodeterminetheimpacttotheproject(forexample,extratimeandcost) andwriteaproposaltochargemorefortheadditionalreports.Thatshouldgetsomeone’s attention.Ifthestakeholdersarenotwillingtopayextra,thenreducethenumberofreports andtheproblemissolved.
TIP Performance reports are essential to the success of the project. Their importance is evident in the number of times performance reports show up in the PMBOK (49 times). Performance reports are referenced as inputs and outputs to many processes in many knowledge areas, such as integration management, risk management, HR, and communications. Therefore, you can expect a number of questions on these reports in the PMP and CAPM exams.
Report Performance Outputs TheprimaryoutputfromtheReportPerformanceprocessistheactualperformancereports. Reportsarecreatedanddistributedatdifferentintervalsandtodifferentstakeholder audiences.(Seethelistofreporttypesshownlaterinthissectionfordetails.) Thereportsyoucreateanddistributeonyourprojectwillmorethanlikelybe customizedtomeetyourneedsandtheneedsofthestakeholders. Thereisanoldsayingthatgoessomethinglikethis:“Ajobisneverdoneuntilthe paperworkiscomplete.”Thepaperworkmakesthefindingorresultsrealandauditable;it isthegluethatkeepstheprojecttogether.
Types of Performance Reports Thetypeofreportsthatgotothevariousstakeholdersdependonanumberoffactors, includingthesizeoftheproject,levelofcriticality,andimpacttothecommunity.
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Currentstatusforprojectprogress(usuallyreportedonaweeklybasis)
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Previousprojectperformanceanalysis(trends,lessonslearned,andsoon)
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Riskandissuelogstoknowwherethethreatsandopportunitiesmightbe
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Workcompletedduringtheperiod(earnedvaluereports,percentagecomplete,andsoon)
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Summaryofchangesreviewed,approved,andimplementedduringtheperiod
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Specificapprovedmeasurementsormetrics(forexample,scheduleandbudgetresults)
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Planversusactualchartswithvarianceanalysisagainsttheapprovedbaseline
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Forecastreports,suchasETC(estimatetocomplete)andEAC(estimateatcompletion)
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Otherrelevantinformation,asneeded,forreviewanddiscussion
Forecasting Methods Forecastinginvolvesdustingoffyourcrystalballtolookatthefutureanddetermineifthe currentstatusisgoingtoaffectthefutureoutcomeoftheproject. Severalmethodscanbeusedtoforecastyourproject: ●
Timeseriesmethods Thesemethodsinvolvetheuseofhistoricaldataasthebasis forestimatingthefuture(forexample,earnedvalue,movingaverage,extrapolation, trendestimating,andvariousgrowthcurves).
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Causal/econometricmethods Thesemethodsmaketheassumptionthatitis possibletoidentifytheunderlying(rootcause)eventsthatmayaffecttheoutcome. Forexample,thesalesofskipassesareaffectedbytheamountofsnowfallatany giventime.Someexamplesincludelinearandnonlinearregression,autoregressive movingaverage(ARMA),andeconometrics.
●
Expertjudgmentalmethods Thesemethodsusetheintuitivejudgmentsofsubject matterexpertsforcostestimates,probabilityandimpactestimates,timeestimates,and soon.Sometools/techniquesusedinthistypeofforecastingaretheDelphimethod, technologyforecasting,andanalogyforecasting(top-downfromsimilarprevious projects).
Othermethodsincludesimulationmodeling,probabilisticforecasting,andensemble forecasting.
Chapter10: ProjectCommunicationsManagement
Summary of Communications Management Remembertheimportanceofgoodtwo-waycommunications.Alsorememberthatproject managersspendabout90percentoftheirtimecommunicating.Intheworldofrealestate, thefamousmottois“location,location,location.”Intheworldofprojectmanagement,the mottoshouldbe“communication,communication,communication.” Anddon’tforgettheimportanceoflistening.Tobebettercommunicatorswehaveto learntolisten.Afterall,youweregiventwoearsandonlyonemouth,soyoushouldlisten twiceasmuchasyoutalk. WhenIfirstbecameaPM,IfeltthatIwasnotcontributingtotheworkoftheproject. Sure,Iwasbusyschedulingmeetings,talkingtostakeholders,preparingreports,running thenumbers,andkeepingtrackofthebudgetandschedule,butthisdidn’tfeellikereal work.Thenonedayateammembersaid,“Thisprojectwouldfallapartwithoutthework youdotoorganize,coordinate,andcommunicatewhatneedstobedone.”Itwasthen Irealizedmyworthontheprojectandacceptedthefactthattrueprojectmanagement involvesmanagingtheflowofcommunications,likeaconductorofanorchestra. Soraiseyourbatonanddirectyourteamtosuccessthrougheffectivecommunications management.
References
1.MichaelStarling2009webcastoncommunications.
2.Wikipedia,http://en.wikipedia.org/wiki/Nonverbal_communication.
3.SecondLife,http://secondlife.com/whatis/.
4.“PrincetonProjectMethodology—ProjectCommunicationPlan”(rev.10/03/03),http://
web.princeton.edu/sites/ppo/PMCommunicationPlan.doc.
5.MichaelStarling2009webcast.
6.CarolKinseyGoman,Ph.D.“FiveBodyLanguageTipsFromthePresidential
Debates,”http://hodu.com/debates.shtml.
7.MichaelStarling2009webcast.
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Chapter
11
Project Risk Management
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KeySkills&Concepts ●
Projectriskmanagementprocess
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Definitionofrisk(uncertainty)
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Sixriskmanagementprocesses
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Threekeycomponentsofrisk
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Threatsandopportunities
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Riskidentificationtechniques
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Riskresponsestrategy
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Probabilityandimpactanalysis
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Risktolerancesandthresholds
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Expectedmonetaryvalue
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MonteCarloanalysis
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Risktypesandcategories
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Contingencyplans
R
iskisoftendefinedasuncertainty(alackofknowledgeaboutapotentialeventthat cancauseapositiveornegativeimpacttotheproject).Asmentionedpreviouslyin thisbook,riskmanagementmustbedoneearlyandoften.Riskisalwaysconsideredto beinthefuture.Itcanhaveoneormanycauses,andoftenhasacascadingeffectonother elementsoftheproject.Riskmanagementshouldbeconductedasateam.Itshouldbe plannedthoroughlybecauseriskcomesinmanydifferentflavorsandmostofthetimecan leaveaverybadtasteinyourmouth(bycostingyoutheproject).Theupsideisyoucan minimizerisksbyfollowingafewsimpleprocesses. Whenisthelasttimeyourprojectteamsatdownandtalkedaboutrisk?Weareso focusedonspecificeventsandactivitiesontheprojectthatwerarelyjusttalkaboutrisk ingeneral.Thebadnewsis,riskisallaroundus;itislurkingineverycornerandcan happenatanytime.Yet,forsomereason,proactiveriskmanagementisoftennotformally practicedinprojects;itisonlydiscussedafterariskeventhasoccurred.
Chapter11: ProjectRiskManagement TIP Risk management is viewed as one of the toughest areas of the PMP exam. This is true for a couple reasons. This first reason is that PMI assumes you and the team are managing risk (it is a given). However, the reality is only a small percentage of projects in the real world actually have a risk management plan. The second reason is lack of experience. We hope we never encounter serious risks so we tend to ignore or avoid them. Therefore, there are not a lot of experts in this field. Paying close attention to the material in this chapter will help you manage risk more effectively and score higher on the PMP exam.
Whenyougetupinthemorningandstartdownthestairsforthatfirstcupofcoffee,you probablyaren’tthinkingaboutwhetherthekidsforgettoputawaytheirtoysorwhetherthe dogisfastasleeponthetopstepasyoustumbleandfall.Threatsareeverywhere.Thereally goodnewsis,ourbrainsandsensesareconstantlyscanning(likeradar)andwillpickup potentialdangerwithoutusevenrealizingwearedoingit.Alargenumberofaccidentsare avoidedduetothisinternalradarandourquickreactionsduringtimesofdanger. Thesameistrueonprojects.Agoodprojectmanagerisconstantlyonthelookout forriskevents,probability,impact,timing,gaps,orpotentialthreats(oropportunities)in managingrisk.
Risk Factors Tobebetterriskmanagers,weneedtobetterunderstandriskfactors.Herearetheprimary factorstoriskthatalwaysneedtobeconsideredonyourproject: ●
Theriskeventitself(R)
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Theprobability(P)ofoccurrence
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Therangeofpossibleoutcomes(impact[I]oramountatstake)
Otherkeyconsiderationsaretimingandanticipatedfrequencyofoccurrence.Timing isanimportantconsiderationbecausetheprobabilityandimpactchangedramatically, dependingontimeofyear(forexample,weatherisabiggerriskforoutdooreventssuch aspicnicsandweddings).
Threats, Opportunities, and Triggers ItisimportanttoknowthatPMIviewsriskasnotjustathreat(negativeevent)butasan opportunity(positiveevent).Withproperplanning,riskcanbemanagedeffectivelywith substantiallyreducedimpacttotheproject.Thismeanswehavetothinkandtalkabout risk.Wemustplanforit,trainforit,andbeproactiveaboutmanagingrisk.
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PMPCertification:ABeginner’sGuide Mostpeoplehaveaprettygoodideaaboutthreats.Athreatisariskthathasanegative impactontheprojectifitoccurs.Buthowcanariskbeanopportunity?Opportunities arerisksthathaveapositiveimpactontheprojectshouldtheyoccur.Here’salistof opportunitiesthatcanarisefromrisk: ●
Asupplierisoutofstockforthebuildingmaterialsyouorderedandtheyupgradethe ordertoahigherqualityproduct.
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Ateammemberretiresandhisreplacementhasmoreexperienceatlesscost.
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Ameetingispostponedandmovedtoanewlocationatalocalbranchofficeinsteadof atanexpensivehotel.
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Anicehockeyeventiscancelledbecausetheteamdoesn’tmaketheplayoffsanda professionalrodeoagentcallstoscheduletheeventscenterforthesamedatesthat hadbeenreserved.Therodeoeventdrawsalargecrowdinwhatwouldhavebeenan emptyarena.
NOTE It is said that up to 90 percent of threats that are identified and analyzed by the project team during the risk management processes can be eliminated.
Howcanyoupredictwhenariskisabouttohappen?Thebestwayistolookforrisk triggers.Atriggerisasymptomoranearlywarningsignthatindicatesariskhasahigh probabilityofoccurring.Atriggercansimplybenoisearoundthewatercooler(thatis, peopletalkingandthenstoppingwhentheprojectmanagerorcustomerwalksby)which maybeasignthattherearestaffingorotherproblems.Othertriggersincludemarket trends,foreclosuresonhousinghavingarippleeffectonthebankingindustry,oraseries ofbudgetcutsorresourceactions(RAs)thatmightsignalacompanyisthinkingabouta mergerorreorganization.Anyofthesetriggersshouldraisesuspicionsaboutthebudget, staffing,orsupportonaproject. In1984,Iwasassignedtoparticipateontheprojectteamtosetupandmaintain anumberofcomputersystemstoscoretheOlympicSummerGamesat26venues inthegreaterLosAngelesarea.Oneofthefirstthingswedidwastositdownasa team(remember,riskisateamsport)andstartidentifyingrisks,suchastrafficjams, communicationsandpowerblackouts,equipmentfailure,weather,andsoon.Thelistwas long,butwewentthroughtheriskmanagementprocessestomakesurewehadaplanfor if(orwhen)theriskeventsoccurred.
Chapter11: ProjectRiskManagement Theprojectteamfeltthatwedidaprettygoodjobofidentifyingtherisks,whowould owntheresponsestrategy,theactionitems,andhowweweregoingtoensurebackup planssotheOlympicscoringcouldgoon.Butwemissedactingonasimpletrigger—a dampmustysmellinastorageroom(seethefollowing“TryThis”).
TryThis
Don’t Rain on My Project
YouareaprojectmanagerworkingattheOlympics.Youcomeinonemorningaftera longsteadyrainthenightbeforetofindthatthestoragebuildingwhereyourcomputers, tools,andotherequipmentarestoredissoaked.Theroofleakedandwaterisallover everything.Whatdoyoudo?
A Lookatyourprojectriskplantoseewhowasassignedtothisriskeventandthenwork
withtheriskownertorespondtotheriskbasedontheirdocumentedresponseplan.
B Lookforsomeonetoblame.
C Gathertheteamtodiscussarecoveryplan.
D Ordernewequipment,fast.
Answer:A.Ifyouhaveplannedproperly,theriskeventwillhavebeenidentified,the ownerassigned,andaresponsestrategywillhavebeendocumentedandapproved.
Watchingfortriggers(suchasthedampmustysmellinthestorageroom)andhaving agoodmitigationplanwouldhavehelpedreducetheriskprobabilityornegativeimpact totheproject.Agoodproactivemitigationplanwouldbetocovertheequipmentinthe storageroomwithplasticintheeventofrainorotherpotentialcontamination. Theprojectteamin1984missedthetriggeranddidn’tidentifyormitigatethisrisk event.Theteamusedhairdryerstoblowdrytheequipmentinthestorageroom.We learnedourlesson.
Be Proactive (Plan for Risk and Mitigate Wherever Possible) Talkaboutbeingproactive.Let’slookatariskeventthatcouldhavecost155lives.Itis hardtobelieveafewbirdscouldtakedowna170,000poundairplane,buttheydid.Iam sureyourememberthe2009incidentdubbedthe“MiracleontheHudson.”LianaStanley,
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Ask the Expert Q: IamthePMonaprojecttomitigatetheriskofbirdstrikestoairplanesatmylocal airport.WhatdoIdofirst?
A: Youstartbydoingyourhomeworkbyfirstidentifyingtheproblem.Youwouldfindthat
birdstrikesoccurmostlyaroundairports.Since1990,about82,000wildlifestrikeshave beenreportedtotheFederalAviationAdministration,andthenumberofstrikesisgrowing steadilyeachyear.In1997,thenumberofreportedstrikeswas3,458,andin2007that numberhadrisento7,666.Youalsofindthatreportsestimatethatonly20percentofall wildlifestrikesarereportedtotheFAA.[2]Therefore,theproblemisbiggerthanthe reportsshow. Next,asashort-termsolution,yourecommendtheairportuseanintegratedapproach, withhabitatmodificationsuchasmaintainingaconsistentlowgrassheightaswellasusing noisemakersandotherscaredevices.Additionally,youwouldwanttoverifypilotshave aminimumnumberofhoursspentinasimulatortopracticehowtodealwithbirdstrike situations.Lastly,youmightwanttogetateamofengineerstogethertodetermineways todesigndeflectorsofsortstominimizetheprobabilityandimpacttotheairplane.Risk managementisthekey.
intheNewAmericanarticle“HeroicsBehindthe‘MiracleontheHudson’”describesitas follows: “WhenUSAirwaysFlight1549wasforcedtomakeasplashlandingin theHudsonRiveronThursday,January15,coolheads[CaptainChesley SullenbergerIII]prevailedandwhatcouldhavebeenanimmensetragedy turnedinto10minutesofteamworkthathasawedthenation.”[1]
Risk Averse or Risk Prone (Which Are You?) Thesampleprojectaboutmitigatingbirdstrikesatanairportisaprojectthatneedsa projectmanagerwhois“riskaverse.”Youwantaperfectionistwhenitcomestopeople’s lives.Apersonwhoisriskaverseissomeonewhodoesn’twanttotakerisks. Ontheothersideofthecoinarethepeople/companiesthatarewillingtotakerisks. Thrillseekerswhoperformextremesports(skydivers,racecardrivers,andsoon)or projectmanagersthatdon’ttakethetimetoplanforriskareriskprone.
Chapter11: ProjectRiskManagement Eventhoughairlinepilotstrainforemergencysituationsinsimulators,whenyoulose bothenginesinarealairplanejustminutesaftertakeoff,theoddsareagainstyou.OnFlight 1549,thepilot’strainingandexperiencereallypaidoff.Thatisriskresponseatitsfinest.
Risk Tolerances and Thresholds Risktolerancesaretheareasofriskthatareeitheracceptableorunacceptable.Forexample, ariskinhealthorsafetyforacompanyinthefood-processingordrug-manufacturing businessistotallyunacceptable.Therearesomeriskswearenotwillingtotolerate. Riskthresholds,ontheotherhand,refertothedegreeofriskapersonorcompany isorisnotwillingtoaccept.Insomecases,acompany’ssecrettosuccessistiedtoits willingnesstotakerisks.Thisisespeciallytrueinthetechnologysector,wherethename ofthegameistopushtheenvelopeonnewproductdevelopmenttobethefirsttomarket wheneverpossibletogainmarketshare.Inthiscase,riskthresholdmustbehightoever expecthighersuccessandinnovation.Inthearticle“OnTheEdge:SettingtheThresholds,” CarlPritchardstatesthefollowing: “Inestablishingprojectplans(andmorespecifically,riskplans),project managersneedtorecognizetheimportanceofelementsthatgobeyond basicriskidentificationandassessment.Onecriticalissueweoftenmiss outonisthenotionoftheriskthreshold.Howmuchcanwestand?How muchofascheduledelayistoomuch?Howmuchofacostoverruncan theorganizationtolerate?Theformal,patanswerisoften‘nooverrunsare acceptable.’Butthat’snotrealistic.Mostprojectscanwithstandsomesmall overrunsintermsofscheduleorcost,orsomesmallshortcomingsintermsof requirements.Thoserepresentourthresholds.”[3] Anotherwaytoshowthresholdsforidentifiedrisksistodeterminetheirriskscores. Yousimplymultiplyprobabilitybyimpactandthencomparetheriskscoretothe approvedthresholds. Approvedthresholdsforriskshouldbesetdependingonthesize,type,andcriticality oftheproject.Therearemanyrisktoolsthatassistindeterminingtheriskscorebasedon certaincriteria.Oftenthescoresaresetinriskprioritycategoriessuchashigh/medium/ low,red/yellow/green,oranumericalrangefrom1–10oreven1–100formorecomplex scoring.Nomatterwhatscoringsystemyouoryourcompanyuses,thekeyistohave clearlydefinedthresholdsandresponsestrategiestoalignwiththescore.
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Project Risk Management Processes ProjectRiskManagementincludessixprocesses,accordingtoPMI,andincludes conductingriskplanning,identification,analysis(qualitativeandquantitative),response strategy,andmonitoringandcontrollingtheprojectrisks. Themajorityoftheprocesses(fiveofsix)areinthePlanningprocessgroup,as youwouldimagine.(TheMonitorandControlRisksprocessisintheMonitoringand Controllingprocessgroup.)Becarefultonotletthispreponderanceofemphasisduring theplanningphasedullyoutothecriticalimportanceofmanagingrisksthroughoutthe lifeofyourproject.Youshouldplantohaveatleastweeklymeetingstoreviewyourrisk log.Otherwise,youwillsufferacommonfate:outofsight,outofmindequalsmissed risksandahigherprobabilityofprojectfailure! ●
11.1:Planriskmanagement Definehowtheteamwillconductriskmanagement.
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11.2:Identifyrisks Determinewhichriskscouldoccurandmayaffecttheproject.
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11.3:Performqualitativeriskanalysis Analyzetherisksidentifiedandprioritize themtoseewhichrisksneedfurtherrevieworactionbasedonprobabilityand impact.
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11.4:Performquantitativeriskanalysis Analyzetherisksinnumericaltermsto seewhichonespotentiallyhavethehighestimpactonprojectobjectives.
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11.5:Planriskresponses Lookatoptionsandactionstoreducethreatsandincrease opportunitieswhentheriskeventoccurs.
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11.6:Monitorandcontrolrisks Makesureyouhaveariskstrategyplaninplace thatcanbeeffectivelymeasuredandtrackedtoensuretherearenosurprises(always belookingfornewrisksortherippleeffectsfromexistingrisksshould/whenthey occur).
Theseprocessesareinteractivewithotherprocessesinotherknowledgeareas.Risk managementcrossesallboundariesandcanaffectscope,schedule,cost,quality,andsoon.
TIP By now I am sure you get the importance of risk management, and with something this important you can expect many questions on the PMP exam. The best way to lock in on the processes is to memorize the order and how they tie to the process groups. You should remember the inputs, tools and techniques, and outputs to the processes, the risk factors, and response strategies as well (all covered later in this chapter).
Chapter11: ProjectRiskManagement
1. Plan Risk Management Process ThefirstprocessintheProjectRiskManagementknowledgeareaisriskmanagement planning.ThePlanRiskManagementprocessinvolvesdecidinghowtoapproach,define, plan,andexecutetheriskmanagementactivitiesfortheproject.Aswithmanyother processes,thisoneisdefinitelyateamsport.Withthisprocess,themorestakeholdersyouhave involved,andtheearlierinthelifecyclethebetter.Keyplayerssuchastheprojectmanager, sponsor,team,customer,andsubjectmatterexpertsshouldtakepartintheplanningprocess. Theamountoftimespentandthenumberofresourcesinvolvedinthisprocesswill varybasedonanumberofvariables,suchasthepriorityoftheproject,theoverallsizeand complexityoftheproject,andthepotentialimpacttothecompany,team,orcommunity.
TIP You might see a question on an exam someday that goes something like this: “The highest level of risk is encountered during which process group (or which phase of the project)?” Answer is the Initiating group. The earlier you are in the project life cycle, the higher the degree of uncertainty and the higher the risk.
Risk Categories (or Sources of Risk) Thereareseveralcategoriesofrisk(sometimesreferredtoassourcesofrisk): ●
Internal Risksinsidetheprojectororganization(staffing/resourceavailability,other constraints,changestotheproject,lackofproperplanning,andsoon).
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External Risksoutsidetheprojectteamororganization(environmentalfactors, regulatoryagencies,weather,shiftinconsumerdemand,andsoon).Theseriskscan bepredictedorunpredicted(seeTable11-1).
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Technical Risksduetochangesintechnology,systemupgrades,configuration, infrastructure,andsupport.
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Unforeseeable Eventhoughmostriskscanbeidentified,thereisalwaysasmall percent(approximately10–15percent)ofrisksthatcannotbepredicted.
ExternalPredictable
ExternalUnpredictable
Market risks
Government or regulatory compliance
Operational risks
Unusual natural disasters
Environment impacts
Vandalism and sabotage
Inflation or currency exchange rates
Political unrest and labor strikes
Taxes
Supplier availability (bankruptcy, mergers, and so on)
Table11-1
External Risk Examples
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PMPCertification:ABeginner’sGuide Anotherwaytohelpidentifyorcategorizeriskisbysource.Lookingatriskfromits source(fromthecustomer,supplierdependencies,poorworkingconditions)mighthelp youaligntheriskspecificallywiththepotentialimpacttoyourproject(cost,schedule, scope).Ariskmayalsocrosscategories;forexample,alackofskilledresourcescan affectcost,quality,andschedule.Thebadnewsaboutriskistherippleeffectaneventcan havebothinsideandoutsidetheproject.Therippleeffectcanbefeltbothupstreamand downstreamfromtheprojectandcanimpacttheteam,customersatisfaction,milestones, deliverydates,andsoon. Duringtheplanningprocess,youmustunderstandthatrisksareeitherknownor unknown.Risksthatareknownarethoseyoucanidentifyfrompreviousprojectsor fromcommonsense.Birdstrikes,forexample,areaknownriskfortheairlines.Theydo happen,andfrequently.Therefore,airlinesplanforthisriskandtrainhowtorecoverwhen itoccurs. IntheUnitedStates,the“GreatFloodof1993”causedanumberofleviestofail inLouisiana.Thiswasaknownrisk.AgencieshadperformedMonteCarlocomputer simulations(explainedinmoredetaillaterinthischapter)andhundredsof“what-if” scenarios,buttheplannersdeterminedthatitwouldtakea“perfectstorm”(multiple eventswithhighintensity)forsuchaneventtohappen.Well,ithappened.Thefollowing isfrom“TheGreatUSAFloodof1993”byLeeW.Larson: “Themagnitudeandseverityofthisfloodeventwassimplyover-whelming, anditranksasoneofthegreatestnaturaldisastersevertohittheUnited States.Approximately600riverforecastpointsintheMidwesternUnited Stateswereabovefloodstageatthesametime.Nearly150majorriversand tributarieswereaffected.[…] “Tensofthousandsofpeoplewereevacuated,somenevertoreturntotheir homes.Atleast10,000homesweretotallydestroyed.”[4] Therewillalwaysberisksthatcatchusbysurprise.Theyareconsideredtobeunknown risksandareusuallyeventsthathaven’thappenedbeforeorwerenotevenconsidered duringtheplanningprocess.Becauseriskhappens,weshouldplanforboththeknown andunknownrisks.Thisinvolvesgoingintotheplanningprocess(brainstormingsession) open-mindedandthinkofthingsthatcangowrong,bothinsideandoutsidethebox. Unknownriskscannotbemanagedproactively,whichmeanstheprojectteamshould createacontingencyplan—anestimatedbudgetamount(oftenreferredtoas“management reserves”)thatisusuallyheldoutsidetheprojectbudgetatthemanagementorgovernment level.AnexampleistheFederalEmergencyManagementAgency(FEMA)emergencyfunds.
Chapter11: ProjectRiskManagement
Plan Risk Management Data Flow Whenplanningforriskandhowtomanageitonyourproject,itisbesttostartwith adocumentedriskmanagementplan.Theplanshouldincludetheinteractionand dependenciesacrossthevariousknowledgeareas,people,departments,andorganizationsto ensureaclearpictureofhowyouplantoidentify,analyze,andmanageriskonyourproject. TogetabetterlookatthewaydatashouldflowandthevariousinputsintothePlan RiskManagementprocess,seeFigure11-1(notethattheboxnumberstietothePMBOK).
