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P-Mac Consulting
Proven Roadmap Leading PM Training and Consulting Company

for the PMP®
Certification Exam Best-validated Project Management Course
Professional
Project Management
[Aligned to the Project Management Institute, A Guide to the Project Management Body of Knowledge,
® ®
(PMBOK Guide)- Fifth Edition, Project Management Institute, Inc., 2013 and PMP examination Content
®
Outline, published by PMI USA]
INSIDE:
New PMP® Exam-Based Topics
Points to consider for situational questions
Logical layout to help you understand and retain important
knowledge
Exercises
Diagrams
Case studies and examples
Narratives linking topics with exam
Time-tested Tips to make study simple (proven by success of
thousands of candidates)
Participants of this course qualify for ‘Mentoring Assignments’!
© 2013 PMAC Consulting Private Limited, Global R.E.P., Project Management Institute Inc., USA,
Asia Pacific Center, B-24, Industrial Area, Sector 64, Noida-201307, Phone: +91-120-4272165
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About P-Mac
PMAC Consulting Pvt. Ltd., as Global R.E.P. of PMI® USA, is a distinguished Project Management
Education and Consultancy Provider, imparting full-spectrum project management training and
consulting services to business enterprises, government organizations, and individual professionals
engaged in various projects across all sectors. PMAC is operating since the year 2002 and acquired PMI
Affiliation in the year 2005.
Our activities:
1. Training
2. Corporate Partners
3. Consulting (Project/Program/Portfolio/PMO/OPM3/Best Practices Implementation)
4. Special Competence Development (Communication, Leadership, Teamwork)*
Training
P-Mac has provided training to over 14,000 professionals from sectors, such as Information
Technology, Pharmaceuticals, HealthCare, Life Sciences, Power, Automobile, Transportation (Metro),
Medical Equipments, Chemicals, Petroleum, Defense (Navy, Air force, and Army), Banking, Telecom,
Electronics, Manufacturing and R&D, etc.
A partial list of companies/organizations whose candidates have attended our programs:
Microsoft, Accenture, IBM, CSC, HCL Technologies, Infosys, Wipro, UHG, XL Group, Pentair Water,
Sandvik Asia, Essar Oil & Shipping, Stryker, ISGEC John Thompson Jubilant Organosys (API, Biosys,
CRAM, Energy Divisions), Ranbaxy, Apollo, Dr. Reddy’s, United Health Group, , ONGC, Sasan
Chemicals, , RBI, SAMTEL, ST Microelectronics, DEST (Department of Education, Science & Training),
Australia Microsoft, Fiserv, IBM Global, TATA Technologies, HCL Comnet, Indus Towers, Bombardier,
Coromandel, ADOBE, ORACLE, Hewitt Associates Conexant, Xansa, Perot Systems, Keane, TCIL, Cable &
Wireless, TCIL, Hughes, Bharti Televentures, Indian Army (Officers from Directorate General of Infosys,
Software Development Center, PMO, Army HQ), Indian Air force Officers, Eicher Design Solutions, ,
Donaldson, Kaplan, Globallogic, GENPACT, RMSI, American Express-Global Corporate Technologies,
OLIVE, BirlaSoft, Infogain, Infotech Enterprises Boeing & GIS divisions), STPI, Nucleus, Scicom, R-systems,
JIL Information Technology, JK Technosoft, CMS Computers, , WHO, CITS (United Nations), Espilan
Consulting, BSNL, Kring Technologies, Intersoft, Sahara Net Corp., Manak Computers, Pulsar, FedEx,
ACCL Frontline, ASPEN Communications, INTEGRIX, MothersonSumi INfotech, Network Solutions (an
IBM company), SM Creative, Annik Technology Services, PC Solutions, Eagle Infotech (Bangkok),
among many others.
Corporate Partner
P-Mac programs have not only developed „Project Management Competence‟ of employees of various
organizations, both at middle management and senior management levels, but have also benefited
organizations in terms of timely and cost-effective roll out of their projects. This is why PMAC is
preferred corporate partner of many organizations in different sectors.
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A partial list of our corporate partnerships:
Microsoft SSP (US Information Technology

Adobe Company)
Fiserv (Baking Solutions) Kazstroy (Engineering, Construction,
XL Group (Global Insurance) Procurement of Large Projects)
Stryker (Medical Equipments) Tata Chemicals (prestigious bulk
ONGC (Exploration, Refinery, Piping) chemicals company)
Bombardier (Metro Rail, Aircrafts) Tata Power (Mega Power Plants
Jubilant Organosys (Life Sciences, Projects)
CRAM, API, Drug Discovery, CAPEX, HSCC (Prestigious GOI Projects)
Energy) STPI
Max New York Life Infotech Enterprises (both Boeing and
Jindal (Steel, Rolling Mills, Power GIS divisions)
Plants) Sandvik (Swedish Earth Moving
United Health Group (Fortune 25 Machinery Company)
Company) Thomson Digital
Indus Towers (Largest Telecom Towers Prakash Industries (Power Plants,
Company) Sponge Iron)
Birlasoft Globallogic
Indian Air Force Coromandel
Indian Navy ICWAI
Consulting
P-Mac specializes in providing „Project/Program/Portfolio Management Consulting‟ to industries

ranging from Pharmaceuticals to Petrochemical, Manufacturing, EPC, IT, Power, Shipping,
Banking, Automobile, Defense, and Tele Communications. We have recently added Metro Rail
Transportation Consulting Vertical.
Special Competence Development (Communication, Leadership, Teamwork)
P-Mac Leadership Institute provides industry-demanded and widely-recognized Business Skill/Soft Skill
Programs. These Executive Development Programs are customized to the specific needs of the
organizations with measurable results.
PMAC Consulting Private Limited

Global REP PMI USA
Asia Pacific Center
B-24, Industrial Area
Sector 64
Noida-201307
Phone: +911204272165
PMI, PMBOK, R.E.P., R.E.P. logo, PMP are registered trademarks of the Project Management Institute, Inc. PMAC
is the registered mark of PMAC Consulting Private Limited.
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About the course
The course has been designed for learning project management and acquiring competence to
pass PMP® Exam with smooth and logical understanding. We have used material from our
extensive consulting with real-life examples and essential points to consider. As Global R.E.P. of
the Project Management Institute, USA, we have also used definitions, excerpts, figures from the
Project Management Institute, A Guide to the Project Management Body of Knowledge,
(PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., to keep our course aligned
to the PMI® Standard, which is syllabus of the exam.
The course serves dual advantage:
1. In-depth learning and competence development for managing projects

2. Proficiency to pass PMP® Exam
Exam Pattern
200 multiple choice questions. 25 questions are pretest and not counted for marks.
Total questions Scored Not scored Exam duration

200 175 25 4 hours
The percentage distribution of questions, according to PMP Examination Outline published by

PMI:
Domain Percentage of questions

Initiating 13%
Planning 24%
Executing 30%
Monitoring and controlling 25%
Closing 8%
Total 100%
The exam tests application of knowledge in situations, not memorization. It is important to first
learn the concept and see how it helps finding answer to the situations described in the questions.
This is why reliance on physical memorization does not help.
Course Structure is in conformity with new PMP® Exam Outline Content as published by PMI®
USA.
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HOW TO PREPARE FOR THE PMP® EXAMINATION?
Better way of preparing for the exam is to develop an interest in the discipline of project
management and learn how to avoid “common mistakes” committed on most projects in the
areas of Scope, Time, Cost, Quality, HR, Communication, Risk, Procurement, and Integration!
Understanding what entails right initiation, planning, execution, monitoring and controlling, and
successful closing of a project? Knowing how can we minimize scope creep, time and cost
overruns, or lots of rework? Learning how can we avoid mismatch of expectations that keeps us
struggling throughout the project life cycle?
Objective of the study should be to address following questions:
1. How can I become better professional by understanding good project management as

defined in A Guide to the Project Management Body of Knowledge (PMBOK® Guide) of
Project Management Institute, Inc., USA?
2. What are the „common mistakes‟ on most of the projects?
3. What are „common project management problems‟?
4. How can this knowledge help me avoid common „mistakes and problems‟?
5. How can I handle „bigger roles‟ and become ready for „progression in my career‟?
6. How can I „impress my boss, management, client and other key stakeholders better‟ after
I learn?
This way of preparation for PMP® exam not only brings you in good shape to tackle situational
questions in the exam but also provides you a better way of looking at things and talking about
them in your interactions.
REQUEST
Wherever, you find a term you have not heard earlier pause for a moment! Understand it well.
These terms have evolved through years of hard work and global consensus achieved by PMI
USA. And please remember, the terminology or the standard of project management developed
by PMI USA is international language which professionals and companies use today. It is not
PMIism. It is project management discipline! More you have real-world experience of managing
larger projects, more you will appreciate PM Best Practices!
PMAC Consulting Private Limited

Global R.E.P. PMI USA
B-24, Industrial Area
Sector 64
Noida-201307
Phone: +91-120-4272165
Email: pmac@consultant.com
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INDEX
Serial Number Item Page Number
1. Project Management Fundamentals 10-53
2. Project Initiating 54-59
3. Project Planning 60-178
4. Project Executing 179-225
5. Project Monitoring and Controlling 226-278
6. Project Closing 279-285
7. Professional Responsibility 286-290
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Welcome to Project the World of Project Management!
This course is aligned to the Project Management Institute, A Guide to the Project Management Body of
Knowledge, (PMBOK® Guide)- Fifth Edition, Project Management Institute, Inc., 2013.
Importance of Project Management

Project management underpins most of the economic activities. In industries as diverse as
pharmaceuticals, software and aerospace, projects drive business. And in the public sector, it is
effective project management that translates Government’s' targets of new roads, schools and
hospitals into new constructions that improve our everyday life.
Innovation too relies on project management. A new product, or a new process, or

contribution to pure science even, better project management ensure a successful outcome
reached more quickly, having consumed fewer resources.
Project Management offers exciting career opportunities. Majority of Global Surveys identify
Project Professionals as Vital Job Category. The competence in managing projects is highly
valued across industries and those who possess it are preferred by employers irrespective of
discipline and level, entry or managerial levels.
Need for a Global Standard

For managing projects successfully, we require A Project Management Standard that applies to all
projects irrespective of the industry, economic or social activity. A standard that enhances Project
Management Competencies of organizations and individuals to help organizations achieve their
Strategic Objectives, and enable individuals achieve Professional and Career Growth.
Global Standard
The Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK®
Guide)- Fifth Edition, Project Management Institute, Inc., 2013 is a recognized Global Standard for
project management profession. Features of this standard include:
1. It is generally recognized as good practice. General recognition means that the knowledge and
practices contained in this standard apply to most projects most of the time with consensus
about their value and usefulness. Good practice means the application of the knowledge, skills,
tools, and techniques increase the chances of project success.
Please remember that good practice does not imply that all the knowledge described in this
standard uniformly applies to all projects. Projects are of different complexities and sizes. The
project management team and the performing organization should determine what is
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appropriate for the project being undertaken, and accordingly select applicable processes, tools,
and techniques from what is described in this standard.
2. A common vocabulary of project management to be consistently used by all those who are
responsible for managing of the projects, programs, and portfolios across industries and other
organizations.
PMBOK is a registered trademark of Project Management Institute, Inc.
Professional Responsibility
In addition to the knowledge of project management, the practitioners are also required to demonstrate
a commitment to ethical and professional conduct while managing a project in accordance with the
guidelines established by the Project Management Institute Code of Ethics and Professional Conduct
(PMI CEPC). This code specifies basic obligation of responsibility, respect, fairness, and honesty.
The course provided in this book is divided into following modules:
Serial Module Topics

Number
1 Project Management Fundamentals Introduction (Project Management Framework)
Organizational influences and project life cycle
Project Management Processes
2 Project Initiating Initiating processes: Develop Project Charter, Identify
Stakeholders
3 Project Planning Planning processes: Plan Stakeholder Management, Plan Scope
Management, Collect Requirements, Define Scope, Create WBS,
Plan Schedule management, Define Activities, Sequence
Activities, Estimate Activity Resources, Estimate Activity
Durations, Develop Schedule, Plan Cost Management, estimate
Costs, Determine Budget, Plan Quality management, Plan HR
Management, Plan Communications management, Plan Risk
Management, Identify Risks, Perform Qualitative Risk Analysis,
Perform Quantitative Risk Analysis, Plan Risk responses, Plan
Procurement management, and develop Project Management
Plan
4 Project Executing Executing processes: Direct and manage Project Work, Acquire
Project Team , Develop Project Team, Manage Project Team,
Perform Quality Assurance, Manage Communications, Manage
Stakeholder Engagement, and Conduct Procurements
5 Project Monitoring and Controlling Monitoring and Controlling processes: Monitor and Control
Project Work, Perform Integrated Change Control, Validate
Scope, Control Scope, Control Schedule, Control Costs, Control
Quality, Control Communications, Control Stakeholder
Engagement, Control Risks, and Control Procurements
6 Project Closing Closing processes: Close procurements, and Close Project or
Phase
7 Professional responsibility Four elements of professional responsibility
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Learning Objectives
Upon completion of this course, the students will be able to:
1. Comprehend concepts, tools and techniques, and terminology relating to the profession of Project
Management aligned to the Project Management Institute, A Guide to the Project Management
Body of Knowledge, (PMBOK® Guide)- Fifth Edition, Project Management Institute, Inc., 2013
2. Master identification of stakeholders, their interests, influences, and requirements in order to
create project scope statement and WBS for reliable estimation, easier management and control.
3. Command estimation techniques for determining project resources, budget and schedule, and build
cost performance and schedule baselines.
4. Attain expertise in balancing project constraints, assessing and dealing with risks, and establishing a
dependable project monitoring and controlling system for controlling scope, time, cost, quality, and
risks.
5. Achieve proficiency in procurement management and procurement closure with appropriate
archival of historical information and lessons learned.
6. Attain expertise required for managing communications, human resources, and project
stakeholders.
7. Acquire expertise required to develop management plans for guidelines for planning, executing,
monitoring and controlling, and closing.
8. Attain proficiency needed for phase or project closure with appropriate transition and archival of
historical information and lessons learned.
9. Acquire knowledge and ability to pass Project Management Professional (PMP)® certification
examination.
Methodology
For ensuring the learning objectives, the course uses highly researched and validated methodology as
described hereunder:
1. Introduction of the course by discussion on common issues and problems faced by most projects
2. Sharing real-life examples and case studies
3. Participative
4. Exercises
5. Encourages participants to think and logically understand the topics
The main emphasis is on interaction and evolution of understanding that stays and appeals.
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Project Management Fundamentals
Project management fundamentals build the concept and foundation of the profession of project
management. We will discuss the following broad topics:
1. Introduction (Project Management Framework)

2. Organizational influences and project life cycle
3. Project Management Processes
Introduction (Project Management Framework)
Topics
What is a project?
What is project management?
Relationships among Portfolio Management, Program Management, and
Project Management, and Organizational Project Management:
- Program management
- Portfolio management
- Projects and strategic planning
- PMO
Relationship between Project Management, Operations Management, and
Organizational Strategy :
- Operations and project management
- Organizations and project management
Business value
Role of the Project Manager:
- Responsibilities and competencies
- Interpersonal skills
Project Management Body of Knowledge, (PMBOK® Guide)
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Now let’s discuss each topic!
What is a project?
*A Project is a temporary endeavor undertaken to create a unique product, service, or result.”
*This definition is taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge,
(PMBOK® Guide)–Fourth Edition, Project Management Institute, Inc., 2008.
Temporary means:
Definite beginning and definite end with well defined project objectives of scope, time, cost, and quality.
It is not ongoing like operations. Operations keep going on until a product, service, or result created by
the project reaches retirement.
Project end is reached when:
It meets the objectives for which it was undertaken, or

It is realized that this project will not meet the objectives, or
The need for which the project was undertaken itself does not exit any more.
Does Temporary mean short in duration? No! Projects may last several years!! Government of
India’s E-governance project is a multi-year project. Temporary only means is that project duration is
finite, not ongoing.
Does Temporary mean that the product of the project will also be temporary? No! Most projects
are done to produce products, service or results that are long lasting. Examples: a bridge, a dam, a
building, a monument, postal service, geological survey.
Projects may be undertaken for:
An occasion: Olympics, Fashion show, Grammy awards

An opportunity. Sale Campaigns for Christmas, Diwali, Pongal, Id, etc.
PROJECT TEAMS ARE FORMED AS IT BEGINS AND DISBANDED WHEN IT ENDS.
Unique product, service, or result. Projects involve creating a product, service, or result EVEN IF YOU
HAVE BEEN DOING SAME CATEGORY OF PROJECTS MANY TIMES OVER! Think why? Reasons: Different
CLIENTS, REQUIREMENTS, LOCATIONS, or INTERFACES, etc.
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A project can be undertaken to create:
A product. Hitech Gear Project for setting up a gear manufacturing plant for Hero-Honda Bikes.
LG Project to set up manufacture plant for Air Conditioners.
A service. Ultratech Cement WCM Project to support production and logistics.
A result. Jubilant J&J Project to develop Drug Discovery Knowledge. PMAC’ Enterprise Wide PM
Competence Survey Project to provide Organizational Project Management Maturity Report for
a major MNC client.
Projects involve progressive elaboration!
*Progressive Elaboration. The iterative process of increasing the level of detail in a project management
plan as greater amounts of information and more accurate estimates become available.
(PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013.
Question: Why projects involve Progressive Elaboration?
Answer: Because projects are temporary and unique! Example: Project scope is high-level in the beginning. It
becomes more detailed as project team progresses and acquires better understanding of project objectives and
deliverables. Caution: Many people confuse it with scope creep that happens due to poor scope definition, poor
WBS formation and uncontrolled changes. Each project’s product is unique. Hence, its characteristics must be
“PROGRESSIVELY ELABORATED!” the product scope and project scope are progressively understood better.
Product scope: Functions and features characterizing the product or service. COMPLETION is measured
against product requirements
Project scope: The work required to be performed to deliver a product bearing specified functions and
features. COMPLETION is measured against project management plan
Sample Progressive Elaboration
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What is project management?
*The application of knowledge, skills, tools and techniques to project activities to meet the project
requirements.
Project management is accomplished by applying and integrating 47 project management

processes under 5 Process Groups:
Initiating,
Planning,
Executing,
Monitoring and Controlling, and
Closing.
*Initiating Process Group. Those processes performed to define a new project or a new phase of an
existing project by obtaining authorization to start the project or phase.
*Planning Process Group. Those processes performed to establish the scope of the effort, refine the
objectives, define the course of action required to attain the objectives that project was undertaken to
achieve
*Executing Process Group. Those processes performed to complete the work defined in the project
management plan to satisfy the project specifications.
*Monitoring and Controlling Process Group. Those processes required to track, review, and regulate
progress and performance of the project; identify any areas in which changes to the plan are required;
and initiate the corresponding changes.
*Closing Process Group. Those processes performed to finalize all activities across all Process Groups to
formally close the project or phase.
*All these definitions are taken from the Glossary of the Project Management Institute, A Guide to the Project
®
Management Body of Knowledge, (PMBOK Guide)–Fifth Edition, Project Management Institute, Inc., 2013.
Managing a project involves:
1. Identifying requirements;
2. Addressing needs, expectations, and of the stakeholders as the project is planned and carried
out;
3. Communicating with stakeholders;
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4. Managing stakeholders to meet project requirements and produce project deliverables;
5. Balancing conflicting project constraints (Scope, Schedule, Budget, Quality, Resources, and Risks)
A change in one constraint will lead to change in other constraints! If you increase scope, it will
conflict with time, cost, quality, and may create some risks too. If reduce time, it will conflict with scope,
cost, quality, and may create some risks. It is your duty as a project manager to balance these conflicts.
For this, please remember whenever a change is requested in one constraint always evaluate its impact
on other constraints, and follow the change control procedure. Remembering this will help you solve
many questions in the exam.
Managing a project requires:
Iteration of many of the processes within project management because of the existence of and
necessity for progressive elaboration in a project throughout the Project’s life cycle. The more a
project management team learns about a project, the better the team can manage to greater level of
detail.
Relationships among Portfolio Management, Program Management, and Project

Management, and Organizational Project Management:
- Program management
- Portfolio management
- Projects and strategic planning
- PMO
It is important to understand to understand that project management exists in a broader context of

Program Management and Portfolio Management. Organizations formulate Strategic Plan and select
programs and projects to realize it. Collectively such programs and projects constitute a portfolio.
What is a program?
*A program is a group of related projects, subprojects, and program activities managed in a coordinated
way to obtain benefits not available from managing them individually.
[*This definition is taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge,
(PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013]
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Programs may include elements of related work outside the scope of the discrete projects in the
program.
Example:
Reliance Industries had a strategic objective of “growing real big”. It was decided to undertake projects
in Oil & Gas, Power, Infocom, Retail, and Insurance. All of power projects were grouped together as
Power Program. All of retail projects were put together as Retail Program.
What could be the benefits for clubbing projects and putting them under a program?
Managing related projects under a program provides following benefits:
1. Becoming long-term player in these sectors;

2. Resource optimization and effective management of funds;
3. Better management of schedules based on prioritization;
4. Centralized management which reduces supervision cost;
5. Cumulative management of risks;
6. Collective capability.
What is a program management?
*The application of knowledge, skills, tools, and techniques to a program to meet the program
requirements and obtain benefits and control not available by managing projects individually.
*This definition is taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK®
Guide)–Fifth Edition, Project Management Institute, Inc., 2013.
Hierarchy
In this hierarchy, a program consists of several associated projects that will contribute to the
accomplishment of a STRATEGIC PLAN!
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A program:
Extends over a longer period of time horizon.