Plan Risk Management Inputs, Tools and Techniques, and Outputs YouhavealargenumberofinputstoconsiderduringthePlanRiskManagementprocess, butonlyonetoolandtechniqueandasingleoutput.Youmayrecallthatinputstoa processareusuallytheoutputsfromthepreviousprocess,soacommonthreadexists betweenprocesses.Thisshouldhelpyouwhenitcomestimetostudyfortheexam.
Inputs Asimportantasinputsareforanyprocesstobesuccessful,inputstorisk managementareessential.Notethatinthecaseofriskmanagement,thereareinputstothe overallprocessaswellastoeachinternalprocess.Forexample,historicalinformationand
Project Risk Management 5.2 Define Scope (Scope statement)
11.1 Plan Risk Management
6.0 Project Time Management (Schedule plan)
*Risk management plan
7.0 Project Cost Management (Cost plan) 10.2 Plan Communications (Communications plan) Enterprise/ Organization (Assets/Factors)
Figure11-1
11.2 Identify Risks
11.4 Perform Quantitative Risk Analysis
11.3 Perform Qualitative Risk Analysis
11.5 Plan Risk Responses
4.2 Develop Project Management Plan
Plan Risk Management data flow (*output is the risk management plan)
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PMPCertification:ABeginner’sGuide lessonslearnedfrompreviousprojectsareneededinputstotheoverallriskmanagement process.Theyshouldbereviewedpriortobeginningthespecificprojectplanningprocess. Rememberthatinputsshouldanswerthefollowingquestion:“Whatinformation, data,andresourcesdoIneedbeforeIcanbeginthisproject(orprocess)?”Allcurrentand previousplansfortheprojectshouldbeconsideredwhenplanningforriskmanagement. Here’sthelistofinputsforthisprocess: ●
Scopestatement
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Costmanagementplan
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Schedulemanagementplan
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Communicationsplan
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Enterpriseenvironmentalfactors,includingattitudetowardrisk,tolerances,andthe degreeofrisk(thresholds)theteamororganizationcanaccept
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Organizationprocessassets(riskcategoriesspecifictotheproject,commondefinitions, templates,standards,concepts,andterms(potentialpenalties)ofthecontract)
ToolsandTechniques Theonlytoolandtechniqueforthisprocessisplanning meetingsandanalysis.Thisincludesdeterminingthefrequencyandformatofmeetings andwhentheyshouldoccur.Theteamcomestogethertoshareideasaboutwhatcould gowrongontheproject,theprobabilityofriskhappening,andthepotentialimpactifor whentheriskoccurs(analysis). Outputs Asyoushouldrecalloutputsarethedeliverables(finishedproductsorresults) oftheprocess.Outputsinallcasesshouldanswerthequestion,“Whatshouldwehave whentheprocessiscomplete?”Theonlyoutputforthisprocessistheriskmanagement planitself,whichincludesanumberofcomponents.Herearejustafew: ●
Methodology Definestheapproachyourteamplanstotakeinmanagingrisk, includingriskscoring,trackingtools,andotherdatasourcesusedinperformingrisk managementonyourproject.
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Rolesandresponsibilities Defineswhothekeyteammembersareforrisk identificationandanalysisaswellasriskownersforeachidentifiedriskintheplan.
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Budget Theapprovedcostmanagementplanandbaseline,riskcontingency reserves,andsoon.
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Timing Describeswhenandhowoftenriskreviewmeetingsandsuchshouldoccur.
Chapter11: ProjectRiskManagement ●
Riskcategories Thiscanbeasimpleordetailedlistofrisksbycategorythatyou andyourteamselecttodocumentandtrackrisks.Agreatwaytodothisisbyusinga RiskBreakdownStructure(RBS)toshowrisksbycategoryorsource.AsampleRBS isshowninFigure11-2.
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Riskanalysis Thiscanbebycategoryandhigh-levelatfirstoritcanbedetailedby workpackage;ineithercaseit’sdesignedtoshowtherisk,probability,andimpact. Amatrixusuallyworksbest,andyoucanuseanumberingsystem(1–10)orrating system(high,medium,low)toshowthelevelofriskinaparticularareainthematrix. (AsamplematrixisshownlaterinthischapterinTable11-2.)
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Revisedstakeholdertolerances Asyouworkthroughthisprocess,youlearnmore aboutthestakeholdertolerances,soyoumayneedtorevisetheplanaccordingly.
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Reportingformats Howtheoutcomesoftheprocesswillbecapturedand documentedforuseintheanalysisandultimatelycommunicationoftherisk managementplan.
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Tracking Howtheriskactivitieswillbetrackedandrecorded.Thisalsoshowshow theresultswillbeusedforfutureprojects(lessonslearned,record-retentionmedia, location,durationtostoredata,andhowdataisretrieved).
Project Risks
Project Management
Figure11-2
Internal
External
Technical
Initiating
Organizational
Vendors
Planning
Planning
Cultural
Customer
Requirements
Executing
Policies
Regulatory
Reliability
Monitoring & Controlling
Resources
Government
Quality
Closing
Funding
Market place
Performance
Sample Risk Breakdown Structure Categories
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PMPCertification:ABeginner’sGuide Somegreattemplatesareavailabletoassistyouincreatingyourriskmanagement plan.SeeFigure11-4attheendofthischapterforasampletemplatefromCVR/IT ConsultingLLC.
2. Identify Risks Process Inthisprocesstheworkoftheteam(allstakeholders)comestogether;theyshouldplan toputtheirheadstogetherandbrainstormaboutwhatcangowrongandwhichrisks mayaffecttheproject.Thissession(notameeting)shouldbeplannedwell,facilitatedif possiblebysomeonewhocanhelpcapturethemanypotentialrisksthatareidentified. Youshouldallowanadequateamountoftime;sometimesthesesessionsgoforhours. Also,asmentionedbefore,thisprocessshouldbeginearly(attheonsetoftheprojectlife cycle)andshouldbemonitoredthroughouttheentireproject. ThereasonIsaytheriskidentificationprocesssessionshouldbefacilitatedisbecause groundrulesmustbeclear(nosuchthingasabadideaorinput,everyonehasavoice, andsoon).Theintentistothinkoutsidetheboxtocollectallpossiblerisksbuttonot evaluateanyofthematthispoint.Thisprocessshouldbeiterative,meaningthereshould besynergywhereoneidealeadstoanother.Don’tworryabouttheprioritizationoroverall chanceorimpactoftherisks;thiswillallcomeoutduringtheanalysisprocess.Analysis (bothqualitativeandquantitative)willseparateoutthoserisksthatarehighpriority, mediumpriority,andlowpriority(basedonprobabilityandimpact).Therefore,you shouldcollectalonglisttobeginwithandnarrowitdownfromthere.
TIP If you see a question on the PMP exam that asks who should be involved in the Identify Risks process, the answer should be all stakeholders, including the customer, sponsor, project team, and so on.
How Do We Identify Risk? Theoperativewordis“we”inthisquestion.Andtheansweristousewhatevertoolsand techniquesyouandtheteamcancomeupwiththathelptoidentifyrisksonyourproject. ThebestwayIhavefoundtoidentifyriskisthroughthefacilitatedbrainstorming sessionmentionedpreviously,butIespeciallyliketheinterviewprocessaswell.There aretimeswhenpeoplearenotopenandcandidinaworkgroupsession;therefore,oneon-oneinterviewstendtoworkreallywellinthissituation.Ifpossible,conductthe interviewinaquiet,uninterruptedlocationandtaketimetoputthepersonatease.When peoplefeelcomfortableandina“no-penalty”environment,theyaremorelikelytoopen
Chapter11: ProjectRiskManagement upwithexistingissues,concerns,andproblemsthatyouneedtobeawareofduringthe riskidentificationprocess.Ihavefoundthataquietlunchoroff-sitemeetingataneutral locationwillhelpthepersonfeelmoreateaseandwillingtoshareanyperceivedand potentialrisks. Anotherwaytoidentifyriskistodoyourhomeworkbyreviewingallproject-related documentation.Thefirstthingyoushoulddowhenassignedtoaneworexistingproject istoreviewallthedocumentationavailable(includingthedocumentationforsimilar previousprojects).KeepinmindthatPMIisbigonlessonslearned(andsoamI).
Types of Risks AccordingtoPMI,risksfallintooneoftwoprimaryclassifications: ●
Businessrisks Theseareusuallyrisksthatresultinagainorlosstothebusiness.
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Pure(insurable)risks Theserisksonlyapplytoaloss(theft,fire,personalinjury, andsoon).
Therearetimeswhenriskshavearippleeffect;theyricochetaroundandhavea residualimpactontheproject.Theprojectteamshouldbeawareofthesetypesofrisks andplanaccordingly.Herearesomeexamples: ●
Residualrisks Risksthatremainevenaftertheoriginalriskhasbeenrespondedto (forexample,waterdamagethatcausesmildeworrust).
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Secondaryrisks Risksthathavesideeffectsorcauseotherriskstooccur(for example,theriskofelectricalshockduetoaleakyroof).
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Riskinteraction Risksthatdon’tplaywelltogether.Forexample,theinteractionof twochemicalstocleanastoragetankcancausetoxicfumes,evenresultingindeath. Nowthereisariskeventyoudon’twanttohavetodealwith.
Identify Risks Inputs, Tools and Techniques, and Outputs Likethepreviousriskmanagementprocess,thisonehasmanyinputs(11accordingto PMI).Also,therearemany(PMIshowsseven)toolsandtechniquesthatcanbeusedto helpyouandtheprojectteamidentifyrisk,butstilljustasingleoutput(inthiscase,the riskregister). Togetabetterideaofalltheareasthatmaycauseriskonaproject,lookbackatthe riskmanagementdataflowdiagramshowninFigure11-1.
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PMPCertification:ABeginner’sGuide Inputs Remember,whenitcomestoriskidentification,youshouldlookallaroundfor anythingthatmayjumpupandimpact(hurtorhelp)theproject.Here’sasamplelistof inputsthatshouldbeconsidered,ataminimum: ●
Riskmanagementplan Thisincludesallthekeyareasoftheplan,suchasscope, schedule,communicationsplans,andsoon.
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Activitycostestimates Remember,costisoneofthekeycomponentsofthe projectconstraintsandisoftenamajorriskonprojects(forexample,budgetcuts, overspending,andrisingcostofmaterials).
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Activitydurationestimating Thisisanotherbigriskonaproject.Thingsseemto takelongerthanexpected.Forexample,theSydneyOperaHouserannineyearsover theapprovedschedule.
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Scopebaseline Theassumptionsfoundinthescopestatementthatareapprovedas thebaseline(includingtheWBS)aregreatsourcesofinputtohelpidentifyrisk.
TIP The best time to start the risk identification process is during the creation of the WBS (see Chapter 5). By doing these activities together, you may be able to combine two processes into one at the very start of the project. ●
Stakeholderregister Informationaboutthestakeholders,theirrisktolerancesand thresholds,theirexpectations,theirlevelofsupport,andeventheirattitudetowardthe projectcanhelpyouidentifystakeholderrisks.
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Costmanagementplan Understandingtheoverallbudgetandlevelofpriority theprojecthasattheuppermanagementlevelwillhelpyouidentifyrisksinthis area.Lookforindicatorssuchasdelaysinorderprocessinganddelayedaccounts payable,whichcanmeannomanagementapprovalorfinancialissuesmayexistinthe companyordepartment.
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Schedulemanagementplan Anothergreatplacetolookforpotentialrisks.Remember thatthescheduleisakeycomponentoftheprojectconstraintsandisoftenthehighest sourceofconflictontheproject.
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Qualitymanagementplan Qualityrequirementsposethreats.Therefore,thisisa greatplacetolookforpotentialrisksonyourproject.
Chapter11: ProjectRiskManagement ToolsandTechniques Hereareafewofthetoolsandtechniquesusedorplacestolook intheIdentifyRisksprocess: ●
Checklistanalysis Usinghistoricalinformation,thechecklistprovidesasimpleway tocapturetherisksforreviewandanalysistomakesuretherisksareidentified.
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Assumptionsanalysis Theassumptionsshouldbedocumentedandreviewedtosee iftheyarevalid.Theyareusedforthepurposeofidentifyingfuturerisks.
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Diagrammingtechniques Variousdiagramscanbeusedforriskidentification:cause andeffectdiagrams(alsoknownasIshikawaorfishbonediagrams),systemorprocess flowcharts(showinterrelationships),influencediagrams(graphicalrepresentationsof situationsortime-orderedeventsontheproject),andmindmapping.[5]
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Expertjudgment Directandeffectiveuseofsubjectmatterexpertsisoneofthe moreeffectivewaystoidentifyrisks.
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Informationgathering Youhaveamultitudeofwaystogatherinformationabout yourproject.Someofthesehavealreadybeendiscussed,butforclarificationIlista fewofthemhere: ●
Brainstorming Oneideapromptsanother(synergy).
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Interviewing Alsomaybecalled“expertinterviewing”ontheexam.
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Delphitechnique Thistechniqueprovidesawaytoreachaconsensusofexperts. Expertsparticipateanonymouslythroughtheuseofaquestionnaireorsurvey. Afacilitatorconductsaniterativeprocesstonarrowthefieldofpossibilitiesuntila consensusisdrawnbasedontheresultsfromtheparticipatingexperts.
TIP You should remember the Delphi technique if you are planning to take the PMP exam. ●
Rootcauseanalysis(RCA) Theuseoftoolstodrilldowntothecoreofthe problem.
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Strengths,weaknesses,opportunities,andthreats(SWOT)analysis Looksat theoverallprojecttodeterminewherethestrengthsandthepossibleweaknesses mayexistaswellastheopportunitiesandthreats.
NOTE SWOT analysis examines the project itself as well as the project management processes, various plans, resources, and organizational structure to help identify future risks.
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Ask the Expert Q: Whataretheadvantagesofcreatingariskregister? A: Theadvantagesprovidedbycreatingariskregisterstartwiththeabilitytoorganizethe
identifiedrisksinafashionthatwillassistintheanalysisofthoserisks.Theriskregister shoulddocumenttheidentifiedrisks,thecategory(scope,quality,schedule,staffing,and soon),risktriggers(ifknown),andresponsestrategiesaswellastheassignedowner,who willmonitorandrespondtotherisk.Theriskregisterisalsoagreatwaytodemonstrate yourprojectmanagementcontroltostakeholders.
Outputs TheonlyoutputtotheIdentifyRisksprocessistheriskregister,whichisalist oftheidentifiedrisksandspecificinformationabouttherisks.Itisusuallycreatedinlist ortableformatandcontainsthefollowinginformation: ●
Listofidentifiedrisks Therisksshouldbedescribedinasmuchdetailasneeded andshouldincludetheevent,probability,impact,expectedcause,andpriority(tobe determinedduringtheanalysisprocesses).
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Listofpotentialresponses Theresponsesshouldbedeterminedbytheassigned owneroftheriskeventandresponsesshouldbefocusedonthehigh-priorityrisks foundduringtheriskidentificationandanalysisprocesses.
3. Perform Qualitative Risk Analysis Process Performingqualitativeriskanalysisinvolvesassessingtheprobabilityandimpactof theidentifiedrisks.Remembertoalwaysusetheworkperformedinpreviousprocesses tohelpdevelopeachdownstreamprocess.(PMIcallsthis“progressiveelaboration.” Rememberthisterm.)
TIP Remember that qualitative analysis is subjective analysis, which depends on judgment to determine or qualify the probability and impact to your project. You should also know that PMI (as does the real world) refers to the terms “probability” and “impact” in a number of different ways (refer to Table 11-3, later in this chapter).
ThePerformQualitativeRiskAnalysisprocessinvolvesanunderstandingofthe stakeholdertolerancesandthresholdsdiscussedearlier.Aswithallriskmanagement
Chapter11: ProjectRiskManagement processes,thisanalysisshouldbeperformedearlyandoftenthroughouttheproject lifecycle. Probabilityandimpactcanbedeterminedinmanydifferentways: ●
Expertjudgment(usingpeoplewhoaresubjectmatterexpertsandareexperienced withtherisk)
●
CostandtimeestimatesaswellastoolssuchasMonteCarloanalysis(computer simulation)
●
Useofprevioussimilarprojectrisks(historicalinformationorlessonslearned)
●
Delphitechnique(mentionedearlierinthediscussionoftheIdentifyRisksprocess)
Probability and Impact Matrix Todeterminetheprobabilityandimpacttotheprojectofthevariousrisks,itishelpful touseamatrix(seeTable11-2).Thematrixprovidesagoodwaytorate,sort,andrank (inorderofpriority)therisksthathavebeenidentified.Thegoalistodeterminewhich riskswillhavethebiggestimpactontheprojectandshouldhaveanownerassignedand responsestrategycreated.Table11-2isanexampleofariskprobabilityandimpactmatrix. Beawarethatriskprobabilityandimpactcanbereferredtousingdifferentterms(see Table11-3)andyouarelikelytoseethesetermsonthePMIexam. Risk
Probability
Impact
Priority
Owner
Staff availability
High
High
1
PM
Scheduling issues
High
High
2
PM and team
Obtain budget
Med
High
3
Financial analyst
Procure equipment
Med
Med
4
Asset manager
Create training materials
Low
Low
5
Course developer
Table11-2
Risk Probability and Impact Matrix
Probability
Impact
Likelihood
Consequence
Chance
Effort
Possibility
Outcome
Odds
Results
Table11-3
Other Terms Used for Probability and Impact
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Perform Qualitative Risk Analysis Inputs, Tools and Techniques, and Outputs Theinputs,toolsandtechniques,andoutputsforthisprocessarelistednext.
Inputs Here’salistofsomeoftheinputsthatshouldbeconsideredwhenperforming qualitativeriskanalysis: ●
Riskregister Outputfromthepreviousprocess
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Riskmanagementplan Includingotherprojectplans
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Projectscopestatement Fromtheriskperspective(forexample,newtechnology)
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Organizationalprocessassets Standardtemplates,commonterms,andsoon
ToolsandTechniques Hereareafewofthetoolsandtechniquesusedinthisprocess: ●
Riskprobabilityandimpactassessmentmatrix Discussedearlierinthe “ProbabilityandImpactMatrix”section.
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Riskdataqualityassessment Dataneedstobeaccurateandunbiasedforbest results.
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Riskcategorization Categorizedbysourceofrisk(usetheRBS)orother categories.
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Riskurgencyassessment Near-termresponsestrategyforhigherimpactrisks.
Outputs Theonlyoutputofthisprocessisupdatestotheriskregister,basedonany newinformationacquired.Theriskregistercanalsoincludecausesofrisk,near-termrisk responseactivities,trendinformationthatmaybeanindicatorortriggerforpotentialrisks, andany“watchlists”oflowerpriorityrisks.
4. Perform Quantitative Risk Analysis Process ThePerformQuantitativeRiskAnalysisprocessisthenumericalviewoftheeffectofthe (prioritized)riskevents.Youassignanumericalratingtoonlythehighestimpactrisks (sometimesreferredtoasthe“amount-at-stakerisks”). Thepurposeofanumericalratingistodeterminewhichriskswarrantaresponse. Thelistofrisksshouldgetshorterandshorteraftereachwaveofanalysis.Clearly,you don’thaveenoughtimeormoneytorespondtoalltherisksidentified.Thequalitativeand quantitativeanalysishelpsnarrowthefieldtoamanageablenumberbasedonpriority.
Chapter11: ProjectRiskManagement Thisprocesspresentsaquantitative(lesssubjective)approachtomakingdecisionsin thepresenceofuncertainty.
Quantitative Risk Analysis Dependingonthenatureorlackofcomplexityoftheproject,youmaynotfocusonthis processasaseparateactivity.Itmaybeconsolidatedwiththequalitativeanalysis(orat leastduringthefirstwaveoftheprocess). Quantitativeanalysisincludesthefollowing: ●
Additionalinvestigationofrisksthatareratedhighforprobabilityand/orimpact
●
Furtherdefinitionofthetype,source,orcategoryofrisk
●
Determiningthetypeofquantitativeanalysistobeused—thetypeofprobability distribution(normal,triangular,beta,andsoon),statisticaldata,howthedatais collected,howthedataistested,andsoon.
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Sensitivityanalysis—determiningwhichriskshavethebiggestimpact(amountatstake)
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Expectedmonetaryvalue(EMV)ortheresultsofMonteCarlosimulations(orother computersimulations)todeterminethepossiblecost/impacttotheproject.
Expected Monetary Value (EMV) Oneofthebigquestionsthatalwayscomesupwhenattemptingtomanageriskis,“What’s itgoingtocost?”Oneestimatethatcanbeusedtodeterminethisisexpectedmonetary value(EMV).Theformulaissimple:EMV=P*I(probabilitytimesimpact).EMVshould beestimatedforeachworkpackageontheWBS(seeTable11-4foranexample).
WorkPackage
Probability
Impact
ExpectedMonetary Value(EMV)
A (Zamboni failure)
20%
$10,000
$2,000
B (inaccurate painting of the sub-floor for ice hockey)
30%
$28,000
$8,400
C (failure of the cooling system to freeze the ice)
50%
$12,000
$6,000
Table11-4
EMV Calculations
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Monte Carlo Analysis MonteCarloanalysisisacomputersimulationusedtodeterminepossibleoutcomesby usingrandomnumbers.Manyinsuranceandfinancialinstitutionsusethissoftwareto runactuarialtablesand“what-if”scenariosforthecostofpremiums,retirement,and investmentforecasts. TheBoeing777wastestedextensivelyusingMonteCarlosimulationsoftwarefor everythingfromwingstrengthtoflightcapabilityafterabirdstriketotheengines. Forinformationonly(asthesestepsarebuiltintothesoftwareapplication),hereare thebasicstepsinvolvedintheMonteCarlosimulator:
1.Assesstherangeforthevariablesanddeterminetheprobabilitydistribution.
2.Selectarandomvalueforeachvariable.
3.Runadeterministicanalysis.
4.Repeatsteps2and3manytimestoobtainprobabilitydistribution.
TIP You should know the following regarding Monte Carlo analysis for the PMI exam: ●
Computer-based software used to quantify the overall risk to the project
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Evaluates the overall risk for the project shown in a probability distribution
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Can provide probability estimates for the project to complete on time or on budget
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Provides the probability of any activity being on the critical path
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Takes into account path convergence
●
Translates uncertainties into impact probability on the total project
Perform Quantitative Risk Analysis Inputs, Tools and Techniques, and Outputs Theinputs,toolsandtechniques,andoutputsforthePerformQuantitativeRiskAnalysis processareasfollows.
Inputs Here’salistofsomeoftheinputsthatshouldbeconsideredwhenperforming quantitativeriskanalysis: ●
Riskregister
●
Riskmanagementplan
●
Costmanagementplan
●
Schedulemanagementplan
●
Organizationalprocessasset(riskdatabases,studiesonsimilarrisks,andsoon)
Chapter11: ProjectRiskManagement ToolsandTechniques Hereareafewofthetoolsandtechniquesusedinthisprocess: ●
Datagatheringandrepresentativetechniques Interviewing,datamining, probabilitydistributions,andsoon
●
Quantitativeriskanalysisandmodelingtechniques Sensitivityanalysis,EMV, MonteCarloanalysis,andsoon
●
Expertjudgment Theuseofsubjectmatterexpertswhospecializeinquantitative analysis
Outputs TheonlyoutputtothePerformQuantitativeRiskAnalysisprocessisthe updatestotheriskregister(sameasPerformQualitativeRiskAnalysisprocess)based onanynewinformationacquired.Theupdatestotheriskregisterinthisprocessmight includestatisticaltrends,updatestotheprioritizationlist,andprobabilisticanalysis supportedwithfactsandfigures(forexample,theschedulecontingencyshowstheproject isinthe78thpercentileandisexpectedtocompleteontime).
Decision Tree Analysis DecisiontreesareprimarilyusedtoassistthePMandteaminmakinginformed decisionsabouttherisksandthealternativesbeingconsideredontheproject(see exampleinFigure11-3).AirlineBhasalowerfarebutrateslowerinon-timearrival.
Factor to consider is on-time arrival Airline A (fare = $1,000)
Pass (on-time) 85% Fail (late) $10,000 lost sale
Travel Decision
Pass (on-time) 60% Airline B (fare = $500)
Figure11-3
Fail (late) $10,000 lost sale
Airline A
(.15 x $10,000 = $1,500) + (.85 x $0.0 = $0.0) + $1,000 = $2,500
Airline B
(.40 x $10,000 = $4,000) + (.60 x $0.0 = $0.0) + $500 = $4,500
Decision tree diagram
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PMPCertification:ABeginner’sGuide Adecisiontreetypicallyhasthefollowingattributes: ●
Amodelofarealsituation
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Takesintoaccountfutureeventstohelpyoumakeadecisiontoday
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Canbeusedtohelpcalculatetheexpectedmonetaryvalue(probabilitytimesimpact)
●
Involvesmutualexclusivity(wheretwoeventsareexclusive)
5. Plan Risk Responses Process Planningriskresponsesinvolvesdevelopingoptionsandactionstoreducetheimpact andprobabilityofthreatsandtoenhanceopportunities.Thisprocessanswers(orshould answer)thefollowingquestions: ●
Whatarewegoingtodoif/whenaparticularriskeventoccurs?
●
Whatcanwedotodecreasetheprobabilityand/orimpactoftheeventoccurring?
●
Whatcanwedotoincreasetheopportunityshouldtheeventoccur?
Thisprocessisalsowheretheriskowner(thepersonassignedtherisk)willdocument aresponsestrategyandactionfortheriskeventshoulditoccur.
Risk Response Strategies Sometimescalled“riskmitigationstrategies.”Regardlessofthename,thegoalisclear: Keepthingsfrombreakingandfixthemquicklysotheydon’tbreakagaininthefuture. Ifsomethingbreaks,thequestionbecomes“Howcanwemakeitbetter?” Riskresponsestrategiesaredifferentforthreatsandopportunities(seeTable11-5).
ResponseStrategiesforThreats
ResponseStrategiesforOpportunities
Avoidance (do what you can to eliminate the threat)
Exploit (reverse of avoidance—take advantage of the risk should it occur)
Mitigation (reduce probability or impact)
Enhance (increase likelihood)
Transfer (deflect or allocate; for example, by purchasing insurance)
Share the risk (reverse of mitigation by writing joint responsibility in the contract or agreement)
Accept the risk (do nothing)
Accept the risk (do nothing)
Table11-5
Risk Response Strategies
Chapter11: ProjectRiskManagement NOTE Transferring risk doesn’t mean transferring all the ownership and accountability. For example, outsourcing work to a vendor or third-party supplier doesn’t let you off the hook for schedule delays or poor workmanship. You are still responsible for the quality of the work. Also, remember that accepting risk may be appropriate for either threats or opportunities.
Riskresponsestrategiesvaryfromcasetocaseandshouldbeadaptedtotheproject situationtothebestofyourability.Say,forexample,youhavetwoteammembers whoarenotshowingupontimetomeetingsandarenotmeetingyourexpectationsfor performanceontheproject.Inonecase(Joan),itappearsherperformanceisaffectedby alackofexperienceandtraining.Intheothercase(Joey),itappearsheisnotinterested inworkingontheproject.Theresponsestrategyyouchoosewilllikelybedifferentfor each.YoumaydecidetoreleaseJoeyfromtheprojectandprovideadditionaltrainingand mentoringforJoan.Formoreexamplesofriskresponsestrategies,seeTable11-6.
Plan Risk Responses Inputs, Tools and Techniques, and Outputs Theinputs,toolsandtechniques,andoutputsforthePlanRiskResponsesprocessareas follows.
Inputs Here’sasummaryoftheinputsthatshouldbeconsideredforthisprocess: ●
Riskregister(outputfrompreviousprocess)
●
Riskmanagementplan(includingotherprojectplans)
DescriptionofRiskEvent
ResponseStrategy
Remove a poor performer from the project team
Avoid
Train a team member to improve their performance
Mitigate
Seek additional funding to cover increased cost of materials
Accept
Adjust the schedule to allow the use of more experienced person
Exploit
Hire a vendor/subcontractor to perform some of the work
Transfer
Order equipment early to take advantage of better pricing
Enhance
Work with the customer to ensure requirements are clear and dependencies are met
Share
Table11-6
Sample Risk Response Strategies
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PMPCertification:ABeginner’sGuide ToolsandTechniques Hereareafewofthetoolsandtechniquesusedinthisprocess: ●
Strategyfordealingwithnegativerisksandthreats.
●
Strategyfordealingwithpositiverisksandopportunities.
●
Contingentresponsestrategies(designedforcertaineventsthatwillbeinitiatedonlyif aspecificeventoccurs).Forexample,thelossofahighlyskilledexpertmayrequirea uniqueresponsetoobtainaspecific-skilledresourcereplacement.
Outputs Theoutputshownbelowisuniqueforthisprocess.Theotherthreeoutputs (riskregisterupdates,PMplanupdates,andprojectdocumentupdates)aresimilarto outputsfromotherprocesses,soIwillonlydiscusstherisk-relatedcontractdecisions outputhere. ●
Risk-relatedcontractdecisions Theinformationcollectedfrominputs,andtools andtechniquesforthePlanRiskResponsesprocesswillinfluencethetypeofcontract selected,theextentofsharedrisk,amountofinsuranceneeded,orotherkeydecisions.
NOTE The output from this process (contract decisions made) becomes the input to the Plan Procurements (Section 12.1) process and potentially other processes as well.
Regardlessofwhetheryouarerespondingtothreatsoropportunities,therearesome guidelinesthatshouldalwaysbefollowed: ●
Reponsesshouldbetimelyandwellcommunicated.
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Responsesmustbeappropriatetothesignificanceoftherisk.
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Responsesshouldbecosteffective(ifpossible).
●
Responsesmustberealisticinnature.
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Responsecanaddressmultipleriskswithasinglerootcause.
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Responsesshouldinvolvetheteamandotherstakeholders
6. Monitor and Control Risks Process Aftertheriskshavebeenidentifiedandanalyzed,theownersassigned,andtheresponse strategiesdocumentedandcommunicated,it’stimetomonitorandcontroltherisks.This isanon-goingprocessandneedstobereviewedandupdatedfrequently.Irecommenda
Chapter11: ProjectRiskManagement weeklyreview,butwhatyouchoosedependsonyourproject’slength,complexity,and condition(troubled,stable,critical,andsoon). TheMonitorandControlRisksprocessinvolvesimplementingtheapprovedrisk responseplan,trackingthoserisksthathavebeendeemedhighpriority,watchingoutfor allrisks(evenlowerprobabilitythreatsinsomecases),monitoringresidualandsecondary risks(rippleeffect),andwatchingfornewrisksthatmaysurface.Toeffectivelycontrol risks,youmustbediligentinmonitoringallrisks,eventhoughthemajorityofthefocusis onthoserisksidentifiedasmostlikelytooccurorwithhighimpacttotheproject. Severaltoolsandtechniquesareavailableformonitoringandcontrollingrisks,suchas trendanalysistolookintothefutureforchangesinriskprobabilityandimpact.Hereare someofthequestionsthatneedtobeasked,answered,andreviewedoften: ●
Aretheassumptionsforaparticularriskeventstillvalid?
●
Hasanythingchangedontheproject,suchasscope,schedule,cost,staffing, expectations,typeofmaterials,andrequirements?
●
Aretheriskpoliciesandproceduresdocumentedanduptodate?
●
Istheriskmanagementplanbeingfollowedandreviewedregularly?
●
Arecontingencyreservesstillappropriateandsufficientifneeded?
NOTE The Monitor and Control Risks process requires all team members to keep a close eye on their area of the project. It is important to use good management skills to weigh the situation and make decisions about all risk events in a timely manner. The alternatives and options (risk response strategies) have to be clear and must be implemented as needed to meet the challenge of risk management on your project.
Risk Assessment (Reassessment) and Audits Thereisasayingthathasfloatedaroundintheworldofprojectmanagementthatgoes likethis:Itisnotamatterofifyourprojectwillbeaudited,butwhen.Thismeansthatat sometimeinyourPMcareer,youwillbeaudited.Riskauditsarespecificallydirected towardhowyouandtheteamaremanaging(ormanaged)risk.Theauditorswillwantto seeyourriskregister;theywillwanttoseehowyouidentifiedandanalyzedrisks.Did youassignownerstothetoprisks?Didyoucollectdocumentedriskresponsestrategies forthetoprisksfromtheassignedowners?
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Ask the Expert Q: HowdoesthePMandteamensuretheyarepreparedforanaudit? A: Throughriskassessment,reassessment,andauditpreparedness.Itisimportanttostay
focusedonriskbykeepingyourriskregisterloguptodateandmakingsureyouare effectivelytrackingandmanagingprojectrisk(bothinternalandexternaltotheprojectas appropriate). Thisalsorequiresthatyouandtheteamget(andstay)uptodateonallregulatory compliancerequirementsthatmayapplytoyourproject.Thekeyistodoyourhomework, researchthoseareasthatapplytoyourproject/industry,andfindsomeonetoassistinthis process.Youdonotwanttofailanaudit.
Regulatory Authority and Agencies Regulatoryauthorityisagovernmentorpublicauthorityresponsibleforexercising autonomouspoweroversomeareaofhumanactivityinasupervisoryorgoverning capacity.Anindependentregulatoryagencyisusuallyseparatefromotherbranchesof thegovernment. Regulatoryagenciesdealintheadministrativelawenforcement,regulationor rulemaking(suchascodeenforcementoverbuildingcodes),andauditandregulatory compliancesupervision.Theyprovideoversightorgovernanceforthebenefitofthe publicatlarge. Thefollowingisashortlistofregulatoryagenciesthataresometimesinvolvedwith auditingprojectsintheirareasofresponsibility.FormoredetailsgototheCodeofFederal Regulations(CFR)website[6]orperformanInternetsearchon“regulatoryagencies.” ●
TheCodeofFederalRegulations(CFR)isacompilationofregulationsissuedby federaldepartmentsandincludesthefollowing: ●
TheFederalCommunicationsCommission(FCC)istheU.S.governmentagency thatregulatesandenforcestheuseofradiotransmissionfrequencies(Title47CFR).
●
Title21istheDepartmentofHealthandHumanServices(DHHS)regulations.
●
Title29istheDepartmentofLaborregulations.
●
TheCanadianStandardsAssociation(CSA)isaprivatecompanythatdrafts standardsforuseincertifyingproductsafety.
Chapter11: ProjectRiskManagement ●
TheSecurityandExchangeCommission(SEC)overseesstocktransactionsand protectsinvestors;maintainsfair,orderly,andefficientmarkets;andfacilitatescapital formation.
●
TheOfficeoftheComptrolleroftheCurrency(OCC)providesadvicetohelpprevent borrowersfrombecomingvictimsofforeclosurerescuescams.
●
TheU.S.FoodandDrugAdministration(FDA)protectsandpromoteshealthandsafety.
●
TheSarbanes-Oxley(SOX)Actof2002affectshowanyaccountingfirmdoesbusiness. AuditorsandaccountantspaycloseattentiontotheSOXActwhenadvisinganybusiness, largeorsmall,onfinancialtrackingandreporting.
●
TheInterstateCommerceCommissionfacilitatesthetransportationofproductsand servicesfromonestatetogeographicpointsinotherstates.
●
TheOccupationalSafetyandHealthAdministration(OSHA)oftheUnitedStates DepartmentofLaborfacilitatesworkplacesafetyandhealthbyissuingandenforcing standardstopreventwork-relatedinjuries,illnesses,anddeaths.
TIP The code of regulations and list of regulatory agencies is for reference only and will not likely be on the PMI exam.
Reserve Analysis Partofriskmanagementisanalyzingthereservesneededtorespondtoormitigaterisk. Wetalkedaboutreservesincostmanagement(Chapter7).Asareminder,therearetwo typesofreserves: ●
Contingencyreserves Usedforknown(possible)risks.Estimatedfundsare typicallyheldinsidetheprojectbudget.Theresponsestrategyandestimatedcost shouldbeclearlydocumented,monitored,andcontrolled.
●
Managementreserves Forunknown(unplanned)risks.Estimatedfundsare typicallyheldoutsidetheprojectbudgetandcannormallyonlybeaccessedwith managementapproval.
Case Study Example MattandJakeareseasonedchangeoverprojectmanagersfortheBudweiserEventsCenter (BEC),andeventhoughtheEventSheetclearlydirectstheworkoftheproject,thereare timeswhentheyareforcedtomakedecisions“onthefly”inordertogetthejobcompleted inthemostefficientwaypossible.
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PMPCertification:ABeginner’sGuide Forexample,duringthechangeoverfromindoorfootballtoicehockey,oneofthe twoforkliftsbreaksdown.Itisakeypieceofequipmentinvolvedinremovingtheindoor footballfieldandpads,removingtheinsulatedflooring,andhaulinginheavyloadssuch ashockeyglass,dasherboards,andsoon.Itismidnight,sogettingtheforkliftrepaired intimetocompletethechangeoverisoutofthequestion.Everyminutethatthecrewis standingaroundwaitingonthenextstepinthechangeoverprocessiscostingtimeand money.Thecompleteicehockeysetupmustbefinishedby6A.M.togivethetechnicians enoughtimetopreptheiceforpracticethatday. Thisisoneofthosetimeswhenitisimportanttohaveacontingency(fallback)plan withbackupoptionsavailable.Inthisinstance,althoughtheoptionsseemlimited,the PMshaveplannedwell;theyhaveestablishedacoupleresponsestrategyoptionstoensure thattheprojectgetscompletedontime.Theoptionsareasfollows: ●
OptionA Lineuparentalcompanythatcanprovidetheneededequipmentatany time,dayornight,andtomakesuretheestimatedcostoftherentalisheldinthe contingencyreservefund.
●
OptionB Usetemporarylabortoprovidelate-nightassistancetohelpcompletethe changeoverintime(again,usingcontingencyreservefunds).
MattandJakedecidedtouseOptionAtocompletethechangeoverontime.Theirrisk management,solidprojectmanagement,andcontingencyplanningsavedtheday.
Monitor and Control Risks Inputs, Tools and Techniques, and Outputs Theinputs,toolsandtechniques,andoutputsfortheMonitorandControlRisksprocess areasfollows.
Inputs SomeoftheinputsfortheMonitorandControlRisksprocessarethesameas previousprocesses(riskregisterandprojectmanagementplan)andtheoutputsfrom thePlanRiskResponsesprocess.Thetwouniqueinputsforthisprocessthatshouldbe consideredare ●
Workperformanceinformation Deliverablestatus,scheduleprogress,andcosts
●
Performancereports Lookfortrends,forecastingdataaccuracy,andsoon
ToolsandTechniques Thetoolsandtechniquesusedinthisprocessareuniqueandare asfollows: ●
Riskreassessment Involveslookingforsecondaryornewrisks.
●
Riskaudits Revieweffectivenessofriskresponses,actiontaken,andsoon.
Chapter11: ProjectRiskManagement ●
Varianceandtrendanalysis Statisticaldatathathelpsanswerthequestions:Were theexpectedresultsachieved?Wheredowegofromhere?
●
Technicalperformancemeasurement Requiresobjectivequantifiablemeasurements.
●
Reserveanalysis Comparetheplantotheactualuseofreservesandfutureneeds.
●
Statusmeetings Regularstatusreviewsareusedtoensureproperfocusand action.
Outputs Theoutputstothisprocessareasfollows: ●
Riskregisterupdates Fromreassessments,riskaudits,andreviews.
●
Organizationalprocessassetsupdates Informationfromthesixriskmanagement processeswillproduceinformationthatcanbeusedforcurrentandfutureprojects.
●
Changerequests Changeisinevitable.Asaresult,changerequestsmayneedtobe initiatedtoputtheprojectbackontrack(thisincludesrecommendedcorrectionand preventiveactions).
●
Projectmanagementplanupdates Progressiveelaborationyieldsnewinformation, newsituations,andnewrisks,whichalltendtodriveupdatestoyourprojectplan.
●
Projectdocumentupdates Therippleeffectrequiresupdatestovariousproject documentsastheprojectprogresses.
Reporting Status—Early and Often Nothingismoreembarrassingthanthecustomerknowingsomethingbeforeyoudowhen itcomestoyourproject.Youneedtobetheairtrafficcontroller,theconductorofyour project.Youneedtobethepersonreportingthestatusofariskevent,theexpectedimpact toyourproject,andtheactionplans(fallbackorback-outplans)youaretakingtoensure everythingisundercontrol.
TIP Timely and accurate reporting is essential to risk management. Information is power when it comes to managing a project. Making sure you collect meaningful, accurate, and timely information can mean the difference in whether or not you meet your project objectives on time and on budget. There isn’t a project manager alive who hasn’t wished they would have known more about a situation sooner than later. Our actions and reactions are totally dependent on timely and accurate reports (verbal or written) so we can make prompt informed decisions.
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Updates to Project Documents Forpeaceofmindandforauditpurposes,youneedtokeeptheprojectplandocuments uptodateandaccurate.IrecommendaWiki(electronic,easy-accessteamroom)ora similarcentralrepositorytoholdthemasterprojectcontrolbook(PCB).Nomatterwhat toolsortechniquesyouchoose,theymustbemanagedeffectively;otherwise,theywillget outdatedandmaycausemisinformationorconfusion,allofwhichiscounterproductiveon theproject.
Summary of Risk Management Riskhappens,soplanforit!Makesureyouhaveidentifiedandanalyzedtherisks.You alsoneedtohaveassignedriskownersandadocumentedaction(response)planforthe toprisks.Reportstatuspromptlyandwithconviction.Bediligentinlookingforfuture risks. Wouldn’titbegreatifalltherisksthatoccurredonyourprojectwereidentified, analyzed,assigned,andaddressedasplanned?Whenariskeventhappens,nothingis moresatisfyingthanbeingabletoreport,“Theriskwasidentifiedinourplan,theowner assignedtotheriskhasimplementedtheapprovedresponseaccordingtotheplan,and everythingisundercontrol.”Thebestmottoforriskmanagementis,“Bepreparedfor anything.”Noonelikessurprisesontheirproject. Rememberthedefinitionofriskis“uncertainty,”soeveniftheriskisaknownrisk,we don’talwaysknowiforwhenitwilloccur.Thefollowinglistrepresentssomecommon pitfallsanderrorsmadeintheareaofriskmanagement: ●
Notconductingathoroughriskidentificationprocesswithallstakeholders
●
Notassigningownerstohigh-profilerisks(andhavingabackupplan)
●
Notdocumentingtheriskresponsestrategyclearly
●
Notcommunicatingtheprobabilityorimpacttotheprojectinatimelymanner
●
Nothavingadequatereservestocoverriskswhentheyoccur
●
Notdoingriskassessmentearlyoroftenenough(andcompletely)
●
Missingcategoriesofrisks(suchasmarketimpact,culturalrisks,andcustomerrisks)
●
Conductingriskmanagementwithanunclearobjective,scope,ortargetschedule
Chapter11: ProjectRiskManagement ●
Notobtainingprojectsponsorcommitmenttotheprojectandtheriskplan
●
Notinvolvingtheteamandallstakeholdersintheriskmanagementprocess
●
Notmonitoringyourriskregisterregularly
Whenitcomestomanagingriskonyourproject,thebestapproachinvolvesthesame threetakeawaypointsmentionedinotherchapters:
1.Stayfocusedontheendresults(especiallyonriskmanagement).
2.Usethetoolsandresourcesavailableonyourprojecttoensureeffectiveriskmanagement,
suchasthesummarylevelsampleshowninFigure11-4attheendofthischapter.(Forthe latestandcompleteriskmanagementtemplatefromDrGaryEvansatCVR/ITConsulting LLC,gotohttp://www.cvr-it.com/Samples/XRisk_Management_Plan_Template.pdf.)[7]
3.Workasateam.Thisisespeciallytruewhenmanagingrisks.
References
1.Stanley,Liana.“HeroicsBehindthe‘MiracleontheHudson’”NewAmerican(January20,
2009),http://www.thenewamerican.com/culture/family/698.
2.DeVault,Travis.“ISUalumnusworkstocutdownbirdstrikes,”IndianaState
University(January29,2009),http://www.indstate.edu/news/news.php?newsid=1613.
3.Pritchard,Carl.“OntheEdge:SettingtheThresholds,”ProjectConnections,http://
www.projectconnections.com/articles/063000-pritchard.html.
4. Larson,LeeW.“TheGreatUSAFloodof1993,”http://www.nwrfc.noaa.gov/floods/
papers/oh_2/great.htm.
5.Wikipedia,http://en.wikipedia.org/wiki/Mind_map.
6. TycoElectronics.“RegulatoryAgenciesandComplianceRequirements,”http://www
.elotouch.com/Products/agencies.asp.
7. CVR/ITConsultingLLC,http://www.cvr-it.com/Samples/XRisk_Management_Plan_
Template.pdf.
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ProjectName: Preparedby: Date(MM/DD/YYYY):
RiskManagementStrategy 1.Definetheriskmanagementmethodologytobeused: Section 1 of this table defines your risk management process. The process is scalable to ensure that the level, type, and visibility of risk management on your process. •
RiskIdentification:Identify risks through discussion with all major stakeholders. Also use the Risk AssessmentandProject Planning Assessment Checklist, and other project-specific risks, as appropriate.
• RiskCategorization: Group the risks into categories by using the Risk Assessment. The
project manager can create additional categories, as required.
• RiskProbabilityandImpactAssessment: Enter all risks into the Risk Response Plan
document. For each risk identified, assess the risk event in terms of likelihood of occurrence (Risk Probability) and its effect on project objectives if the risk event occurs (Risk Severity = Impact Score).
• RiskPrioritization: Risks that meet the threshold criteria will be so noted in the Risk Register. • RiskResponsePlanning: For each risk in the Risk Register that is above the Risk Threshold: • Determine options and actions to reduce the likelihood or consequences of impact to • • • •
project objectives. Describe the actions to be taken to mitigate the risk, and actions to be taken when risk event occurs. Assign responsibilities for each agreed-upon response, and “due date” where risk responses are time sensitive. Determine impact on project budget and schedule and make appropriate changes to the project plan. Incorporate this information into the Risk Register.
• RiskResponseTracking: • Dates and the actions taken to mitigate the risk. • Actions taken when the risk event occurred (contingency plan). • Incorporate this information into the Risk Register.
Figure11-4
Sample Risk Management Plan template
Chapter11: ProjectRiskManagement
• RiskMonitoring: Establish systematic reviews and schedule them, ensuring the following
reviews: Ensure that all requirements of the Risk Management Plan are being implemented. Assess currently defined risks as defined in the Risk Register. Identify status of actions to be taken, and evaluate effectiveness of actions taken. Validate previous risk assessment (likelihood and impact) and assumptions (state new assumptions). • Identify new risks, track risk response, establish communications. • • • •
• RiskControl: • V alidate mitigation strategies and alternatives, and take corrective action when actual • • • • • •
events occur. Assess impact on the project of actions taken (cost, time, resources). Identify new risks resulting from risk mitigation actions. Update the Project Plan and Risk Management Plan. Ensure change control addresses risks associated with the proposed change. Revise the Risk Assessment and other risk management documents to capture results of mitigation actions. Revise the Risk Register and establish communications.
2.Defineassumptionsthathaveasignificantimpactonprojectrisk: •
Risk Assumptions:
3.Definetherolesandresponsibilitiesuniquetotheriskmanagementfunction: •
Risk Management Team:
•
4.Defineriskmanagementmilestones(insertrowsasneeded): Milestone
Date(MM/DD/YYYY)
•
Risk Management Plan approved
•
Risk Assessment and Project Planning Assessment Checklist complete
•
Risk Management Reviews scheduled
5.Defineriskrating/scoringtechniques: The project will rate each identified risk (e.g., Impact
Score = High, Medium, Low) based on the likelihood that the risk event will occur and the effect on the project’s objectives if the risk event occurs. This will be a subjective evaluation based on the experience of those assigned to the project’s risk management team. Default rating/scoring system is as follows:
Impact score can be rated as 1, 3, 5, 7, or 9 (1 = Very Low, 9 = Very High). Probability can be rated as 0.1, 0.3, 0.5, 0.7, or 0.9 (0.1 = Very Low, 0.9 = Very High). Figure11-4
Sample Risk Management Plan template (continued )
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6.Establishriskthresholds: Modify the text below to show how the project team will plan for
risk events (for example, “The project will establish risk responses for risk events that have been determined to have a rating of High”).
Risk priority is determined by calculating a Risk Score (= Impact * Probability) and then comparing that Risk Score to priority thresholds. Based on the scoring system, the lowest possible Risk Score is 1 * 0.1 = .01. The highest possible Risk Score is 9 * 0.9 = 8.1. 7.Defineriskcommunications: Describe the type and frequency of communications for risk
management.
8.Definerisk-trackingprocess:Describe how the risks will be tracked and reported.
ProjectRiskManagementPlanApproval/Signatures I have reviewed the information contained in this Project Risk Management Plan and agree: Name
Title
Signature
Date
The signatures above indicate an understanding of the purpose and content of this document by those signing it. By signing this document, they agree to this as the formal Project Risk Management Plan document. Figure11-4
Sample Risk Management Plan template (continued ). Reprinted with permission from CVR/IT Consulting LLC
Chapter
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KeySkills&Concepts ●
Procurementmanagementprocess
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Definitionofacontract
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Elementsofalegallybindingcontract
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Roleoftheprojectmanager(buyerorseller)
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Make-or-buyanalysis
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Buyerandsellerrelationship
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Sourceselectionprocess
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Termsandconditions
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Privityofcontractandcontractwaiver
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Typesofcontractsandwhobearstheburdenofrisk
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Projectprocurementdocuments:RFPs,RFQs,andRFBs
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Bidder’sconferenceandvendorselectionprocess
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Statementofwork(SOW)
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Contractchangecontrol
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Administrativeclosure
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Forcemajeure
T
hischaptercoversthedifferencebetweencontractsandprocurementsandhowtheyfit togetherwhenitcomestomanagingtheseimportantelementsofaproject. Mostprojectmanagersarefamiliarwithcontracts,andmanyprojectmanagersare involvedwithprocurementofgoodsandservices,sotheinformationinthischaptermay simplyserveasarefresher.However,you’llencountertipsandtermsalongthewaythat youwillneedtobefamiliarwith,especiallyifyouareplanningtotakethePMIexam.
Chapter12: ProjectProcurementManagement TIP Knowledge of how to manage contracts as well as key terms and conditions is important to project managers in the real world. However, you should note that PMI tends to focus mostly on procurement management. You’ll encounter a few exam questions regarding the types of contracts, who bears the burden of risk between the buyer and seller on the different contracts, and even some calculations. Therefore, you should be familiar with these key aspects of contract management.