Consists of several parallel or sequential work efforts that are coordinated toward program
goals.
Time scale for projects tends to be shorter, and projects are often the individual work efforts of
a program.
What is a Portfolio?
*Projects programs, subportfolios, and operations managed as a group to achieve strategic objectives.
A collection of projects, subportfolios, programs and other work that are grouped together to facilitate
effective management of that work to meet strategic business objectives. The projects or programs of
the portfolio may not necessarily be interdependent or directly related.
Example:
Reliance Industries had a strategic objective: “Grow Real Big”.
Reliance Portfolio: Jamnagar Refinery Project, Power Program, Infocom Project, Retail Program, and
Insurance Program.
What is a Portfolio Management?
*The centralized management of one or more portfolios to achieve strategic objectives.
This definition is taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge,
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Relationships among project management, program management, and portfolio
management
Strategic plan
Portfolio Project
Program
Project A Project B Project C
Subproject 1 Subproject 2
Main
Portfolio
Sub Main
Projects
Portfolios Programs
Sub
Programs Projects
Programs
Sub
Projects Projects
Programs
Projects
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*Comparative Overview of Project Management, Program Management and Portfolio Management!
Item Projects Programs Portfolios

Scope Defined objectives, progressively Larger scope, more Scope changes strategic
elaborated significant benefits goals
Change Project Managers expect change, Program Managers must Portfolio Managers
monitor & control them. expect change from inside continually monitor
& outside program, and changes in broad
manage. environment.
Planning Project Managers progressively Program Managers develop Portfolio Managers develop
elaborate hi-level info into detailed overall program plan, and maintain relevant
plans throughout project life cycle create hi-level plans for processes and
guiding detailed planning at communication at total
component level. portfolio level.
Management Project Managers manage the Program Managers manage Manage portfolio
project team for meeting project program staff and project management staff.
objectives. managers. Provide overall
leadership and vision.
Success Success criteria: product & project Success criteria: degree to Success criteria: aggregate
quality, time and cost and degree which program satisfies performance and value
of customer satisfaction. needs. indicators.
Monitoring Project Manager monitors & Program Manager monitors Portfolio Manager monitors
controls the project work and controls program aggregate performance and
components value indicators
*Source: The Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide)–Fifth Edition, Project
Management Institute, Inc., 2013. Table 1-1, page 8
Projects and strategic planning

Projects realize “Strategic Plan” of an organization! Strategic plan is normally a plan of growth, a plan of
capturing more market share, and a plan of increasing return-on-investment. Projects are driven by a
need which may arise from:
Market demand (air conditioners in summer)

Customer request (product enhancement)
Strategic opportunity/Business Need (captive power generation)
Technological advance (4G mobile technology)
Legal requirements/ Government Regulations (BASAL Norms in Europe for banks)
Environmental consideration (Global Warming, Go-green Projects)
Social Need (Delhi Metro Rail)
“Hence, organizational goals and objectives are achieved through Projects (whether they are part of a
program or a portfolio)!” Every organization has a dream of growth. For fulfilling this dream, a portfolio
consisting of projects and programs is undertaken. Projects are at the nerve of all portfolios and
programs! If project don’t succeed, nothing succeeds.
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Projects
 May be undertaken at lower, middle, or higher levels;

 Within a department or division or may be enterprise-wide;
 May involve many organizations, such partners, suppliers, contractors, and consultants;
 May involve a small project team or thousands!
What is a PMO?
*Project Management Office (PMO) is an organizational structure that standardizes the project related
governance processes and facilitates the sharing of resources, methodologies, tools, and techniques.
Same: The responsibilities of a PMO can range from providing project management support functions
to actually being responsible for the direct management of a project.
Three types of PMO structures: Supportive, Controlling, and Directive.
1. Supportive PMO provides consultative role and degree of control over projects is low, and
serves as project repository:
Best practices, templates, historical information and lessons learned from previous
projects
Training
2. Controlling PMO provides support but require compliance to project management

methodologies, degree of control is moderate:
Compliance to project management framework, methodologies
Use of specific templates, forms, tools and techniques
3. Directive PMO directly manages projects, degree of control is high.
Note: It is common sense that PMO evaluates data from various projects and analyzes that projects
are fulfilling program and portfolio levels goals- hence aligned to the strategic business objective. You
can say PMO works as a link between portfolios, programs, projects, and corporate measurement
system (balanced score card in USA and Policy Deployment in Japan). Corporate measurement system
checks measures how organizational projects are measuring upto achievement of organizational goals as
set for a period of time. It is also common sense that PMO has authority to act as important stakeholder
and decision maker throughout the project life cycle:
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Make recommendations
Take actions to help project stay aligned with the business objects
Involved in selection, deployment, and management of ‘shared’ or ‘dedicated resources’
Terminate projects
Detailed functions of PMO:
1. Administer shared and coordinated resources across all projects.

2. Identify and deploy PM Methodology/Bests Practices/ Standards.
3. Clearinghouse and management of project policies, procedures, templates, and other shared
documents.
4. Central repository/management for shared and unique risks for all projects.
5. Central office for operation/management of PM Tools (enterprise pm software).
6. Mentoring of Project Managers.
7. Central coordination of communication across all projects.
8. Central coordination of overall project quality standards between PM & other quality staff
(internal or external), or standards organization.
9. Central monitoring: all project timelines and budgets at enterprise level!
Relationship between Project Management, Operations Management, and

Organizational Strategy:
- Operations and project management

- Organizations and project management
Difference between projects and operations
Projects Operations
Projects are temporary and unique. Operations are ongoing and repetitive.
The purpose of a project is to attain its objective and The purpose of an ongoing operation is to sustain the
then terminate. Projects realize strategic plan of an business.
organization.
The project concludes when specified objectives have Operations adopt new set of objectives and the work
been achieved. continues.
Examples: Developing a new product or service, Examples: Manufacturing operations
Starting a new business, or expansion of the existing Production operations, Usage of the product of a
one, Installing a new facility/ infrastructure, Increasing project, such as a software application, or using
productivity, Increasing market share, Increasing network infrastructure, Accounting operations
profitability, Cost reduction (operation and
maintenance), R & D projects, Technology up-
gradation/ new technology projects, Pharmaceutical
projects, Organizational Change management projects
(work environment, performance management,
organization structure, training, etc.)
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Remember:
1. Operations produce same product until the product becomes obsolete.

2. Many projects may be undertaken during operations phase or other phases of a product’s life
cycle:
 Productivity or Process Improvement Project
 New Product Development Project or Product Upgradation Project
 Projects to expand outputs (capacity augmentation)
 Many other types projects until divestment (upgrades, enhancements)
3. Knowledge and Deliverables transition, both ways:
 Projects transition deliverables and knowledge to operations, along with transition of

resources at the end of the project.
 Operations transition deliverables and knowledge to the projects along with resources
at the start of the project.
 So both projects and operations overlap and interrelate!
4. Operations facilitate projects: Take example of a New Product Development Project.
 Marketing provides customer requirements.

 Production provides product expertise for prototyping and design, and knowledge of
manufacturing capability, including readiness of production lines to manufacture a new
product. Production also provides resources and deliverables as needed by the project.
 Quality provides inputs and resources for testing.
Operations and project management

Operations management is an area of management concerned with ongoing production of goods and
services. It transforms inputs like materials, components, energy, and labor into outputs like products,
goods, or services. Chocolates, cars, banking services.
Note: You must consider needs of operational stakeholders while managing a project because projects
deliver goods or services which will be used by operations to avoid future issues. Plus operations people
will take over product of the project and give you final sign-off. These stakeholders must be identified
and their needs must be documented.
Question: Who are operational stakeholders?
Answer: Plant operators, manufacturing line supervisors, help desk staff, production system support analysts,
customer service representatives, salespersons, maintenance staff, call center personnel, retail staff, and training
officers.
21
Organizations and project management: Project management is used to perform projects to meet
business goals. For establishing strategic direction and performance parameters, organizations use
governance. Organizations formulate governance policies and procedures which projects must comply.
Project-based organizations (PBO) refer to organizational forms that create temporary systems to
diminish hierarchy and bureaucracy so that project success is not affected by position or politics. PBOs
perform majority of their work as projects unlike functional approach. An entire firm can be a PBO or a
network (Indus Towers).
Business value
*A concept unique to each organization and includes tangible and intangible elements.
Through the effective use of project, program, and portfolio management disciplines, organizations will
possess the ability to employ reliable, established processes to meet enterprise objectives and obtain
greater business value from their investments.
To simplify, you can say Business Value of an organization is the entire sum of all tangible and intangible
elements of an organization. You can quickly understand it if you think you want to acquire a company.
How will you do its valuation? You will calculate the value of all the tangible and intangible elements to
arrive at the purchase price.
Example of tangible elements:
Monetary assets,
Fixtures,
Stockholder equity, and
Utility.
Example of intangible elements:
Good will,
Brand recognition,
Public benefit, and
Trademarks.
22
What creates business value?
Business value is created through:
Effective management of ongoing operations.

Effective use of processes portfolio, program, and project management to achieve strategic
objectives and thereby get higher business value from their investment in projects, programs,
and portfolios.
What leads to successful value realization?
For successful value realization, you need to define strategic planning and management as the
first thing. This will constitute your organizational strategy and spell out:
 Your organization’s orientation to markets, competition, and other enterprise
environmental factors;
 Directions for development and growth;
 Performance metrics for success.
After formulating organizational strategy, you need to use project, program, and portfolio
management techniques to bridge the gap between organizational strategy and successful
business realization. Projects lead to business value which will happen only when you use right
techniques of project, program, and portfolio management!
Remember organizational strategy should be converted into appropriate projects for making it
happen in real life. If it is not converted into appropriate projects, it will continue to be a dream or
wishful thinking! Secondly, if you do not use right techniques of managing projects, programs or
portfolios, then there will be big gap between what you wish to achieve (strategy) and what you really
achieve (value). There will be a gap between your organizational strategy and successful business value
realization.
How portfolio management, program management, and project management help realization of
business value?
Portfolio management:
Portfolio management aligns projects, programs, or related operations to your organizational

strategy.
Portfolio management optimizes project and program objectives, dependencies, costs,
schedules, resources, and risks in order to meet your organizational strategy.
23
It shows how strategic goals are incorporated in the portfolios.
It helps deploying appropriate governance.
It helps authorize resources (human, financial, or material) on the basis of expected
performance and benefits.
Program management:
Program management aligns projects for optimized and integrated costs, schedules, efforts, and
benefits intended from the projects to achieve strategic plan.
Program management manages project interdependencies and uses optimal approach for
managing its projects for benefit realization.
Project management:
Project management provides knowledge, skills, tools, and techniques for managing projects
successfully and brings benefits intended through the projects: successful deliveries of products,
services, or results. Remember projects are utilized as a means of achieving strategic plan of an
organization! These projects may be part of portfolios or programs.
How Organizational Project Management (OPM) helps realization of business value?
OPM aligns project, program, and portfolio management activities by strengthening

organizational enablers.
Organizational enablers are Structural, Cultural, Technological, and Human resource Practices.
Without appropriate structure, culture, technology, and human resources practices projects do
not succeed and do not achieve intended results. Hence, it is very important that these
organizational enablers are support project, programs, and portfolios.
Summary of business value realization:
For attaining effective investment management and successful business value realization, organization
perform following activities:
Develop organizational strategy (strategic plan)

Select appropriate projects, programs, and portfolios
Select appropriate project, program, and portfolio management techniques
Develop robust organizational enablers that support projects, programs, and portfolios
Continuously conduct business impact analysis
Continuously conduct portfolio strategic alignment and optimization
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Role of the Project Manager:
The person assigned by the performing organization
Responsible for leading the project team
Responsible for project success
Works closely with closely with the program or portfolio manager if the project comes under a
program or a portfolio
Works closely with a functional manager if project comes under a functional area where project
manager is reporting to a functional manager
Works closely and in collaboration with other roles (BAs, QA manager, and SMEs)
Reporting of project manager:
May report to a functional manager (depending on the organization structure)

May report to a program manager (if the project is part of the program)
May report to a portfolio manager (if the project is part of a portfolio)
Role of a functional and an operations manager:
A functional manager provides management oversight for a functional or business unit. Or you
may simply say, manage a function or business unit.
An operations manager ensures that business operations are efficient.
Responsibilities and Competencies of the Project Manager

Responsibilities:
Project manager is responsible for satisfying three types of needs:

o Task needs
o Team needs, and
o Individual needs
Project manager acts as a link between strategy and the project team as projects are utilized as
a means of achieving strategic plan of an organization. Project manager’s role is strategic!
Competencies:
For effective project management, the project manager should understand and apply the
knowledge, tools, and techniques that are described in PMBOK® Guide which is recognized as good
practice. But this is not sufficient. For effective project management, the project manager should
possess following competencies:
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Knowledge- possesses knowledge of project management.
Performance- ability to apply project management knowledge to accomplish project goals.
Personal- behavioral competence like attitude, core personality traits, leadership- to guide
project team and balance project constraints.
Interpersonal skills of a project manager: project management involves lots of interaction with the team
and so many other stakeholders. Therefore, a project manager needs to have interpersonal skills, such
as Leadership, team building, motivation, communication, influencing, decision making, political and
cultural awareness, negotiation, trust building, coaching, and conflict management.
When technical people are promoted as project managers, they must ensure development of these
interpersonal skills for successful project management.
The Project Management Institute, A Guide to the Project Management Body of

Knowledge, (PMBOK® Guide) - Fifth Edition, Project Management Institute, Inc.,
2013.
*Project Management Body of Knowledge. An inclusive term that describes the sum of knowledge
within the profession of project management. As with other professions, such as law, medicine, and
accounting, the body of knowledge rests with the practitioners and academics that apply and advance it.
The complete project management body of knowledge includes proven traditional practices that are
widely applied and innovative practices are emerging in the profession. The body of knowledge
includes both published and unpublished material. The body of knowledge is constantly evolving. PMI’s
PMBOK® Guide identifies that a subset of the project management body of knowledge that is generally
recognized as good practice.
*This definition is taken from the Glossary of Project Management Institute. A Guide to the Project Management Body of
®
Knowledge (PMBOK Guide)-Fifth Edition.
PMBOK® Guide applies to:
1. Most projects
2. Most of the times
3. Across many industries
PMBOK® Guide defines:
The project management processes (47)

The tools and techniques of each process for successful management of a project!
From our discussion you already know that Project Management is interrelated to other project
management disciplines, such as program and portfolio management! Projects are constituent
26
components of a portfolio and/or a program. Successful project management leads to achievement of
strategic business objectives linked with a portfolio and/or a program.
Therefore, projects are performed in a broader context of a portfolio and/or a program. To

understand this broader context, you should consult other standards created by the Project Management
Institute, Inc., namely:
The Standard for Program Management

The Standard for Portfolio Management
Organizational Project Management Maturity Model (OPM3 ®)
OPM3 is a registered trademark of Project Management Institute, Inc. The Standard for Program Management and the
Standard for Portfolio Management are copyrighted Foundational Standards created by the Project Management Institute, Inc
Organizational influences and Project Life Cycle and Organization
Topics
Organization cultures and styles

Organization communications
Organization structures
Organizational process assets
Enterprise environmental factors
Project stakeholders and governance:
- Project stakeholders,
- Project governance,
- Project success
Project team and its composition
Project life cycle:
- Characteristics of the project life cycle,
- Project phases,
- Types of life cycles
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Organization cultures and styles
Organizational culture and styles influence success of the project. Most projects fail or face rework and
overruns due to unsupportive culture. Organizations develop their unique cultures or ‘cultural norms’,
shown by:
Values, norms, beliefs, and expectations (shared within organization)

Work ethics and work hours
Policies and procedures
View of authority relationships
Organization culture can be entrepreneurial, aggressive, participatory, rigid hierarchical, fraught with
infighting and politics, friendly and human-centered, etc.
Question: You have been tasked with organizational transformation. You primary job is to develop a common
knowledge to facilitate change. You meet the experts and determine how to approach getting the work done,
what means are acceptable, and who is influential in helping the work done. Such norms may be together termed
as:
A. Policies and procedures

B. View of authority relationships
C. Cultural norms
D. Work ethics
Answer: Cultural norms.
Organizational communications. Success of project management largely depends on effective

organizational communication style. This is more important due to globalization. Communication
capabilities greatly influence how projects are performed! You can use face-to-face communication and
also electronic media.
Organization structures.
Organization structures constraint availability of resources by describing what authority a project
manager enjoys in each structure, ranging from Functional to Projectized and Matrix between them.
Levels of organizational structures: For managing business, organizational structures have three levels:
Strategic level (Senior management)

Middle management level (functional and operational managers)
Operational level (staff)
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Need for interaction with these three levels: Project manager needs to interact at all the three levels.
This interaction depends on following factors:
 Importance of the project

 Project management maturity of the organization, project management systems, organizational
communications
 Capacity of stakeholders to influence the project
Based on above-mentioned factors, the interaction will define
 Authority of the project manager

 Availability of resources
 Management of resources (Will project manager manage or functional managers will manage?)
 Who will control project budget?
 Role of project manager (Is he just a staff assistant, or coordinator, or a manager in true sense?)
 Project team composition (Is it dedicated, or part-time, or both?)
Organization structures:
1. Functional
2. Projectized
3. Matrix
Who enjoys authority and what are advantages and disadvantages of each structure will make questions
in exam.
Functional
Functional organization structure is the MOST COMMON / TRADITIONAL FORM. Organization is

structured by functions, such as Marketing, Engineering, Manufacturing, Finance, HR. Procurement, etc.
Each function works as separate entity with managers and subordinates.
Chief Executive
Officer (CEO) CEO
Functional
Managers (FMs) FM-A FM-B FM-C
Staff Staff Staff Staff Staff
 Project manager has no or little power.

 Functional managers are most powerful.
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 Project communication/coordination through functional managers only. Project manager
cannot communicate directly with team members in other departments.
 Functions work in silos.
 Project does not get due attention for resources.
 Suitable for manufacturing.
Advantages
1. Similar resources are centralized to function. Companies are grouped by functions/specialties.

Easier management of functional specialists.
2. Clearly defined career path in the functional area.
3. Team members report to only one supervisor/one boss. Team members have home-their
department.
Disadvantages
1. More emphasis on functional specialty, not project.

2. Scope of the project limited to functional boundary. Each function views its responsibility in the
project as its project, not able to think about whole project. Design department is required to
develop design part of a project; the design department will treat as their Design Project,
although it is only a phase of the project.
3. Project Manager has no authority over the team members of different departments who work
for his/her project. Respective functional managers control these resources.
4. Loyalty to the functional area not projects.
5. There no career in project management.
Projectized
Projectized organizations are on other extreme and are opposite to the functional. All organization is by
projects. The project manager has total control of projects. Functional managers either report to the
project managers or just provide support function. They do not have much authority. All the team
members a project manager needs are directly co-located under him/her. Most of the resources are
assigned to the projects.
30
Source: The Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK® Guide)-Fifth Edition, Project
Management Institute Inc., 2013, Figure 2-5, Page 25.
 Project Manager is Sole Authority

 Departments or functions report directly to the project manager or provide support services.
 Project team is co-located.
Advantages
1. Project manager has ultimate authority over projects.

2. More effective communication.
3. Loyalty to the projects, unlike functional.
4. Team members are co-located.
5. Most effective project organization.
Disadvantages
1. Duplication of facilities and job functions as each project manager has solely assigned similar
resources. Hence less effective utilization of project resources.
2. Lack of professionalism in disciplines/functions as specialization grows when you have separate
functions performing on various projects.
3. Team members do not have home (their fixed functional departments) when the project is
complete.
Both Functional and Projectized have strengths and weaknesses. To maximize strengths and minimize
weaknesses, we have Matrix Structure (best of both structures).
Matrix
Team members in a matrix organization report to one functional manager and at least one project
manager. Functional manager and the project manager together conduct performance review of the
functional team members. Matrix has three types:
Weak Matrix
Balanced Matrix
Strong Matrix
Weak Matrix
Weak matrix (more like functional) - Here, the balance of power rests with the functional manager and
the project manager is merely an expeditor or coordinator. Project expeditor acts mainly as a staff
assistant and coordinates communication. Project expeditor cannot make or enforce any decisions.
Project coordinator has some power to make decisions and reports to higher level manager than
expeditor.
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Chief Executive
Officer (CEO) CEO
Functional
Managers (FMs) FM-A FM-B FM-C
 Project manager has no or little power. Project manager’s role is more of an expeditor or
coordinator than a manager. Functional managers are most powerful.
 Project communication occurs through functional managers only.
 Functions work in silos again.
 Project does not get due attention for resources.
Balanced Matrix
Balanced matrix- The power is balanced between project manager and functional manager. Each
manager has responsibility for his/her part of the project or organization, and people get assigned to
projects based on the needs of the project, not strengths or weakness of the manager’s position. Most
of the good organizations are Balanced Matrix these days! Even in exam, please this structure when
questions are asked. In a situational question, you should assume that we are talking in matrix
organization set-up.
Chief Executive
Officer (CEO)
CEO
Functional Managers
(FMs) FM-A FM-B FM-C
 Power is balanced between FMs and PM. PM gets better control over the resources as
compared to his/her position in functional.
 Project communication/coordination is both vertical and horizontal. Project manager can
communicate with his/her boss vertically and with functional managers and resources
horizontally. Note, here communication becomes complex. Therefore project manager should
have good communication skills.
 Team members report to two bosses.
 Project gets better attention for resources. Projects succeed but functional work suffers, not
well for long term advantage to the organizations. Hence the best one is balanced matrix as
both functions and projects go on smoothly, with due attention.
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Strong Matrix
Strong matrix is more like Projectized. Here, the balance of power rests with the project manager not
functional manager.
Chief Executive
CEO
Officer (CEO)
Functional Manager
FM-A FM-B
Managers (FMs) of PMs
 Project manager has more power than functional managers and can direct them for resources.
 Project communication/coordination is horizontal. Project manager interacts directly with the
functional managers and resources.
 Team members report to two bosses.
 Project gets full attention for resources. Projects succeed.
Matrix Structure Advantages and Disadvantages
Advantages
1. Improved project manager’s control over resources. Projects get visibility and importance.
2. More support from functions.
3. Maximum utilization of scarce resources as they perform functional work as well as project
work.
4. Better coordination.
5. Better information flow (both horizontal and vertical) than functional.
6. Team members maintain a home; they continue to belong to their respective departments
unlike Projectized.
Disadvantages
1. Team members report to two bosses.

2. More complex to monitor and control as team members are borrowed resources (from
functional areas) and therefore hard to motivate.
3. Not cost effective as more administrative personnel are needed.
4. Tougher problems with resource allocation.
5. Requires extensive policies and procedures.
6. Functional managers may have differing priorities than project managers.
7. Higher potential for conflicts and duplication of efforts.
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Composite structure
Large organizations may have more than one type of organization structure. Some units may be
functional, some balanced matrix, while other units may be strong matrix or Projectized. Such mix of
structures followed within an organization is called composite structure. Think of Reliance, Tata,
Jubilant.
Source: The Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK® Guide)-Fifth Edition, Project
Management Institute Inc., 2013, Figure 2-6, Page 26.
Important sum-up. *Organizational structure influences on projects
Functional Project Resource Who controls Role of Administrative

Manager Availability Budget? Project Staff
Power Manager
Little or none Little or none Functional Part time Part time

Manager
Weak Limited Limited Functional Part time Part time
matrix Manager
Balanced Low to Moderate Mixed Full time Full time
matrix Moderate
Strong Moderate to Moderate to Project Full time Full time

matrix High High Manager
Projectized Full authority Almost total Project Fulltime on Full time on

Manager projects projects
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Organizational process assets. *Organizational process Assets. Plans, processes, policies,
procedures, and knowledge bases that are specific to and used by the performing organization. *This
definition is taken from the Glossary of The Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK®
Guide)-Fifth Edition, Project Management Institute Inc., 2013.
Any or all process related assets, from any or all of the organizations involved in the project that are or
can be used to influence the project’s success. These process assets include formal and informal plans,
policies, procedures, and guidelines. The process assets also include the organization’s knowledge
bases such as lessons learned and historical information.
Organization process assets help us throughout the project as they provide us:
1. Corporate knowledgebase (historical information and lessons learned from previous

projects)
2. Policies, procedures, templates for use on the projects
Enterprise environmental factors. *Enterprise Environmental factors. Conditions, not under the
immediate control of the team, that influence, constraint, or direct the project, program, or portfolio.
*This definition is taken from the Glossary of The Project Management Institute, A Guide to the Project Management Body of Knowledge
(PMBOK® Guide)-Fifth Edition, Project Management Institute Inc., 2013.
Any or all external factors and internal organizational factors that surround or influence the project’s
success. These factors are from any or all of the enterprises involved in the project, and include
organizational culture and structure, infrastructure, existing resources, commercial databases, market
conditions, and project management software.
Why do we need to consider all the external and internal factors that surround our project?
These factors may act as an opportunity or a threat to the project objectives! Remember this. Do you
agree? Recall a famous Infotech Project in Bangalore? We have already talked about it!
Project stakeholders and governance:

Project governance- ensures that projects are consistently managed, engage stakeholders, maximize
value of outcomes, and align projects with business strategy. It is an over sight function. For project
governance, PMO plays decisive role.
Question: Can you define project governance framework?
Answer: Project governance framework includes responsibilities:
1. Defining project success and deliverable acceptance criteria

2. Defining process to identify, escalate, and resolve issues
3. Defining relationships among project tea, organizational groups, and external stakeholders
4. Defining organizational chart to identify project roles
5. Defining communication processes and procedures
35
6. Defining project decision making processes
7. Defining guidelines for alignment of project governance and organizational strategy
8. Defining project life cycle approach
9. Defining process for stage gate reviews
10. Defining change control process for review and approval of changes to scope, schedule, budget, and
quality- that is beyond the project manager
11. Defining process for aligning internal stakeholders with project process requirements
Do you find in your company a Project Governance Function similar to what is written above?
Note: Project team performs within project governance framework but team is still responsible for
planning, executing, controlling, and closing the project. It is responsibility of the project manager and
project team to determine appropriate method of performing the project. You should describe project
governance approach in the project management plan:
 Who will be involved

 What resources are required
 General approach to work
 Specific project life cycle
 Is it one phase or multi-phase
 Escalation procedure
Project success-Project success means completing the project within the constraints of scope,
time, cost, quality, resources, and risk as approved between the project manager and senior
management.
Project success is measured against last approved baselines! Project manager is responsible for
establishing realistic and achievable boundaries to complete project within approved baselines.
Question: Before handing over to operations, what can you include in total project time to ensure realization of
benefits for which project had been undertaken?
Answer: You can include a test period. Example: Soft launch in services.
Project team and its composition

Project team includes: Project Management Staff, Project Staff, Supporting Experts, User or Customer
Representatives, Sellers, Business Partner Members, and Business partners. Project team may be full
time or part-time. Composition of team depends on:
 Organizational culture and structure,

 Scope, and
36
 Location.
Remember for exam: Relationship between project manager and team depends on authority of the
project manager. Examples: If a project manager is team’s line manager, he/she will have full authority
over team members. In another case, a project manager may have no or little control and may be just
be a part-time project manager under contract.
Team composition:
1. Dedicated: assigned full-time, may be collocated and virtual but report directly to the project
manager. Here, lines of authority are clear and team focuses on project objectives. Dedicated
team members are seen Projectized organizations.
2. Part-time: When projects are set up as temporary additional work, the project manager and
team members work on the project but they continue to remain in their existing organizations
and carry out their normal functions. Part-time team members may be working on more than
one project. Here, functional manager controls team members and the resources. Project
manager does other management duties! Part-time team members are seen in functional
organizations. Matrix organizations may have both dedicated and part-time.
Partnership projects: Several organizations may come together and undertake a joint venture to exploit
industrial synergies, to do projects that one partner may not do alone, or for some political and strategic
reasons. Jubilant Energy and Gujarat Petroleum had entered such partnership for USD100 million
Golaghat Project. Here, one organization takes the lead and appoints project manager who coordinates
efforts among other partners. Advantage: Flexibility at lower costs. Disadvantage: Project manager’s
lower degree of control, need for strong mechanisms for communication, coordination, and monitoring
and controlling.
Managing virtual teams requires attention to:
Cultural differences and languages

Working hours and time zones
Local conditions
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Understanding role of project team is important:
Member Role
Project management staff Scheduling, budgeting, reporting, control, communication, risk management, and
administrative support. PMO plays it or at least supports this role.
Project staff Carry out work to create deliverables
Supporting experts Activities to develop or execute project management plan: Contracting, Financial
Management, Engineering, Test, QC, Logistics, Legal, Safety. May be full-time or part-
time as required.
User or customer representatives Accept deliverables or products. Also coordinate between customer and vendor,
advice on requirements, and validate acceptability of results.
Sellers Provide components or services
Business partner members Act as project team on behalf of partners
Business partners Provide specialized expertise: Installation, Customization, Support, Training, and Soft
Launch.
Project life cycle:
- Characteristics of the project life cycle

- Project phases
What is a project life cycle?
*Project Life Cycle. The series of phases that a project passes through from its initiation to its closure.
*This definition is taken from the Glossary of The Project Management Institute, A Guide to the Project Management Body of
®
Knowledge (PMBOK Guide)-Fifth Edition, Project Management Institute Inc., 2013.
Project life cycle is a collection of generally sequential Project phases whose names and number are
determined by the control needs of the organization or organizations involved in the project. A life cycle
may be documented with a methodology.
Projects are unique undertakings and involve a degree of uncertainty. Hence, a project is divided into
phases for better management control and providing for links to the ongoing operations. Together, the
project phases make the ‘Project Life Cycle’. Project life cycle defines start and finish of the project and
determines transactional actions at the start and finish.
PIL
Project
Project
Requirements Design Build Test Turnover
Management
38
Project life cycle (PLC) defines what one needs to do “to do the work” on the project.
Project life cycle examples:
Construction PLC. Phases: Feasibility, planning, design, product, turnover, and startup.
Information systems PLC. Phases: Requirements analysis, high-level design, detailed design,
coding, testing, installation, conversion, and operation.
Output of Preceding phase is input to Succeeding phase. Each phase is marked by completion of one or
more deliverables and takes its name from the item/items; it has to deliver- the primary phase
deliverable. For example, in the requirements phase the primary phase deliverable is ‘duly gathered and
approved requirements’.
Question: What is a deliverable?
Answer: A deliverable is a tangible, verifiable work product. EXAMPLES: A specification, feasibility

report, detailed design document, or a working prototype
Types of deliverables: You have two types of deliverables on the projects:
1. Product deliverable (end products or the components of end products for which the project is
undertaken)
2. Project management deliverable (charter, scope statement, plan, baseline, etc.)
Deliverables, and therefore phases, are part of a generally sequential process designed to ascertain
proper control of the project and to accomplish the intended Product or Service!
Project phases: vital points
• A project may have single phase or multiple phases. It depends on the nature of the project,
application area and industry practices.
• Since each project is unique, even if the names and deliverables of phases sound similar, we
should not mistake that these phases are identical.
• Please remember a project is divided into phases for better management and control and there
is no ideal method. It depends on common practices or an organization’s own practices. For
instance, different organizations may consider Feasibility Study in different ways:
Pre-project work, or
First phase of the project, or
A separate project.
Phases can be further subdivided into sub phases depending on size, complexity, level of risk, and cash
flow constraints. Each sub phase is aligned with defined deliverable (s) for monitoring and control, and is
related to primary phase deliverable.
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Project life cycle characteristics
 Uncertainty and risk are highest in the beginning and the chances of success are lowest at the
start.
 As we move further, uncertainty and risk get progressively reduced, and chances of success
become brighter.
 The final characteristics of project’s product must be understood early during planning. As
project proceeds, the cost of any change or revision in product characteristics becomes very
high. This lays stress on proper scope definition to avoid later surprises and overruns.
Remember
 Most projects are linked to the ongoing operations of the performing organization for resources,
knowledge transfer, and transition of product or service.
 Projects are authorized only after due feasibility study.
 It may require you to develop and test a prototype before initiating a project.
Phase-to-phase relationships
1. Sequential relationship. Start another phase only when previous phase is completed. It is logical
step-by-step approach which reduces uncertainty. You begin one phase, complete it. The output
of previous phase becomes input to the subsequent phase. Example: Say your Phase 1 is
Requirements, Phase 2 is Design, and Phase 3 is Development. You collect requirements, finalize
them, and then only begin Design Phase. After Design is made properly and approved, then only
you begin Development. It is systematic way of working.
Advantage: Sequential relationship is step-by-step approach and reduces uncertainty.

Disadvantage: You do not have option of compressing overall schedule.
2. Overlapping relationship. Start another phase before completion of previous phase. This
approach is also used for schedule compression and called Fast Tracking. The problem with this
40
relationship is that you begin next phase without earlier phase is being complete. Take same
example: You are working on Requirements Phase as well as Design Phase as well. Your Design
has progressed more than half and then you come to know some more requirements need to be
added in the design parts that you have already made. You come to know these requirements
because Requirements Phase is also in progress. You did not wait for Requirements to be
collected fully and be finalized. You preferred to perform Requirements and Design Phases in
parallel. Now you have to do rework to add these requirements in the design you have already
made.
Advantage: It may help in schedule compression.

Disadvantage:
It increases risk.
Overlapping phases requires additional resources to do the work in parallel.
Overlapping phases may result in rework if subsequent phase advances without
accurate information from previous phase. Used for schedule compression.
Important
When phases are sequential, completion of each phase marked by review of:
1. Key deliverable
2. Project performance to date
3. Go or no-go
This phase-end review is termed as phase exit, stage gate, decision point, kill point, milestones,
etc.
Fast-tracking Phases (overlapping relationship). Starting activities of next phase without closing the
current phase! Examples abound:
 Often, the management review is conducted to decide beginning activities of next phase before
the current one is closed.
 Most IT projects use an iterative cycle in which more than one phases are undertaken at the
same time:
Requirements for a module are collected and analyzed prior to the design and
construction of the module.
Requirements of another module are collected while analysis of previous module is
STILL underway!
41
Types of Life Cycles
There are three types of life cycles:
Predictive life cycles

Iterative and incremental life cycles
Adaptive life cycles
You need to know about each one.
Predictive Life Cycles:
1. Predictive life cycles are known as fully plan-driven as project scope, time, and cost are
determined as early as practically possible. But it is possible only when the product is well
understood in advance. The team defines full scope, develops plan, and performs work in
phases to execute the plan. Take example of Delhi Metro. This project had used predictive life
cycle.
2. Each phase focuses on a subset of project activities and project management processes. Each
phase is unique in nature and requires different skill-sets and team make-up. The work to be
done in each phase is different from the work to be done in other phases.
3. Phases may be sequential or overlapping.
4. Changes to the scope are not encouraged and require replanning and formal acceptance of
addition of new scope through change control procedure. Since time and cost are finalized in
advance, subsequent changes in scope lead to overruns and hence scope changes follow strict
procedure.
Iterative and Incremental Life Cycles:
1. The product is developed iteratively and incrementally. A high-level vision is created for overall
project. Detailed scope is defined for one iteration (phase) at a time!
2. Next iteration is planned when work progresses on current iteration.
3. Involve project phases that are iterated as more information becomes available. Product is
developed through iterative cycles-adding increments of functionality through progressive
elaboration.
4. Iterations (phases) can be sequential or overlapping. At the end of each iteration, a deliverable
or set of deliverables is provided. Future iterations enhance these deliverables or create new
ones. Each iteration gradually builds the deliverables till it reaches exit criteria for the phase.
This allows project team to incorporate feedback.
5. Phases may be sequential or overlapping.
6. Preferred when you are required to manage changing objectives and scope, to reduce
complexity, or when partial delivery is beneficial, and provides value to the stakeholders,
without impacting final product.
42
7. Large and complex projects use this life cycle to recue risk as it allows taking benefit of
feedbacks and lessons learned from iteration to iteration. Example: Ship Building Projects.
Adaptive Life Cycles:
1. Used in rapidly changing environments where requirements and scope are difficult to define in
the beginning. Not much planning is done upfront.
2. Iterations are very rapid: 2 to 4 weeks in duration. Iterations are fixed in time and cost.
3. Product backlog defines features to be developed. Then releases and iterations are planned.
4. Early iterations are more detailed.
5. Plan adapts to changes. Iterations are time-boxed and fixed in cost-not total project.
6. Each iteration is reviewed by customer and delivers functionality incrementally.
7. Customer and sponsor are continuously engaged.
8. Minimally marketable features are selected for development. Features are prioritized as Must
Have, Should Have, and Could Have.
9. Adaptive life cycles are useful when you are required to deal with rapidly changing environment,
and requirements and scope cannot be defined in advance, and when small increments of the
product/improvements will deliver stakeholder value.
10. Adaptive life cycles are known as change-driven or agile methods.
Note: Adaptive methods are also iterative and incremental. You may confuse it with Iterative and
Incremental Life Cycles. Please note the difference. The only difference is that in adaptive, the iterations
are very rapid (duration 2 to 4 weeks) and fixed in time and cost. In Iterative and Incremental Life Cycles,
iterations may last many weeks or months as these life cycles are used in large and complex projects in
order to reduce risk by allowing the team to incorporate feedback and lessons learned!
1. Question: When predictive life cycles are preferred?
A. When product is to be developed incrementally

B. When phase involved are called iterations.
C. When the product is required to be delivered in full to have value to stakeholder groups.
D. When dealing with a rapidly changing environment, when requirements and scope are difficult
to define in advance.
2. Question: When iterative and incremental life cycles are preferred?
A. When dealing with a rapidly changing environment, when requirements and scope are difficult
to define in advance, and when it is possible to define small incremental improvements that will
deliver value to the stakeholders.
B. When an organization needs to manage changing objectives and scope, to reduce the
complexity of the project, or when the partial delivery of a product is beneficial and provides
value for one or more stakeholder groups without impact to the final deliverables.
43
C. When product to be delivered is well understood, there is substantial base of industry practice,
or where a product is required to be delivered in full to have value to the stakeholder groups.
D. When projects are small and not complex, and do not require reducing of risk by feedbacks and
lessons learned.
3. Question: When adaptive life cycles are preferred?
A. When dealing with a rapidly changing environment, when requirements and scope are difficult
to define in advance, and when it is possible to define small incremental improvements that will
deliver value to the stakeholders.
B. When an organization needs to manage changing objectives and scope, to reduce the
complexity of the project, or when the partial delivery of a product is beneficial and provides
value for one or more stakeholder groups without impact to the final deliverables.
C. When product to be delivered is well understood, there is substantial base of industry practice,
or where a product is required to be delivered in full to have value to the stakeholder groups.
D. When projects are small and not complex, and do not require reducing of risk by feedbacks and
lessons learned.
4. Question: You have been assigned a project that is large and complex. You need to reduce risk by
allowing the team to incorporate feedback and lessons learned between iterations which are not rapid
or just 2 to 4 weeks in duration. Which life cycle would you use?
A. Iterative and incremental

B. Adaptive
C. Predictive
D. Sequential
Answers:
Question 1: C
Question 2: B
Question 3: A
Question 4: A
Revise your understanding of various life cycles once again!
44
Project Management Processes
Topics:
- Common Project Management Interactions

- Project Management Process groups
- Initiating Process Group
- Planning Process Group
- Executing Process Group
- Monitoring and Controlling Process Group
- Closing Process group
- Project Information
- Role of Knowledge areas
Common Project Management Interactions

High-level view of Five Process Groups
Initiating Process Group- authorizes the project or phase.

Planning Process Group- Establish the scope of the project, refines the objectives (mentioned in
the project charter), and defines Define the course of action for attaining those objectives.
Executing Process Group- Complete the work defined in the project management plan to satisfy
the project specifications! Coordinates people and resources.
Monitoring & Controlling Process Group- Track, review, and regulate the progress and
performance of the project. Manage changes to the project management plan
Closing Process Group- Finalize all activities across all Process Groups to formally close the
project or phase and rings it to an orderly end.
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Process Groups Interactions
PM process groups overlap and occur at various levels of intensity throughout each Project Phase.
They are not one-time, discrete events!
*Process group Interactions in a project

®
*Figure Source: The Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK Guide)-
Fifth Edition, Project Management Institute Inc., 2013, Figure A1-1, Page 419.
46
Question: Why do we repeat initiation process at the beginning of each phase?
Answer: It keeps the project focused on the business need for which it has been taken up! It helps you
halt the project if the project is not likely to satisfy the business need or the business need for which
project was undertaken is no longer there!
*Project boundaries
*Figure Source: The Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK® Guide)-Fifth Edition,
Project Management Institute Inc., 2013. Figure 3-4, page 425.
Process Groups. There are 42 project management processes which help us manage a project.
These processes are grouped under 5 Process Groups:;;
*Initiating Process Group. Those processes performed to define a new project or a new phase of an
existing project by obtaining authorization to start the project or phase.
*Planning Process Group. Those processes performed to establish the scope of the effort, refine the
objectives, define the course of action required to attain the objectives that project was undertaken to
achieve
*Executing Process Group. Those processes performed to complete the work defined in the project
management plan to satisfy the project specifications.
*Monitoring and Controlling Process Group. Those processes required to track, review, and regulate
progress and performance of the project; identify any areas in which changes to the plan are required;
and initiate the corresponding changes.
*Closing Process Group. Those processes performed to finalize all activities across all Process Groups to
formally close the project or phase. *All these definitions are taken from the Glossary of the Project Management Institute, A
Guide to the Project Management Body of Knowledge, (PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013.
47
INITIATING PROCESS GROUP
THE PURPOSE
Facilitates formal authorization to begin a new project or phase.

Done outside the project’s scope of control.
Business needs or requirements are documented.
Normally the feasibility is performed by evaluating various alternatives and choosing the best
one.
Stakeholders are identified with their interests, influences, and classification to prioritize
attention to them
WHAT IS DONE HERE?
Clear descriptions of project objectives are developed, noting down the reasons for selecting
the project to best satisfy the requirements.
Such decision also gives us basic description of:
 project scope
 deliverables
 forecast of resources
 high-level constraints, assumptions, and risks
VERY IMPORTANT
Involve stakeholders during initiation provides following benefits:
Develops “Shared Ownership”;

Enhances “Chances of Deliverable Acceptance”; and
Ensures “Customer/other stakeholders’ satisfaction!”
Simply put this process group:
1. Authorizes/starts a project or phase

2. Defines project’s purpose
3. Identifies objectives
4. Empowers project manager to start the project
5. Identify stakeholders, their interests, influences on the project
48
PLANNING PROCESS GROUP
THE PURPOSE
 Planning processes are used to plan and manage a successful project.