Definition of a Contract Acontractisalegal,mutuallybindingdocument,agreement,orexchangeofpromises betweentwoormorepartiestoprovidegoodsorservicesinexchangeforsomething ofvalue.Contractsusuallyhavetermsandconditionsandcanbeusedforawiderange ofpurposes—saleofproperty,termsofemployment,settlementofdisputes,ownership protection(whenitcomestolicensing,intellectualproperty,orcopyrightprotection),and eventicketstoasportingevent.That’sright.Atickettoabaseballgame,forexample,has termsandconditions(“Holderisadmittedontheconditionof...”). Intheentertainmentworld,acontractmaybereferredtobyvariousnames:technical contract,appearanceagreement,bookingagreement,andevenengagementcontract. Whateveryoudecidetocallthispieceofpaper,itisessential.Itprovidesprotection toboththeperformerandthevenue/eventcenter.Thegoaloftheagreementissothat everythingislaidoutonthetableandthatbothpartiesremainintotalagreement.Once thecontractoragreementissignedanddated,itbecomesalegalbindingdocument.
Contract Terms and Conditions Termsandconditions(T&Cs)settherightsandobligationsofthecontractingparties. Theseinclude“generalconditions,”whicharecommontoalltypesofcontracts,aswell as“specialconditions,”whicharepeculiartoaspecificcontract(forexample,contract changeconditions,paymentconditions,pricevariationclauses,andpenalties). T&Csalsodefinethebusinessrelationshipbetweenthebuyerandseller,theroles/ responsibilitiesofeachparty,andhowtheactivitieswillbecarriedoutthroughoutthe establishedperiodofcontractperformance. ●
Terms Necessarystatementsthatmakethecontractlegallyvalid(forexample,“The totaltermdurationoftheproject,includingallapproveddeliverables,shallnotexceed 12months”). Anothercontracttermisforpayment.Intheentertainmentworld,forexample,a contracttermmaystatethefollowing:“Allpayments(includingperformanceamount
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Conditions Definedeventsthatmusthappeninorderforcontingenttermsina contracttobecomefixed(forexample,“Latepaymentpenaltyof10percentofthetotal invoicewillbeaddedtothestatementforpaymentsnotreceivedbythe10thbusiness dayofthemonthfollowingthedateoftheinvoice”).
Conditionsshouldincludeanyspecificrestrictionsorexpectationsfortheperformer thatthevenueorhostingpartyhasset.Thiscanincludetheperformer’sexpectedattire, language,andmusicselection.Thisconditionvariesfromplacetoplace.Theperformer hastherighttolayouttheirownpersonalrestrictionsandexpectations,suchasguestlists, guestpasses,dressingrooms,backstagerefreshments(forexample,blueM&Ms),and otherhospitalities.Theconditionsdependontheindividualperformerandthevenue’s willingness/abilitytomeettheconditionsofthecontract. Thefollowinglistrepresentssomeitemsyoumightseeinthetermsandconditionsof acontract: ●
Acceptance Clearlydefinedprojectmilestonesanddeliverablesaswellaswhatwill bemeasured,reported,anddeemedformallyacceptableatcompletion.
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Agent Whospecificallyrepresentsthebuyerandseller.
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Arbitration Amethodthatdescribeshowdisputes,escalations,orissueswillbe handledaswellashowthisprocesswillbeassignedandbilled(andwhodoesit).
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Assignment Describesthecircumstanceswhereonepartyortheothercanassign theirrightsandobligationstoanotherparty(liketoanagentormanager).
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Authority Whoholdsthepowerinacontractandunderwhatconditions.
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Bonds Ifbonding(performanceassurance)isrequiredbyonepartyortheother.
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Breach/default Failureofthesellertoperform/deliveraspromisedinthecontract.
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Contractchangeprocess Definestheprocess,whowillserveontheCCB(change controlboard),andthetoolusedtotrackandmanagechanges.
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Incentives(ifappropriate) Torewardachievementofobjectivesonthecontract.
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Indemnification(liability) Whoisliableunderwhatconditionsandhowthisis handled.
Chapter12: ProjectProcurementManagement ●
Personnel Keypersonnelinvolvedorwhohavebeenrequestedtoremainfora specifiedperiodoftimetoprovideservicesonacontract.
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Reporting Format,frequency,distributionlist,tool,andsoon.
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Termination Stoppingtheworkbeforeitiscomplete.
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Waivers Howorifrightscanbewaived.Asaprojectmanager,youneedtounderstand howyoumaywaivecertainrightsintentionallyorunintentionally(forexample,allowing changestooccurwithoutgoingthroughthechangeprocess).
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Warranties Measureofqualityanddurationofcoverage.
Nowonderpeopledevelopheadacheswhilereadingcontracts!Theycanbequite complex.What’smore,legaljargonandeventheplacementofacommacanchangethe meaningofacontract. Unlessyouspeak“legalese,”thebestthingyoucandoisgetalawyerorsubjectmatter expertinvolvedtohelpensureyouandtheotherpartiesunderstandthelanguageofthe contract.Thegoodnewsis,manygreatforms,templates,andsoftwareapplicationsare availabletomakethiseasier.
Ask the Expert Q: What’sareal-worldexampleofacontractmisinterpretationthatprovidesagood lessonlearned?
A: Trythisoneonforsize:Onacontractlong,longago,thePMwasreviewingtheservice
levelagreements(SLAs)forcomputersupport(forexample,hoursofsupport,system availability,andthefinancialpenaltiesassociatedwithmissedSLAs).Thecontract languagewasnotclear,andwhenthePMaskedthecontractmanagertoexplainit,he simplysaid,“Don’tworry.TherewillneverbepenaltiesagainsttheSLAsbecauseofthe waythecontractisworded.”Well,thefirsttimeacriticalserverwentoutofoperation duetoafailure,theclientcametothePMandsaid,“Youoweseveralthousanddollarsin penaltiesfortheoutage!”Thecustomerhadinterpretedthecontractlanguageinoneway, whereasthePMandteaminterpretedittotallydifferent.Afterheateddiscussions,thelegal teamwascalledbacktorewritethelanguagearoundSLAsandpenalties.Apenaltywas paidandthecontractrewrittentoensuretherewasnoconfusioninthefuture.Themoralto thisstoryisthatunclearlanguageisnotgoodandwhenlefttointerpretationcancreatealot ofconfusionandillfeelingsintheend.
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Elements of a Legally Binding Contract Undernormalcircumstances,acontractmustcontaincertainkeyelementstobelegally bindingandenforceable: ●
Offerandacceptance Thecontractmustincludeanoffertoprovidegoodsor servicesandacceptanceoftheoffer.
NOTE A counteroffer is not an acceptance and will normally be treated as a rejection of the offer. ●
Mutualconsideration Themutualexchangeofsomethingofvalue.Inorderforthe contracttobevalid,thepartiestoacontractmustexchangemoneyorsomethingof value.(Inthecaseofthesaleofaneventticket,thebuyerreceivessomethingofvalue intheformofattendancetothegame,andthesellerreceivesmoney.)
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Legalpurpose Acontractcannotviolatelegal,government,orpublicpolicy.For example,ifacontractisforthesaleofillegaldrugs,thecontractisnotenforceable.
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Legalcapacity Buyerandsellermusthavelegalcapacitytoenterintocontractfor exchangeofproductsorservices.Forexample,someonetryingtosellsomethingthey don’towndoesnothavelegalcapacity. Otherelementsofalegallybindingcontractare
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Goodfaith Itisimplicitinallcontractsthatthepartiesareactingingoodfaith.For example,ifthesellerofa“bike”knowsthebuyerthinksheispurchasingamotorcycle insteadofabicycle,thesellerisnotactingingoodfaithandthecontractwillnotbe enforceable.
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Performanceordelivery Inordertobeenforceable,theagreed-toactionofthe contractmustbecompleted(forexample,theticketshavetobedeliveredaspromised andpaymentreceivedtocompletethetransaction).
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Mutualconsent Theremustbemutualconsentbetweenthebuyerandseller (a“meetingoftheminds”)overproducts,services,orresultstobeprovidedand received.
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Mutualunderstanding Theremustbeaclearunderstandingbyallpartiestothe contractofwhatisbeingprovidedandreceived.Forexample,inacontractforthesaleof landthebuyermaythinkheisbuyingalottobuildahouseonwhenthesellerisactually contractingtosellapadoflandforcommercialuse(zonedcommercialuseonly).There isnomeetingoftheminds,andthecontractwilllikelybeheldunenforceable.
Chapter12: ProjectProcurementManagement
Is an Oral Agreement Legally Binding? Thereisanoldsaying“anoralcontractisn’tworththepaperit’swrittenon,”which issotrue.Itcanbeverydifficulttoproveanoralcontractexistswithoutdocumented proofoftheagreement.Withanoralagreementor“handshake,”onepartymaybe unabletoenforcetheagreementormaybeforcedtosettleforlessthantheoriginal bargain.Thesolutionistodraftacontract(oragreement).Itisgoodpracticetoalways makesomesortofwrittendocument,signedbybothparties,toclarifythekeytermsof anagreement.
Definition of Procurement Procurementistheacquisitionofgoodsand/orservices.Generally,procurementsareacquired viaacontractoragreement.Asimpleprocurementhowever,maynotrequirecontracts, formalagreements,orpurchaseorders.Complexprocurementsshouldinvolvefinding vendorsorsupplierswhoarewillingtoestablishalong-termbuyer/sellerrelationship. Almostallpurchasingdecisionsincludefactorssuchasprice,shipping,anddelivery, qualityofgoodsand/orservices,benefits,andpaymentprocessing.Procurementsmay alsoinvolvemakingbuyingdecisionsthatmakeuseofeconomicanalysismethodssuch ascost-benefitanalysis,cost-utilityanalysis,andriskanalysis: ●
Cost-benefitanalysis Involveslookingatthetotalcostsandallthebenefitsofa decision,thenweighingtheprosandconstodeterminebeforethedecisionismadeif theplannedactionisbeneficial.
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Cost-utilityanalysis Thismethodisoftenusedasabasisforprocurementdecisions usingacommonunitofmeasure(forexample,qualityoflifeinhealthcare,or money).Thismethodtendstoprovideamorein-depthanalysisoftotalbenefitsover cost-benefitanalysis.
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Riskanalysis Thismethodidentifiesandreviewsthefactorsthatmayjeopardizethe successofaproject.Itcanalsohelptheprojectteamidentifypreventivemeasuresto mitigatetherisk(reducepossibilityandtheprobabilityorimpact)shouldtheeventoccur.
Contractsandprocurementprocessescanbeperformedbytheprojectmanager,a centralizeddepartment,ororganization,ormaybedividedorspreadoveranumberof
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CentralizedContracts/Procurement
DecentralizedContracts/Procurement
Advantages
Disadvantages
Advantages
Disadvantages
Standard processes
Less flexibility
More PM flexibility
Unclear processes
Volume discounts
Rigid bid process
Quicker acquisitions
Higher prices
Consistency
Bureaucracy
Less bureaucracy
Inconsistency
Support experts including legal
Administrative cost
Less overhead cost
Limited support, increased liability
Table12-1
Differences in the Procurement Organizational Structures
differentresourcesintheprojectorganization.Themostcommonorganizationalstructure formanagingcontractsandprocurementisthrougheitheracentralizedstructureora decentralizedstructure.Inthecaseofacentralizedstructure,theprocessesaremanaged withinaspecificdepartmentorgroupwithintheorganizationthatspecializesinthe processesneededtocarryoutthisrole.Inadecentralizedstructure,theworkisoften performedbytheprojectmanager.Clearly,thereareadvantagesanddisadvantagestoboth structures.Table12-1listssomeofthedifferences.
Role of the Project Manager (Buyer or Seller) Theprojectmanagercanperformtheroleofeither(orboth)thebuyerorthesellerina procurementtransaction.Forexample,thePMmaybethesellerofprojectmanagement servicestoaprojectsponsor(customer)andinturncontractforoutsideservicesfrom anothergrouporcompany(inwhichcasethePMisalsoabuyerofvendor/supplier services).Regardlessofwhichsideofthefenceyouareon,it’salwaysagoodideato understandtheotherside’sperspectiveandresponsibilitiesfromaPMstandpoint.
TIP PMI tends to view the project manager as the buyer in the buyer/seller relationship. Also, note that on the PMP exam the Project Procurement Management knowledge area can be difficult for people who have little experience in dealing with contracts or procurement. It is good to have real-world experience; however, you need to look at this knowledge area from PMI’s perspective as covered throughout this chapter.
Asaprojectmanager,youwillneedtodeterminewhichproducts/goods/services willbeneededfromoutsidetheprojectteam.Asalways,theprocurementsneededare totallydependentonthesize,typeofproject,andstaffingrequirements(skillsandpeople available)ontheproject.
Chapter12: ProjectProcurementManagement Thebestapproachfordeterminingwhatyouwillneedtosuccessfullyadminister theprojectdeliverablesistopulltheprojectmanagementteamtogetherandconducta brainstormingsession.StartwiththeWBSandmakealistofproducts,equipment,and/or servicesneeded.Theninitiatethemake-or-buyanalysis(discussedlaterinthischapter)to seewhetherornotyourteamcanprovidecost-effectiveproductsorservices. APMneedstoclearlyunderstandlaborrequirementsandrelatedcosts.Laborincludes notonlythepeopleandtheiravailability,buttheskills,education,andexperiencetheybring tothetabletodelivertheproject(forexample,programmer,constructionmanager,financial analyst,teamleader,orcontractmanager).Thenyoumustdetermineifyourprojectteam canperformthesefunctionsorifyouwillneedtoobtain(orprocure)themfromoutsidethe projectteam.Asforrelatedcost,frequentlylaborratesare“loaded”or“burdened,”which meansthattherateincludesoverhead,benefits,profit,andothercostsofdoingbusiness. Directlaborisgenerallytheemployee’ssalaryorpayrate,whereasthebillrateisnormally theloadedratethebuyerpaystheseller.Makesureyouknowthedifference.
TIP I suggest you use the “80/20 rule,” discussed in Chapter 8, to focus on the areas that are going to cost the most, especially labor. Also, don’t shortchange yourself on the cost of managing the project contract(s) and procurements, which can be independent of project costs. These activities take time, especially if they are unfamiliar, not clear, or are misinterpreted.
Wheneverpossibleyouwillwanttobeinvolvedinthecontractandprocurement processfromthebeginningofyourproject.Ifyouareworkinginacentralized procurementorganization,youwillneedtoworkcloselywiththatdepartmentorgroupto initiatetheproperrequests,usingtheproperformsandprocedures.Ifyouattempttowork outsidetheprocess,theconsequencescanbedisastrous—forexample,notgettingthebest pricefromsellers,missingkeyinformationintheSOW,orevenlosingyourjob.(That’s correct!Ifyoudon’tutilizetherightpeopleorprocessesforprocurement,itisoften considereda“bypass”andcancostyouyourjob.)
Project Procurement Management Processes ProjectProcurementManagementincludestheprocessestopurchaseoracquirethe products,services,orresultsneededfromoutsidetheprojectteam.Here’sanoverviewof thefourprojectprocurementprocesses: ●
12.1:Planprocurements(Planningprocessgroup) Documentingprocurement decisionsonhowyouwillmanageprocurementsandsettingthesellerselection criteriaontheproject
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12.2:Conductprocurements(Executingprocessgroup) Involvesinitiatingthe bidderselectionprocess,obtainingsellerresponses,choosingaseller,andawarding thecontract
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12.3:Administerprocurements(MonitoringandControllingprocess group) Involvesmaintainingtheprocurementrelationshipwiththevendorselected aswellasmonitoringcontractperformanceandmanagingthechangesandcorrections neededtoensurecompliance
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12.4:Closeprocurements(Closingprocessgroup) Theprocessofcompleting eachprojectprocurementtransactionandthecontractservicesattheendoftheproject
NOTE The Project Procurement Management knowledge area was reduced from six processes down to four in the fourth edition of the PMBOK, thus streamlining the processes and making them much easier to understand.
1. Plan Procurements Process Theprocurementplanningprocessisallaboutunderstandingwhatneedstobeobtained inthewayofproducts,services,orresultsontheproject,andthendocumentingthe purchasingdecisionsandtheapproachyouplantotaketoidentifytheresourcesneeded, suchasmarketing,advertising,vendors,subcontractors,andsoon.
TIP It is important to remember the seller is often referred to as a vendor, supplier, subcontractor, provider, or even customer. Also, note the procurement planning process has the highest number of inputs (11) of all the processes in the PMBOK, with project schedule being one of the biggest influencing factors during the procurement process (see the detailed list of inputs for this process in the “Inputs” section that follows).
Whenplanningprocurementsonaproject,youhavemanythingstoconsider,starting withthescope(andscopebaseline),requirementsdocument,schedule,budget,and contracttype.Thisprocessshouldbecloselytiedtothecostandtimeavailabletodeliver theproject.
Plan Procurements Inputs, Tools and Techniques, and Outputs Theinputs,toolsandtechniques,andoutputsforthePlanProcurementsprocessareas follows.
Chapter12: ProjectProcurementManagement Inputs Becauseprocurementisanimportantaspectofobtainingresourcesoutsidethe projectteam,thelistofinputsforthisprocessislong: ●
Scopebaseline Includesthescopestatement,WBS,andWBSdictionary.
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Requirementsdocumentation Includescontractualandlegalimplicationsaround health,safety,security,performance,environmentalconsiderations,insurance,andsoon.
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Teamingagreements Theteamcharter.Arethereexistingornewlegalcontracts thatneedtobehonoredorestablishedtofacilitatetheproject?
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Riskregister Includesrisk-relatedinformation,suchasidentifiedrisks,owners,and responsestrategyasitpertainstocontractsandprocurement.
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Risk-relatedcontractdecisions Isinsuranceneededorbondingofproviders?
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Activityresourcerequirements Numberofpeopleandtypeofskillsneeded.
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Projectschedule Constraints,timelines,specificdeliverables,andtargetdates.
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Activitycostestimates Fromprocurementactivity,bidprocess,andcostof deliverables.
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Costperformancebaseline Setstheapprovedstartingpointfortracking/reporting.
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Enterpriseenvironmentfactors Typeofstructure,marketconditions,supplier performance,relationshipandcredibility,andtermsandconditionsofthecontract.
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Organizationalprocessassets Formalprocurementpolicies,managementsystems used,andcontracttype(itisimportanttoknowwhobearstheburdenofrisk).
ToolsandTechniques ThefollowingtoolsandtechniquesareusedinthePlan Procurementsprocess: ●
Make-or-buydecision Atechniqueusedtodetermineifspecificworkcanbe performedwiththeskillsandresourcesavailableontheprojectteamorifthisneedsto beacquiredoutsidetheteam.Again,theschedulewillofteninfluencethisdecision.
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Expertjudgment Inthecaseofprocurementplanning,theexpertssoughtoutmay befinancialanalysts,businessanalysts,contractorprocurementspecialists,andsoon.
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Contracttypes Therearethreeprimarytypesofcontracts(fixed-priced, cost-reimbursable,andtimeandmaterials).Thesearecoveredinmoredetaillaterin thischapter.
NOTE Each contract type carries varying degrees of risk between the buyer and seller.
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PMPCertification:ABeginner’sGuide Outputs TheoutputsofthePlanProcurementsprocessareasfollows: ●
Procurementmanagementplan Includesthetypesofcontracttobeused,risk issues,andevaluationcriteriaforvendorselection.
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Procurementstatementofwork(SOW) Basedontheprojectscope,thisisa narrativedescriptionoftheprocurementworktobeperformedontheproject.
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Make-or-buydecision Conclusionsanddecisionsmadetoperformthework internaltotheprojectteamorexternaltotheteam.Notethatthisisaresultofthe make-or-buyanalysisperformedasatool/techniqueandisalsoaninputtothenext process(ConductProcurements).
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Procurementdocuments Thedocumentsusedtosolicitproposalsfrompotential sellers,vendors,orsuppliers.
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Sourceselectioncriteria Thekeyskills,deliverables,cost,andsoonthatwillbe consideredaspartofthevendorselectionprocess.
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Changerequests Itemsthatsurfaceduringprocurementplanningthatrequire changestotheselectionprocessortothecriteriawhenchoosingavendor.
Contract Types Hundredsofcontractsandagreementsareavailabletoyouasaprojectmanager,soto keepthisdiscussionsimplewecoveronlytheonesmentionedinthePMBOK. Anotherimportantfactorwhenchoosingthecontracttypetouseonyourprojectis whowillbeartheburdenofriskbetweenthebuyerandseller.Eachcontracttypecarries advantagesanddisadvantages,dependingonwhichsideofthetableyouareon. ThethreeprimarytypesofcontractsrecognizedbyPMIaredetailednext.
Fixed-priceContracts Fixed-pricecontractsinvolvesettingafixed(orlumpsum) pricefordeliveryofaproductorservice.Thispriceisfixedatthetimethecontractis awarded.Theremayalsobeincentivesincorporatedintothecontract—nodownpayment, delayedpayments,factoryrebates—butthepriceisusuallytheprice.Ofcourse,wetry hardtonegotiatethepricedown,butwhateverpricethesellerandbuyeragreeupon becomesthefixed-pricecontract. Herearethethreetypesoffixed-pricecontractsmentionedinthePMBOK: ●
Firmfixedprice(FFP) Thisisthemostcommonandisfavoredbymostbuyers becausethepriceissetandtheriskgoesmostlytotheseller.Ifthecostofservicesor materialsgoesup,thesellerbearstheburdenofriskinthistypeofcontract.
Chapter12: ProjectProcurementManagement NOTE A purchase order (PO) is the simplest form of a fixed-price contract. This type of contract is considered to be unilateral (signed by the buyer) as opposed to bilateral (signed by both parties). ●
Fixedpriceincentivefee(FPIF) Givesthebuyerandsellersomeflexibilityinthatit allowsforvariationsinperformance,withfinancialincentivestiedtoanyagreed-upon results.Forexample,ifthehouseiscompletedintimetomoveinbeforeschoolstarts, thesellergetsanincentivefeebasedonapre-negotiatedamount.Here’sanexample: Contract=$100,000+$5,000foreachmonththeprojectiscompletedaheadof schedule.(Twomonthsearly=$10,000+$100,000=$110,000totalcontractvalue)
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Fixedpricewitheconomicpriceadjustment(FP-EPA) Usedwhentheseller’s performanceperiodspansaconsiderablenumberofyears,allowingforchanges inlaborandmaterialcosts.Itisafixed-pricecontract,butwithaspecialprovision allowingforpredefinedannualorfinaladjustmentstothetotalpriceofthecontract. Here’sanexample: Two-yearcontract=$100,000($50,000/year)+$5,000-per-yearcostofliving adjustment(COLA)startingyeartwofortheaddedcostoflabor.(Year1=$50,000, year2=$55,000.Totalcontractvalue=$105,000.)
Cost-ReimbursableContracts Thiscontractcategoryisadvantageoustotheseller andiscommonlyreferredtoasa“costplus”(CP)contract.Itinvolvespayments(cost reimbursements)foralllegitimateactualcostsincurredfortheworkperformedand includessometypeofincentive(oraddedprofit)ifthesellerexceedspredefinedobjectives (suchasschedule,cost,orperformancetargets).Cost-reimbursablecontractstendtopass therisktothebuyer.Theyalsoallowflexibilityinthecontractifthescopeisnotclearor ifthere’sahighnumberofexpectedchanges.Thiscontracttypeiscommonlyusedwith researchanddevelopment(R&D)projects. Herearethreeofthemorecommoncost-reimbursablecontracts: ●
Costplusfixedfee(CPFF) Thesellerisreimbursedforallallowablecostsfor performingtheagreed-toworkofthecontractplusafixedfeeusuallyidentifiedasa percentage.Here’sanexample: Actualcost(forexample,laborandmaterials)=$100,000+$5,000(5%)fixed fee=$105,000.
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Costplusincentivefee(CPIF) Thesellerisreimbursedforallowablecostsfor performingthecontractworkandreceivesapredeterminedincentivefeebasedon achievingcertainperformanceobjectives,suchascompletingtheprojectontime (similartoFPIF).Here’sanexample: Actualcost=$100,000+$10,000incentiveatcompletion=$110,000totalcontract value.
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Costplusawardfee(CPAF) Thesellerisreimbursedforalllegitimatecosts,but themajorityofthefeeisearnedbasedonthesatisfactioncriteriapreapprovedbythe sellerandthebuyer(forexample,thesoftwareapplicationperformstorequirements). Here’sanexample: Actualcost=$90,000+$20,000awardfee(ifpreapproveddeliverablesaremet)= totalcontractvalue(ifapproved)=$110,000.
NOTE Cost-reimbursable contracts often include direct and indirect costs (see Chapter 7 for details on cost management). A contract of this type is beneficial when the scope of the project is not clearly or easily defined, or there are a high number of changes expected.
TimeandMaterialsContract Timeandmaterials(T&M)contracts(sometimescalled unitpricecontracts)areconsideredtobea“hybrid”typeofcontractualarrangementin thattheyhavecertainaspectsofbothfixed-feeandcost-reimbursablecontracts.Theyare oftenviewedas“riskneutral,”meaningtheburdenofriskissharedbybothparties. SometimestheT&Mcontractisleftopen-endedtoallowflexibilityintheterms andconditions(T&Cs)ofcontractdelivery.T&Mcontractscanresemblefixed-price contractswhenspecificparametersaresetinthecontract’sT&Cs.Here’sanexample: Time=1,000laborhours*theapprovedhourlyrate($50perhour)=$50,000+costs ofmaterials(actual=$58,255)=totalcontractvalueof$108,255.
Things to Consider in Contract Selection Anumberoffactorsneedtobeconsideredwhenitcomestothetypeofcontractyou(or yourorganization)selectsforyourproject.
TIP As a PM, you may not always be directly involved with, or be the decision-maker in, the selection of which contract type will be used on your project (especially if you operate in a centralized procurement organization). However, for the purposes of the PMP exam, you need to be able to put yourself in the procurement manager’s shoes and answer questions on the exam as if you are making these decisions as the PM from the buyer’s perspective.
Chapter12: ProjectProcurementManagement Herearesomethingsyouneedtoconsideraspartofthecontractselectionprocess: ●
Contracttype(sometimespredeterminedbyyourcompanyororganization).
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Relationshipwiththeseller/vendor/supplier.
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Vendor’sreputationandpastperformance.Forexample,dotheydeliverontime,with skilledresponsiblepeople?Dotheyinvoiceinatimelymanner?Aretheinvoices accurate?Dotheystandbehindtheirwork?Dotheycomplytoindustrystandards?
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Vendor’swillingnesstoadjustschedule,skills,cost,andsoontomeetprojectneeds.
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Competition.(Howdoesthesellercomparetotheircompetition?)
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Degreeofriskonbothparties(idealissharedrisk).
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Contracttermsandconditions.(Aretheyrigidorflexible?)
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Otherspecificconsiderationsuniquetoyourproject.
Advantages/Disadvantages by Contract Type Table12-2providesacomparisonofthecontracttypesinthethreeprimarycategoriesand theadvantagesanddisadvantagesofeach.
TIP There will be a few questions on the PMP exam regarding contract types, so I recommend you become familiar with the types, who bears the burden of risk between them, and the advantages/disadvantages of each contract type.
Keepinmindthatcontractscanbecomplex,eveniftheprojectisnot.Thiscanbe exacerbatedwhenyouaremanagingmultipleprojectsorsubcontractsatthesametime. Eachprojectlifecyclecanendatdifferenttimes.Withthisinmind,itisimportanttokeep akeeneyeonthewayoneprojectmayaffectanotherwhenitcomestoprocurements. Youmayrequirecertainskills,equipment,orotherresourcesacrossmanyprojects, andkeepingeverythingorganizedbyprojectmaybeachallenge.Thisiswherestrong organizationalskillsareessential(forexample,don’tfallintoatrapbysigningaone-year leaseforequipmentonasix-monthproject).
Risk-Related Contract Decisions Contractdecisionsshouldbebasedontherelatedrisk.Themainpurposeofacontractisto protectyouandtheotherparty.FromaPMIperspective,contactsarearrangedaccording tothelevelofrisktotheprojectmanager(buyer).TheslidingscaleinFigure12-1shows howriskshiftsbetweenthebuyerandseller.Youshouldbeabletorecognizewhobears theburdenofriskforeachofthesevencontracttypestypicallyusedandrecognizedinthe worldofprojectmanagement.
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Fixed-price(LumpSum)Contracts Advantages
Disadvantages
Very common and easy to understand. Buyer knows the total price at the start of the project.
Can be more expensive than cost-reimbursable contract to help cover added risk to the seller.
Buyer has less risk and less work to manage (or audit) Seller may underprice the bid and overprice the invoices. FP contracts work well when the scope is add-on services, features, or upgrades for clearly defined. higher profit. Seller is responsible to control the costs.
Quality of work may suffer or the seller may cut corners if costs run higher than estimated. Also, there’s little flexibility for change.
Cost-Reimbursable(CP)Contracts Advantages
Disadvantages
Typically less work to write the contract/SOW. CP contracts work well when additional or critical skills are needed to augment your staff.
Buyer has higher involvement to audit seller invoices closely. Additional procurement and administrative uplift (burden).
Seller has less contract risk.
Seller is not motivated to control costs.
Generally lower cost than FP contracts because of cost reimbursement instead of having to add in for unknown contingency.
Total price is unknown.
TimeandMaterials(T&M)Contracts Advantages
Disadvantages
Easy to create/manage, T&M contracts are effective when work needs to begin right away.
Profit margins are built in to the hours billed.
Add flexible workforce (supplementing staff).
Seller has no incentive to control costs.
Usually for very specific products or services over a shorter, more manageable period of time.
Usually only appropriate for smaller projects.
Table12-2
Advantages/Disadvantages of the Contract Types
High
Burden of Risk
Low
Buyer Seller
High
Low CPAF
Figure12-1
Contract risk scale
CPIF
CPFF
T&M
FP-EPA
FPIF
FFP
Chapter12: ProjectProcurementManagement
Procurement Management Plan Tobesuccessfulinmanagingprocurements,youshouldalwayshaveaplan.Theprocurement managementplanshoulddescribehowtheprocurementprocesseswillbemanaged.It shoulddefinethekeycharacteristicsoftheproject(suchasconcernsorissuesthatneedtobe consideredduringtheprocess)andthepoliciesusedtoselectsuppliers—forexample,single source,preferred(preapproved)vendors,performancemeasurements,billingrequirements (suchaselectronic,net30-day,paymentbyauto-deposit,andsoon). Keycomponentsoftheprocurementplanmayincludethefollowing: ●
Thetypeofcontracttobeused,termsandconditions,andwhothesignerswillbe
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Assumptionsandconstraints
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Theriskplanandcontingencies
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Thebidderselectionprocessandwhowillmanageit
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Theschedule,withdateandtimerequirementsorestimates
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Thebillingandreconciliationprocess
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Theescalationorexceptionprocess(tohandlegrievancesordisputes)
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Contractterminationlanguage(forexample,30-daywrittennotice,nonperformance penalties,andearlyterminationclause)
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Thecommunicationsplan(forexample,frequencyofmeetings,formatofdocumentation, wherethedocumentationiskept,whotakesminutesofthemeetings,andlevelof participationfromsuppliersintheprojectprocesses)
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Performancemeasurementsandevaluationcriteria
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Theoverallschedule,documenteddeliverables,andmajormilestones
NOTE The procurement management plan can be very detailed or high level. It can be formal or informal, depending on the needs of the project and the relationship (history) between the buyer/seller, as well as the level of confidence the seller will deliver as agreed to in the contract.
Make-or-Buy Analysis Themake-or-buyanalysishelpsthePMdecidewhetheritiscostefficienttoproducethe products/servicesinsidetheprojectteamorbuythemoutsidetheteamfromasupplier orvendor.Therearetimeswhenitismoreefficienttofarmout(outsource)thework orleaseequipmentthantodotheworkinternaltotheteamorpurchasetheequipment.
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Procurement Documents AsanoutputtothePlanProcurementsprocess,youdevelopdocumentsthatwillbeused tosolicitproposalsfromsellers/suppliers.Thesedocumentsrepresentadetailedviewof theworktobeperformed,products,orresultsexpectedaspartofthevendorperformance. Theterm“proposal”isusedgenerallytodescribeanyoneofthefollowingdocuments tosolicitproposals(bids)fromprospectivesellersorsuppliers: ●
Requestforproposal(RFP) Sometimescalleda“requestfortender.”AnRFP callsforapricefromthesellerandusuallyadetailedproposalofhowthesellerwill performthework,handlebilling,receivepayments,andsoon.
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Requestforinformation(RFI) Requestsdetaileddescriptionofhowthesellercan andwillperformthework.
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Requestforbid(RFB)orinvitationforbid(IFB) Requestsapricefortheworkto beperformed(typically,thebidreceivedhasatimelimit;forexample,30or60days).
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Requestforquote(RFQ) Requestsapricequoteperitem-hourorperunitofwork.
NOTE As the buyer, you (the PM) structure the request or invitation to meet your specific project needs. The documents should have sufficient details to address the specific products, services, or results you need to accomplish from the procurement.
Herearethestepstofollowwhenthefinaldecisionismadeonthetypeofdocuments youplantouseforsolicitingproposals:
1.Identifythepotentialsellers.Thisisnormallyaccomplishedeitherbycurrentorpast
relationshipwithsellers(somecompanieshaveapreferredvendor/sellerlist)orby referralsfromothers.YoucanalsosimplyuseaphonedirectoryoranInternetsearch.
2.Whenyouhavealistofsellers,youneedtoassesstheirabilitytoprovidetheneeded
products,services,orresultsinthetimeframetheyareneeded.
3.Sendouttheinvitationtobidtoprospectivesellers.
NOTE The invitation should be clear on the requirements, return date, and bidders conference information (described in the next section). This could include location, time, format, time allocated to each seller to present, and question-and-answer period.
Chapter12: ProjectProcurementManagement
Source (Seller) Selection Criteria Thisprocessbeginswithdistributingrequestsforproductsorservicesusingthe documentscreatedintheprecedingsection.Thedocumentsdescribetheworktobe performedandtheinitiationofthesourceselectionprocess. Assessmentofpotentialsellersmayincludethefollowing: ●
Overalllifecyclecost Whatisthetotalcostofownershipintheworktobeperformed (purchasecostplusoperatingcost—forexample,officeequipment,officespace,and disposalfees)?Aretherelicensesorroyaltiesthatwillneedtobepaidfortheirservices?
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Capabilitytomeettheneedsofthecontract Staffingtechnicalskills,management orspecialtyskills(suchasCAPMorPMP),andtrackrecordonpastprojects.Also,is trainingrequiredand/oravailableifneeded?
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Riskrating Levelofrisktotheseller,pastperformance,andmitigationstrategy.
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Managementapproach Willthesellerprovidesupervision,HRmanagement (includingpayroll),andstandardprocesses,methods,andproceduresfortheservices tobeperformed?
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Technicalapproach Doesthesellerhaveprovenmethods,measuredresults,and positivetrendsinqualityperformance?Dotheirservicesmeettheprocurement documentrequirements?
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Warrantyrequirements Doesthesellerwarrantthefinishedproductandforwhat timeperiod?Aretherepropertyrights(licenses)forproductsorservicestheseller provides?
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Financialstatus Aretheyfinanciallysoundtotakeonyourproject?Dotheyinvoice inatimelymannerandpaytheirbillsontime?Cantheyhandlewiretransfersbetween banks?
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References Aretheywillingandabletoprovidegoodreferencesfrompreviousclients?
Theinformationandsampleselectionscoring(weighting)criteriainTable12-3 representsabidforcallcenter(helpdesk)services.
NOTE Keep in mind the scoring criteria and weight numbering are subjective and must be meaningful and applicable to your specific project.
Thebestapproachistostartwithidentifyingwhichcriteriaisrequired(“musthave”) asopposedtocriteriathatyouwouldliketohaveoryour“want”listfromtheseller.
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Category
Weight
I.FunctionalCharacteristics (This section evaluates the system and technologies.)
40
A. Redundancy/reliability/life cycle of technology proposed
10
B. Flexibility for interconnection with peripheral systems installed at other locations (non-call center)
1
C. System management tools and report capabilities
5
D. System expandability (scalability) ease of adds, deletes, moves, and changes
1
E. Integration of voice, data, video, and Internet
7
F. Flexibility for network and VRU (voice response unit) interface
7
G. User operational characteristics
1
H. Flexibility for multisite virtual network
8
II.VendorQualifications (This section evaluates the vendor’s capabilities to get the job done.)
25
A. Strategy for long-range product development
5
B. Training and backup support
2
C. Installation capabilities
3
D. Maintenance capabilities
7
E. Installed base of comparable systems
6
F. Call center management strategy expertise
2
III.SystemCost/RevenueOpportunities(This section evaluates the costs over the useful life of the system or services, and any revenue opportunity enhancements available.)
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A. Discounted cash flow over system life cycle
5
B. Capability to minimize network costs
5
C. Capability to minimize staffing costs
15
D. Capability to maximize revenue production
10 Total:
Table12-3
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Sample Scoring Criteria
Themust-havecriteriamightincludeasetofkeyperformanceindicators(KPIs)or servicelevelagreements(SLAs)thataretracked,measured,andreportedonaregular basis.IftheKPIorSLAismissed,penaltiesmaybeassessedontheseller(inthiscase, thecallcenterserviceprovider).Rememberthatspecialorcriticalsupportrequirements
Chapter12: ProjectProcurementManagement mayresultinhigherrisktothesellerandpossiblyhighercosttothebuyer.Here’sa samplesetofmust-havecriteriaforacallcenter: ●
Ninetypercentofallcallstothecenterwillbeansweredwithin30seconds.
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Oncethecallisanswered,nomorethan45secondsof“holdtime.”
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Seventy-fivepercentofcallerproblemswillberesolvedattheLevel1callcenter withouttransferringthecallertoaLevel2supportgroup.Note:Beingabletoresolve thecaller’sproblemsonthefirstcallissometimesknownasthe“first-timefixrate”or “firstcallresolution”(FCR).
Each“want”criterionmustbegivenarelativeweighttodisplayitsimportance comparedtoalltheother“want”items.Thetotalofall“want”criteriashouldbe100points, or100percentofthedecision(inourexample).Fortechnologyacquisitions,itiscommon todividethe“want”criteriaintothreemajorcategories: ●
Functionalcharacteristics(suchasthesystemandtechnologytobeused)
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Vendorqualificationsandcapabilitiestomeettherequirementsofthecontract
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Systemcostandrevenueopportunity(seethesamplecriteriainTable12-3)
2. Conduct Procurements Process TheConductProcurementsprocessinvolvesobtainingsellerresponsesandcomparingthe responsestothescoring(orweight)table.Atthistime,youhaveaclearsetofselection criteria,procurementdocuments(suchasRFPorRFQ),andadistributionlistofthe sellersyoufeelwouldbeabletoprovidethegoodsorservicesyouwanttoacquire. Therequestissenttothesellers,andyoubegincollectingtheresponses.
Bidders Conference Insomecasesyoumayconductabiddersconference(sometimescalledacontractors conference,vendorsconference,orpre-bidconference).Thisisusuallyheldatthe (requesting)customer’ssiteoracentrallocationformorecomplexorlargercontracts. Thebiddersconferenceisawaytogettherequestpresentedinanorganizedfashion tomultiplevendor/suppliersbygettingthemtogetheratthesametimeinthesameplace (co-located).Thisisagreatopportunitytopresentthegoodsorservicesneededandthe criteriathatwillbeusedintheselectionprocesstoensureallparticipantshearthesame informationinanunbiasedmanner.Itiscustomarytoallowaquestion-and-answer(Q&A) sessionduringtheconferenceincasethesupplierswantclarificationonanyspecifics oftheproject.Normally,theminutesandQ&Asarepostedonlineordistributedtoall prospectivebiddersinatimelymanner.
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PMPCertification:ABeginner’sGuide Choosingamongcompetitivebidscanbeachallengingprocess.Itofteninvolves havingacommitteerepresentingavarietyofdisciplinesandagendas.Afairandimpartial analysisthatresultsinaconsensusdecisionisthegoal,butcompetingprioritiesand hiddenbiasesoragendasoftenslowdowntheprocess.Thisiswheretheworkinthe previousprocessespaysoff—forexample,youhaveanapprovedprocurementplanand associateddocuments(includingscoringcriteria).
Source Selection: Selecting a Seller and Awarding a Contract Oncethebidsarereceivedfromthesellers,yourcommitteebeginsreviewingand analyzingthebidsforcompliancewithyourmust-havecriteria.Herearesomeinsights intotheselectionprocessfromthearticle“UsingSelectionCriteriainVendorBid Analysis”byMaggieKlenke: “Any[‘musthave’]failureswilleliminatethatvendor.Once[thereview]is completed,theremainingvendorswillbescoredagainsteachotheronthe ‘want’criteria.Forexample,if[processandsystems]redundancyisthecriteria andithasaweightof10points...,thenthecommitteeconsidersallvendorsand selectstheonethatisjudgedtobethebestofallbidders.Thatbidderisgiven ascoreof10.Allothervendorsarejudgedagainstthebestvendorandgivena relativescore.ItisOKtohavetiedscoresandevenzeroscores.Onceallhave beenscored,thenthescoreismultipliedtimestheweightthatwasgivento [those]criteria.Sothewinningvendorinredundancywouldreceiveaweighted scoreof10×10or100points.Anothervendorgivenascoreof6would receive6×10or60points.Thisprocessisrepeatedforeachcriteriaitemuntil allhavebeenscored.Theweightedscoresareaddedtoobtainthefinalscore foreachvendor.Theonewiththemostpointsisthewinnerandgenerally representsthebest-balancedchoicefortheorganization.”[1]
Ask the Expert Q: Doyouhaveanexampleofasellerselectionthatcanserveasalearningexperience? A: Yes,inresponsetoanRFPfromasellertoabidfor24/7(three8-hourshiftsperday)call centersupport,thesellerstatedtheywouldprovidesupportintwo12-hourshiftsperday. Whenthesellerwasaskedwhytheyproposeddifferentshiftcoverage,theysaidthatit wouldbemoreefficientandsavemoneytoprovidetwo-shift12-hourcoverageinstead ofthree8-hourshifts.Whenthetruthcameout,thecompanydidn’thaveenoughtrained stafftoperformcoverageforthreeshifts.Needlesstosay,theywerenotawardedthe contract.
Chapter12: ProjectProcurementManagement
Conduct Procurements Inputs, Tools and Techniques, and Outputs Theinputs,toolsandtechniques,andoutputsfortheConductProcurementsprocessareas follows.
Inputs TherearemanyinputstobeconsideredintheConductProcurementsprocessand theinputsinmostcasesaretheoutputsfromtheprevious(PlanProcurements)process. ●
Projectmanagementplan
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Procurementdocuments
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Sourceselectioncriteria
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Qualifiedsellerlist
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Sellerproposals
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Otherprojectdocuments
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Make-or-buydecisions
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Teamingagreements
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Organizationalprocessassets
ToolsandTechniques WhenitcomestimetoworktheConductProcurements process,thereareanumberoftoolsandtechniquesavailable.Eachhasitspurposeand maybepredeterminedbyyourPMO,procurementdepartment,ororganization.ThePM shouldbeinvolvedinthisprocessevenifitisbeinghandledormanagedbyacentralized procurementdepartmentorgroup.Afewofthetoolsandtechniquesavailableare ●
Biddersconference,contractorconference,orvendorconference
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Proposalevaluationtechniquesusingselectioncriteriabasedonprocurementpolicies
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Independentcostestimates
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Expertjudgment
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Advertising,Internetsearch
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Procurementnegotiations
Outputs TheoutputsoftheConductProcurementsprocessare ●
Selectedsellersandprocurementcontractaward(contractoragreement)
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Resourcecalendars(workschedule,workperiods,andsoon)
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Changerequests
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Projectmanagementplanupdates
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Procurementdocumentupdates
NOTE You should remember that the outputs from a given process typically become the inputs to the next process. Watch for the links—this will help when studying for PMI exams.
3. Administer Procurements Process TheAdministerProcurementsprocessinvolvesmanagingprocurementrelationships andmonitoringcontractperformancetoensurethework(orproduct)ismeetingquality requirements.Thelegalnatureofthecontractualrelationshipmakesitextremelyimportant fortheprojectteamtobefullyawareoftheimplicationsoftheiractionswhenadministering procurement.Thisiswhatisoftenreferredtointhebusinessworldasa“betyourjob” situation. Mostcompanieshaveestablishedprocurementpoliciesandfollowstrictbusiness conductguidelinespertainingtohowcontractsshouldbemanaged.
TIP The best way to “do good and avoid evil” is to stay current on all your business conduct guidelines. Ensure you follow all regulatory requirements and your company’s code of ethics. The PMI professional and social responsibilities/ethics are available on the www.pmi.org website. I highly recommend you print it out two to three weeks prior to taking the exam to get very familiar with this section and the two key categories (“Mandatory” and “Aspirational”).
Managing the Relationship Thekeytosuccesswhenitcomestoprocurementistherelationshipbetweenthebuyer andtheseller.AsthePM(assumedbuyer),itisextremelyimportantthatyoumanage thisrelationship.Thebestwaytomanagetherelationshipduringtheadministrationof procurementsiswithaformaldocumentofagreement(DOA)orstatementofwork(SOW) toestablishthegroundrulesandrolesandresponsibilitiesbetweenthebuyerandseller.
Statement of Work (SOW) MostprojectmanagersuseSOWsorasimilartypeofdocument.Forperformance-based contracts,theSOWisoftenreferredtoasthe“performanceworkstatement”(PWS).An SOWisanarrativedescriptionoftheservices(orproducts/results)tobedeliveredonthe project.Othertitlesincludeworkorder,requestforservice,servicerequest,serviceorder,
Chapter12: ProjectProcurementManagement anddocumentofunderstanding(DOU).Itdoesn’tmatterwhatyoucallitinyourworld; youneedtobefamiliarwiththeSOWfromPMI’sperspective,especiallyifyouplanto takeandpassthePMIexam. TheSOWshouldbedevelopedfromtheapprovedscopebaselineanddefinesthe specificworkthatwillbeperformedfromoutsidetheprojectteam.Itcanbeviewedas alegallybindingdocumentandshouldsufficientlydescribethework,qualitydeliverables, features,functions,metrics,duedates,specifications,estimatedhours,duration,andso on.Itshouldalsoincludedetailsofthelocationwhereworkwillbeperformed,hoursof service,billingrequirements,andkeycontacts(seetheupcomingsamplelistofSOW contents).SomegreatSOWtemplatesareavailableontheInternet.Oneexamplecan befoundattheCVR/ITConsultingLLCwebsite(http://cvr-it.com/PM_Templates/ TemplateDetails8.html).
Sample List of Topics in a Statement of Work Herearesomekeycomponentsyoumightseeinastatementofwork: ●
Introductiontotheproject(businessneedorjustification).
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Problemstatementorbackground(whattheprojectwillfixoraddress).
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Scopestatement/baseline.
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Sellerandbuyerrequirements,deliverables,andmilestones.
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Scheduleduration(periodofperformance,targetcompletiondate,andsoon).
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Changemanagementplan,system,process/procedures.
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Specifictypeofservicesanddeliverables.
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Ratestructure(byskilltype,expectedhours,constraints,andcosts).
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Hoursofsupportorcoverage.
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Communicationsplanandexpectationsformeetingsandstatusreporting.
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Specialneeds,training,mentoring,andsoon.
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Paymentscheduleandtype(forexample,invoicesmustbepaidwithin30daysof receipt).
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Nondisclosures(forexample,handlingofconfidentialorproprietaryinformation).
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Physicalandlogicalsecurity(forexample,userIDs,accesscodes,andpasswords).
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Travelanddiscretionaryexpensereimbursementguidelines.
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Approvalsignatures.
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Administer Procurements Inputs, Tools and Techniques, and Outputs Theinputs,toolsandtechniques,andoutputsforthisprocessareasfollows.
Inputs TheAdministerProcurementsprocesshasanumberofinputstoconsider,with keyfocusonthecontractandotherspecificperformanceandprocurementagreements. Theinputsareasfollows: ●
Procurementdocuments
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Projectmanagementplan
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Thecontract
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Performancereports
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Approvedchangerequests
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Workperformanceinformation
ToolsandTechniques ThetoolsandtechniquesfortheAdministerProcurements processfocusonresultsreporting,tightchangecontrol,andaccountabilityintheprocess. Thetoolsandtechniquesforthisprocessare ●
Contractchangecontrol
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Procurementperformancereviews
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Inspectionsandaudits
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Performancereporting
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Paymentsystem
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Claimsadministration
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Recordsmanagementsystem
Outputs Aswithalloutputs,keepinmindtherippleeffect(progressiveelaboration). Whenadministeringtheprocurementprocess,youneedtokeepallprocurementand projectdocumentsuptodate.Theoutputsofthisprocessinclude ●
Procurementdocumentation
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Organizationalprocessassetsupdates
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Changerequests
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Projectmanagementplanupdates
Chapter12: ProjectProcurementManagement Itisimportanttonotethatmanyorganizationstreatcontractandprocurement administrationseparatelyfromoperationalorfunctionalsupport.AlthoughaPMmay beinvolvedwiththeadministrationofcontractsandprocurement,theymayhave supervisory/managementsupporttoadministerthisprocess.
Contract Change Control Asmentionedpreviously,changecontrolisessential,especiallywhenyouaremanaging procurementsandcontracts.Whenitcomestolegaldocumentsandliabilities,thisis notatopicyouwanttotakelightly.Changestoaprojectcanhaveadirecteffectonthe contract,suchasamodificationtothescopeofwork,ordeliverables.Also,theremaybea changeinoverallcost(priceincreasesforproducts,materials,orservices).Itisimportant toensurethatallcontractchangesarereviewed,documented,andapprovedbyboth partiespriortoimplementation.Ihighlyrecommendyouseeksupportfromyourcontracts andprocurementexpertswhendrafting/managingcontactsandprocurements.
TIP You should be aware of the doctrine of privity of contract, which refers to the contractual relationship between the buyer and seller. You may see a question on the PMP or CAPM exam around this term. Simply stated, if Seller A enters into a contract to build a house for Buyer B, and Buyer B contacts Seller C (electrician) to install additional features in the house (such as wiring for a home theater system), and the house burns down because of faulty wiring by Seller C, Seller A will not be liable for the damages.