 Help gather information from many sources for completeness and confidence.
 Develop project management plan by integrating planning performed in the areas of scope,
time, cost, quality, human resources, communication, and procurement.
 Identify, define, and mature:
 Project scope, requirements
 Project cost, and
 Schedule the project activities
 As new information is found out, additional requirements, risks, opportunities, constraints,

assumptions, and dependencies are identified and resolved!
 As more information is grasped, follow-on actions are undertaken.
 Additional analysis through feedback loops.
 Plan stakeholder engagement
Final achievement of the Project Management Plan which contains following information:
 Project baselines (Scope baseline, Cost baseline, and Schedule baseline)

 Project life cycle & phase processes chosen
 PM processes selected (result of tailoring)
 Execution methods
 Change management plan
 Configuration management plan
 Baseline integrity process
 Key Management Reviews to facilitate open and pending decisions
 Subsidiary plans/management plans
- Scope management plan
- Requirements management plan
- Schedule management plan
- Cost management plan
- Quality management plan
- Process improvement plan
- Human resource plan
- Communication management plan
- Risk management plan
- Procurement management plan
- Stakeholder management plan
As we develop the project management plan, we conduct iterations to ensure our plan meets the project
objectives and it is realistic and achievable. Then we obtain approval of the project management plan and publish
it for execution. Before execution, we hold kick-off meeting so that everyone is on the same page!
49
EXECUTING PROCESS GROUP
THE PURPOSE
 Perform activities to accomplish project requirements

 Create project deliverables
 Acquire, train, and manage team members.
 Obtain and manage resources
 Implement planned methods and standards
 Establish and manage communication
 Generate project data for status and forecasting
 Issue change request
 Adapt approved changes into project’s scope, plans and environment
 Manage risks and execute response activities
 Manage sellers and suppliers
 Execute approved process improvement activities
 Collect and record lessons learned
 Manage stakeholder engagement
MONITORING AND CONTROLLING PROCESS GROUP

THE PURPOSE
PROJECT PERFORMANCE IS OBSERVED AND MEASURED REGULARLY TO IDENTIFY VARIANCES FROM THE
PROJECT MANAGEMENT PLAN. Monitor and control project activities! Influence the factor that could
circumvent integrated change control to ensure only approved changes are executed!
 Track, review, and regulate progress and performance

 Identify areas where changes to the plan are needed. And initiate such changes.
 The project team gets insight into the health of the project!
 Highlights areas needing additional care!
 Helps monitoring and controlling ENTIRE PROJECT EFFORT!
,
 When variances threaten the project objectives recommend updates to the project plan to
rescue the project. For example, a missed activity completion date requires Trade-offs between
schedule & budget targets, Dependence on over time, and Adjustments to present staffing plan.
 Control stakeholder engagement
CLOSING PROCESS GROUP

THE PURPOSE
 Finalize all activities across all PM Process Groups for formal completion of the project, phase, or
contractual obligations.
 Hand off the completed product to others (customer if on contract)
50
 Close a cancelled project
 Completion of defined processes within all Process Groups is verified
 Accomplishment of a project or phase is formally established
Following occurs during project or phase closure:
1. Customer or sponsor acceptance

2. Project-end or phase end review
3. Impacts of tailoring to any process documented
4. Lessons learned recorded
5. Organizational Process Assets updated
6. Documents archived as historical information in project management information system.
7. Procurements are closed out.
Recap ABOUT Project Management Processes

 The five process groups we have discussed are not one time processes.
 They are iterative and revisited throughout the project life cycle as the project is refined.
 Apart from entire project, each phase is also initiated, planned, executed, controlled, and
closed.
 The output of preceding phase becomes input to the succeeding phase (in sequential phases).
 Completion of each phase allows the project manager and Stakeholders to reanalyze the
business needs and determine whether the project is satisfying those needs or not! Here is
another opportunity to make a go or no-go decision.
Homework: Make a table showing Project Management Process Groups and Knowledge Mapping
Project Information: After planning, execution begins; we collect project data as a result of
executing processes, analyze, transform, and distribute information in various formats to team members
and other stakeholders. You can say the project data are collected, analyzed, and transformed in project
information for distribution. This job is handled by controlling processes.
Question: In real life, data and information are used interchangeably and leads to confusion. Can you suggest how
to minimize confusion and use appropriate terminology?
Answer: Clarification on what is work performance data, information, and report minimizes confusion.
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Project information terminology
Work Performance data Work Performance Information Work Performance Report

Raw observations and Work performance data when Physical or electronic
measurements during analyzed in context and representation of work
execution: integrated based on performance information is
Percentage complete relationships across areas called work performance report.
Activity Start and finish becomes work performance Work performance report is
dates information: intended to generate
Actual durations Status of deliverables awareness, actions, decisions,
Actual costs Forecasted estimate to or raise issues:
Technical and quality complete  Status reports
performance measures Implementation status  Electronic dashboards
Number of change of change requests  Updates
requests  Recommendations,
 Justifications
 Memos
Role of knowledge areas

47 project management processes are grouped into 10 knowledge areas. Each project has 10 concern
areas; these concerns are addressed by knowledge areas. Process Groups borrow their processes from
the knowledge areas.
NOW WE WILL DISCUSS ALL KNOWLWDGE AREAS OF PROJECT MANAGEMENT:
1. SCOPE MANAGEMENT
2. TIME MANAGEMENT
3. COST MANAGEMENT
4. QUALITY MANAGEMENT
5. HUMAN RESOURCE MANAGEMENT
6. COMMUNICATION MANAGEMENT
7. RISK MANAGEMENT
8. PROCUREMENT MANAGEMENT
9. PROJECT STAKEHOLDER MANAGEMENT
10. INTEGRATION MANAGEMENT
52
Project Management Process Groups and their Processes
Process group Processes Number

Initiating Develop project charter, Identify stakeholders 2
Planning Plan scope management, collect requirements, define scope, create WBS, Plan 24
schedule management, define activities, sequence activities, estimate activity
resources, estimate activity durations, develop schedule, Plan cost management,
estimate costs, determine budget, Plan quality Management, Plan human resource
management, Plan communication management, Plan risk management, identify
risks, perform qualitative risk analysis, perform quantitative risk analysis, plan risk
responses, Plan procurement management, Plan stakeholder management,
Develop project management plan
Executing Direct and manage project work, perform quality assurance, acquire project team, 8
develop project team, manage project team, manage communications, conduct
procurements, Manage Stakeholder Engagement
Monitoring Monitor and control project work, perform integrated change control, Validate 11
and Scope, control scope, control schedule, control costs, Control Quality, Control
controlling Communications, Control Risk, Control Procurements, Control Stakeholder
Engagement
Closing Close procurements, Close project or phase 2
Total 47
Knowledge areas and their Processes
Knowledge Area Processes Number of

processes
Integration Develop project charter, Develop project management plan, Direct and 6
manage project work, Monitor and control project work, Perform
integrated change control, Close project or phase
Scope Plan scope management, collect requirements, define scope, create WBS, 6
Validate Scope, control scope
Time Plan schedule management, define activities, sequence activities, estimate 7
activity resources, estimate activity durations, develop schedule, control
schedule
Cost Plan cost management, estimate costs, determine budget, control costs 4
Quality Plan quality Management, perform quality assurance, Control Quality 3
HR Plan human resource management, acquire project team, develop project 4
team, manage project team
Communication Plan communication management, manage communications, Control 3
Communications
Risk Plan risk management, , identify risks, perform qualitative risk analysis, 6
perform quantitative risk analysis, plan risk responses, Control Risk
Procurement Plan procurement management, conduct procurements, Control 4
Procurements, Close procurements
Stakeholder Identify stakeholders, Plan stakeholder management, Manage Stakeholder 4
Management Engagement, Control Stakeholder Engagement
Total 47
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INITIATING PROCESS GROUP
Integration: Develop project charter
Stakeholder: Identify stakeholders
Recap
THE PURPOSE
Facilitates formal authorization to begin a new project or phase.

Done outside the project’s scope of control.
Business needs or requirements are documented.
Normally the feasibility is performed by evaluating various alternatives and choosing the best
one.
Stakeholders are identified with their interests, influences, and classification to prioritize
attention to them.
WHAT IS DONE HERE?
Clear descriptions of project objectives are developed, noting down the reasons for selecting the
project to best satisfy the requirements.
Such decision also gives us basic description of:
 project scope
 deliverables
 forecast of resources
 high-level constraints, assumptions, and risks
VERY IMPORTANT: Involve stakeholders during initiation provides following benefits:
 Develops “Shared Ownership”;

 Enhances “Chances of Deliverable Acceptance”; and
 Ensures “Customer/other stakeholders’ satisfaction!”
Simply put this process group:
Authorizes/starts a project or phase

Defines project’s purpose
Identifies objectives
Empowers project manager to start the project
Identify stakeholders, their interests, influences on the project
54
*Develop Project Charter. The process of developing a document that formally authorizes
the existence of a project and provides the project manager with authority to apply organizational
resources to project activities. [*This definition has been taken from the Glossary of the Project Management Institute, A Guide to
the Project Management Body of Knowledge, (PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013]
Key points to consider:
a) Project fits with the business need and strategic objectives.

b) Project has justification and measurable objectives, and well-defined success criteria.
c) Initial requirements and risks.
d) Initial project description and constraints.
e) All external and internal enterprise factors are understood.
f) Historical information and lessons learned are looked into.
g) Large projects need to be divided into phases.
h) Haphazard initiation can lead to project failure!
What do we require?
1. Project Statement of work. Project SOW contains:

Business need
Product scope description: high-level
Strategic plan: all projects must support organization’s strategic goals!
2. Business Case
Justification for investment.
Business need and cost-benefit analysis
Reviewed from time to time in multi-phase projects for ensuring benefits.
[Facilitates comparison and selection of the project among other alternatives and helps deicide
feasibility for chartering a project!]
3. Agreements (Contracts). If you are a seller and doing the project for an external customer, then you
will use contract to initiate a project. But initiation needs to be performed properly and a formal charter
should be developed and provided to the project manager.
[Caution: Many vendor organizations do not formally initiate a project internally after obtaining the
contract. These organizations overlook enterprise environmental factors and organization process
assets, only to find surprises during execution!]
4. *Enterprise environmental factors. *Any or all external environmental factors and internal
organizational environmental factors that surround or influence the project's success. These factors are
from any or all the enterprises involved in the project, and include organizational culture and structure,
infrastructure, exiting resources, commercial databases, market conditions, and project management
software.
5. *Organizational process assets
55
How do we do it?
1. *Expert Judgment. *Judgment provided based upon expertise in an application area, knowledge area,
discipline, industry, etc. as appropriate for an activity being performed. Such expertise may be provided
by any group, or person with specialized education, knowledge, skill, experience, or training.
2. Facilitation techniques help us reduce differences and bring consensus on the contents of the project
charter. You can use brainstorming, conflict resolution, problem solving, meeting management, and
facilitated workshops. You need a qualified facilitator to do it.
What do we achieve?
Project Charter. *A document issued by the project initiator or sponsor that formally authorized the
existence of a project, and provides the project manager with the authority to apply organizational
resources to project activities.
[Project charter documents Business Needs, Current understanding of customer’s needs, or the new
product, service or result that the project is intended to meet, in the backdrop of constraints,
assumptions, and enterprise environmental factors, and organizational process assets! Expert judgment
helps us!]
Information in the Project Charter
 Project purpose and justification

 Measurable project objectives & success criteria
 High-level requirements, project description, and boundaries
 Stakeholder list
 Assigned project manager and empowerment
 Initial project description
 Initial or high-level risks
 Summary schedule and budget
 Project Approval Requirements
 Initial or high-level Constraints and Assumptions
Name and signature the sponsor or initiator (who has funding authority for the project)
Remember: If anything is required to change in the charter, only sponsor can decide whether is
necessary or not.
Constraints are known as factor limiting project management team’s options. Examples:
imposed date
predefined budget
scope
56
staffing
specified quality
contractual terms
Project’ product to be socially, economically, and environmentally sustainable (puts
further constraint on in terms of scope, time, staffing, cost, and quality).
Question: When a project manager should be identified and assigned?
Answer: Preferably while the charter is being developed!
Question: Should the project manager be involved in the development of the project charter?
Answer: Yes. The project manager should be involved in the development of the project charter. It provides
him/her authority to use resources for the project.
Question: Who authorizes the projects?
Answer: Sponsor, PMO, Portfolio Steering Committee. They can create it or delegate that duty to the project
manager. Note: project initiator/sponsor is a position having funding authority!
Question: During which processes do we need to use charter and why?
Answer: Charter is used as input to 7 processes:
1. Identify stakeholders
2. Plan scope management
3. Collect requirements
4. Define scope
5. Plan schedule management
6. Plan cost management
7. Plan risk management
Identify Stakeholders
*The process of identifying the people, groups, or organizations that could impact or be impacted by a
decision, activity, or outcome of the project, and analyzing and documenting relevant information
regarding their interests, involvement, interdependencies, influence, and potential impact on project
success. [*This definition has been taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body
of Knowledge, (PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013.]
Who is a stakeholder?
*Stakeholder. An individual, group, or organization who may affect or be affected by, or perceive itself
to be affected by a decision, activity, or outcome of a project.
[*This definition has been taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of
Knowledge, (PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013.]
57
What do you need?
1. Project Charter provides information about key internal and external stakeholders involved in or
whose interest might be affected by the project. Examples: Project sponsors, customers,
departments/groups involved, team members, and other organizations.
2. Procurement Documents. When the project is being done for a customer, the buyer and seller
become key stakeholders. You must identify who all on the customer’s side have interest, influence, and
involvement in your project. Also you should consider suppliers also as stakeholders as sometimes
ignoring them results into problems!
3. Enterprise Environmental Factors provide important information that is used in Identify Stakeholder
process, such as Organizational or company culture, Government or industry standards, Local, regional,
or global practices/trends.
4. Organizational Process Assets do help: Stakeholder Register Templates, Lessons Learned from
previous projects, stakeholder registers from previous projects. Does your company maintain
organizational process assets?
How do we perform it?
1. Stakeholder analysis. A technique of systematically gathering and analyzing quantitative and

qualitative information to determine whose interests should be taken into account throughout the
project.
Steps of stakeholder analysis:
Identify Classify Assess
Identify all potential Analyze impact/support and classify Assess how key stakeholders
stakeholders and gather to form strategy based on their would respond in various
information on interests, power and interest or power and situations to plan approach how
influence, position, role, influence or influence and impact, influence them to maximize their
knowledge, expectations, etc. support and minimize negative
departments, location. impacts.
Question: How will you communicate and manage stakeholder expectations if your project involves large
stakeholder communities?
Answer: By prioritizing the key stakeholders.
2. EXPERT JUDGMENT. Project Management involves taking advantage of the experience, and expertise
of groups or individuals with specialized training and knowledge in the related area project managers
who have done similar projects (SMEs, PMO, and senior management), etc.
58
3. MEETINGS (Profile Analysis Meetings). Help us develop understanding of each one of the key
stakeholders, their roles, interests, knowledge, and overall position in the project.
What do we achieve?
1) *Stakeholder Register. A project document including the identification, assessment, and classification
of project stakeholders. [*This definition has been taken from the Glossary of the Project Management Institute, A Guide to the Project
Management Body of Knowledge, (PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013.]
Sample Stakeholder Register
Identification Assessment Stakeholder

Information Information Classification
Name, position, Major requirements, main Internal/external,

Location, role in project, contact expectations, potential Supporter/neutral/resistor, etc.
info. influence, phase of most
interest.
Remember: You should review and update stakeholder register regularly to reflect change of
stakeholders or new ones being identified.
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PLANNING PROCESS GROUP
Stakeholder: Plan stakeholder management
Scope: Plan scope management, collect requirements, define scope, and create WBS
Time: Plan schedule management, define activities, sequence activities, estimate activity resources,
estimate activity durations, develop schedule
Cost: Plan cost management, estimate costs, determine budget
Quality: Plan quality Management
HR: Plan human resource management
Communication: Plan communication management
Risk: Plan risk management, identify risks, perform qualitative risk analysis perform quantitative risk
analysis, plan risk responses
Procurement: Plan procurement management
Integration: Develop project management plan
THE PURPOSE
Planning processes are used to plan and manage a successful project.

Help gather information from many sources for completeness and confidence.
Develop project management plan by integrating planning performed in the areas of scope, time, cost,
quality, human resources, communication, and procurement.
Identify, define, and mature:
Project scope, requirements
Project cost, and
Schedule the project activities
As new information is found out, additional requirements, risks, opportunities, constraints, assumptions,
and dependencies are identified and resolved!
As more information is grasped, follow-on actions are undertaken.
Additional analysis through feedback loops.
Plan stakeholder engagement
Final achievement of planning is the Project Management Plan which contains following information:
Project baselines (Scope baseline, Cost baseline, and Schedule baseline)

Project life cycle & phase processes chosen
PM processes selected (result of tailoring)
Execution methods
Change management plan
Configuration management plan
Baseline integrity process
Key Management Reviews to facilitate open and pending decisions
Subsidiary plans/management plans: Scope management plan, Requirements management
plan, Schedule management plan, Cost management plan, Quality management plan, Process
improvement plan, Human resource plan, Communication management plan, Risk management
plan, Procurement management plan, and Stakeholder management plan.
60
As we develop the project management plan, we conduct iterations to ensure our plan meets the
project objectives and it is realistic and achievable. Then we obtain approval of the project management
plan and publish it for execution. Before execution, we hold kick-off meeting so that everyone is on the
same page!
Plan Stakeholder Management

*The process of developing appropriate management strategies to effectively engage stakeholders
throughout the project life cycle, based on the analysis of their needs, interests, and potential impact on
the project.
(PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013.]
Question: What is the main benefit of this process?

Answer: Plan stakeholder management process provides a clear and actionable plan to interact with stakeholders
to support the project success.
What do we need?
1. Project management plan provides relevant information for developing stakeholder management
plan. This information describes:
Life cycle and processes selected for each phase

Work methods selected to achieve project objectives
Human resource management plan detailing how human resource requirements will be
satisfied, roles and responsibilities will be defined, reporting relationships will be
established, and staffing management plan will be structured.
Communication requirements of the stakeholders and techniques for communication
with the stakeholders
Change management plan for monitoring and controlling changes
2. Stakeholder Register provides information that is used for planning ways to engage stakeholders.
3. Enterprise environmental factors. We use information on all the environmental factors to adapt
management of stakeholders to the project environment. Key factors to consider: Organization culture, structure,
and political climate.
4. Organizational process assets. We use all organizational process assets for this process. Key process assets
to consider: Historical information and lessons learned in managing this process in previous projects and
effectiveness of stakeholder management plans.
How do we do it?
1. Expert judgment. Expert judgment is useful in two ways:
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For understanding level of stakeholder engagement: Project manager should use his/her expert
judgment to decide level of engagement of various stakeholders at each stage of the project.
Examples of required level of engagement:
In the beginning, senior stakeholders should be engaged to remove obstacles to project success.
You can call this ‘leading’ engagement. Subsequently, their engagement needed is ‘supportive’.
Later, end users engagement or other stakeholders’ engagement is important to review and
sign-off deliverables and product.
For developing stakeholder management plan: Project management team should also use
expertise and judgment of experts (senior management, SMEs, team members, other units or
individuals, identified key stakeholders, experienced project managers who had worked on
same type of projects, industry groups, consultants, professional associations, and government
and non-government organizations) for creating stakeholder management plan.
2. Meetings. We define the required levels of stakeholder engagement by holding meetings with experts
and project team and use this information in creating stakeholder management plan.
3. Analytical techniques. Stakeholder engagement throughout the project life cycle is critical to project
success. We use analytical techniques to compare current level of stakeholder engagement with
planned levels of stakeholder engagement. If we find gaps, we take corrective actions.
Analytical technique: We use Stakeholder Engagement Assessment Matrix to document current and
desired engagement of the stakeholder. If we find gap between desired and current engagement, we
further communicate with stakeholders and take appropriate actions to bring the concerned
stakeholders to the desired level.
We prepare the matrix by first defining various engagement levels:
Engagement Level Description of engagement level

Leading Actively engaged for project success. Aware of
project and potential impacts.
Supportive Supportive to change. Aware of project and
potential impacts.
Neutral Aware but neither supportive, nor resistant.
Unaware Not aware of project or potential impacts.
Resistant Aware of project and potential impacts and
resistant to change.
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Checking engagement: Current (C) vs. Desired (D) in the Stakeholders Engagement Assessment Matrix
Stakeholders Engagement Assessment Matrix

Stakeholder Leading Supportive Neutral Unaware Resistant Remark To do
Stakeholder 1 D C Currently Require further
unaware, desired communications
to become and actions to
supportive bring to desired
level
Stakeholder 2 D C Currently Require further
neutral, desired communications
to become and actions to
supportive bring to desired
level
Stakeholder 3 DC At the desired No action
level required
What do we achieve?
1. Stakeholder Management Plan. *Stakeholder Management Plan is a subsidiary plan of the project
management plan that defines the processes, tools, and techniques to effectively engage stakeholders
in project decisions and execution based on the analysis of their needs, interests, and potential impact.
Sample stakeholder management plan

Project:
Project manager:
Project objectives:
Method for updating:
Stakeholder Current level of Desired level Scope and Interrelationship Information Reason for Timeframe &
engagement of impact of and potential to distribute distribution frequency
engagement change to overlap (language,
the between format,
stakeholder stakeholders content,
level of
detail)
Stakeholder 1
Stakeholder 2
Stakeholder 3
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Remember:
Stakeholder management plan may have sensitive information, such as information about
resistant stakeholders. Project manager should take precaution in distributing information on
such stakeholders.
Stakeholder management plan has some underlying assumptions. You must check the validity of
these assumptions otherwise your stakeholder management plan prove to be faulty.
2. Project document update. Plan stakeholder management process leads to updating project schedule
and stakeholder register.
Scope: Plan scope management, collect requirements, define scope, and create WBS
Plan Scope Management

*“Plan Scope Management. The process of creating a scope management plan that documents how the
project scope will be defined, validated, and controlled.”
*This definitions is taken from the Glossary of The Project Management Institute, A Guide to the Project Management Body of Knowledge
Question: What is the advantage of scope management plan?

Answer: Scope management plan guides and directs us on how scope will be managed throughout the project.
Plan Scope Management: Process Discussion
What do we need?
Project charter. Project context mentioned in the charter helps plan appropriate scope management
processes! Project statement of work from charter defines high-level project description and product
characteristics. For achieving both project scope and product scope, we define guidelines in scope
management plan.
Project management plan. Approved subsidiary plans help us develop scope management plan. These
sub-plans guide us on approach we should take for planning and managing scope!
Organizational process assets provide historical information and lessons learned as well as policies and
procedures to consider while developing scope management plan.
Enterprise environmental factors are important to consider while developing scope management plan
(market conditions, infrastructure, personnel administration, and organization’s culture).
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How do we do it?
Expert judgment.
Meetings. We hold meeting to develop scope management plan where project manager, sponsor,
selected team members, selected stakeholders, and other relevant people participate.
What do we achieve?
1. Scope management plan: Describes how the project scope will be defined, developed, validated, and
controlled. It is an input to all scope management processes. Based on the needs of the project, it may
formal or informal. It may be broadly defined or highly elaborated.
Sample entries in Scope Management Plan:
Processes for creating scope statement, WBS, and approval and maintenance of WBS
Processes for scope validation and formal acceptance of deliverables
Process for managing changes to the scope baseline
2. Requirements management plan: Describes how requirements will be analyzed, documented and
managed! Project manager must decide approach how phase to phase requirements relationship will be
maintained! Entries in requirements management plan largely will depend on such relationship!
Sample entries in Requirements Management Plan:
How requirements activities will be planned, monitored, and reported!

How configuration management activities will be initiated, how impacts will be
evaluated, how changes will be traced, tracked and informed!
Authorization levels to approve changes!
Requirements prioritization process
Product metrics to be used and its rationale
Traceability structure (which requirements attributes will be captured on traceability
matrix and to which project documents requirements will be traced).
Collect Requirement
*Collect requirements is the process of determining, documenting, and managing stakeholder needs
and requirements to meet the project objectives. Project’s success is directly influenced by the care
taken in capturing project and product requirements!
Question: What does a requirement mean?
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Answer: *Requirement. A condition or capability that is required to be present in a product, service, or result to
satisfy a contract or other formally imposed specification.”
Points to consider:
Most projects fail as appropriate attention is not paid to collecting all the requirements right in
the beginning of the project. Requirements keep changing or increasing resulting in rework and
time and cost overruns. Project success is possible only when we pay proper attention to
gathering and managing project and product requirements. You must involve stakeholders early
to discover and decompose their needs into requirements!
Requirements represent needs and expectations of the stakeholders, be it client or sponsor, or
any other stakeholder. Project charter provides high-level idea of requirements. Stakeholder
register provides names of stakeholders with their interest and influence in the project and
helps in understanding requirements of these stakeholders. You have to meet and collect
requirements of all the stakeholders and take approval.
Requirements mean both and product requirements and project requirements.
1. Product requirements:
 Technical requirement
 Performance requirements
 Security requirements, etc.
2. Project requirements:
 Business requirements
 Project management requirement, etc.
Requirements become basis of estimation of work, time, cost, and quality planning. Requirements
are also basis of procurement. If any requirement is missed, it not is considered while creating WBS, or
estimating time and cost or quality planning. It does become part of your project management plan.
Whenever you discover it later, during execution, you have no provision. It will create all kind of
overruns and problems.
Collect Requirements: Process Discussion

What do we need?
1. Scope Management Plan. Provides guidance on how to determine and collect different type of
requirements for the project.
2. Requirements Management Plan. Provides procedure to define and document stakeholder needs.
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3. Project charter. Provides high-level description of the product or service or result that project is undertaken
to deliver. Charter also provides high-level project description. This information helps us project and product
develop detailed level product and project requirements!
4. Stakeholder Register. Project management means meeting the needs and expectations of the stakeholders.
We interact with the stakeholders identified and mentioned in the stakeholder register in order to document their
requirements!
5. Stakeholder Management Plan. Helps us know communication requirements and level of engagement so
that we may decide whom to involve and how much to interact in collecting their requirements.
How do we do it?
1. Interviews. We collect requirements by interviewing experienced project stakeholders and subject

matter experts to gain understanding of the features and functions of the project deliverables!
2. Focus groups. We brainstorm with pre-selected group of key stakeholders and stakeholders to learn
about their expectations, with the help of a qualified facilitator. This session is more interactive than
interviews.
3. Facilitated workshops
Focused sessions to bring together key “Cross-Functional Stakeholders” to define product

requirements! An expert facilitator is required!
It helps define Cross-Functional Requirements resolving differences!
Builds trust with improved understanding.
Issues uncovered and reconciled in a short span which is not possible in individual interactions!
Examples of facilitated workshops:
JAD (Joint Application Development/Design) Sessions: Users and software developers together for
evolve software development process.
QFD (Quality Function Deployment): In manufacturing industry. Helps determine critical characteristics
for new product development. It is very useful as customer needs (VOC) are collected, sorted and
prioritized, specifying jointly evolved requirements!
4. Group Creativity Techniques
Brainstorming: collect multiple ideas.

Nominal group technique: voting to rank most useful ideas. Enriches brainstorming.
Delphi: common opinion of experts anonymously.
Idea/mind mapping: building maps to show commonalities and differences in the collected
ideas. This triggers new ideas.
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Affinity diagram: numerous ideas organized in groups. Review and analysis provides better
understanding.
5. Group Decision Making Techniques
a) Unanimity: All agree.

b) Majority: More than 50% agree.
c) Plurality: Largest part of the group decides.
d) Dictatorship: one individual forces decision on the
6. Questionnaires & surveys: appropriate when broad audience and statistical analysis needed.
7. Observations: seeing people in their environment. Particularly useful for elaborate processes when
stakeholders find difficulty in spelling out their requirements!
8. Prototypes : You must have used it already. It is the most widely used technique to evolve
requirements through a mock-up and iterations through feedbacks till requirements are settled. The
final prototype freezes requirements in quantified manner.
9. Benchmarking: Benchmarking means comparing our practices to those of other industries to gather
ideas for improvement and setting a new benchmark for performance. We find out requirements
gathering best practices used by other industries for taking advantage.
10. Context diagrams: Context diagram is Scope Model. It shows the product scope by depicting a
business system and interaction of people and other systems with it. A business system produces
outputs by using inputs. Actors provide inputs and outputs. Making such a context diagram helps us
better understand requirements from the point of view of production environment/user requirement.
11. Document analysis: A good insight into requirements is achieved by studying and analyzing Business
Plans, Marketing Literature, RFP, Agreements, Logical data Model, Current Process Flows, Business Rules
repositories, Business Process/Interface Documentation, Regulatory Information, Use Cases, Application
Software Documentation, etc. All organizations do it when they undertake a project.
What do we achieve?
1. Requirements documentation:
Baselines the requirements showing contribution of each requirement in meeting the business
need for which project is undertaken. These requirements are duly agreed by the stakeholders.
But please remember, each requirement should be unambiguous, measurable, testable,

traceable, complete, consistent, and acceptable to the stakeholders- before you baseline them!
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You should document: Business requirements, Stakeholder requirements, Solution requirements,
Project requirements, Transition requirements, requirements assumptions, constraints, and
dependencies.
Requirements Documentation Sample Template (a power plant project)
Requirements ID Requirement Description
PIL UB-52.1 Business Need 150 MW Power Plant

PIL UB-52.2 Traceable Project Objectives 12 months, 60 m INR, SE: 897
PIL UB-52.3 Functional Requirements Refer indexed docs of Boiler,
Turbine, DM plan, Cooling Towers
PIL UB-52.4 Non-functional Requirements SE: 897, Hydo Test, X-ray, BS:339
(performance, safety, regulatory
compliances)
PIL UB-52.5 Technical Requirements and Refer CVL, Siemens Standards
Acceptance Criteria
PIL UB-52.6 Interface with other projects and Refer 4x25, SID
operations, and related impacts
PIL UB-52.7 Training and Post Commission 28 Technical Modules, CVL, Siemens
PC Docs
NOTE: Description must contain constraints and assumptions relating to each requirement
2. *”Requirements traceability matrix. A grid table that links product requirements from to their origin
to the deliverables that satisfy them.” *This definition is taken from the Glossary of The Project Management Institute, A Guide
to the Project Management Body of Knowledge (PMBOK® Guide)-Fifth Edition, Project Management Institute Inc., 2013.
RTM is created by associating requirements with work products that satisfy them. Tests are created to
measure the requirements.
Traceability requires unique identifier for each requirement and work products. Numbers of work
products are established in a Configuration Management Plan.
Traceability ensures completeness. All lower level requirements emerge from higher
ones and all higher level requirements are allocated to lower ones.
Traceability provides basis for managing change and also test planning.
Question: Why is the importance of requirements traceability matrix?
Answer: It links requirements to business and project objectives and ascertains each requirement delivers due
value! It also acts as a framework to manage product scope changes!
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Sample Requirements Traceability Matrix
Project Name
Cost center
Project description
ID Associate Requirements Business Project WBS Product Product Test

ID description needs, objectives deliverables design development cases
opportunities,
goals,
objectives
001 1.0
1.2
002 2.1
2.2
*This figure is taken from The Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK® Guide)-Fifth
Edition, Project Management Institute Inc., 2013, Figure 5-6 Example of a requirements traceability matrix, page 119.
Define Scope
*The process of developing a detailed description of the project and product.
Points to consider:
1. Defining scope is critical to project success.

2. We define scope using major deliverables, constraints and assumptions documented in the project
charter.
3. During initiation scope is high-level. But during, we get more data and we detail to a level appropriate for
managing the project.
4. While preparing scope statement, we should clearly define product scope, project scope, exclusions, and
constraints, assumptions, and risks as far as known so far!
Scope Statement contents (6 items)
Product scope description

Acceptance criteria for the deliverables
Project deliverables (both product deliverables and project management deliverables)
Project exclusions (specifically mentioning what is not included in the project to clarify
expectations).
Project constraints (relating to scope, time, cost, and quality, and contractual obligations if the
project is being done under contract).
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Project assumptions (relating to project scope). All assumptions carry a degree of risk. We should
document assumptions and check their validity during risk identification.
Importance of scope statement

Item Importance
Product scope Facilitates WBS creation, estimation, and planning.
Helps manage and control changes, and smooth closing.
Acceptance criteria Facilitates plan deliverables and product verification.
Project deliverables and the work needed Facilitates WBS creation, estimation, and planning.
Project exclusions Clarifies expectations among stakeholders
Project constraints Helps in planning in view of these constraints
Project assumptions Facilitates further detailing of scope planning and also

warns potential impacts if these assumptions prove to
be wrong! Provides input to risk identification for
assumptions analysis.
Risks as far as known by now Provides realism for rest of planning in view of risks
known till now.
Updates Leads to refining stakeholder register with more

knowledge of interests, influence, and contribution of
stakeholders as known during defining scope. Even
requirements documentation and traceability matrix
may be revised.
Stakeholder Buy-in Facilitates common understanding of project scope.
Important: Make this chart yourself three times.
Define Scope Process discussion

What do we need?
1. Scope management plan

2. Project charter. Provides high-level project and product description, and approval criteria.
3. Requirements documentation. We are able to finalize scope (product and project scope) only
after collecting the requirements.
4. Organizational Process Assets. We need to how scope statement was made in earlier projects,
what went wrong, what went right. We would also use organization’s policies and procedures
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for developing scope statement. We also require scope statement template. Provides policies,
templates, and procedures; Historical information and Lessons learned.
How do we do it?
1) Product analysis
Helps translate high-level product descriptions into tangible deliverables.

You must have used techniques like product breakdown, systems analysis, systems engineering, value
analysis, and function analysis.
2) Alternative identification. Creative thinking to find out alternative, better approaches for
performing the work of the project! General techniques:
Brainstorming
Lateral thinking (Edward de bono). Remember the Six Thinking Hats
3) Expert judgment
4) Facilitated workshops: Used in developing scope statement by bringing consensus among diverse
opinions of the stakeholders.
What do we achieve?
1. Project scope statement
For exam as well as real-life, you need to know:
Describes deliverables.
Develops common understanding of the project scope among stakeholders.
Contains clear SCOPE EXCLUSIONS that helps managing stakeholder expectations.
Enables team to perform more detailed planning.
Guides the project team during execution.
Acts as baseline for EVALUATING changes!
2. Project document updates
 Stakeholder register. Some new stakeholder interest or influence discovered during development of the
scope statement.
 Requirements documentation. Some new requirement highlighted not covered earlier.
 Requirements traceability matrix. Traceability structure may change in view of any new requirement
being elaborated.
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CREATE WBS: Overview
*The Process of subdividing project deliverables and project work into more manageable components.
*This definition is taken from the Glossary of The Project Management Institute, A Guide to the Project
Management Body of Knowledge (PMBOK® Guide)-Fifth Edition, Project Management Institute Inc.,
2013.
Question: What is WBS?
Answer: *A hierarchical decomposition of the total scope of work to be carried out by the project team to
accomplish the project objectives and create the required deliverables.
For exam as well as real-life, you need to know more about WBS:
IS THE FOUNDATION upon which project is built. ALL planning and controlling depends on WBS.
A GRAPHICAL PICTURE of the hierarchy of the project scope. VISUALIZES the entire project.
Each descending level progressively elaborates the deliverables into their detailed components.
Serves as scope baseline. Identifies all work to be performed. Work not in WBS is outside the
project scope.
Creates a common understanding of project scope among the stakeholders.
Unstructured list of activities does not form WBS.
Can be used as template for other projects.
BREAKS DOWN the project work into work packages that:
Can be realistically estimated,
Can be completed quickly,
Have no logic for further division,
Can be completed without interruption,
Have meaningful conclusion and deliverable.
WBS Essentials:
1. CREATED with help of project team. Ensures team buy-in. WBS creation leads to team building
also as people jointly create it.
2. WBS is communicated to all internal and external stakeholders and their consent is obtained as
rest of the planning and estimation will depend on WBS. It should obtain stakeholder buy-in.
3. HELPS prevent changes and work slipping through the cracks.
4. Determines proof of need for staff, cost and time.
5. Facilitates communication and cooperation between and among the stakeholders.
6. Each element at each level of the WBS is assigned a unique identifier.
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7. This unique identifier is generally a number associated with the organization’s financial system.
8. These identifiers help hierarchical summation of costs and resources, and also help tracking
them.
9. These identifiers are known as code of accounts or chart of accounts.
10. Some project managers choose to note milestones on their WBS. A milestone is a major
accomplishment in a project. EXAMPLE: Completion of a deliverable. Milestones serve as check
points to determine progress. IN MOST CASES, higher levels of WBS can be flagged as
milestones.
11. The items at the lowest level of WBS are called Work Packages.
12. Work packages can be easily assigned to individuals, with clear accountability and reasonability
for completing the assignment.
13. Work packages may be subdivided in a subproject work breakdown structure when some scope
of work is assigned to another organization.
Question: What is a work package?
Answer: Lowest level of WBS. A work package can be: Scheduled, Cost estimated, Monitored and controlled.
Question: Which of the following statements is not true for WBS?
A. IMPROVES accuracy of time, cost, and resource estimation

B. DEFINES a baseline for measuring and controlling performance!
C. FACILITATES unambiguous responsibility assignments!
D. IS THE ONLY way to identify risks
Answer: D. Risks can be identified by many techniques including reviewing WBS. So using WBS can help us know
risks related to scope, but we have several other techniques too to identify risks related to time, cost, and quality.
Question: Which of the following is not an impact of inadequate WBS creation?
A. Leads to inadequate requirements gathering

B. Causes rework
C. Increases time
D. Lower productivity and team morale
Answer: A. WBS is not used to collect requirements. WBS is created after collecting requirements. Requirements
documentation is an input to Create WBS process.
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Sample WBS
Sample WBS
Create Work Breakdown Process discussion

What do we need?
1. Scope management plan defines process for creating WBS.
2. Project scope statement provides major deliverables that require decomposition to create WBS. We
also get product scope and project scope, along with constraints and assumptions needed for creating
WBS.
3. Requirements documentation provides details of all the requirements to be met by performing the
work. Hence, it another major input.
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4. Organizational Process Assets provide guidance on how create WBS, how to conduct decomposition,
what WBS template should be used, lessons learned in previous projects.
5. Enterprise environmental factors provide industry-specific WBS Standards to follow as reference

while creating WBS. Example: For creating WBS for a new project, you can use ISO/IEC 15288 Standards
for Systems Engineering-Systems Life Cycle Processes.
How do we do it?
1. *Decomposition. A technique used for dividing and subdividing the project scope and project
deliverables into smaller, more manageable parts.
We perform decomposition until the project work associated with accomplishing the project scope and
providing the deliverables is defined in sufficient detail to support estimation, execution, monitoring,
and controlling the work, that is work package level. *WORK PACKAGE. The work defined at the lowest
level of the work breakdown structure for which cost and duration can be estimated and managed.
*These definitions are taken from the Glossary of The Project Management Institute, A Guide to the Project Management Body of Knowledge
Question: You are assigned to manage a large ERP system for a leading petroleum company. You have involved
team in creating WBS. You are now deciding a unique identifier for each work element. You are explaining project
team what this identifier does not mean. You will likely say:
A. Generally a number associated with the organization’ financial system.

B. Generally a number associated with risk IDs
C. Helps hierarchical summation of costs and resources, and also helps tracking them.
D. Known as code of accounts or chart of accounts.
Answer: B. Unique identifier is not associated with risk IDs.
2. Expert judgment of experienced and knowledgeable people or groups helps us create WBS and
reconcile differences in opinion on how to divide total project scope. Expert judgment can also be given
by pre-defined industry-specific WBS templates which have evolved from experience of people in similar
projects. Expert judgment provides guidance only. It is responsibility of the project manager, in
collaboration with the team, to divide total scope into discrete work packages.
What do we achieve?
1. *“Scope Baseline. An approved version of a scope statement, work breakdown structure (WBS),
and its associated WBS dictionary, that can be changed only through formal change control
procedures and is used as a basis for comparison.”
In Create WBS process, we create WBS and WBS dictionary. Scope Statement we had made
earlier. Scope Baseline consists of these three documents.
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Work Breakdown Structure. *A hierarchical decomposition of the total scope of work to be
carried out by the project team to accomplish the project objectives and create the required
deliverables.
Work Breakdown Structure Dictionary. *A document that provides detailed deliverable,
activity, and scheduling information about each component in the work breakdown structure.
Sample WBS Dictionary

Project Name:
WBS component:__________________
Code of account identifier: __________
Responsible organization ____________
Description of work and technical references

Schedule milestones
Cost estimates
Quality requirements
Acceptance criteria
Assumptions and constraints
Agreement information-if outsourced
*These definitions are taken from the Glossary of The Project Management Institute, A Guide to the Project Management Body of
Knowledge (PMBOK® Guide)-Fifth Edition, Project Management Institute Inc., 2013.
2. Project document updates. During WBS creation, the project team may suggest some changes
in the requirements documentation. These suggestions are sent to Perform Integrated Change
Control process, and if agreed, then these changes are incorporated in the requirements
document.
Time: Plan schedule management, define activities, sequence activities, estimate activity resources,
estimate activity durations, develop schedule
Plan Schedule Management Process

*”The process of establishing the policies, procedures, and documentation for planning, developing,
managing, executing, and controlling the project schedule.”
*“Schedule management plan. A component document of the project management plan that
establishes the criteria and the activities for developing, monitoring, and controlling the schedule.”
[*These definitions are taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge,
Question: Can you describe main benefit of this process?

Answer: It provides guidance and direction on how schedule will be managed throughout the project!
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Plan Schedule Management process discussion
What do we need?
1. Project charter. Summary milestones schedule and project approval requirements impact
management of schedule. This information from charter helps in development of schedule management
plan.
2. Project management plan. Scope baseline helps us in development of schedule management plan, as
Scope Statement and WBS details are used for defining activities of work packages, estimating duration,
and some insights on how we should develop and manage schedule to achieve project objectives.
3. Organizational process assets provide historical information and lessons learned as well as policies
and procedures to consider while developing schedule management plan.
4. Enterprise environmental factors are important to consider while developing schedule management
plan (resource availability and skills, published commercial information, infrastructure, project
management software, work authorization system, and organization’s culture).
How do we do it?
1. Expert judgment. We take the help of knowledgeable and experienced people or group who
have specialized education and skills in developing scope management plan.
2. Meetings. We hold meeting to develop scope management plan where project manager,
sponsor, selected team members, selected stakeholders, and other relevant people participate.
3. Analytical techniques. We try to choose strategic options for estimating and scheduling the
project. Examples:
Estimating approaches, tools and techniques, including PM Software, and formats
Scheduling methodology
What do we achieve?
1. Schedule management plan: Describes how the project schedule will be developed, validated, and
controlled. It is an input to all scope management processes. Based on the needs of the project, it may
formal or informal. It may be broadly defined or highly elaborated.
Sample entries in Schedule Management Plan:
Defines Scheduling methodology and tool for project schedule model development
Process descriptions (for each schedule management process)
Defines Level of Accuracy, the acceptable range for activity duration estimates
Defines control thresholds (acceptable variation in schedule performance from
schedule baseline before need for action)
Defines units of measure (Time measure: staff hours, days, or weeks. Quantity
Measure: meters, liters, kilos, cubic yards, etc.)
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Defines organizational procedure links (WBS acts as framework for schedule
management plan- permitting consistency with estimates and schedules)
Defines rules for performance measurement (EVM Rules or Physical Measurement
Rules, such as:
 What will you call percentage complete
 At what control account schedule performance will be measured
 Which of the EVM Measurement Techniques will be used (baselines or percent-complete or
fixed formula)
 Which performance measure will you use to know magnitude of variance (SV, SPI, or what)
 Defines reporting formats
Defines schedule model maintenance (process of updating status, progress)
Define Activities Process

*The process of identifying and documenting the specific actions to be performed to produce project
deliverables. *This definition is taken from the Glossary of the Project Management Institute, A Guide to the
®
Project Management Body of Knowledge, (PMBOK Guide)–Fifth Edition, Project Management Institute, Inc., 2013.
Activities
Provide a basis for estimating, scheduling, executing, and monitoring and controlling the
project work.
We should define and plan activities in order to achieve project objectives.
The WBS, WBS dictionary, and activity list can be developed either sequentially or
concurrently. Involving team members can lead to better and more accurate results!
Question: What is the impact of activities on the project objectives?
Answer: project objectives are achieved by performing activities. For example:
Performance of activities consumes resources, cost, and time

Performance of activities determines quality
Performance of activities produces deliverables
Remember: Project objectives are achieved through activities only!
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Define Activities Process discussion
What do you need?
1. Schedule Management Plan. Provides methodology to be used for defining activities.
2. Scope baseline. The work packages from WBS are decomposed into activities required to be
performed to produce project deliverables. We decompose work packages into their respective
activities only after understanding all the characteristics of the work packages provided by the WBS
dictionary. While defining activities, we duly consider constraints and assumptions recorded in the scope
baseline!
2) Enterprise Environmental Factors. We need scheduling software to help us define activities. Even WBS is
created and documented in such a software. The tool, termed as Project Management Information System (PMIS),
is provided by the enterprise environmental factors. Commercial databases provide published literature that also
guides us in defining activities if the project is new or complex. Organizational culture and structure also impact
how much attention and support we get while defining activities.
3) Organizational Process Assets. We take guidance from the organizational knowledge base regarding what
activities were defined in similar previous projects, what were lessons learned. We also use process assets, such as
organizational policies and procedures for defining activities, and also activity list templates. You can get these
process assets from your PMO!
How do you do it?
1) DECOMPOSITION. The work packages are subdivided into smaller and more manageable
components (schedule activities). The process of decomposition is the same as we discussed during
create WBS, except that the output in this case is activities instead of deliverables.
2) Rolling wave planning. *An iterative planning technique in which the work to be accomplished
in the near term is planned in detail, while the work far in future is planned at a higher level.
3) Expert judgment
What do we achieve?
1) ACTIVITY LIST
Consists of all the schedule activities that are to be performed to complete the project. Includes the
activity identifier and a scope of work description for each activity in sufficient detail to help team
members understand what work is required to be accomplished!
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2) Activity attributes
Extend the description of each activity by identifying multiple components associated with each activity.
Please note: components for each activity evolve over time. During initial stages of the project they
include: activity ID, WBS ID, and activity name.
Activity Attributes Template
Activity Activity Predecessor Successor Logical lead Lag Required Imposed constraints assumptions
code description relationship resources dates
Question: What is the use of activity attributes?
Answer: Read carefully and remember that activity attributes are:
Used to identify the person responsible, geographical area, and activity type (level of effort, discrete
effort, and apportioned effort).
Used for schedule development.
Used for selecting, sorting, ordering in various ways within reports.
In real-life, we get surprises by missing activity attributes, resulting into wrong estimations!
3) Milestone list
Identifies all milestones:
Mandatory milestones (in contract)

Optional milestones (as per project requirements/ historical information)
Millstones are similar to regular activities but their duration is zero as they are a moment in
time- a key achievement.
Sequence Activities Process discussion

*The process of identifying and documenting relationships among the project activities.
Answer: Sequence activities process identifies the logical sequence to get maximum efficiency under all project
constraints. This is main benefit!
Question: Can you define standard logic of sequencing activities?
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Answer: Except the first and last, every activity must be connected to at least one predecessor (with FS or SS
relationship) and at least one successor (with FS or FF relationship). We should sequence activities in such a way
that we are able to create a realistic and achievable schedule.
What do we need?
1. Schedule management plan defines scheduling method and tool to be used for sequencing activities.
2. Activity list is obviously the main input.
3. Activity attributes describe necessary sequence of activities or defined predecessor or successor

relationships.
4. Milestone list helps sequence with regard to meeting milestones.
5. Project scope statement defines product scope description whose characteristics guide us how to
sequence activities to create the product. Examples:
If you are handing a project to build plant (product of the project), the plant layout as
described in scope statement will guide you with workflow and associated equipments
to sequence activities accordingly to achieve the plant layout.
If you are handling a software project, subsystem interfaces help you understand
software project workflow, and accordingly you sequence activities for developing
modules, test cases.
6. Organizational process assets provide scheduling methodology data from historical project files,
organization’s activity planning-related policies and procedures (here we use the ones related to
sequencing). We also use network diagram templates to expedite sequencing work. We also check what
went wrong and what went right when sequencing activities in earlier projects in the past.
7. Enterprise environmental factors provide PMIS, scheduling tool, company work authorization system.
We also get knowledge of government and industry standards to sequence activities for compliance to
them.
How do we do it?
1) Precedence diagramming method (PDM)
Used in Critical Path Methodology (CPM).