4. Close Procurements Process TheCloseProcurementsprocessinvolvescompletingeachprocurementactivityandverifying thatallworkanddeliverableswereperformedaccordingtothetermsandconditionsofthe contract.Theclosureofprocurementsmaybefortheentireprojectoroneormorephases. TheCloseProcurementsprocessalsoincludesadministrativeactivitiessuchasfinalizing anyopenclaims,updatingrecords,andarchivingallpertinentdocumentsforfutureuse. Thebestplacetostartwhenitcomestoclosingprocurementsisthecontractterms andconditionstomakesureallcontractualobligationshavebeenfulfilled.Onceyou aresureyouandtheteamhavesuccessfullycompletedalldeliverablesofthecontract/ procurements,youneedtoobtainformalacceptancefromthesponsor(orsponsors)ofthe project.Insomecases,aformalauditmaybeperformedpriortofinalpayment. Acoupleofthingstothinkaboutwhenclosingouttheprocurementsaretoensure youobtainformalacceptanceofalldeliverablesonthecontract,verifyingthattheworkis satisfactory,complete,andwarrantedasappropriateandthatallinvoicesarepaid.Andto makesureyouhavecompleteadministrativeclosure.Administrativeclosuresimplyrefers tothoseactivitiesassociatedwithclaimsprocessing,trackingchangestocompletion, recordretentionmanagement,payments,andsoon.
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Close Procurements Inputs, Tools and Techniques, and Outputs Theinputs,toolsandtechniques,andoutputsforthisprocessarefewbutextremely importanttoensurethatallaspectsofthecontractprocurementarebroughttoa satisfactoryclose.
Inputs ThereareonlytwoinputstotheCloseProcurementsprocess: ●
Projectmanagementplan
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Procurementdocuments
ToolsandTechniques AfewtoolsandtechniquesfortheCloseProcurementsprocess focusonensuringpropercontrol,handlinganyunsettledprocurements,andmakingsure yourrecordsarecompleteandaccurateonyourproject.Thetoolsandtechniquesare ●
Procurementaudits Structuredreviewoftheprocurementprocess.
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Negotiatedsettlements Ifsettlementofcontractdeliverablecannotbeachieved throughdirectnegotiation,someformofalternativedisputeresolution(ADR)may needtobeexplored.
●
Recordsmanagementsystem Consistsofaspecificsetofprocess-relatedcontrol functionsandtoolsthatarepartoftheoverallprojectmanagementinformationsystem.
Outputs Thelastthingyouneedwhenmanagingprocurementsonyourprojectisloose ends.Youmustensureallprocurementsareclosedproperly.Thisincludes ●
Closedprocurement Formalwrittennoticefromthebuyertothesellershowing satisfactoryacceptanceoftheprojectdeliverables.
●
Organizationalprocessassetupdates Includesprocurementdocumentupdates, deliverablesacceptance,andlessonslearneddocumentationreflectingthefinalstatus oftheprocurement.
TryThis
Fixing Issues Before Turning Out the Lights
YouarethePMonalargeprojectandareclosingtheprocurementsbyconductinga lessonslearnedmeeting.Thecustomermakesacommentthatsomeoftheworkwasnot completedproperlyandtheywillnotsignaformalacceptancestatementforsatisfactory
Chapter12: ProjectProcurementManagement projectcompletionuntiltheworkiscomplete.Takeafewmomentstodecidewhatyou woulddofirstandwhatyouwoulddosecond.Thenconsultthefollowinganswer. Answer:
1.Interviewthecustomertounderstandwhatworktheyfeelwasnotcompleted.
(Asitturnsoutinthiscase,theworkthecustomerisreferringtowasnotintheoriginal scopebaseline,andtheworkwasbegunbytheprojectteamlaterinthelifecycle.) 2.Interviewtheteamtocollectstatusandestimatedcompletion.Findoutwhythework
wasstartedeventhoughitwasnotinscope.Thenworkwiththecustomertodocument theworkasfollow-onactivitiesgiventhatitisnotinthescopebaseline.Explainthat youwillbehappytocompletetheworkasafollow-onphasetotheprojectonceitis approved;however,youneedtoofficiallyclosetheoriginalproject.
ContractTermination SherrieBennettstatesthefollowinginherarticle“Contract Termination”atLawyers.com: “Therearemanywaystoterminatetheobligationsofacontract.Mostoften, partiesconcludetheircontractobligationsbyperformingthem.However, sometimesproblemsariseandpartiescannotorwillnotcompletetheir obligationsunderthecontract.Therefore,contractsmaybeterminatedby reasonsofrescission,breach,orimpossibilityofperformance.”[2] Herearedefinitionsofthesethreereasonsfortermination: ●
Breachofcontract(alsocalleddefault) Eitheroneorbothpartieshavefailedto performanobligationasagreedtoandexpectedunderthecontract.Abreachmay occurwhenoneparty ●
Refusestoperformthedeliverablesofthecontract.
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Doessomethingthatwillprohibitthecontractfrombeingdelivered.
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Preventstheotherpartyfromperformingtheirobligations.
Theretwotypesofbreaches:materialandimmaterial. ●
Materialbreachofcontract Thisgoestotheheartofthecontract.Theinjured partycanseekdamagessuchasmonetarypaymenttocoverlossesresultingfrom thebreachofcontract.Forexample,arockstarwhoshowsupataconcertbut doesn’tbringhisguitarhasmateriallybreachedthecontracttoperformifhe cannotplay.
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Immaterialbreachofcontract Thisismoretrivialanddoesnotkillthecontract. Forexample,let’ssayyouhaveaservicecontracttomaintaintheairconditioning systemattheeventscenter.ThesystemistobecheckedweeklyonFridaysto ensurethetemperatureinthearenaisaconstant60degrees(±2degrees).Contrary tothecontract,theservicepersonmissesaFridayinspectionandcomesinon Saturdayinstead.Thisactisatechnicalbreachofthecontract,butitisimmaterial, unlessforsomereasontheinspectionsneededtobedoneonFridaysasopposedto anyotherday.
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Impossibilityofperformance Thecontractcanbeterminatedifanunforeseen eventpreventstheperformanceofthecontract.Forexample,youcontractwitha famoussingertoperformaconcertandtheperformergetslaryngitisandisunable tosing.Thecontractisterminatedbyimpossibilityofperformance.Asalways,there maybeexceptions.
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Rescission Thismayterminatetheobligationsofacontractinavarietyof circumstances.Onepartymayhavethelegalrighttorescindthecontract,orthe partiestogetheragreetoterminatethecontract.Forexample,eventticketsalesare extremelylowandtheeventcenterhasanotherclienttofillthespot(date),soboth partiesagreetoarescissionofthecontract.
Additional Contract and Procurement Terms Herearesomeadditionaltermsyoushouldbefamiliarwith(especiallyforthePMPexam).
ForceMajeure AccordingtoWikipedia,“forcemajeure(Frenchfor“superiorforce”) isacommonclauseincontractswhichessentiallyfreesbothpartiesfromliabilityor obligationwhenanextraordinaryeventorcircumstancebeyondthecontroloftheparties, suchasawar,strike,riot,crime,or...an‘actofGod’(forexample,flooding,earthquake, volcano)preventsoneorbothpartiesfromfulfillingtheirobligationsunderthecontract. However,forcemajeureisnotintendedtoexcusenegligenceorothermalfeasance ofaparty,[ifthe]non-performanceiscausedbytheusualandnaturalconsequences ofexternalforces(forexample,predictedrainstopsanoutdoorevent),orwherethe interveningcircumstancesarespecificallycontemplated.”[3] LetterofIntentorLetterofAgreement Letterofintent(LOI)andletterofagreement (LOA)aretermsthatrefertothebuyer’sexpressinterestintheseller.Eventhoughthese lettersfromthebuyerarenotnormallyconsideredtobecontracts,theymaybeused duringtheengagementorproposalphaseofnegotiationstocommittoacloser(bestand final)reviewoftheseller’sproposal.Theremaybefinancialcompensationwritteninto
Chapter12: ProjectProcurementManagement theLOIorLOAthatallowsforaperiodofduediligenceforthesellertoverifythesize andcomplexityoftheprojectpriortoenteringintothefinalcontract.LOIsandLOAs areoftenusedwhentherearemanyunknownsassociatedwiththeproject,suchasnew technology,uniqueconditions,uncertaintyintheoverallsizeorcomplexityoftheproject, andsoon.
DueDiligence Duediligenceisatermusedfortheperformanceofaninvestigation ofabusinessorperson.Acommonexampleofduediligenceinvariousindustriesisthe processthroughwhichapotentialbuyerevaluatesatargetcompany’sassetstoensurethey accuratelystatedinventory,revenues,andsoon,priortotheacquisition(thegoalisfull disclosureofthebuyer’sstatusandnosurprisestothesellerafterthecontractissigned). SingleandSoleSource Youshouldbefamiliarwiththesetermsofnoncompetitive procurements: ●
Singlesource Asinglesourcecontractismadedirectlywithapreferredseller,often withoutgoingthroughthefullprocurementprocess.Thisisnormallyusedwhenyou haveapriorlong-termrelationshipwiththeseller.Itisbasedontrustandconfidence.
●
Solesource Withasolesourcecontract,thereisonlyonesellerduetospecial conditions,patents,orspecialskillsthatmayexistwiththatseller.
NOTE Single and sole source contracts carry higher risk of nonperformance due to putting all your eggs in one basket.
Performing Contract Closure Contractclosureinvolvesmakingsurealltheunfinishedwork(looseends)aretiedup andformallycompleted.Manystepsareinvolvedwithprocurementclosure.Thesesteps includeproductverification,administrativeclosure,financialclosure(paymentsaremade/ received),finalreports,lessonslearned,andupdatingallprojectdocumentation.
TIP You will likely see situational questions on the PMI exams asking whether the project is closed. Also, you may see questions asking the difference between contract closure and administrative closure. The difference is contract closure should occur first and then administrative closure.
Allcontractdocuments,suchastheprocurementplan,scopestatement,WBS,and soon,needtobereviewedtoensuresatisfactorycompletion.Reviewingalltheproject
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Scopebaseline
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Approvedschedule,deliverables,andmilestones
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Budgetreportsandotherfinancialdocuments(suchasinvoices,payments)
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Inspectionsandauditresults(asappropriate)
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Substantialcompletion.(ThisisdefinedbyTheAmericanInstituteofArchitects,AIA, as“thestageintheprogressoftheWorkwheretheWorkordesignatedportionis sufficientlycompleteinaccordancewiththeContractDocuments.”)
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Finalcompletion(formalacceptance)
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Inventorycloseout
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Releaseofliens/claims(formal)
Oncethedeliverableshavebeenacceptedbythecustomerandthecontracthasbeen closed,it’stimetocollectallthecontract,procurement,andprojectinformation(conduct alessonslearnedmeeting)andfinalizetheprojectcontrolbookforrecordretention. Remember,lessonslearnedshouldhavebeencollectedthroughouttheproject,makingthe finallessonslearnedmeetingevenmoreeffective.Makesuremorethanonepersonknows wherethecontractfiles/documentsarestoredandthatyouhavemorethanonekey.This soundssimpleenough,butentirewarehousesarefullofoldprojectdocumentsneededfor
Ask the Expert Q: Canyouprovideanexampleofprojectdocumentsneededonanoldproject? A: Yes,ayoungPMcalledmeacoupleofyearsagoandaskedifIhadthescopestatement,
SOW,orWBSforaprojectIhadworkedon“sometimeago.”Ifinallyfoundthe documentsinmyarchives.Theywerefromoversevenyearsago,andthecustomer’s recollectionofthedeliverablesoftheprojectwasmuchgranderthanwhatwascapturedin theseprojectdocuments.Needlesstosay,thesedocumentssavedthedayandallowedthe newPMtogetandgiveaclearpictureoftheoriginalproject.ThisenabledthenewPMto managethecustomerexpectationsmoreeffectivelyastheyinitiatedPhaseIIoftheproject.
Chapter12: ProjectProcurementManagement auditorcustomerreviewbuttheprojectmanagerhassinceretiredormovedontoanother company.WhentheclientcomesbackforPhaseIIorIIIoftheproject,unlessyouhave keydocumentsyouwillhavetostartallover;otherwise,youcouldfailanauditifthe documentscannotbeproducedwhenneeded.
Summary Herearethethingsyouneedtorememberaboutcontractandprocurementmanagement: ●
Knowthedifferenttypesofcontractsandwhobearstheburdenofriskbetweenthe buyerandsellerforeach.
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Knowthefourprocurementmanagementprocesses(andbefamiliarwithinputs,tools andtechniques,andoutputsofeach).
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ForthePMIexam,thinkofthePMasthebuyerinthebuyer/sellerrelationship.
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Befamiliarwiththeelementsofalegallybindingcontract.
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UnderstandtheSOWandcontract/agreementdetailsonyourproject.
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Understandtheevaluationcriteria.Makeitasobjectiveaspossible.
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Knowtheimportanceofgoodnegotiationskillsandtheneedtomaintainagood buyer/sellerrelationship.
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Ensurecontractperformancereporting/documentationiscompleteandaccurate.
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Knowtheimportanceofobtainingformalacceptanceandeffectivelyclosing procurements.
NOTE Additional information on project closure is provided in Chapter 13.
References
1.Klenke,Maggie.“UsingSelectionCriteriainVendorBidAnalysis,”TheCallCenter
School,http://www.swpp.org/newsletter/fall08/managing.html.
2.Bennett,Sherrie.“ContractTermination,Lawyers.com,http://consumer-law.lawyers.com/
Contract-Termination.html.
3.Wikipedia,http://en.wikipedia.org/wiki/Force_majeure.
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13
Closing the Project: Are We There Yet?
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KeySkills&Concepts ●
Importanceofproperlyclosingtheproject
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Formalacceptance(gettingthesignoffinwriting)
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Thetwoclosingprocesses
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Reverseengineering
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Lessonslearned
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Exitcriteriaandcommonclosureactivities
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Conductinglessonslearned/closuremeeting
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Rewardsandrecognition
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Findingteammembers/assetsahome
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Finalprojectclosurereport
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Planforrecordretention
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Celebrate!
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ReminderoftheA.I.M.strategy
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Nextsteps—wheretogofromhere(stepstoapplyforaPMIexam)
Y
ouareapproachingtheendofyourproject(andthisbook).Closingtheprojectis probablytheleastplannedandpotentiallythemostdifficultpartofmanaginga project.Sohowdoyouensureyoubringyourprojecttoasuccessfulclose?Theanswer isbyusinggoodsoundprojectmanagementdiscipline.Youwanttomanagetheproject closurephaseoftheprojectlifecyclejustlikeanyotherphase—byusingthefiveprocess groups,asappropriate.Youshouldrememberthembynow;theyareInitiating,Planning, Executing,MonitoringandControlling,andClosing.Youmightthinkyoucanfocusonly ontheClosingprocessgroupandthatisnotthecase.Asmentionedbefore,allprocess groupsworkinteractively.
Chapter13: ClosingtheProject:AreWeThereYet?
Importance of Project Closure Closingtheprojectorphaseisasimportantasstartinganewproject.AsthePM,you needtomanageprojectclosureasaprojectinitself.That’sright,youneedtoinitiate projectclosure,verifythescopeanddeliverablesofprojectclosure,makesureyouhave authorizationtocloseouttheproject(potentiallyaseparateprojectcharterwithfocus ontheclosingphase),planforit,andensureproperstaffing,adequatetime/schedule, sufficientbudget,andsoon,tomeettheapprovedclosuredatesanddeliverables.
Formal Acceptance Onewaytoensureproperprojectclosureistomakeitofficialbygettingthefinal acceptance(sign-off)inwriting.WetalkedaboutriskmanagementinChapter11andhow youmustplanforandmanageriskthroughouttheprojectlifecycle.Thisisespecially importantduringprojectclosure.Theprojectisnotofficiallycompleteuntilthepaperwork isdoneandsignedbytheapprovingsponsor(s). Mostprojectmanagershaveafearofsurprises.Surprisesaregreatforbirthdays,but notwhenclosingaproject.Oneofthegreatestsurprisesonanyprojectiswhenyougoto theprojectsponsor(customer)toobtainformalacceptanceofprojectcompletionandyou discovertheydon’twanttheprojecttoend.Eithertheyreallyliketheworkperformedand thusfeelconfidentaboutaddingmorefeaturesor,ontheothersideofthecoin,theyfeel theydidn’tgetalltheyexpectedandwantyoutodelivermore. Ifyouhaveplannedwellandproperlydocumentedtheprojectscopeanddeliverables (whatIcall“liningupyourducks”)bydefiningtheacceptancecriteria,communicatingthe planandmeasurementobjectives,andobtainingformalacceptancefromthesponsor(s), thenyoushouldexperiencefewornosurprisesattheendoftheproject.
TIP At the end of the project, the success or failure of a project depends entirely on measured results and perception. For example, a project may be on time and on budget, but may not meet the customer’s expectations. PMI feels issues/conflicts should be resolved in favor of the customer. Therefore, you need to manage customer expectations effectively early and often especially when closing the project.
Three Takeaway Points Areallygoodwaytomanagecustomerexpectations,theprojectasawhole,andproject closureistorememberthethreekey“takeawaypoints”fromChapter2.Inmyopinion,they areessentialtohelpingyouclosedownyourprojects.Hopefully,bynowyouremember them.Ifnot,nowisagoodtimetoasktheexpertforarefresher.
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Ask the Expert Q: Whatarethethreetakeawaypointsneededforsuccessonanyprojectorphase? A: Atthispoint,youshouldbeabletorecitethesefrommemory.Ifyoucan’t,learnthemnow: ●
Stayfocusedontheendgoalsandobjectives Youshouldbeabletoanswerthe followingquestionconfidently:Didyoudowhatyousaidyouwoulddoonthe project?Forexample,didyoumeetallprojectdeliverables,effectivelymanage constraints,meettheapprovedbudgetandschedule,performinaqualitymanner, andmeetcustomerexpectations?
●
Usethetoolsavailable Didyoueffectivelymanagetheresourcesanddidyou effectivelyusetoolssuchasstandardprocesses,templates,checklists,thisbook, yourorganization’sassets,andthePMBOK?
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Workasateam Didyoumanagetheteameffectively?Didyouhelpgrowthe teamandtheindividualteammembersthroughmentoring,partneringwiththe team,andotherteambuildingactivities?
Closing Processes ThereareonlytwoprocessesintheClosingprocessgroupofthePMBOK: ●
Closeprojectorphase Theprocessoffinalizingallactivitiesacrossalltheproject managementgroupstoformallycompletetheprojectorphase(Chapter4.6)
●
Closeprocurements Theprocessofcompletingeachoftheprocurementsonthe project(Chapter12.4)
Reverse Engineering Reverseengineering(sometimescalled“right-to-leftplanning”)isagreatwaytoclosea project.Younormallyhaveaset(orfixed)targetdateforclosure.Sostartbybackinginto thetargetdateandallowenoughtimetoproperlyshutdowntheproject.Theamountof timeneededtocloseaprojectdependsentirelyonthesize,type,andcomplexityofthe project.Ingeneral,allowatleast60to90daysduetothewrittennoticesyouneedtosend
Chapter13: ClosingtheProject:AreWeThereYet? tosupplierstocancelservices,towritelease(orlicense)terminationlettersforhardware andsoftware,andtogivepeoplesufficientnoticetoplanfortheirnextassignment. Itdoesn’tmatterifyouareclosingalong-termprojectthatyouhavebeenworking onforsometimeorifyouarebroughtinonafairlynewshort-termprojectthatsomeone elsehasbeenmanaging,theapproachshouldbethesame.Managetheclosingphaseasa project(chartertoclose).
The Past Is a Crystal Ball Into the Future Wouldn’titbegreatifyouknewhowtoreachsuccessonyourprojectbeforeyoueven began?Youcan,andyoudon’tevenneedacrystalballtoseeintothefuture.Thepasthas providedalotofgreathistoricalinformationaboutwhyprojectsfail.Weshouldbeableto simplylearnfrompastmistakesandmoveontogreaterprojectsuccess. YoumayrememberthatinChapter2wetalkedaboutwhyprojectsfail,andthese reasonsapplyevenwhenclosingaproject.Torefreshyourmemory,here’sashortsummary: ●
Lackofprojectmanagementdiscipline(riskmanagement,communications,change, time,costandscopemanagement,andsoon).Whenclosingaproject,wetendtoget inahurryandthinkwejustneedtogettothe“endofthegame”andtheprojectwillbe complete.However,youstillneedtoexercisegoodPMpracticesforsuccessfulclosure.
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Lackofuser(keystakeholder)involvement.(Don’tleaveoutthecustomerorusers.)
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Lackofprojectsponsorcommitment.(Sponsorstendtoloseinterestattheendofthe project;remindthemofwhatneedstobedoneandtheneedfortheirsupport.)
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Projectsendingforthewrongreasons(assumingtheproblemsaresolved,ordueto lackofsponsorship).
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Lackofproperlytrainedorskilledpeopletoworktheproject.
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Lackofculturalskillsandabilitytomanageinmulticulturalenvironment.
Exit Criteria Theexitcriteriaforagivenprojecttendstobeuniquenomatterhowmanytimesasimilar projecthasbeenconducted.Eveniftheprojecthasbeendonebefore,therearealways certainfactorsthatrequireaslightlydifferentapproachtotheclosingprocessforeach project. Exitcriteriamustaligntotheagreed-tomeasuresfortheprojectandmayinclude quality,quantity,conformancetospecificrequirements,keydeliverablessuchasproducts, services,andresults.
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Project Closure Activities Herearesomeofthemorecommonprojectclosureactivities: ●
Providefinalwrittenreports(financialstatus,earnedvaluereports,milestones, changes,successes,openissues,thelocationofupdateddocumentation,andsoon).
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Conductcontractcloseoutandoveralladministrativeclosure.
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Getformalacceptance(extremelyimportant)ofalldeliverables.
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Conductalessonslearnedsessiontocapturewhatworkedandwhatdidn’twork (includethecustomer).
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Updatedocumentationforrecordretention.(Checkwithyourassetmanageror businesscontrolscoordinatorforstateandlocal,federalgovernment[IRS,SEC],and company-specificrequirements.)
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Conductteamandindividualevaluations.Providefeedbacktotheemployeesandtheir managers.
●
Providerewardsandrecognitiontotheteamandindividualsfortheircontributions.
●
Celebrate!
Sample Project Closure (from the BEC Case Study) Tocarryonwithoureventscentercasestudy,seeTable13-1forareal-worldexample ofprojectclosure.Aftereachevent/project,thischecklistisusedtodeterminethestatus ofthefacility,equipment,andpreparednessforthenextevent.Allidentifiedfollow-up activitieswillbeinitiatedasappropriate.
Conduct Lessons Learned/Closure Meeting Historyisourbestteacher.Itshowsushowtodothingsbetterifwetakethetimetolearn fromourmistakes.Ifwedon’tapplytheknowledgelearned,wetrulymissoutonsome valuablelessonsthatcanbecostlytoourfutureprojects.Toooftenwejustdiveintothe waterbeforewerealizewedon’thaveonalifepreserver.ThewordsofClarenceDarrow areappropriatehere:“Historyrepeatsitself.That’soneofthethingswrongwithhistory.” Tohelpassesstheresultsofyourproject,scheduleaprojectteammeetingand includethecustomer.Planforatleasttwohours(moreiftheprojectislargeorcomplex). Also,setthestageandexpectationsbysendinganagendaaheadoftimeandbesureto capturetheminutesofthismeeting.Thelessonslearned/closuremeetingworksbest ifyouprovidequestionnairesorsurveysaheadoftimesopeoplecanthinkabouttheir
Chapter13: ClosingtheProject:AreWeThereYet?
Resource/Owner ActivityDescription
Complete? Yes/No Comments/Follow-Up
Building operations
Walk through a visual inspection for damages.
Schedule repairs if necessary.
Preventative maintenance
Check all building equipment and systems to ensure good working order.
Schedule maintenance as needed.
Sponsorships
Create a detailed report outlining fulfilled elements of the event sponsorships.
Create action plans as needed.
Marketing
Reconcile all advertising audit reports with each media partner (radio and television spot times and newspaper tear sheets).
Ensure event advertisement is cancelled to match event completion and billing, as appropriate.
Sales
Analyze box office sales and determine return on investment (ROI) in relation to each media buy.
Use results for future marketing trend analysis and strategy.
Manager on duty
Create a report detailing building cleanliness, attendance, staff performance, issues/concerns related to the event, successes of the event, accidents/injuries, patron behavior, police reports, and recommendations for future events.
Communicate status results. Create action plans as needed.
Finance manager
Process all payments, expenses, and financial settlements, and report financial status with event promoter/manager.
Handle reconciliations and payments disputes. Ensure that retention of financial reports meets all company external agency requirements.
Table13-1
Sample Project Closure
answerspriortoattendingthemeeting.Herearesomekeyquestionsthatneedtobe askedandanswered: ●
Howdidwedooverallontheproject?(Weretheresultsachievedandanticipated?)
●
Didwemeetourdocumentedobjectives?(Didwedeliverwhatwesaidwewould?)
●
Aretheproductsorservicesattheapprovedqualitylevels?
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Didwemanagethecustomerandteamexpectationsproperly?
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Didweeffectivelymanagechangebyenforcingthecontrolprocess?
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Whatcausedthemostproblems,andhowcanwekeepthemfromcomingbackonour nextproject?
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Wasthebudgetmanagedproperly,ordidwehavetobegformorefundinghalfway throughtheprojectlifecycle?
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Didwemakethebestuseofourresources?(Didweusetherightskillsattheright timeintherightplace?)
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Didweusethelessonslearnedfromprevioussimilarprojectsanddidwecapture lessonslearnedfromthecurrentprojecteffectively?