Shows activities in rectangle boxes linked by arrows showing dependencies. These boxes are
called nodes. Therefore, this technique is also termed as activity-on-node (AON). Most software
programs use it these days
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In PDM, there can be four types of relationships between activities:
Finish-to-start FS
Finish-to-finish FF
Start-to-start SS
Start-to-finish SF
PDM allows for various instances of interactivity relationships. It also allows for Time Lags in these
relationships.
Finish-to-start: The successor activity can begin only when predecessor activity completes. This is the
most commonly used relationship.
Suppose employees have to shift from one room to another room.
Finish to finish: The successor activity can complete only when predecessor completes.
Suppose, we need lay asphalt and paint parking lines on a long road.
In this case both activities may be performed in parallel. If we need to do this job for a long road, we can
perform both activities in parallel. But painting parking lines will finish when the asphalt has been laid on
the last stretch of the road.
Start to start: The successor can start only when predecessor starts.
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Suppose employees of ten rooms of old office have to shift from other 10 rooms of new office.
Start to finish: The successor can finish only when predecessor starts. This relationship is rarely used.
Successor activity, that is phasing out of old system can happen only when predecessor activity, testing
of new system begins.
2) Dependency Determination
Mandatory dependencies (hard logic) determined by the type of work being performed and
offer physical limitations as the nature of work itself dictates the order of activities.
Example: You can’t prime the walls until scraping is done before. You cannot make control board until
printed circuit boards are populated and wave-soldered
Discretionary dependencies (soft logic, preferred logic, preferential logic) DETERMINED by the
project management team. THESE dependencies allow the activities to happen in a preferred
order because of best practices in the application area. SOMETIMES, a specific sequence is
desired due some unusual aspect of the project, besides alternative sequences being available.
Watch out!
External dependencies are external to the project and depend on relationship between project
activities and non project activities. Examples: Testing schedule activity on a software project
may depend on delivery of hardware from an external source. Environmental forecasts need to
be considered before site preparation on a construction project
3) Leads and lags
LEAD is an overlap in the relationship allowing the successor activity to be scheduled earlier than the
predecessor will generally allow. In a FS relationship with 5 day lead, the successor activity begins 5
days before the predecessor has finished. A technical writing team can begin writing the second draft
of a large document (successor activity) 15 days before they complete writing the entire first draft
(predecessor activity). This can be done by finish to start relationship with 15 days lead time!
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Lag is a gap in the relationship causes the successor activity to be scheduled later than the predecessor
will generally allow. In a Wall Painting Project, there is a 3-day delay between Priming and Painting.
The painting activity begins 3 days after the predecessor has finished, for primer to dry up.
What do we achieve?
1. Project Schedule Network Diagrams
Schematically show project activities along with their dependencies.

May be drawn manually or on computer, using PDM.
May incorporate full project details, or just one or more summary details- called Hammocks.
A summary description of sequencing approach accompanies them.
Unusual sequences, if any, are properly narrated.
[A network diagram is traditionally known as PERT Chart, but it wrong. PERT (program evaluation and review
technique) was a particular type of network diagram using weighted average for activity durations.]
2. Project Document Updates
 ACTIVITY LIST UPDATES: While preparing network diagrams, we may discover some instances where certain activities
must be divided or refined in order to show correct logical dependencies. This leads to activity list updates to include
approved changes through Perform Integrated Change Control process. Please remember again ‘Planning is an
Iterative Process!
 ACTIVITY Attributes updates: Defined logical relationships and associated leads and lags.
 Risk Register Updates to document critical areas in the network diagram, such as path of convergence or divergence.
Estimate Activity Resources Process

Estimate Activity Process is *”The process of estimating the type and quantities of material, human
resources, equipment or supplies required to perform each activity.”
Answer: this process helps us know the type, quantity, and characteristics of resources needed to complete various
activities. This in turn will help us accurately estimate costs and durations-based on quantity and quality of
resources!
Points to remember
Resources are a project’s most important assets. The project managers often face the issue of limited
resources. Management of resources is as important as managing time, cost, quality and scope
Ability of the project manager to effectively organize resources can make difference between project
success and failure!
Resources must be planned and coordinated to avoid common problems of resources non-availability or
their being taken away from the project.
Resource Planning must be well coordinated with cost estimating.
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The quality of resource, their knowledge of latest techniques of performing work in their application area,
and their skills will immensely impact the cost.
What do we need?
1. Schedule management plan provides information on level of accuracy and units of measure for
resource estimation.
2. Activity list identifies activities for which resources are to be estimated.
3. Activity Attributes developed during “Define Activities” and refined during “Sequence Activities”
processes act as PRIMARY DATA for estimating resources for each activity.
4. Resource Calendars help us know what resources are potentially available (people, equipment,
and material) during planned activity periods. Every organization maintains such resource
calendars based on loading of resources and free time available. Do you have one?
5. Risk register provides list of identified risks which influences resource availability and selection.
6. Activity cost estimates influences selection of resources for the activities. If there is a
predefined cost for an activity, we cannot select resources which are costlier than the cost limit.
7. Enterprise environmental factors provide information on availability and skills of the resources.
8. Organizational process assets provide:
policies and procedures regarding staffing,
Policies and procedures for rental and purchases
Historical information on resources used in similar projects, along with lessons learned.
How do we do it?
1. Expert judgment helps you assess inputs to resource estimating.

2. Alternative analysis helps you identify alternative methods of accomplishing schedule activities,
Each activity needs:
Different levels of resource capability/skills

Different size/types of machines
Different tools (manual or automated)
Make or buy decisions
3. Published estimating data helps you in estimating resources for schedule activities. Many
companies trading in these resources routinely publish extensive array of:
Labor trades
Material
Equipment
4. Project management software helps us plan, organize, estimate, and manage resource pools.
The Project Management Software also defines (data is already fed):
Resource breakdown structures
Resource availability
Resource rates
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Resource calendars
5. Bottom-up estimating involves breaking up the work within a schedule activity into more detail.
Used when a schedule activity can’t be estimated for resource with confidence. Resource needs
for each smaller component are estimated and then added upwards to find total resource
requirement for the particular schedule activity.
[The pattern of resource usage may be influenced by dependencies between the activities. We reflect this in the resource requirements for the
concerned schedule activities.]
What do we achieve?
1. Activity resource requirements Identify and describe the types and quantities of resources
required for EACH SCHEDULE ACTIVITY IN A WORK PACKAGE. We can find resource
requirements for each work package by adding up resource requirements for all its schedule
activities. Level of specificity and detail vary by application area!
Please don’t forget to document: Basis of estimate and Assumptions
[You must record assumptions made about the type of resources required, their availability, and
quantities! All assumptions carry a degree of risk and we would check their validity during risk
identification!]
2. Resource Breakdown Structure. Hierarchical structure of resources by resource category and

type.
3. Project document updates. Resource types and quantities part of activity attributes, but we are
not able to document these attribute until we estimate resources. We go back and record this
information in the Activity Attributes, which updates the Activity Attributes. Activity list and
resource calendars are also updated. Planning is an Iterative Process!
Estimate Activity Durations Process

*The process of approximating the number work periods needed to complete individual activities with
estimated resources.
Basic information required for Estimating Activity Durations:
Schedule activity scope of work

Required resource types
Estimated resource quantities
Resource calendars
Resource capabilities
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What do we need?
1. Schedule management plan provides duration estimation method for use, information on level of
accuracy, other criteria, and the project update cycle for activity duration estimation.
2. Activity list and 3. Activity Attributes serve as primary inputs. The nature of activity and its attributes
determine activity effort time.
4. Activity resource requirements. The duration of an activity depends on quantity and productivity
level of the resources! More efficient resources in right quantity, at the right time minimize durations!
5. Resource calendar provide information:
Availability
Capability
Skills
Type, and
Quantity (actually available).
6. Project scope statement provides constraints and assumptions that we need consider while
estimating durations.
Constraint: Available skilled resource, Contract terms and conditions.

Assumptions: Existing conditions, Availability of information, and Length of the reporting periods.
7. Resource breakdown structure defines a hierarchical structure of estimated resources by category

and resource type. This information helps in duration estimation.
8. Risk register gives information on identified risks, results of qualitative and quantitative risk analysis,
and risk response planning. This information helps further in deciding risk reserve to be added in
estimated duration.
9. Enterprise environmental factors provide
Duration estimating databases,

Productivity metrics,
Published commercial information, and
Other reference data.
10. Organizational process assets provide
Historical duration information,

Project calendars,
Scheduling methodology, and
Lessons Learned.
Before we proceed, can you think why we require 10 inputs?
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How do we do it?
1. Expert judgment. Involve experts! The team members rely on their knowledge and experience, but
these estimates can be very risky.
 Many factors need to be considered: activity durations, resource capability, levels required, timeframes,
and risks involved!
 We must also take guidance from historical data from similar previous projects, and let experts use such
knowledge base while providing their advice!
Therefore, expert judgment must be combined with historical information.
See the advantage of co0mbing expert judgment with historical information:
Duration estimate or recommended maximum activity durations from similar past projects.
Knowledge whether to combine methods of estimating and how to reconcile differences.
2. Analogous estimating: USED only in early phases of the project when we do not have detailed
information. It is a form of expert judgment applied with the help of historical data.
Question: When analogous estimating is most reliable?
Answer: When previous projects activities are really similar (not apparently) and the people have the necessary
expertise.
3. Parametric estimating: We use a parameter evolved from our experienced and documented
information. Examples: Number of drawings X labor hours per drawing, or Cable installation in meters X
labor hours per meter. The parameter you use must be scalable.
4. Three-point estimates
Just think how risky are your original single point estimates? Three-point estimation provides realistic
activity duration. It calculates weighted average of three types of durations for each activity:
Most likely tM
Optimistic tO
Pessimistic tP
Most likely: duration considering all resources with their productivity, availability, dependencies, and interruptions.
Optimistic: best case.
Pessimistic: worst case.
[The concept originated with the Program Evaluation and Review technique (PERT). PERT uses three estimates to
define an approximate range for activity duration: Most Likely, Optimistic, and Pessimistic.]
Calculates an EXPECTED (tE) activity duration using a weighted average of three estimates:
tE = tO + 4 tM + tP / 6
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If you are using three-point estimate, you can predict the probability range in your duration estimates
by finding standard deviation. Standard Deviation = P – O / 6
Important points about standard deviation and risk:
The higher the standard deviation for an activity, the higher the risk.
Standard deviation measures the difference between the pessimistic and optimistic
times.
A greater spread between the two results in higher standard deviation and therefore
higher risk.
Hence, lower the standard deviation, lower the risk
5. Reserve analysis. An additional time (known as time buffer, reserve, or contingency) is added to the
activity duration or elsewhere in the schedule in recognition of schedule risk:
A percentage of estimated activity duration, a fixed number of work periods, OR

Calculate through Perform Quantitative Risk Analysis process.
[Remember: You may use a contingency reserve completely or partially. You may reduce it later based
on your knowledge and situation. As you progress and get more precise information about the project,
you may even eliminate the reserve.]
6. Group decision-making techniques (Brainstorming, Delphi, Nominal group techniques). We engage

team members to jointly discuss and decide duration estimates.
Engaging team members provides following advantages:

Improves accuracy of estimates by involving team members who are closest to the technical performance
of work
Ensures team buy-in
Increases team commitment for honoring these estimates
What do we achieve?
1. Activity duration estimates. Your team’s quantitative assessment of the work periods required to
complete an activity. Please note: Do not add any lags in your duration estimates! You can apply leads
and lags while developing the schedule!
You may show some range to factor in uncertainty but such range is possible through calculation of
standard deviation in Three-point Estimate:
2 weeks +/- 2 days to indicate that the activity will take at least eight days and no more than twelve days
(assuming 5 day week).
15 % probability of exceeding three weeks to indicate a high probability, 85%, that the activity will take
three weeks or less.
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2. Project document updates. Whenever you find project document update, always recall that planning is an
interactive process! The team may get better knowledge update:
 Activity attributes. The activity duration is one of the activity attributes. It is filled up in the attributes
document.
 Assumptions made in developing the activity duration estimates (skill levels and availability) are updated
in the project documents.
Develop Schedule Process

FREQUENT CAUSES OF PROJECT FAILURE
Scheduling and allocation of resources are incorrect.

Assignments are not anticipated.
Resource skills and capabilities are unknown.
Resources for back up are not available
The problem emerges during planning and continues throughout the project:
Project staff are reassigned and turned over without readjusting the schedule to allow
for the lost time or the learning curve.
Resource requirements are not anticipated and scheduled, and resource issues are
addressed only as they occur.
There is generally no skill inventory indicating who is available for the project.
Develop Schedule Process discussion

*The process of analyzing activity sequences, durations, resource requirements, and schedule
constraints to create the project schedule model.*Schedule model is a representation of the plan for
executing the project’s activities including durations, dependencies, and other planning information,
used to produce a project schedule along with other scheduling artifacts.
*These definitions are taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge,
Now answer these questions (important for exam):
Answer: When you enter scheduling information in the scheduling tool, it generates schedule model with planned
dates for completing project’s activities.
Question: What information do you enter in the scheduling tool to generate schedule model?
Answer: Activity list, logical relationships, resources, and resource availability!
Question: For what purpose do we use schedule model?
Answer: We use schedule model to determine the planned start and finish dates for project’s activities and
milestones. But is it is based on accuracy of inputs!
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Question: What review and revision is required for schedule development in order to establish an approved
schedule that can serve as a baseline to track progress?
Answer: Review and revision of duration estimates and resource estimates.
Question: What does this review mean?
Answer: After activity start and finish dates are determined, project team assigned to these activities review these
dates are still valid and do not conflict with resource calendars, and assigned activities in other projects or tasks
Question: How do you sustain a realistic schedule throughout the project?
Answer: As the work is performed and moves on, we revise and maintain schedule model to ensure we are able to
sustain a Realistic Schedule.
What do we need?
1. Schedule management plan provides information on what scheduling method and tool is to be sued
and how to develop schedule. This is the benefit of advance thinking and there is no confusion on tools,
techniques, and methods.
2. Activity list provides activities to be incorporated in schedule model.
3. Activity attributes provides information for use in developing schedule model.
4. Project schedule network diagrams- a key input to calculate schedule as network diagram shows
logical relationships, predecessors, and successors.
5. Activity duration estimates- a key input to calculate schedule as these estimates are quantitative
assessments of likely work periods that will be taken by activities to finish.
6. Activity resource requirements-a key input to create schedule model as it informs about type,
quantity of resources needed for each activity.
7. Resource Calendars provide information on availability of resources and it most important for
calculating schedule. If you don’t consider it, you can’t make a realistic schedule.
8. Project scope statement provides information on Constraints and Assumptions that impact
development of project schedule. Constraints: FACTORS THAT LIMIT project management team’s
options when performing schedule network analysis.
Two major categories of constraints used:
 Imposed dates
 Key events or major milestones
Question: Can you think why such constraints are imposed?
Answer: These time constraints may be imposed due to:
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Agreed-upon contract dates
A market window on a technology project
weather conditions for outdoor work
Compliance to government requirements (safety requirements for hazardous projects, or pollution control
requirements, etc.)
Supplies from the outside agencies not shown in the project schedule, etc.
Key events or major milestones
Project sponsor, customer, or other stakeholders often dictate key events and major
milestones for completion of certain deliverables.
Once scheduled, these dates become expected. They can be moved only through
approved changes!
Assumptions
Assumptions are the factors we have documented so far and taken them true or certain for planning
purpose. We examine them for their impact while developing project schedule. Ensure that they do not
turn out false and become risks!
9. Organizational process assets provide three important items to consider:
Project calendar: A Calendar of working days/shifts that establish the dates on which:
Schedule activities are worked
Schedule activities are idle
Scheduling methodology as organization’s policy and procedure for creating schedule
Historical information and lessons learned
10. Risk register provides information on identified risks, their characteristics and root causes. This
information will influence schedule development so please consider it.
11. Project staff assignments provide information on which resources are assigned to project’s activities
and what is their skill set, experience, capability. This information will impact schedule.
12. Enterprise environmental factors provide Scheduling Tool, Communication Channels, and
information on standards.
13. Resource breakdown structure helps us with details for resource analysis and organizational
reporting.
[An acceptable project schedule is developed through iterations! True or false? Can you justify this
statement? There are some inputs which are not available initially when we begin to develop schedule,
such as risk register.]
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How do we do it?
1. Schedule Network Analysis. *The technique of identifying early and late start dates, as well as early
and late finish dates, for the uncompleted portions of the project schedule activities.” *This definition is taken
from the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide)–Fifth Edition,
Project Management Institute, Inc., 2013.
Schedule network analysis results in generating schedule model. Analytical techniques used:
Critical path method

Critical chain method
What-if analysis
Resource optimization techniques: Calculating early and late dates
In schedule network analysis, loops and open ends in the network diagram are adjusted
before any analytical technique is applied. Path convergence/divergence points are
identified and used in schedule compression or other analysis.
2. Critical Path Method (CPM). *A method used to estimate the minimum project duration and
determine the amount of scheduling flexibility on the logical network paths within the schedule model.
Early start and finish dates are calculated by forward pass, using a specified start date. Late start and
finish dates are calculated by backward pass, starting from a specified completion date, which
sometimes is the project early finish date determined during the forward pass calculation.
Float/slack = LF - EF or LS – ES
Calculated ES and EF and LS and LF dates may not be the same on any network diagram. WHY? Because
total float (which gives scheduling flexibility) may be: Positive, Negative or Zero.
You should know definitions of total float, free float.
Finding TOTAL FLOAT
Find positive value of LF-EF or LS-ES. This positive value is called TOTAL FLOAT.
*“Total Float. The amount of time that a schedule activity can be delayed or extended from its early
start date without delaying the project finish date, or violating a schedule constraint. *This definition is taken
Critical paths have either a ZERO or Negative total float! Schedule activities on critical path are called
“critical path activities”.
Adjustments to activity durations, logical relationships, leads and lags, or other schedule constraints are
necessary to make network paths with zero or positive total float.
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Finding FREE FLOAT
When the total float for a network path is zero or positive, then the free float can be found!
*“Free Float. The amount of time that a schedule activity can be delayed without delaying the early start
date of any successor or violating a schedule constraint.”
*This definition is taken from the Glossary of the Project Management Institute, A Guide to the Project
Management Body of Knowledge, (PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc.,
2013.
Project float
The amount of time a project can be delayed without delaying the externally imposed project
completion date required by the customer or management, or previously committed by the project
manager.
Calculating float requires Forward pass and Backward Pass to determine ES, EF and LS and LF. Float = LF
– EF or LS – ES
Forward Pass
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Backward Pass
Float calculation
What is the use of float?
Float is extremely useful for you:
It allows better allocation of resources.