SomegreatlessonslearnedtemplatesareavailableontheInternet.Youcansee apartialexampleinFigure13-1.[1]
Documenting Results and Action Items Theprojectisnotoveruntilthepaperworkisdone.Documentingtheresultsofthe lessonslearnedandprojectclosuremeetingsneedstobeconcisewithspecificsof keyfindings,aclearshortsummaryofevents,feedbackfromtheteam,milestones, deliverables,andany/allfollow-upactionitems,warrantyperiodcontacts,andsoon. Herearethestepstotake:
1.Completelyandaccuratelydocumenttheprojectresults.(Thisshouldmatchthescope
baselineandmilestonesaswellasaddressallapprovedchanges.)
2.Documentaccomplishmentsandteammemberrecognition.
3.Captureminutesofallmeetings,especiallylessonslearnedandclosuremeetings,
includinginputfromallstakeholders(customer,team,yourselfasthePM,sponsors).
4.Planforprocessimprovement(rememberDeming’s“Plan-Do-Check-Act”cycle).[2]
Mostprojectmanagerslikechecklistsorsurveystotellthemhowtheydidin managingtheproject.Table13-2isasamplepost-projectsurvey(fromIdentifyingand ManagingProjectRisk,SecondEdition,byTomKendrick)thatincludesquestionsabout projectdefinition,planning,defectandissuesmanagement,decisionmaking,teamwork, leadership,andmanagingdependencies.[3]
Chapter13: ClosingtheProject:AreWeThereYet?
1.ProjectLessons-LearnedCheckList Impact Low Yes No N/A 1
No. LessonsLearned
2
Yes = The project team agrees with the statement. No = The project team does not agree with the statement. N/A=Thisstatementdoesnotapplytotheproject. Impact = The extent to which this factor had an impact on your project. Add a >comment to any question where supporting detail would be helpful ProjectPlanning 1. Business objectives were specific, measurable, attainable, results-focused, and time-limited. > 2. Product concept was appropriate to business objectives. > 3. Project plan and schedule were well documented, with appropriate structure and detail. > 4. Project schedule encompassed all aspects of the project. > 5. Tasks were defined adequately.
>
6. Stakeholders (e.g., sponsor, customer) had appropriate input into the project planning process. > 7. Requirements were gathered to sufficient detail. > 8. Requirements were documented clearly.
>
9. Specifications were clear and well documented. > 10. Test plan was adequate, understandable, and well documented. > 11. External dependencies were identified and agreements were signed. > Figure13-1
Sample lessons learned template
High 3
4
5
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Please evaluate each of the following statements using the scale: 1-Strongly disagree, 2-Disagree, 3-No opinion, 4-Agree, 5-Strongly agree 1
2
3
4
5
Project developed and used a project and risk plan.
1
2
3
4
5
Problems were dealt with quickly and escalated properly when necessary.
1
2
3
4
5
Schedule/budget problems were dealt with effectively.
1
2
3
4
5
Resource problems were dealt with effectively.
1
2
3
4
5
Specifications were modified only through approved change control/management.
1
2
3
4
5
Project reviews were done at appropriate times.
1
2
3
4
5
Communications were thorough, timely, and complete.
1
2
3
4
5
Documentation was consistent and available when needed.
1
2
3
4
5
Project status was reported honestly throughout the project.
1
2
3
4
5
Reporting project difficulties resulted in solutions.
1
2
3
4
5
Standard processes were used properly.
1
2
3
4
5
The project had appropriate sponsorship and support.
Table13-2
Comments
Sample Project Closure Survey
Rewards and Recognition Mostofusthriveonrewardsandrecognition.Weliketoknowthatweareappreciated andrecognizedfortheextraeffortweputforthonprojectactivities(thelonghours,hard work,andsacrificeswemaketodowell).Therefore,asaprojectmanageryouneedto makesureteammembers’effortsandgooddeedsarerewarded,evenifit’sonlyapaton thebackandanicenoteorlettertotheteammemberandtheirboss.Monetaryrewards aregreataswell.Remember,yourteamisthenumber-oneassetonyourproject,andteam membersneedtofeelneededandappreciated.
Finding Homes for the Team and Assets Breakinguptheteamisalwaysthehardpart.Thisiscalledthe“adjourning”phasein theBruceTuckmanmodel.Whenitcomestimetocloseaproject,emotionsaremixed. SomePMsfeelsadthattheprojectiscomingtoanend,theprojectteamismovingon tothenextproject,andthefearoftheunknown(thenextprojectandstartingallover again)tendstocreepin.SomePMsarehappytoseetheirhardworkcomingtosuccessful
Chapter13: ClosingtheProject:AreWeThereYet? closureandnewprojectopportunitiesappearingjustaroundthecorner,wheretheycan applyallthelessonslearnedandtheirnewexperiencetothenextbigproject. Thisisnotimetoshortchangetheteam.Itisextremelyimportanttoworkwitheach teammembertofindthemagoodprojecthometomoveto.Ifyoulookoutfortheteam members,theywilllookoutforyou.Weworkinasmallworld,sodon’tbesurprised whenyougointoanewprojectandfindpeopleyoupreviouslyworkedwitharenowyour customerorboss(thishashappenedtomeseveraltimes).
TIP Another measure of success for you as the project manager is when people are willing to work with you on the next project. I view this as the biggest compliment one can receive. The team (or at least key members of the team) is confident enough in your PM skills and ability to work with you again on future projects.
Whenitcomestofindingahomefortheassets,youneedtobethoroughandget transferacceptanceinwriting.Findahomeforalltheequipmentandthenproperly transfertheequipment.Cancelallappropriatesoftwarelicensesorhardwareleases, asneeded.Thelastthingyouwanttohappenistohaveasuppliercallyouthreetosix monthsaftertheprojectiscloseddownlookingforpaymentofaninvoice.Thishas happenedtomanyexperiencedPMs,anddealingwiththissituationisnotfunespecially whentheprojectbudgetisclosed.
Final Project Report Theprimarypurposeofthefinalreportistoacknowledgetheaccomplishmentsofthe projectandtocommunicatetoeveryoneinvolvedthattheprojectisofficiallycomplete.A finalprojectreportshouldalsothankallstakeholdersandcontributorsaswellasaddress whotocontactifquestionsariseorifrecordsarerequiredaftertheprojectisclosed. Regardlessofthesizeoftheproject,herearesomefundamentalstepsthat,ifused, willhelpyouensuresuccessfulclosureonyourprojects:
1.Useprovenprojectmanagementdisciplines.Thisincludesusingorganizationalassets
bydocumentingandmanagingscopebaseline,change,risk,scope,time,andcost diligently.
2.Reviewandreportstatusfrequentlyandhonestly(Irecommendweekly).
3.Ensurecleartwo-waycommunications(useactivelistening).
4.Workwiththestakeholderstoensuretheyarefocusedontheclosureactivities.
5.Beanadvocateforyourprojectteam(catchthemdoingsomethingright!).
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6.Verifytheoverallhealthoftheprojectbyaskingyourselfandtheteamthefollowing
questions: ●
Weredeliverablesproducedontime,withintheapprovedscope,andwithinthe approvedbudget?
●
Didtheprojectsatisfythebusinessrequirementsofthestakeholders?(Forexample, wastheproblemsolvedorbusinessresultaccomplished?)
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Hastheprojectmetthebusinessvaluegoals?(Suchgoalsmightincludecostsavings, increasedmarketshare,andstreamlinedprocessesneededtoimprovequality.)
●
Mostimportantly,dothebusinessowners(sponsors)believetheprojectwas successful?Didyoudeliveraqualityproductandmeetstakeholderexpectations?
●
Lastbutnotleast,document,document,documentandcommunicateproject results.
Plan for Record Retention Aspartofformalacceptanceyoushouldensurethatallfinalreportshavebeencompleted, reconciled,andapproved.Makesureyouhavedocumentedandplannedforhowtostore theprojectdocuments.Thisincludesrecordretention,e.g.,wheretostoretheproject documents,forhowlong,whowillhaveaccesstothedocuments,whothebackupperson isincasetheprimarycontactisnotreadilyavailable?Makesurethesebasesarecovered inwritingandarefullycommunicatedtoallthekeystakeholders,especiallywhendealing withparticularindustries,PMsshouldbeawareoftheirdocumentretentionpoliciesor requirements.
Celebrate! Nowitistimetocelebrate.Nomatterhowtheatmospherehasbeenduringtheclosing daysofyourproject,bringittoapositiveconclusion.Celebratethesuccessoftheteam, theindividualsontheteam,andthekeysupportmanagers.Adinnerorluncheonworks best,butthismightnotbepossibleiftheteamisgeographicallydispersedorifsome teammembershavealreadymovedontootherprojects.Still,youshouldstrivetorally theteamtogethertoacknowledgetheirgoodwork,eveniftheprojectwasnotacomplete success. Movingontothenextassignment/projectismucheasierforpeoplewhentheyhavea chancetobringtheirlastprojecttoafriendlyconclusion.Forglobalordistributedteams,
Chapter13: ClosingtheProject:AreWeThereYet? youmightwanttoarrangeasimilareventforeachlocationatroughlythesametimeand thenconferenceinthedifferentsubgroupsforafinalthank-youandsendoff.
Next Steps: Where to Go from Here Thebestwaytoreachsuccessistoalwayshaveaplanandastrategy.Irecommendthe A.I.M.strategy(discussedinChapter2).Ifeelstronglyaboutthisstrategyforlifein generalandprojectmanagement.Hereitisagain,asareminder:
1.Analyzethesituation.(Developtheplanasateamandobtainformalacceptanceforthe
projectplan.)
2.Implementtheapprovedplan.(Useavailabletoolsandresources.)
3.Managethewholeproject,andnothingbuttheproject.
HerearethestepsyoushouldfollowifyouareplanningtotakeaPMIexam:
1.Applyfortheexamonlineatwww.pmi.org.
2.Studyusingthekeyresources(books,studygroups,sampleexams)availabletoyou.
3.Considercreatingindex(flash)cardswithquestionsononesideandanswersonthe
back.Studythemuntilyouknowalltheanswers,andthenreversetheprocessby lookingattheanswersandbeingabletodescribethequestions.
4.Stayfocused(makeaprojectplanandsticktoit).
5.Don’tbetoohardonyourself(allowforsomedowntime).
6.Don’tcramfortheexamthenightbeforeyoutakethetest.
7.Celebrateyourachievementuponsuccessfullycompletingtheexam.
Manygreatprojectmanagersaresuccessfulwithoutbeingcertified.You,too,canbea successfulPMbyfollowingthesesimplerules(thethreeP’s):
1.Planwell(preparationisthekey).
2.Performyourrolewithcleardirectionandclearcommunications.
3.Practice(youneedtokeepdevelopingyourskills,applylessonslearnedforcontinuous
improvement,andstaycurrentwithlatestprocesses,tools,concepts,andmethods).
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Ask the Expert Q: HowdoIgetthemostoutofmyprojectmanagementeffortandexperience? A: Iwouldliketoofferthesewords(fromanunknownauthor):“Thebestwaytogetwhere
youwanttogoistoactlikeyouarealreadythere.”Thismeansyouhaveamuchgreater chanceofbeingsuccessfulifyouperformwithintegrity,conviction,andcommitment.Act likealeader.Tobesuccessful,youmustdemonstrateyourabilities,takecharge,andthen takeactiontomoveyourprojectsforwardwithdeterminationanddirection.
Project Objectives for this Book HerearetheobjectivesIsetforthe“project”ofwritingthisbook: ●
Provideusefulinformationthatthereadercanapplytotheirprojectsimmediately.
●
Providethereaderwithprovencheckliststohelpguidetheminmanagingtheir projectstoahigherdegreeofsuccess.
●
Offertipstohelpthereaderbetterunderstandwhattheyneedtodotoapplyforand prepareforthePMIexam.
IconsiderthisbookasuccessifIhaveaccomplishedoneormoreofthesegoals. However,theonlywayIwillknowisthroughfeedbackfromyou,thereader.Feelfree tocontactmethroughmywebsite(www.eagle-business.com)toofferyourfeedbackand suggestionsandtoletmeknowifImetmyprojectgoals.
Go Confidently in the Direction of Your Dreams IwouldliketoleaveyouwithaquotefromHenryDavidThoreau:“Goconfidentlyinthe directionofyourdreams!Livethelifeyou’veimagined.Asyousimplifyyourlife,the lawsoftheuniversewillbesimpler.”
Chapter13: ClosingtheProject:AreWeThereYet? Tofollowyourdreamsandgetwhereyouwanttobeyoumusthaveaclear strategy.Theonethathasworkedformeovertheyearsis“Lineupyourducksand feedthemwell.”ThisisamottothatIlivebyandithasworkedextremelywellfor meinlifeandinthedynamicworldofprojectmanagement.Ihopeitworksaswell foryou.
References
1.CVR/ITConsultingLLC,http://www.cvr-it.com/PM_Templates/.
2.Wikipedia,http://en.wikipedia.org/wiki/PDCA.
3.Kendrick,Tom.IdentifyingandManagingProjectRisk:EssentialToolsfor
Failure-ProofingYourProject,SecondEdition(AMACOM,NewYorkCity),2009, pages296–298.
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Index 0/100rule,205,228 20/80rule,205,228 50/50rule,205,228 80-hourrule,149 8-to-80-hourrule,149
A AC.Seeactualcost(AC) accelerateddepreciation,241 acceptance,380 accommodating,308 accuracy,vs.precision,255–256 AcquireProjectTeamprocess,283–287 actionitems,documenting,418–420 activities,defining,170–174 activityattributes,170,171,174 activityconvergence,199 activitycostestimates,223,356,387 activitydivergence,199,200 activitydurationestimating,356 activitylists,171,173–174 activityresourcerequirements,387
activity-on-arrow(AOA).Seearrow diagrammingmethod(ADM) activity-on-node(AON).Seeprecedence diagrammingmethod(PDM) actualcost(AC),228,229,232 adjourningphase,420–421 ADM.Seearrowdiagrammingmethod(ADM) advertising,399 affinitydiagrams,142 agent,380 AIMstrategy,55–59,423 analogousestimating,190,220 advantagesanddisadvantages,223 ANSI,80 arbitration,380 arrowdiagrammingmethod(ADM),178 aspirationalstandards,87 assignment,380 assumptionsanalysis,357 audits,402 beingaudit-ready,40 authority,380 avoiding,308
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PMPCertification:ABeginner’sGuide
B BAC.Seebudgetatcompletion(BAC) backwardpass,196 stepstocalculate,200–203 barcharts.SeeGanttcharts baseline.Seecostperformancebaseline; scopebaseline basisofestimates,224 benchmarking,265–266 biddersconference,397–398,399 Blanchard,KennethH.,26 bodylanguage,335–336 bonds,380 bottom-upestimating,220 advantagesanddisadvantages,224 brainstorming,141,357 breach/default,380 breakdownstructures,48–49 budget,352 budgetatcompletion(BAC),225–226,229,232 BudweiserEventsCenter(BEC).Seecasestudy burncharts,182 businessrisks,355
C CAPM.SeeCertifiedAssociateinProject Management(CAPM) casestudy,51–53 earnedvalue(EV),232–233 projectmanagementplan example,114–115 qualitymeasurement,249–250 reserveanalysis,369–370 samplecommunicationsplan,324 samplecompletioncriteria,133–134 sampleprojectcharter,104–105 scopestatement,146,161–163 causal/econometricforecastingmethods,338 cause-and-effectdiagrams,271 CCRs.SeeContinuingCertification Requirements(CCRs) celebratingtheendoftheproject,422–423 certification benefitsof,7–8 maintainingcredentials,28–30 reasonsforpursuing,11–12
CertifiedAssociateinProjectManagement (CAPM),6,8,10–11 objectives,19 ChangeControlBoard(CCB),121,159–160 changecontrolmeetings,132 changemanagement controllingchange,121–123 procedures,159 Seealsoscopecreep changerequests,298,371,388,400,402 managing,274 charter,140 DevelopProjectCharterprocess, 65,102–112 ownershipof,105 sampleprojectchartercomponents, 103–104 checklistanalysis,357 checklists,100 closeoutchecklist,124,125 costestimating,218–219 jumpstartchecklist,108–109 forPMmanagementplandevelopment, 113–114 projectexecutionactivities,116–117 quality,268 scheduledevelopment,192 claimsadministration,402 CloseProcurementsprocess,403–409 CloseProjectorPhaseprocess,125–127 closedprocurement,404 Closingprocessgroup defined,63 overview,70–73 closingtheproject,413 celebrating,422–423 closingprocurements,414 closingtheprojectorphase,125–127,414 documentingresultsandaction items,418–420 exitcriteria,415–423 finalprojectreport,421–422 findinghomesfortheteamand assets,420–421 formalacceptance,413 lessons/learned/closuremeeting,416–418 planningforrecordretention,422 projectclosureactivities,416 reverseengineering,414–415
Index rewardsandrecognition,420 sampleprojectclosure,416,417 sampleprojectclosuresurvey,420 CodeofEthics,18,85–90 CodeofFederalRegulations,368–369 collaborating,308 CollectRequirementsprocess,135–143 co-location,289 communication blockers/barriers,336 bodylanguage,335–336 commonblunders,334 deliverymethods,315–316 importanceofclearcommunication,43 PM’sroleincommunications,314–315 samplecommunicationplanforscope managementstatus,155 virtualcommunications,316–317 communicationchannels,325,326,327 communicationmethods,327,332,333 communicationmodel,312–314,326 communicationrequirementsanalysis,325 communicationtechnology,325–326 communicationsflow,318–319 communicationsmanagement,312–314 communicationsplans,352 sample,321–324 completioncriteria,133 casestudy,133–134 compromising,308 conditions,380 ConductProcurementsprocess,397–400 conflictmanagement,298 conflictresolution,307–308 signsofaconflict,307 techniquestohelpresolve conflict,308–309 confronting,308 constraints impactof,193–194 typesof,194 contingencyreserves,369 ContinuingCertificationRequirements (CCRs),28–30 continuousimprovement,256–257. SeealsoKaizen contractchangecontrol,402,403 contractchangeprocess,380
contracttermination,405–406 contractorconference,399 contracts,402 advantagesanddisadvantagesofdifferent types,391,392 breachofcontract,405–406 closure,407–409 defined,379 documentation,407–409 duediligence,407 elementsofalegallybindingcontract,382 forcemajeure,406 impossibilityofperformance,406 letterofintentoragreement,406–407 rescission,406 singlesource/solesource,407 termsandconditions(T&Cs),379–381 thingstoconsiderincontract selection,390–391 typesof,387,388–390 Seealsoprocurement controlcharts,263–264,265,271 ControlScheduleprocess,204–206 ControlScopeprocess,154–159 conversation,298 COQ.Seecostofquality(COQ) cost vs.pricing,217 typesof,219 costestimates,independent,399 costmanagement,210–212 controllingcosts,226–241 costoverruns,242 determiningbudget,225–226 earnedvaluemanagement (EVM),227–234 goals,236 rangesofestimatingaccuracy,216–218 intherealworld,223 reportingformatsandfrequencyof delivery,224 thingstoconsider,219–220 andtimemanagement,212–213 typesofcost,219 costmanagementplan,352,356,362 costofquality(COQ),220,222,262–263 costperformancebaseline,225,387 costperformanceindex(CPI),230,233
429
430
PMPCertification:ABeginner’sGuide costplusawardfee(CPAF),390 costplusfixedfee(CPFF),389 costplusincentivefee(CPIF),390 costvariance(CV),230 cost-benefitanalysis,262,383 cost-reimbursablecontracts,389–390 cost-utilityanalysis,383 CPI.Seecostperformanceindex(CPI) CPM.Seecriticalpathmethod(CPM) crashing,205–206 CreateWorkBreakdownStructure(WBS) process,147–152 credentials,8,10–11 CertifiedAssociateinProject Management(CAPM),8 examplesofeligibility,12–13 maintainingcredentials,28–30 PMIRiskManagementProfessional (PMI-RMP),9 PMISchedulingProfessional (PMI-SP),9–10 ProgramManagementProfessional (PgMP),9 ProjectManagementProfessional(PMP),9 reasonsforpursuing,11–12 timelineofcredentialprocess,22 criticalpath,175 calculating,197–198 criticalpathmethod(CPM),175,196–204 precedencediagrammingmethod (PDM),176–178 Crosby,Philip,254 customersatisfaction,49 howtoachieve,247–248 managingcustomerexpectations, 306–309 CV.Seecostvariance(CV)
D danglers,197 dashboards,181–182 datagatheringandrepresentative techniques,363 DCFROR.Seediscountedcashflowrateof return(DCFROR) decisiontreeanalysis,363–364
decomposition,171 DefineActivitiesprocess,170–174 DefineScopeprocess,144–146 definitiveestimates,216 deliverables,110–111,132–133 Delphitechnique,142,357 Deming,W.Edwards,254 dependencies,176–178 depreciation,240–241 designofexperiments(DOE),266 DetermineBudgetprocess,225–226 DevelopHumanResourcePlan process,281–283 DevelopProjectCharterprocess,65,102–112 DevelopProjectManagementPlanprocess, 112–116 DevelopProjectTeamprocess,287–295 diagrammingtechniques,357 DirectandManageProjectExecutionprocess, 116–118 directcosts,219 discountedcashflowrateofreturn (DCFROR),239 discretionarydependencies,178 distraction,82–85 DistributeInformationprocess,329–332 documentation contracts,407–409 documentingresultsandaction items,418–420 planningforrecordretention,422 procurement,388,394,399,400 requirements,142–143,387 updates,372 DOE.Seedesignofexperiments(DOE) domains.Seeprocessgroups doubledecliningbalance,241 duediligence,407 durationestimating,188–191
E EAC.Seeestimateatcompletion(EAC) earnedvalue(EV),211,228,229,232 casestudy,232–233 formulas,229–234 sampleearnedvaluechart,231
Index earnedvaluemanagement(EVM),227–234 keycomponents,232 earnedvalueperformance(EVP),236 education,importanceof,290 EEFs.Seeenterpriseenvironmental factors(EEFs) effort estimating,188 Seealsolevelofeffort(LOE) EMV.Seeexpectedmonetaryvalue(EMV) enhancements,34 enterpriseenvironmentalfactors(EEFs),48, 78–79,171,218,290,352,387 EstimateActivityDurationsprocess,188–191 EstimateActivityResourcesprocess,185–188 estimateatcompletion(EAC),229,230,234 EstimateCostsprocess,215–224 estimatetocomplete(ETC),229,230,234 estimatingcosts thingstoconsider,219–220 typesofestimates,218 Seealsocostmanagement estimatingduration,188–191 ETC.Seeestimatetocomplete(ETC) ethics,18 EV.Seeearnedvalue(EV) Evans,Gary,40,100 EVM.Seeearnedvaluemanagement(EVM) EVP.Seeearnedvalueperformance(EVP) exams,13–14,423 applyingfor,19–21 balancingcompetingdemandswhile preparing,24 blueprint,15–16 changestotheexams,20 CodeofEthics-relatedquestions,89–90 costs,15 thedayoftheexam,27 differencesbetweentheexams,14–15 endingtheexam,28 examplequestions,23 first-timepassrate,19 learningstyles,25 “MarkforReview”option,27 movingtheexamdate,24 objectives,16–19 preparingfortheexam,21–22 ProjectManagementProfessional(PMP),6
“ReviewAllQuestions”option,27 studytips,26–27 timelineofcredentialprocess,22 toolsforexampreparation,24–25 trainingfor,22–23 exclusions,110 Executingprocessgroup defined,63 flowdiagram,71 overview,70 executionactivitieschecklist,116–117 exitcriteria,415 projectclosureactivities,416 ExpectancyTheory,304 expectedmonetaryvalue(EMV),361 expertjudgment,171,189–190,220, 357,363,387,399 expertjudgmentalforecastingmethods,338 externaldependencies,178 externalrisks,349
F facilitatedworkshops,141 failure failurerates,4–5 whyprojectsfail,56–59,415 fasttracking,205–206 finalprojectreport,421–422 FinishNoEarlierThan(FNET),194 FinishNoLaterThan(FNLT),194 finish-to-finish(FF),177 finish-to-start(FS),176,177 firmfixedprice(FFP),388 FiveSprogram,260 fixedcosts,219 fixedpriceincentivefee(FPIF),389 fixedpricewitheconomicpriceadjustment (FP-EPA),389 fixed-pricecontracts,388–389 float,175,196,197,203–204 flowcharts,267,271 focus onendgoalsandobjectives,44,414 inexampreparation,26–27 focusgroups,141 forcemajeure,406
431
432
PMPCertification:ABeginner’sGuide forcing,308 forecasting,234–235 methods,338 Forsberg,Krister,270–271 forwardpass,196 stepstocalculate,200,201 freefloat,196,204 freeware,40 functionalrequirements,139 futurevalue(FV),238–239 FV.Seefuturevalue(FV)
G Ganttcharts,179,180–181 GartnerGroup,statisticsonprojectsuccess,57 globalstandards,80–81 goldplating,88 Goman,CarolKinsey,335–336 governance,39 grade,vs.quality,255 groundrules,289 groupcreativitytechniques,141–142 groupdecision-makingtechniques,142 AGuidetotheProjectManagementBodyof Knowledge.SeePMBOKGuide
H hammockactivity,184 hardlogic,177 hardobjectives,138 healthchecking,225 Heldman,Kim,283 Herzberg’sMotivator-HygieneTheory,302–303 hindsight,193 histograms,271 HRM.Seehumanresourcemanagement humanresourcemanagement,278–279 acquiringateam,283–287 defined,279 developingtheprojectteam,287–295 knowingcapabilitiesofteam members,297 managementandleadership styles,295–297 motivationaltheories,301–304
problemsolving,297 roleofprojectmanagerin,279–280 skillsneededtomanageteams,292–293 staffingmanagementplan,282 typesofpower,301 humanresourceplan,218
I ideamapping,142 IdentifyRisksprocess,354–358 IdentifyStakeholdersprocess,67,317–321 immaterialbreachofcontract,406 incentives,380 indemnification,380 indexes,229 indirectcosts,219 informationdistributiontools,332 informationgathering,357 Initiatingprocessgroup defined,63 overview,65–67 inputs,78–79 AdministerProcurementsprocess,402 CloseProcurementsprocess,404 CollectRequirementsprocess,140–141 ConductProcurementsprocess,399 DefineActivitiesprocess,171 DefineScopeprocess,144 DevelopProjectCharterprocess,107 DevelopProjectManagementPlan process,115 DevelopProjectTeamprocess,289 DirectandManageProjectExecution process,117–118 EstimateActivityDurationsprocess,189 EstimateCostsprocess,218 IdentifyRisksprocess,356 ManageProjectTeamprocess,298 MonitorandControlProjectWork process,119 MonitorandControlRisksprocess,370 PerformIntegratedChangeControl process,124 PerformQualitativeRiskAnalysis process,360 PerformQuantitativeRiskAnalysis process,362
Index PlanProcurementsprocess,387 PlanRiskManagementprocess,351–352 PlanRiskResponsesprocess,365 VerifyScopeprocess,153–154 inspection,256,402 insurablerisks,355 integrationmanagement CloseProjectorPhaseprocess,125–127 definingthebusinessneed/opportunityor requirement,98–99 DevelopProjectCharterprocess,102–112 DevelopProjectManagementPlan process,112–116 DirectandManageProjectExecution process,116–118 methodologyandsamplechecklist, 100–101 MonitorandControlProjectWork process,119–120 overviewofprocesses,96–97 PerformIntegratedChangeControl process,120–124 PMIviewof,95 selectionprocess,97–98 andtheteam,95 interactivecommunications,327 internalrateofreturn(IRR),239 internalrisks,349 InternationalOrganizationfor Standardization.SeeISO Internetsearch,399 interpersonalskills,289,298,333 interviewtechniques,forgathering requirements,136–137 interviewing,357 interviews,141 invitationforbid(IFB),394 invoices,missingorlate,73 IRR.Seeinternalrateofreturn(IRR) ISO,257 “Itdepends”,99
J Johnson,Jim,5 Johnson,Spencer,26 jumpstartingprojects,107–110
Juran,JosephM.,253–254 just-in-time(JIT)scheduling,177
K Kaizen,257–258,260. Seealsocontinuousimprovement kickoffmeeting,111–112 knowledgeareas mappingprocessesto,81–82,83–84 overview,74 Seealsoindividualknowledgeareas knownrisks,350
L lagtime,182–183,197 leadtime,182–183,197 leadershipstyles,295–297 Lean,257–258,259–260 learningstyles,25 lessonslearned,272 lessons/learned/closuremeeting,416–418 letterofagreement,406–407 letterofintent,406–407 levelofeffort(LOE),174 estimating,188 Liker,Jeffrey,53,170,272 LOE.Seelevelofeffort(LOE) loops,197
M make-or-buyanalysis,393–394 make-or-buydecision,387,388,399 ManageProjectTeamprocess,295–305 ManageStakeholderExpectations process,332–336 managementreserves,369 managementskills,333 managementstyles,295–296 mandatorydependencies,177 mandatorystandards/requirements,87–88 Maslow’sHierarchyofNeeds,301–302 materialbreachofcontract,405
433
434
PMPCertification:ABeginner’sGuide McGregorTheoryXandTheoryY,304 meetings changecontrolmeetings,132 conductingeffectivemeetings,328–329 kickoffmeeting,111–112 lessons/learned/closuremeeting, 416–418 statusmeetings,371 methodology,100–101,352 milestonecharts.Seemilestonelists milestonelists,171,172–173,181 mindmapping,142 “MiracleontheHudson”,345–347 MonitorandControlProjectWork process,119–120 MonitorandControlRisksprocess,366–372 MonitoringandControllingprocessgroup defined,63 flowdiagram,72 overview,70 MonteCarloanalysis,362 motivatingtheteam,298–300 motivationaltheory,301 ExpectancyTheory,304 Herzberg’sMotivator-Hygiene Theory,302–303 Maslow’sHierarchyofNeeds,301–302 McGregorTheoryXandTheoryY,304 Mulcahy,Rita,152,218
N nearcriticalpath,197 need,defining,98–99 negotiatedsettlements,404 negotiationskills,287 netpresentvalue(NPV),237–238 networkdiagrams,167 Ganttcharts,179,180–181 howtheyhelpPMs,184 methodsusedtodraw,176–178 PERTcharts,179–180 time-scalednetworkdiagram,176 nominalgrouptechnique,141 nonfunctionalrequirements,139–140 NPV.Seenetpresentvalue(NPV)
O objectives hardobjectives,138 softobjectives,138 OBS.SeeOrganizationalBreakdown Structure(OBS) observations,142,298 operations,defined,34 opportunities,343–345 opportunity,defining,98–99 opportunitycost,239–240 oralagreements,383 OrganizationalBreakdownStructure(OBS),48 organizationalprocessassets,171,218,352, 360,362,387,399,402,404 updates,371 organizationalstructures functional,47 matrix(Weak,Balanced,andStrong),47 organizingtheprojectusingbreakdown structures,48–49 projectized(alignedandmanagedby project),47 outputs,78–79 AdministerProcurementsprocess,402 CloseProcurementsprocess,404 CollectRequirementsprocess,142–143 ConductProcurementsprocess,399–400 DefineActivitiesprocess,171–174 DefineScopeprocess,144–145 DevelopProjectCharterprocess,107 DevelopProjectManagementPlan process,115 DevelopProjectTeamprocess,290 DirectandManageProjectExecution process,117–118 DistributeInformationprocess,332 EstimateActivityDurationsprocess,189 EstimateCostsprocess,223–224 IdentifyRisksprocess,358 IdentifyStakeholdersprocess,321 ManageProjectTeamprocess,298 MonitorandControlProjectWork process,119 MonitorandControlRisksprocess,371 PerformIntegratedChangeControl process,124
Index PerformQualitativeRiskAnalysis process,360 PerformQuantitativeRiskAnalysis process,363 PlanProcurementsprocess,388 PlanQualityprocess,268 PlanRiskManagementprocess,352–354 PlanRiskResponsesprocess,366 ReportPerformanceprocess,337 VerifyScopeprocess,153–154
P parametricestimating,190,220,221 Paretocharts,272,273 Pareto’sLaw,272 paybackperiod,239 paymentsystem,402 PCBs.Seeprojectcontrolbooks(PCBs) PDM.Seeprecedencediagramming method(PDM) PDUs.Seeprofessionaldevelopment units(PDUs) PerformIntegratedChangeControl process,120–124 PerformQualitativeRiskAnalysis process,358–360 performancereports,336–338,370,402 performancerequirements,139–140 performancereviews,235–236 personnel,381 PERTcharts,179–180 PERTestimates,190–191 PgMP.SeeProgramManagement Professional(PgMP) phases,dividingprojectsintomanageable phases,67 Philips,Joseph,179 PlanCommunicationsprocess,321–329 PlanQualityprocess,262–268 PlanRiskManagementprocess,349–354 Plan-Do-Check-Act(PDCA)cycle,254,256–257 plannedvalue(PV),228,229,232 planning,theimportanceof,82–85 Planningprocessgroup defined,63 flowdiagram,68 overview,67–69
PMBOKGuide,6,18,81 andmethodology,101 what’smissingfrom,90 PMI.SeeProjectManagementInstitute(PMI) PMIexam,stepstopreparefor,423 PMIRiskManagementProfessional (PMI-RMP),9,10–11 PMISchedulingProfessional(PMI-SP),9–11 PMI-RMP.SeePMIRiskManagement Professional(PMI-RMP) PMIS.SeeProjectManagementInformation System(PMIS) PMI-SP.SeePMISchedulingProfessional (PMI-SP) PMOs.Seeprojectmanagement offices(PMOs) PMP.SeeProjectManagement Professional(PMP) PMPExamPrep(Mulcahy),152,218 PMPProjectManagementProfessionalExam StudyGuide(Heldman),283 PMPProjectManagementProfessionalStudy Guide(Philips),179 PMs.Seeprojectmanagers(PMs) portfoliomanagement defined,38 overview,39 portfolios,defined,38 power,typesof,301 precedencediagrammingmethod (PDM),176–178 precision,vs.accuracy,255–256 predecessors,196 preferredlogic,178 presentvalue(PV),237 prevention,256 pricing,vs.cost,217 probabilityandimpact,359 problemsolving,308 processgroups defined,62–63 flowdiagram,65,66 mappingprocessesto,81–82,83–84 Seealsoindividualprocessgroups processimprovementplan,268 processes,80 mappingtoknowledgeareasandprocess groups,81–82,83–84
435
436
PMPCertification:ABeginner’sGuide procurement biddersconference,397–398 closedprocurement,404 contracts,379–383 defined,383–384 differencesinprocurementorganizational structures,384 documentation,388,394,399,400,402 negotiations,399 planning,386–397 roleofprojectmanagerin,384–385 sourceselection,398 Seealsocontracts procurementaudits,404 procurementmanagementplan,388,393 procurementperformancereviews,402 procurementstatementofwork(SOW),388 ProfessionalConductguidelines,18,85–90 professionaldevelopmentunits(PDUs),28–30 profitmargin,217–218 programmanagement,overview,39 ProgramManagementProfessional(PgMP), 9,10–11 programs,defined,33–34 progressiveelaboration,145,358 projectclosure.Seeclosingtheproject ProjectCommunicationsManagement knowledgearea,77 DistributeInformationprocess,329–332 IdentifyStakeholdersprocess,317–321 ManageStakeholderExpectations process,332–336 overviewofprocesses,317 PlanCommunicationsprocess,321–329 ReportPerformanceprocess,336–338 Seealsocommunication;communication management projectcontrolbooks(PCBs),40 ProjectCostManagementknowledgearea, 76,210–212 ControlCostsprocess,226–241 DetermineBudgetprocess,225–226 EstimateCostsprocess,215–224 overviewofprocesses,213–215 Seealsocostmanagement projectdocumentupdates,224,268,371 projectexecution,206 projectfloat,204
ProjectHumanResourceManagement knowledgearea,76 AcquireProjectTeamprocess,283–287 DevelopHumanResourcePlanprocess, 281–283 DevelopProjectTeamprocess,287–295 ManageProjectTeamprocess,295–305 overviewofprocesses,280 Seealsohumanresourcemanagement ProjectIntegrationManagementknowledge area,74–75 CloseProjectorPhaseprocess,125–127 DevelopProjectCharterprocess,102–112 DevelopProjectManagementPlan process,112–116 DirectandManageProjectExecution process,116–118 MonitorandControlProjectWork process,119–120 overviewofprocesses,96–97 PerformIntegratedChangeControl process,120–124 PMIviewof,95 Seealsointegrationmanagement projectlifecycle,46 projectmanagement competingprojectconstraints,37–38 defined,35–36 freeware,40 overview,4–5,39 PMI’sviewof,36 realworldviewof,36–37 projectmanagementestimatingsoftware,220 ProjectManagementInformationSystem (PMIS),40 ProjectManagementInstitute(PMI),6 benefitsofcertification/credentials,7–8 levelsofcredentials,8–11 RegisteredEducationProviders(REPs),13 viewofprojectmanagement,36 Seealsocertification;credentials;exams projectmanagementoffices(PMOs),38–39,101 projectmanagementplan,289,298,399,402 updates,298,371,400,402 ProjectManagementProfessional(PMP), 9,10–11 exam,6 examobjectives,16–18
Index projectmanagementteams,283–285 projectmanagers(PMs) roleincommunications,314–315 roleof,41–42,384–385 roleofinhumanresourcemanagement, 279–280 threedimensionsofprojectmanagement competency,41 threeP’s,423 projectperformanceappraisals,298 projectphases,46–47,103 ProjectProcurementManagementknowledge area,77–78 AdministerProcurements process,400–403 CloseProcurementsprocess,403–409 ConductProcurementsprocess,397–400 overviewofprocesses,385–386 PlanProcurementsprocess,386–397 Seealsocontracts;procurement ProjectQualityManagementknowledgearea,76 overviewofprocesses,261 PerformQualityAssurance process,268–269 PerformQualityControlprocess,269–274 PlanQualityprocess,262–268 Seealsoquality;qualitymanagement ProjectRiskManagementknowledgearea,77 IdentifyRisksprocess,354–358 MonitorandControlRisks process,366–372 overviewofprocesses,348 PerformQualitativeRiskAnalysis process,358–360 PerformQuantitativeRiskAnalysis process,360–364 PlanRiskManagementprocess, 349–354 PlanRiskResponsesprocess,364–366 Seealsorisk;riskmanagement projectschedule,218,387 ProjectScopeManagementknowledge area,75 CollectRequirementsprocess,135–143 ControlScopeprocess,154–159 CreateWorkBreakdownStructure(WBS) process,147–152 DefineScopeprocess,144–146 overviewofprocesses,134–135
VerifyScopeprocess,152–154 Seealsoscopebaseline;scopecreep; scopestatement;scopeverification projectscopestatement,360 projectstaffassignments,289,298 projectteams,283–286 ProjectTimeManagementknowledge area,75–76 ControlScheduleprocess,204–206 DefineActivitiesprocess,170–174 DevelopScheduleprocess,191–204 EstimateActivityDurations process,188–191 EstimateActivityResources process,185–188 overviewofprocesses,168–170 SequenceActivitiesprocess,175–184 Seealsotimemanagement projects actionstepsfortakingcontrolofanew orexistingproject,42–43 defined,33,35 jumpstarting,107–110 selectionprocess,97–98 proposalevaluationtechniques,399 prototyping,142 pullcommunications,327 purerisks,355 pushcommunications,327 PV.Seeplannedvalue(PV);presentvalue(PV)
Q QMP.Seequalitymanagementplan(QMP) qualifiedsellerlist,399 qualitativeriskanalysis,358–360 quality defined,253–254 vs.grade,255 importanceof,250–251 qualityaudits,269 qualitychecklists,268 qualitycontrol,154. Seealsoscopeverification qualitycontrolmeasures,269 qualitymanagement,266 achievingcustomersatisfaction,247–248 benchmarking,265–266
437
438
PMPCertification:ABeginner’sGuide qualitymanagement(continued) casestudy,249–250 continuousimprovement,256–257 controlcharts,263–264,265 costofquality(COQ),262–263 cost-benefitanalysis,262 designofexperiments(DOE),266 FiveSprogram,260 fixingqualityproblems,251–253 flowcharts,267 ISO,257 Kaizen,257–258,260 Lean,257–258,259–260 measuringquality,248–250 precisionvs.accuracy,255–256 preventionvs.inspection,256 principles,270–271 qualityvs.grade,255 SixSigma,257–259 standarddeviation,264,265 statisticalsampling,266–267 qualitymanagementplan(QMP),268,356 qualitymetrics,268 qualitytheorists,253–254 quantitativeriskanalysis,360–364 questionnaires,142
R RACIchart,283,285 RAM.Seeresourceassignment matrix(RAM);responsibility assignmentmatrix(RAM) rangesofestimatingaccuracy,216–218 rateofreturn(ROR),239 RBS.SeeResourceBreakdownStructure (RBS);RiskBreakdownStructure(RBS) RCA.Seerootcauseanalysis(RCA) “Ready,Fire,Aim”dilemma,53–55 recognition,289,293–295,420 records,planningforrecordretention,422 recordsmanagementsystem,402,404 RegisteredEducationProviders(REPs),13 regulatoryauthorityandagencies,368–369 ReportPerformanceprocess,336–338 reporting,381 reportingstatus,371
reports finalprojectreport,421–422 formats,224,353 performancereports,336–338,370,402 progressreporting,205 schedulestatus,195 REPs.SeeRegisteredEducation Providers(REPs) requestforbid(RFB),394 requestforinformation(RFI),394 requestforproposal(RFP),394 requestforquote(RFQ),394 requirements collecting,135–143 documentation,142–143,387 functionalvs.nonfunctional,139–140 interviewtechniquesfor gathering,136–137 managementplan,143 managing,143 mappingtotheprojectgoalsand objectives,138 owningtherequirements,137 traceabilitymatrix,143 rescission,406 reserveanalysis,191,220,221–222,369,371 casestudy,369–370 residualrisks,355 resourceassignmentmatrix(RAM),167,186 ResourceBreakdownStructure(RBS),48,49 resourcecalendars,167,185–186,289,399 resourceleveling,186–187 responsibilityassignmentmatrix (RAM),282–283 sample,284 reverseengineering,414–415 revisedstakeholdertolerances,353 rewards,289,293–295,420 right-to-leftplanning.Seereverseengineering risk,342–343 categoriesorsourcesofrisk,349–350,353 factors,343 riskaverseorriskprone,346 threats,opportunities,andtriggers,343–345 tolerancesandthresholds,347 typesof,355 riskanalysis,353,383 riskassessment,367
Index riskaudits,367–368,370 RiskBreakdownStructure(RBS),48 riskcategorization,360 riskdataqualityassessment,360 riskinteraction,355 riskmanagement dataflow,351 identifyingrisk,354–358 listsofidentifiedrisksandpotential responses,358 qualitativeriskanalysis,358–360 quantitativeriskanalysis,360–364 templates,354 riskmanagementplan,356,360,362,365 sampletemplate,374–376 riskprobabilityandimpactmatrix,359,360 riskreassessment,370 riskregister,218,358,360,362,365,387 updates,371 riskresponsestrategies,364–366 riskurgencyassessment,360 risk-relatedcontractdecisions,366,387,391,392 rolesandresponsibilities,352 rollingwaveplanning,171 ROM.Seeroughorderofmagnitude(ROM) estimates rootcauseanalysis(RCA),357 ROR.Seerateofreturn(ROR) roughorderofmagnitude(ROM)estimates,216 runcharts,272
S salvagevalue,240 scatterdiagrams,272 schedulemanagement burncharts,182 compressingtheschedule,205–206 andcostmanagement,212–213 criticalpathmethod(CPM),175,196–204 dashboards,181–182 definingactivities,170–174 developingaschedule,191–204 durationestimating,188–191 Ganttcharts,179,180–181 hammockactivity,184 leadsandlags,182–183 milestonecharts,181
networkdiagrams,167,176–178 PERTcharts,179–180 progressreporting,205 projectexecution,206 reportingschedulestatus,195 resourceassignmentmatrix (RAM),167,186 resourcecalendars,167,185–186 resourceleveling,186–187 schedulerestraints,193–194 timemanagement(TM)system,167 underestimatingtime,171 schedulemanagementplan,352,356,362 scheduleperformanceindex(SPI),230,233 schedulevariance(SV),230 scopebaseline,171,195,218,356,387 establishing,144 usingtodefineactivities,170 scopecreep defined,156 identifying,157 preventing,157 respondingto,157–158 stepsforavoiding,158–159 Seealsochangemanagement scopemanagement,importanceof,160 scopestatement,132,145,352,360 casestudy,146 keycomponents,146 sample,161–163 scopeverification,152–154 scrapvalue,240 SecondLife,316–317 secondaryrisks,355 selectingprocesses,97–98 sellerproposals,399 SequenceActivitiesprocess,175–184 Shewhart,Walter,256 sign-off,413 singlesource,407 SixSigma,257–259 slack,175,196,203–204 smoothing,308 softobjectives,138 solesource,407 sourceselectioncriteria,388,395–397,399 SOW.Seestatementofwork(SOW) SPI.Seescheduleperformanceindex(SPI)
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PMPCertification:ABeginner’sGuide sponsor,212 defined,106 owningtherequirements,137 staffingmanagementplan,282 stakeholdermanagementstrategy,318–319,321 stakeholderregister,140,321,356 stakeholders expectations,332–336 IdentifyStakeholdersprocess,67 rolesof,44–45 standarddeviation,264,265 standards aspirational,87 global,80–81 mandatory,87–88 StandishGroup,studyonprojectsuccess rates,4–5,56 Starling,Michael,334,336 StartNoEarlierThan(SNET),194 StartNoLaterThan(SNLT),194 start-to-finish(SF),177 start-to-start(SS),176,177 statementofwork(SOW),400–401 statisticalsampling,266–267 statusmeetings,371 straight-linedepreciation,240 strengths,weaknesses,opportunities,and threatsanalysis,357 successrates,4–5 successors,196 sumofyearsdigits,241 summaryactivity,184 sunkcosts,240 surveys,142 sampleprojectclosuresurvey,420 SV.Seeschedulevariance(SV) SWOTanalysis,357 SydneyOperaHouse,5
T takeawaypoints,44,413–414 TCPI.Seeto-completeperformance index(TCPI) teambuilding,stagesofteam development,290–292 teamperformanceandreports,298
teamperformanceassessments,290,305 team-buildingactivities,289 teamingagreements,387,399 teams adjourningstage,292 breakinguptheteam,420–421 formingstage,109–110,291 knowingcapabilitiesofmembers,297 motivating,298–300 normingstage,292 performingstage,292 projectmanagementteams,283–285 projectteams,283–286 skillsneededtomanage,292–293 stormingstage,291 virtualteams,286–287,292–293 waystodevelop,288 workingasateam,44,414 workingtogethertocreatethe WBS,149–150 technicalperformancemeasurement,371 technicalrequirements,139–140 technicalrisks,349 templates,171 riskmanagement,354 riskmanagementplan,374–376 samplechecklists,100 samplelessonslearnedtemplate,419 sampleprojectchartercomponents, 103–104 scopestatement,145 termination,381 terms,379–380 termsandconditions(T&Cs),379–381 TheOneMinuteManager(Blanchardand Johnson),26 TheToyotaWayFieldbook(Liker),170,272 threats,343–345 three-pointestimate,190–191,220,221 tightmatrix,47 timeandmaterialscontracts,390 timemanagement burncharts,182 compressingtheschedule,205–206 andcostmanagement,212–213 criticalpathmethod(CPM),175,196–204 dashboards,181–182 definingactivities,170–174
Index developingaschedule,191–204 durationestimating,188–191 Ganttcharts,179,180–181 hammockactivity,184 leadsandlags,182–183 milestonecharts,181 networkdiagrams,167,176–178 PERTcharts,179–180 progressreporting,205 projectexecution,206 reportingschedulestatus,195 resourceassignmentmatrix (RAM),167,186 resourcecalendars,167,185–186 resourceleveling,186–187 schedulerestraints,193–194 timemanagement(TM)system,167 underestimatingtime,171 timeseriesforecastingmethods,338 time-scalednetworkdiagram,176. SeealsoGanttcharts timing,352 TMsystem,167 to-completeperformanceindex (TCPI),230,235 tools,usingthetoolsavailable,44,414 toolsandtechniques,78–79 AdministerProcurementsprocess,402 CloseProcurementsprocess,404 CollectRequirementsprocess,141–142 ConductProcurementsprocess,399 ControlCostsprocess,227–241 DefineActivitiesprocess,171 DefineScopeprocess,144–145 DevelopProjectCharterprocess,107 DevelopProjectManagementPlan process,115 DevelopProjectTeamprocess,289 DirectandManageProjectExecution process,117–118 DistributeInformationprocess,332 EstimateActivityDurationsprocess,189 EstimateCostsprocess,220–223 IdentifyRisksprocess,357 IdentifyStakeholdersprocess,320–321 ManageProjectTeamprocess,298 ManageStakeholderExpectations process,333–334
MonitorandControlProjectWork process,119 MonitorandControlRisksprocess, 370–371 PerformIntegratedChangeControl process,124 PerformQualitativeRiskAnalysis process,360 PerformQualityControlprocess, 271–272 PerformQuantitativeRiskAnalysis process,363 PlanCommunicationsprocess,325–327 PlanProcurementsprocess,387 PlanRiskManagementprocess,352 PlanRiskResponsesprocess,366 VerifyScopeprocess,153–154 top-downestimating,190,220 totalfloat,203 TotalQualityManagement(TQM),253–254 TheToyotaWayFieldbook(Liker),53 ToyotaWay,principlesof,272–274 TQM.SeeTotalQualityManagement(TQM) traceabilitymatrix,143 tracking,353 training,289 importanceof,290 trendanalysis,236,371 triggers,343–345 Tuckman,BruceWayne,109,291–292 Tuckman’sStages,109–110,291–292 Two-FactorTheoryofJobSatisfaction,302–303
U underestimatingtime,171 unforeseeablerisks,349 unitofmeasure,220 unknownrisks,350 updates,224,268,298,371,372 Utzon,Jørn,5
V VAC.Seevarianceatcompletion(VAC) vaguewords,336
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PMPCertification:ABeginner’sGuide value
addingvaluetotheproject,50 goldplating,88 variablecosts,219 varianceanalysis,235,236,371 varianceatcompletion(VAC),229,230,234 variances,229 vendorbidanalysis,220 vendorconference,399 VerifyScopeprocess,152–154 virtualcommunications,316–317 virtualteams,286–287,292–293
W waivers,381 warranties,381 WBS.SeeWorkBreakdownStructure(WBS) withdrawing,308 WorkBreakdownStructure(WBS),48,147 havingfuncreating,150 WBSdictionary,151–152 workpackages,147–149 workingasateamtocreate,149–150 workperformanceinformation,370,402