It helps team members contribute on multiple projects
Caution: Float should not be confused with activity duration or time buffer. Float is neither activity
duration nor time buffer. Float comes due to sequencing. You change sequence float will change, but
activity duration and time buffer will not change. Therefore you must not allow anyone to think it as
duration or buffer!
3. Schedule compression. Shorten project schedule without changing the project scope, to meet
schedule constraints, imposed dates, or other schedule objectives. The techniques:
Crashing
Fast tracking
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Crashing: An analysis of cost and schedule tradeoffs to obtain greatest schedule compression for
least increase in cost. Thumb Rule: Choose activities costing least to obtain desired compression.
Crashing leads to adding more resources to critical path activities while maintaining scope.
It generally results in increased cost and cannot always promise a viable alternative.
Fast tracking: Performing critical path activities in parallel that are planned to be performed in
series. Thumb Rule: Never use it if dependencies are mandatory. You can use if dependencies are
discretionary/preferential/preferred.
Fast tracking trades of cost for time

Increases the risk
Results in rework
Needs more attention to communications
4. Modeling Techniques: What-if scenario analysis and Simulation
*What-if scenario analysis. The process of evaluating scenarios in order to predict their effect on
project objectives. *This definition is taken from the Glossary of the Project Management Institute, A Guide to the Project Management
Body of Knowledge, (PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013.
Three Steps of What-if scenario analysis:
Step One: Think of what-if scenarios (adverse conditions):
Delay in a major component delivery

Delay in engineering drawings
Delay in providing resources or data
A key resource leaves or preoccupied with another higher priority project
Delay in approvals
A key regulation changes
Step Two: Analyze impact of these scenarios on schedule to assess feasibility of project schedule under
these adverse conditions.
Step Three: Decide contingency response plans to minimize impact of these adverse unexpected
situations or conditions.
*Simulation. Simulation uses a project model that translates the uncertainties specified at a detailed
level into their potential impact on objectives that are expressed at the level of the total project. Project
simulations use computer models and estimates of risk, usually expressed as a probability distribution of
possible costs or durations at a detailed work level, and are typically performed using Monte Carlo
Analysis. *This definition is taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of
Knowledge, (PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013.
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Calculating multiple project durations with different set of activity assumptions with the use of
simulation techniques: Monte Carlo Analysis (most common).
Primarily used to understand the feasibility of schedule under unfavorable conditions. This method also
helps in making contingency, or response plans to tackle or lessen the effect of adverse situations. Here,
different scenarios are made using network logic, assuming instances like delay in supply from an
external source, new regulation, etc. USES three time estimates like PERT but does not use PERT
formula.
Thus distribution of probable results is determined for each activity and then utilized in arriving at a
distribution of probable results for the whole project.
5. Resource optimization techniques: Resource leveling and Resource Smoothing
*Resource Leveling. A technique in which start and finish dates are adjusted based on resource
constraints with goal of balancing demand for resources with the available supply. *This definition is taken
®
from the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK
Guide)–Fifth Edition, Project Management Institute, Inc., 2013.
WE have a schedule of activities. Now, it’s time to plug in resources because:
Techniques like CPM and PERT did not consider resource availability and produced a
preliminary early-start schedule that needs more resources during certain times than
available, or needs unmanageable alterations in resource levels.
We will also have to adjust our schedule if we find any resource constraints to our
schedule of activities made so far using mathematical analysis techniques.
Resource leveling is the process of adjusting resource utilization on your project to match with real
resource availability. You perform following activities:
Allocate scarce resources to critical path activities first.

Move an activity in time to take advantage of a period of under-allocation elsewhere in
the project.
Replace the resources that are not over-allocated during the same timeframe.
Increase the duration of an activity while applying the same total effort.
Resource leveling generally extends schedule. It can change CP also.
Resource leveling produces a RESOURCE LIMITED SCHEDULE, or RESOURCE
CONSTRAINED SCHEDULE!
Question: What other methods, instead of resource leveling, can you try if you in case of critical or limited
resources availability?
Answer: We can try following:
Utilization of extended hours

Productivity increase of resources
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Fast tracking
Reverse resource allocation
Critical chain method (modifies project schedule to account for limited resources).
Question: What is reverse resource allocation scheduling?
Answer: Some projects may have a finite and critical resource. In such cases, the resource is scheduled in reverse
from the project ending date. It is called REVERSE RESOURCE ALLOCATION SCHEDULING! It may not result in an
optimal project schedule.
*Resource Smoothing. A technique which adjusts the activities of a schedule model such that the
requirements for resources on the project do not exceed certain predefined resource limits. *This definition
is taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide)–Fifth
Edition, Project Management Institute, Inc., 2013.
Question: How resource smoothing is different from resource leveling?
Answer: In resource smoothing, the critical path is not changed and completion date is not delayed. Activities may
be delayed within their free and total float. Whereas in resource leveling, critical path is changed and completion
date is delayed.
Disadvantage of resource smoothing: Resource smoothing is not able to achieve resource optimization!
6. *“Critical Chain Method. A schedule method that allows the project team to place buffers on any
project schedule path to account for limited resources and project uncertainties. *This definition is taken from
the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide)–Fifth Edition,
Critical Chain Method combines deterministic and probabilistic approaches. This method adds time
buffers to focus on planned activity durations. How do we do it?
Step one: We find out CP making network diagram with non-conservative estimates (taking required
dependencies and defined constraints as inputs).
Step two: Then, we enter resource availability and determine resource-limited schedule. Resulting
schedule often has a changed CP.
Step three: Now we determine duration buffers and schedule the planned activities TO THEIR LATEST
POSSIBLE START AND FINISH DATES.
Step four: Consequently, in lieu of managing the total float of network paths, we focus on managing 1) the
time buffers, 2) the resources for schedule activities.
7. Applying leads and lags: Leads and lags are adjusted during schedule network analysis to develop a
viable schedule. This is particularly important as improper use of leads and lags distorts the schedule.
8. Scheduling Tool: Schedule data and information is compiled into the schedule model for the project.
We may use the schedule model tool and its supporting data along with manual methods or project
management software to perform schedule network analysis for generating the project schedule.
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What do we achieve? Outputs
1. *Schedule Baseline. The approved version of a schedule model that can be changed only through
formal change control procedures and is used for comparison to actual results. *This definition is taken from
®
the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK Guide)–
Fifth Edition, Project Management Institute, Inc., 2013.
Schedule baseline shows baseline start and baseline finish dates and it is approved by the appropriate
stakeholders. It is used for performance measurement.
2. *Project schedule. An output of a schedule model that presents linked activities with planned dates,
durations, milestones, and resources. *This definition is taken from the Glossary of the Project Management Institute,
®
A Guide to the Project Management Body of Knowledge, (PMBOK Guide)–Fifth Edition, Project Management Institute, Inc.,
2013.
Question: What is the output from schedule model?

Answer: Project schedule presentations! Remember! You can say output from schedule model is project schedule!
Question: What is the status of schedule if resource leveling is done early?

Answer: It remains preliminary until resource assignments are confirmed. After resource assignments are
confirmed, we calculate scheduled start and finish dates to finalize schedule.
SCHEDULE FORMATS/PRESENTATIONS
1. Project network diagrams (display logical relationship among the activities). We use it when we
need to show logical relationships between activities.
2. Bar charts or Gantt charts (display activity start and finish dates, estimated durations as
horizontal bars. We use it when we need to report status or progress.
3. Milestone charts (display start or finish of major deliverables or key external interfaces). We use
it when we need to report to the management.
Project network diagrams with dates
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Bar charts or Gantt charts
Milestone charts
3. *Schedule data. The collection information for describing and controlling the schedule. *This definition is
taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide)–Fifth
Edition, Project Management Institute, Inc., 2013.
Supporting data for the project schedule, includes (at least)
Schedule milestones
Schedule activities
Activity attributes
Scheduling of contingency reserves (risk reserve/ time buffer)
All constraints and assumptions
Resource requirements by time period as Resource Histogram
Alternative schedules (best case, worst case, resource leveled, not leveled, with
imposed dates, without imposed dates)
Amount of additional data varies by application area.
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3. Project Calendars. *Project Calendar. A calendar that identifies working dates and shifts that are
available for scheduled activities. *This definition is taken from the Glossary of the Project Management Institute, A
®
Guide to the Project Management Body of Knowledge, (PMBOK Guide)–Fifth Edition, Project Management Institute, Inc., 2013.
You get an idea of working and non-working days or part of a day for the project activities.
4. Project Management Plan Updates. As a result of this process schedule baseline and schedule
management plan may be updated to consider realities.
5. Project Document Updates. As a result of this process, following project documents may be revised:
Activity resource requirements

Activity attributes
Calendar
Risk register
Discussion on updates:
Activity resource requirements update: Resource leveling impacts preliminary estimates (type
and quantities of resources). The resource leveling analysis changes the project resource
requirements, and updates resource requirements.
Activity attributes update: activity attributes are updated to include any revised resource
requirements and any other revisions generated by Develop Schedule process.
Calendar update: the calendar for each project may use different units as the basis for scheduling
the project.
Risk Register Update: is updated to reflect opportunities or threats perceived through scheduling
assumptions.
Cost: Plan cost management, estimate costs, determine budget
Points to consider:
Project cost management is primarily concerned with the cost of resources needed to complete
the schedule activities. But, project cost management should also consider the effect of project
decisions on the cost of using, maintaining and supporting the product of the project. If you do
so, then you are having broader view of life cycle costing!
Look at this scenario: Less design reviews can reduce project cost at the expense of increase in
customer’s operating costs! Would you like to do otherwise? Would you like to conduct more
design reviews to minimize operating and maintenance cost of product of the project when it is
used by the customer? If yes, then you are paying attention to broader view of costing- Life
Cycle Costing!
Life cycle costing together with value engineering techniques can:

Improve decision-making
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Reduce cost and execution time
Improve quality and performance of project deliverable
Generally, predicting and analyzing prospective financial performance of the product of the
project is done by the finance department or outside consultant. If you are asked to do it within
the project, then you should include additional processes and accounting techniques: NPV, IRR,
Payback, and ROI.
PLAN COST MANAGEMENT

We need a Cost Management Plan to provide us a procedure defining how costs would be estimated,
budgeted, and controlled. *“Cost Management Plan. A component of a project or program
management plan that describes how costs will be planned, structured, and controlled.”

Answer: It provides guidance and direction for managing costs throughout the project.
What do we need?
1) Project management plan provides scope baseline (scope statement and WBS detail) for cost
estimation and management; schedule baseline for knowing when costs will be expanded; and other
information (cost-related scheduling, risk, and communication decisions).
2) Project charter informs summary budget and project approval requirements. Detailed project costs
are developed from summary budget. Project approval requirements also impact costs.
3) Enterprise environmental factors. Can you think of enterprise factors that may influence costs?
Check out following factors:
Market Conditions: what products/services are available, from whom, under what terms and conditions?
Published commercial information: resource rate information, standard cost for material and equipments,
seller price lists, etc. You can easily get this information from websites or printed magazines/business
publications.
Currency rates: project resources that are to be procured from different countries.
PMIS
Organizational culture and structure: Culture and structure do impact management of costs (have you
heard of penny wise, pound foolish?)
4) Organizational process assets provide for guidance and compliance:
Cost estimating and budgeting policies and procedures

Financial control procedures. Every organization has these procedures:
Accounting codes
Expenditure and disbursement reviews
Time reporting
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Visit your finance department and you will know about these financial controls! Historical information
and lessons learned, including financial databases.
How do we do it?
1. Expert judgment. We take the help of knowledgeable and experienced people or group who
have specialized education and skills in developing cost management plan.
2. Meetings. We hold meeting to develop cost management plan where project manager, sponsor,
selected team members, selected stakeholders, and other relevant people participate.
3. Analytical techniques. We try to choose strategic options for funding the project (internal
reserves, IPO, Bank Loan, etc). We may also analyze whether we should make or purchase or
rent or lease project resources and include these decisions in the cost management plan. These
decisions influence schedule and risks. For arriving at these decisions, we may use Payback
Period, ROI, Discounted Cash Flow, IRR, and NPV as per the organizational policies and
procedures.
What do we achieve?
1. *“Cost Management Plan. A component of a project or program management plan that describes
how costs will be planned, structured, and controlled.”
It is an input to all cost management processes. Based on the needs of the project, it may formal or
informal. It may be broadly defined or highly elaborated. Cost management plan includes all cost
management processes and their techniques.
Sample entries in Cost Management Plan:
Defines units of measure:

 Time Measures: staff hours
 Quantity Measures: meters, liters, kilos, cubic yards
 Lump sum in currency form
Defines level of precision: Based on scope of activities and magnitude of project, we
may round up or down, such as USD 1,000.49 to USD 1,000 or USD996.58 to USD1,000.
Defines Level of Accuracy, the acceptable range for activity cost estimates (+/- 5%). May
also incorporate cost contingencies.
Defines control thresholds (acceptable variation in cost performance from cost baseline
before need for action. Normally indicated as percentage deviation from the plan).
Defines organizational procedure links (WBS acts as framework for cost management
plan- permitting consistency with estimates, budgets, and cost controls. For project cost
accounting, we use control account- a WBS element. Each control account is given a
unique code linked to accounting system to booking and tracking expenditures.)
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Defines rules for performance measurement (EVM Rules or Physical Measurement
Rules, such as:
 What will you call percentage complete
 At what control account schedule performance will be measured
 Which of the EVM Measurement Techniques will be used (baselines or percent-
complete or fixed formula)
 Which performance measure will you use to know magnitude of variance (CV, CPI, What
tracking methodology and EVM equation will be used for calculating EAC forecasts for
checking validity of bottom-up EAC)
Defines reporting formats and frequency
Additional details (funding choices, procedure to account for currency rate fluctuations,
and recording costs)
Defines description of all cost management processes
ESTIMATE COSTS
*The process of developing an approximation of the monetary resources needed to complete project
activities. [*This definition is taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of
Answer: We are able to determine amount of cost required to perform work of the project.
What do we need?
1) Cost management plan provides guidance and direction for estimating costs, including method and
level of accuracy required in cost estimates.
2) Scope Baseline acts as main input and each component contributes in estimating costs:
a) Scope Statement: provides product description, acceptance criteria, key deliverables, project
boundaries, assumptions and constraints about the project.
IMPORTANT: Clarify whether you will include only direct costs or indirect costs too. Indirect costs are
those which can be directly traced to a specified project. Your accounting procedure will decide how to
apportion them among various projects.
Most common constraint for projects is a LIMTED Project Budget.

Other constraints: required delivery dates, available skilled resources, organizational policies.
b) Work Breakdown Structure: provides relationships among all the components of the project and the
project deliverables.
c) WBS Dictionary: WBS dictionary and related documents provide identification of the deliverables and
description of work required to produce each deliverable.
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3) Project Schedule: The type and quantity of resources and the amount of time they are used ARE
major factors in estimating costs. Schedule activity resources and their respective durations are key
inputs.
[Please remember: Impact of “Estimate Activity Resources process” and “Estimate Activity Durations”
process on the Estimate Costs process! Estimate Activity Resources determines quantities of resources
and is closely coordinated with cost estimating!]
[Please remember: Activity duration estimates will affect cost estimates. See how:
 Where project budget includes an allowance for the cost of financing (including interest
charges),
 Where resources are applied per unit of time for the duration of activity,
 Where we have time-sensitive costs (materials with seasonal cost variations, union labor
with regularly expiring collective bargaining agreements).
4) Human Resource Plan: Project staffing attributes and personal rates, and related rewards/recognition
are necessary components for developing cost estimates.
5) Risk Register: Risk register should be reviewed to consider risk mitigation costs. Risks, either threat or
opportunities, have impact on both activity and overall project costs.
[Please remember: As a general rule, when project experiences a negative risk event, the near-term
costs of the project will usually increase, and sometimes delay project schedule.]
6) Enterprise environmental factors: provide Information on Market Conditions: what products/services

are available, from whom, under what terms and conditions? Commercial databases: resource cost rates
that track skills and human resource cost, provide standard cost of material and equipment. Another
source: seller price lists. Helps organizing cost estimates
7) Organizational environmental factors provide Cost estimating policies, templates, historical

information (from various sources within organization), and Project files: records of previous project
performance help in developing cost estimates, Project team knowledge, Lessons learned
How do we do it?
1. Expert Judgment. Cost estimates are influence by numerous variables, such as Labor rates, Material
costs, Inflation, Risk factors, and other factors. Expert judgment, guided by historical information,
provides valuable insight about environment and info from past projects. Expert judgment can help
determine combination of estimating methods, and reconcile difference between them.
2. Analogous estimating: Top-down estimating that uses actual costs of similar, past project as
ground for cost estimation on present project. It is a form of expert judgment and used only in early
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phases when detailed information about the project is not there. Most reliable when previous projects
are similar in fact not just in appearance, and when estimators have needed experience.
3. Bottom-up estimating: Estimating cost of individual work packages or schedule activities and
then rolling them up to higher levels for reporting and tracking purposes to find project cost. Bottom-up
estimate is also called Definitive Estimate.
4. Parametric estimating: A mathematical model to estimate project costs. Examples: lines of code in
s/w development, required labor hours, square footage in construction. Remember: This method is
reliable only when:
Historical information used to develop model is correct,
The parameters are quantifiable, and
The model is scalable.
5. Project Management Software: Widely used to facilitate the process of cost estimation. There are many
project management spread sheets and simulation and statistical tools- some of them you must already be using.
6. Vendor bid analysis: For estimating costs of those items which you would outsource, you get bids
from the vendors and analyze them to know how much these items are going to cost!
7. Reserve analysis: We need to add cost contingency in our cost estimates to manage risks. Based on
the policy of the organization, you may some percentage or calculate it via Quantitative Risk Analysis.
8. Cost of quality: We need to add cost of quality in our cost estimates. Cost of quality means costs we
are going to incur on conformance to requirements (prevention and appraisal costs) and cost of
nonconformance to requirements (failure costs).
9. Three-point estimates: Just think how unrealistic are your single point estimates? We can improve
the accuracy and be more realistic by finding three-point estimates: Cost estimate = O+P+4M / 6
10. Group decision-making techniques (Brainstorming, Delphi, Nominal Group Techniques). We engage team
members to jointly discuss and decide cost estimates.
This helps us:
Improve accuracy of estimates by involving team members who are closest to the technical performance
of work
Ensure team buy-in
Increase team commitment for honoring these estimates
What do we achieve?
1) Activity cost estimates. Quantitative approximation of costs to be incurred on the resources to

complete project activities. It includes inflation allowance and cost reserve. We can present them in
summary form or detailed form as per the requirement.
2) Basis of Estimates. Document contains:
Description of the scope of work estimated by reference to WBS
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Basis for estimation
Assumptions made
An indication of possible results
Any other application area specific information.
3) Project Document Updates may include Risk register update.
DETERMINE BUDGET
*The process of aggregating the estimated costs of individual activities or work packages to establish an
authorized cost baseline.
Question: What is the main advantage of this process?

Answer: This process establishes cost baseline for monitoring and controlling costs.
What do we need?
1. Cost management plan provides guidance and direction for determining project budget and
preparing cost baseline.
2. Activity cost estimates provide estimates of activities within a work package which are added up to
get cost estimate for each work package.
3. Scope Baseline acts as key input and each component helps in determining budget:
 Scope statement: provides funding constraints. These constraints may be imposed by

organization’s funding limits, or contract funding requirements, or other external agencies
including government authorities.
 Work breakdown structure: provides cost elements for linkage and aggregation of costs for
determining budget, as well as cost control.
 WBS dictionary: description of work required to be performed to create deliverables, and
associated resources and costs.
4. Basis of Estimates guide cost budgeting as any basic assumptions dealing with the inclusion or
exclusion of indirect costs in the project budget is specified in the basis of estimates.
5. Project schedule provides start and finish dates of the activities, schedule milestones. This
information helps us aggregate costs to the calendar periods. After project budget is calculated by
adding up cost estimates, we time-phase to develop Cost Baseline, which reflects our fund requirements
in different timeframes.
6. Resource calendars provide resource cost by time periods based on their assignment to the project.
7. Risk register. We need to aggregate risk response costs. We review risk register to know how this
aggregation should be done.
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8. Agreements. The costs already incurred for project items procured though contracts are added to
determine the budget.
9. Organizational process assets. While determining budget, we follow organization’s cost budgeting
policies, procedures, tools, and reporting processes.
How do we do it?
1. Cost aggregation: Activity estimates are added up by work packages. Work package estimates are
added up for higher component levels of WBS (control accounts) and finally for the entire project.
2. Reserve analysis: Reserve analysis establishes contingency reserves. Here, we establish management
contingency reserves: budgets for reserved for “unknown unknowns” or you can say unidentified risks.
Remember for exam and real-life: These budgets are not part of cost baseline and are not
considered in EV calculations. Project manager has to obtain management approval before spending
amount from management reserve by raining a change request and getting it approved by CCB.
3. Expert Judgment
4. Historical relationships: We verify historical relationships used to get parametric estimates to predict
total project costs. Such verification is important before accepting cost estimates for determining
project budget! You may call it verification of basis of parametric cost estimation!
Both the cost and accuracy of analogous and parametric models varies widely. They are helpful only
when:
Historical information used to develop is accurate

Parameters used are readily quantifiable
Models are scalable
5. Funding limit reconciliation: Organizations have operations and projects. Both require funds. The
financial planning decides and allocates Fund Limits (constraints) projects based on funds mobilization
prospects. You have recorded Funds Limits for in scope statement. Reconcile your fund requirements
with these limits. It may lead to rescheduling of work.
[“Large expenditure of funds is undesirable.” Hence, expenditure of funds is reconciled with funding disbursement
limits set by the customer or performing organization.]
What do we achieve?
1. *Cost Baseline. The approved version of the time-phased project budget, excluding any management
reserves, which can be changed only through formal change control procedures and it is used as a basis
for comparison to actual results. *This definition is taken from the Glossary of the Project Management Institute, A Guide to the
Project Management Body of Knowledge, (PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013
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Displayed in the form of S-curve.
Cost Baseline, Expenditures, and Funding Requirements
Source Citation: The Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK® Guide)-Fifth Edition,
Project Management Institute Inc., 2013, Part of Figure 7-9. Page214.
Management reserves are added to the cost baseline to prepare project budget. Management reserve
can be used only when unidentified risks occur. If a new risk occurs and we need to use management
reserve, the change control process is required to approve moving of applicable reserve funds to the
cost baseline.
Budgeting process
Project Budget
Management Reserve
Add
Cost Baseline
Aggregated
Control Accounts
Aggregated
Work package cost estimates + Contingency reserve for

work packages
Aggregated
Activity cost estimates + Contingency reserves for activities
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2. Project funding requirements: Total or periodic are derived from cost baseline. May include an
additional margin to allow for either early progress or cost overruns. Total funds required= cost baseline
+ management contingency reserve. Each funding may include some part of management contingency
or it may be given only when needed (depends on organization's policies).
 risk register
 cost estimates
 project schedule
Quality: Plan quality Management
“*Quality. The degree to which a set of inherent characteristics fulfill requirements.” [*This definition is taken
Project Management Institute, Inc., 2013.]
Before we talk about Plan Quality Management process, it’s important to know following points:
 In project context, the key issue is converting IMPLIED NEEDS INTO REQUIREMENTS. Quality
involves conformance to requirements and fitness for use.
 Quality must be planned in, not inspected in.
 No GOLD PLATING. No customer extras, no extra functionality, no higher quality components,
no extra scope of work or additional performance.
 Low quality is a problem, low grade is not. Low quality means defects. Low grade means less
features but no defects. I may buy a low grade car (Maruti 800). It has fewer features than SX4,
but it should not be low quality (defects).
 You should also decide how much Precision and Accuracy needs to be followed:
PRECISION IS CONSISTENCY (repeated achievement of a particular value).
ACCURACY IS CORRECTNESS (closeness to a true value).
 QUALITY MANAGEMENT APPROACHES:

 ISO 9000 and 10000 series
 Deming, Juran, Crosby, Ishikawa, TQM, SQC, Lean Six Sigma, JIT, Jidohka, Kamban, Design
Approach, FMEA, VoC, COQ, and Kaizen (continuous improvement), Warusa-kagen.
 In project quality management, we benefit from these approaches.
 Hence, Modern quality management complements Project Quality Management. Both advocate
the same tenets:
1. Customer satisfaction is the prime focus of all the quality management activities.
2. Prevention over inspection is the hallmark of all the quality management approaches
propounded so far.
3. Management responsibility to provide resources as emphasized by Deming and others.
4. Continuous improvement is the key as shown by Kaizen.
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5. Cost of quality must be understood in order to know cost of conformance and cost of
nonconformance to the requirements.
It is important for you to understand each one of the following:
CUSTOMER SATISFACTION
A project is undertaken to provide products, services, or results for meeting CUTOMER NEEDS. You need to
understand them, decide how you will satisfy them, and finally fulfill all the customer requirements to achieve
customer satisfaction. ‘Conformance to requirements and fitness for use’. Remember customer is the reason why
you are in business!
PREVENTION OVER INSPECTION
Dr. Phillip B. Crosby had written a book ‘Quality is Free’. It became best seller overnight! The message he gave was
the money you spend in planning, designing, and building quality into the product is much less than the money you
waste on correcting defects found by inspection. The entire focus of ALL APPROACHES of quality management is
prevention!
MANAGEMENT RESPONSIBILITY
With all the great the great approaches of quality management, the project team members cannot achieve quality
and project success if they do not get right quality resources! It is responsibility of the management to provide
these resources! Deming suggested: as much as 85% of the cost of quality is management problem. Deming
suggested: once the quality issue has hit the floor, or the worker level, the workers have little control
REAL LIFE SCENARIO: A company had bid on an Express Highway Project and won it. To earn more
profits, management decided to use inferior-grade asphalt. The workers laying the asphalt had little
control over its quality.
CONTINUOUS IMPROVEMENT
Thought Gurus: Shewhart, the founding father of quality management, defined PDCA Cycle for quality
improvement, and Deming, his disciple, modified it. It is also called Deming Wheel
Initiatives to improve both product and project management quality: TQM, SIX SIGMA.
Models for organizational process improvement: Juran Model, Deming Prize, Malcolm Baldrige, Carnegie Mellon’s
® ® ®
CMMI , PMI ’s OPM3 , etc.
[PMI, OPM3 are registered marks of the Project Management Institute, Inc. CMMI is the registered mark of Carnegie Mellon Institute, Inc.]
*COST OF QUALITY. A method of determining the costs incurred to ensure quality. Prevention and
appraisal costs (cost of conformance) include cost of quality planning, quality control (QC), and quality
assurance to ensure compliance to requirements (i.e., training, QC systems, etc). Failure costs (cost of
nonconformance) include costs to rework products, components, or processes that are non-compliant,
cost of warranty work and waste, and loss of reputation. [*This definition is taken from the Glossary of the Project
Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide)–Fifth Edition, Project Management Institute,
Inc., 2013.]
It’s important to understand:
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 In initial efforts of performing work, there may be some portion of work may be done
incorrectly (nonconformance)
 Cost of quality may be incurred throughout the deliverable’s life cycle because of product
retunes, warranty claims, and recall campaigns (Dell, Toyota)
Question: Who should invest in product quality improvement?
Answer: Organizations must reduce project-project cost of quality (Failure Cost). For this, you must invest in the
areas of conformance to quality: to prevent defects (prevention cost), and to inspect nonconforming units so that
defective units are not delivered. Normally, sponsoring organizations should invest in product quality improvement
due to temporary nature of projects and benefits from reducing post-project COQ.
[Suggestion: The Performing Organization should also invest in product quality improvement as it
improves performance of the organization as a whole in its capability to provide products and services
to the customers (internal to the organization or external to the organization.]
Read ‘Quality is Free’ by Dr. Crosby
Impact of not meeting quality
Gaps in meeting Product or Project Quality Requirements leads to:
Project Team overworks!

Inspections are hurried up!
Errors, rework
Morale dips, employees leave jobs
Hidden defects creep in
Quality Management Processes
Plan Quality Management (goes to planning)

Perform Quality Assurance (goes to executing)
Control Quality (goes to monitoring and controlling)
Here we will discuss Plan Quality Management
Plan Quality Management Process

*The process of identifying quality requirements and/or standards for the project and its deliverables,
and documenting how the project will demonstrate compliance with quality requirements. [*This definition
is taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide
Guide)–Fifth Edition, Project Management Institute, Inc., 2013.]

Answer: Plan quality management process details guidance and direction on how quality will be managed and
validated throughout the project!
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Remember IMPORTANCE: Plan Quality Management is one of the key processes while performing Planning
Process Group and developing the Project Management Plan. Must be performed in parallel with other planning
processes. Why is it so important? BECAUSE the required changes in the product to meet quality standards may
REQUIRE SCHEDULE AND COST ADJUSTMENTS! Or the desired product quality MAY NEED DETAILED RISK ANALYSIS
OF AN IDENTIFIED PROBLEM.
Plan Quality Management Process discussion

What do we need?
1. Project Management Plan provides:
a) Scope Baseline (most important input)

Scope statement. While planning quality, we need to understand all the characteristics of the
product along with technical issues, and the acceptance criteria. The acceptance criteria, when
met, would mean satisfying customer needs. It has impact on both project cost and cost of
quality activities.
WBS. During quality planning, we establish measures of project performance. The deliverables,
control accounts, and work packages contained in WBS help us do so.
WBS dictionary. We plan quality metrics for WBS deliverables and technical information of these
deliverables is provided by WBS dictionary.
b) Schedule Baseline: We plan quality metrics to measure project time performance. Approved
schedule provides these metrics (approved start date and finish dates for each activity).
c) Cost Baseline: We plan quality metrics to measure project cost performance. Approved time-
phased project budget provides these metrics.
d) Other management plans: Other management plans, such as scope management plan, schedule
management plan, and cost management plan, etc. are needed to check their contribution in
enhancing project’s quality, and to understand areas of concern relating to quality of the
project!
2. Requirements documentation (another very important input). All the work you do and deliverables
you produce are aimed at meeting requirements recorded in requirements documentation. These
requirements guide project team to decide how quality control should be performed to check
compliance to these requirements.
3. Stakeholder Register: When we plan quality, we must not ignore the stakeholders who have special
interest in quality or who may influence quality. They must be consulting during quality planning and
agree to it.
4. Risk Register: When we plan quality, we must know threats and opportunities relating to quality
requirements. Risk register provides us risks that impact quality.
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5. Enterprise environmental Factors: While planning quality, we should consider standards, regulations,
working and operating conditions both for the project and the product. We get this important
information from enterprise environmental factors!
Quality policy and procedures,

Historical database and lessons learned.
[You must have a Quality Policy to be followed on the project. If there is none or you have multiple
organizations on the project, you should develop one with the consent of stakeholders.]
How do we do it?
1. Cost/Benefit analysis: Analyze cost-benefits tradeoffs.
Primary benefit of meeting Quality Requirements:
1. LESS REWORK
2. HIGHER PRODUCTIVITY
3. LOWER COSTS
4. INCREASED STAKEHOLDER SATISFACTION
PRIMARY COST OF PROJECT QUALITY MANAGEMENT ACTIVITIES:
TRAINING
SURVEYS
STUDIES
APPRAISAL
DESIGN REVIEW
2. Benchmarking: Comparing our practices with those of other industries to gather ideas for
improvement and to set new benchmark of performance!
3. Design of experiments (DOE): It is an experiment to understand what combination of key elements or

variables may help us achieve desired quality. This process designs and sets up experiments to
determine the ideal solution for a problem utilizing a limited number of sample cases. For example, you
want to launch a car with Very High Ride Quality, you can design an experiment to see what
combination of suspension type and tire size (key elements or variables) can help you achieve such
quality!
4. Cost of quality: Consists of all our costs on efforts to:
Achieve product / service quality

Ensure conformance to requirements
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Work resulting from nonconformance to requirements
Cost of quality. THREE TYPES OF COSTS ARE INCURRED:
Prevention costs
Appraisal costs
Failure costs
Prevention costs: Prevention means keeping defects out of the hands of the customer. These costs
are incurred on producing a product/service without defects in order to satisfy Customer Requirements.
Example: quality planning, training, design review, contractor and supplier costs.
Appraisal costs: Costs for examining the product or process and make certain that the
Requirements are being met.
Examples: inspection, testing
Failure costs: Failure costs are the costs incurred when things don’t happen according to the plan:
1. Internal failure costs result when customer requirements are not satisfied and the product is still in the
control of the performing organization. Example: corrective action, rework, scraping, and downtime.
2. External failure costs result when the product has reached the customer and they determine that their
requirements have not been met. Example: returns, repair, replacement, etc. COST OF POOR QUALITY:
FAILURE COSTS.
5. SEVEN BASIC QUALITY TOOLS:
1. Cause and effect diagrams

2. Flowcharts
3. Checksheets
4. Pareto diagrams
5. Histograms
6. Control Charts
7. Scatter diagrams.
[These tools are known since many decades as 7OC tools. These tools are used within the context of
PDCA cycle (Deming) to solve quality problems. Original designation was just ″Seven tools″ and their
content was formed during the fifties and sixties of the last century in Japan by K. Ishikawa and E.
Deming.]
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1. Cause-and-effect diagrams (Ishikawa diagrams, fishbone diagrams). Show relationship between
various factors (causes) to potential problems/effects.
2. Flowchart. System flow or Process flow diagram. Show the logical steps needed to accomplish an
objective and interrelation of individual elements of a system. These charts assist project team to assess
the type and area where quality problems may appear. Useful in understanding cost of quality in a
process.
Process Flow Chart
Base figure
3. Checksheet: The check sheet is a document used to manually capture data from the process, usually
number of defects by type, location or cause or to check probability distribution of the process or to
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monitor steps of the process. Purpose: To provide structured way to collect quality-related data as a
rough means for assessing a process or as an input to other analyses.
4. Pareto diagrams: A Pareto chart, named after Vilfredo Pareto, is a type of chart that contains both
bars and a line graph, where individual values are represented in descending order by bars, and the
cumulative total is represented by the line. The purpose of the Pareto chart is to highlight the most
important among a (typically large) set of factors. In quality control, it often represents the most
common sources of defects, the highest occurring type of defect, or the most frequent reasons for
customer complaints, and so on.
5. Histograms: In statistics, a histogram is a graphical representation of the distribution of data. It is an

estimate of the probability distribution of a continuous variable and was first introduced by Karl
Pearson. A histogram is a representation of tabulated frequencies, shown as adjacent rectangles,
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erected over discrete intervals (bins), with an area equal to the frequency of the observations in the
interval. Histograms are used to plot the density of data, and often for density estimation: estimating
the probability density function of the underlying variable.
6. Control Charts (Used to determine whether or not process is stable or has predictable performance)
Deliverables are produced by using a process. Deliverables have specification limits. A process to
produce a deliverable should have upper and lower control limits so that we may produce the
concerned deliverable within these limits. While planning quality, we decide UCL and LCL for the
process. The process control limits are tighter than specification limits to enhance chances of producing
defect-free deliverables. During execution, the process runs and control chart help us understand
process behavior. Mean of the process is taken to be goal. We check how much process is deviating
from the mean. If deviation is within ULC and LCL, we say process is in control and production is meeting
quality as deviation is within control limits. For repeatable processes, process limits are generally taken
at +/- 3 sigma (sigma indicates deviation from the mean).
Take an example:
We take process control to plus or minus3 sigma. This means 99.7 percent of the parts produced by the
process should fall in the range of plus or minus 3 sigma from the mean value (1.0100). The UCL will be
1.0103 and LCL will be 1.0097. Variation between 1.0103 and 1.0097 is accepted process variation. If it
goes beyond UCL or LCL, then process is out-of-control and cause for concern. In this case, the
production will be defective. We have to find assignable cause and correct it.
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1.0103
1.0100
1.0097
Control Chart Example
Upper and lower specifications are set based on the requirements, reflecting minimum and maximum
values allowed. There may be penalties for crossing these limits.
Question: What are general control limits of a process?

Answer: +/- 3 sigma
Question: When a process is said to be out of control?

Answer: A process is out of control when data points cross the limits or seven consecutive points are above or
below the mean, although inside the control limits.
Question: For do we use control charts?

Answer: Control charts are used to monitor various types of variable outputs. Generally, control charts are used to
track repetitive activities for producing manufactured lots, but may also be used to monitor schedule and cost
variances, volume and frequency of scope changes, other management results to determine if management
processes are in control!
7. Scatter diagrams: The data is displayed as a collection of points, each having the value of one variable
determining the position on the horizontal axis and the value of the other variable determining the
position on the vertical axis. One of the most powerful aspects of a scatter plot, however, is its ability to
show nonlinear relationships between variables. Furthermore, if the data is represented by a mixture
model of simple relationships, these relationships will be visually evident as superimposed patterns.
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6. Statistical Sampling:
It involves choosing part of a population of interest for inspection.
Sample frequency and sizes should be determined during the plan quality process so the cost of quality
will include the no. of tests, expected scrap, etc.
7. Additional quality planning tools:
Brainstorming
Force field analysis
Nominal group techniques
Quality management and control tools: Affinity diagrams, Process decision program
charts (PDPC), Interrelationship diagraphs, Tree diagram, Prioritization matrices, Activity
network diagrams, Matrix diagrams
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8. Meetings: Planning requires project meetings; hence you can mention it as a technique in all planning
processes. Here, we hold meetings to develop quality management plan.
Question: Who all should attend planning meetings?
Answer: In planning meetings, we should have Project Manager, Sponsor, Selected Team Members, Selected
Stakeholders, People responsible for Quality Planning, Assurance, and Control activities, and others as you feel
necessary.
WOW! We have done so much! Let’s examine our outputs.
What do we achieve?
1. *“Quality management plan. A component of the project or program management plan that
describes how an organization’s quality policies will be implemented.” Quality management plan
contains description of how project management team plans to meet quality requirements!
Quality management plan describes how quality assurance, quality control, and process improvement
would be performed. It details quality organization, resources, and responsibilities.
Question: What is the benefit of reviewing quality management plan early in the project?
Answer: The quality management plan should be reviewed early in the project to obtain following
benefits:
Brings sharper focus on project’s value proposition
Reductions in costs and in frequency of schedule overruns due to rework
Ensures decisions are based on accurate information
Remember: An appropriate quality management and review reduces rework and related time and
cost overruns!
2. Quality metrics (Operational definitions). The main purpose of quality planning is to develop
measures (with accepted variations) to check both product quality and project management quality.
These measures are used by Perform Quality Control process.
Examples:
Technical specification measures, Stability, Security, Testability, Rejection Rate, Acceptable Expenditure
Limits, Acceptable Schedule Performance Limits.
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3. Quality Checklists: We design component specific checklists to verify whether the required steps have
been taken or not. A ‘do this’ list or ‘have you done this ’monitor! These lists ascertain consistency in
repetitive tasks.
4. Process improvement plan: Describes how process analysis should be conducted by Perform Quality
Assurance process to achieve process improvement targets! The necessary guidance included:
Process boundaries: Process Objectives, Inputs and Outputs, Beginning Point and End Point,
Responsibility, Concerned Stakeholders.
Process configuration: Process Flow Chart and its Interfaces.
Process metrics: to maintain control over status of processes.
Targets for improved performance: Process Improvement Targets (say achieve 99% efficiency).
Remember planning is an iterative process. As we progress, we may get know more data, more
information which requires revision to project documents created earlier.
The Plan Quality Management process may result into:
 Revision of information in Stakeholder Register.

 Revision of Responsibility Assignment, to include responsibilities related to quality activities.
 Revision of WBS and WBS dictionary to include quality assurance and control activities
HR: Plan human resource management
Plan Human Resource Management

Before we proceed, please understand:
*Project management Team. The members of the project team who are directly involved in project
management activities. On smaller projects, the project management team may include virtually all of
the project team members.
*Project Management Staff. The members of the project team who will perform project management
activities such as schedule, communications, risk management, etc.
*Project team. A set of individuals who support the project manager in performing the work of the
project to achieve its objectives.
*Project manager. The person assigned by the performing organization to lead the team that is
responsible for achieving the project objectives.
[* All these definitions have been taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of
Knowledge, (PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013. ]
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Question: What’s the difference between project team and project management team?
Answer:
Project team: All the project team members, including project management team, the project manager
and, for some projects, project sponsor also.
Project management team: A subset of project team. The group is called core, executive, or leadership
team and is responsible for project management activities like initiating, planning, monitoring,
controlling and closing the project phases. Please remember that sponsor works with project
management team and provides help on following matters:
Clarifying scope
Project funding
Monitoring progress
Influencing stakeholders of requesting or performing organizations for the benefit of the project
Note: Smaller projects may not afford a separate group to act as project management team, hence
all the team members or only project manager perform the responsibilities of project management
team!
Remember:
1. Project team (project staff) includes people with roles and responsibilities for project
completion.
2. Team members may have different sill-sets, specializations, expertise.
3. Project team members may be full-time or part-time; may be internally available or procured
from external sources; may be added or released as project progresses.
4. Involvement of team members during planning and decision making improves planning
process as you get advantage of their experience and expertise, it also ensure their buy-in and
commitment to the project and its targets.
Question: What does managing and leading project team include?
Answer: It includes influencing the project team and showing professional and ethical behavior.
Influencing the project team requires awareness on the part of the project manager about following
factors:
Team environment
Geographical location of the team members
Cultural issues
Communications among stakeholders,
Internal and external politics
Organizational uniqueness, etc.
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Showing professional and ethical behavior requires project management team to know and follow
professional and ethical behavior and make sure that all the team members also follow it.
Plan Human Resource Plan process discussion

* The process of identifying and documenting project roles, responsibilities, and required skills,
reporting relationships, and creating a staffing management plan.
[* This definition is taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge,
(PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013. ]
Answer: This process decides roles and responsibilities, project organization chart (clarifying reporting
relationships), and staffing management plan (which defines timetable of using people on the project,
and releasing people, their training requirements, reward and recognition, compliance issues and safety
issues).
Question: What does HR Management Plan contain?
Answer: *Human Resource Management. A component document of the project management plan
that describes how the roles and responsibilities, reporting relationships, and staffing management will
be addressed and structured.
[* This definition is taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge,
(PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013. ]
Human Resource Management Plan documents:
Project roles and responsibilities

Project organization charts
Staffing management plan (including timetable for staff acquisition and release, training needs,
team-building strategies).
Remember: Project roles can be assigned to persons or groups, inside or outside the organization
performing the project. But we must avoid confusion of responsibility by ensuring that there is only one
person accountable for any one task. We achieve it through responsibility assignment matrix!
Question: What does Staffing Management Plan contain?
Answer: Staffing management plan includes:
Timetable for staff acquisition and release

Training needs
Team-building strategies
Plan for recognition and rewards programs
Compliance considerations
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Safety issues
Impact of staffing management plan on the organization
Remember: IMPORTANT consideration should be given to the availability of or competition for,

scarce or limited resources. These resources may be inside or outside the performing organization.
Other projects may be competing for same skill sets.
Remember: These factors may significantly affect project costs, schedules, risks, quality, and other
areas. Effective human resource planning must consider these factors and plan for them and develop
human resource options!
Develop HR Plan process discussion

What do we need?
1. Activity Resource Requirements: Provides activity resource requirements and description of other
activities like quality assurance, risk management and procurement. For all this, we need to do HR
planning. Initial requirements of people and competencies are elaborated and refined in HR planning.
2. Project management plan provides important information for developing HR Management Plan:
The project life cycle and processes to be used in phases determine skills needed.
Work methods to be used also determine competencies of human resources.
Change management plan and configuration management plan clarify how changes and
configuration management will be performed on the project and related roles are
understood. Maintaining integrity of baselines also guides how to decide roles.
Communication need and methods to be used helps us decide roles related to
communicating and engaging stakeholder.
3. Enterprise environmental factors provide us information on organizational culture and structure,

various interfaces, existing human resources and their competencies, geographical locations of the team
members, personnel administration policies, market conditions about availability of skill-sets outside,
collective bargaining agreements, and economic conditions. We develop human resource management
plan in view of all such information as this will offer options or limit flexibility of HR Planning.
Special discussion: Impact of EEFs on HR Planning!
Economic conditions: Hiring, freezes, reduced training funds, or lack of travel budget are examples that
can limit staffing options. You will find many decisions taken by management in view of economic
conditions that may constrain your project, and therefore HR Planning.
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Various interfaces: The definition of roles and responsibilities on the project is also evolved with an
understanding of:
1. Organizational Interfaces
2. Technical Interfaces
3. Interpersonal Interfaces
4. Logistical
5. Political
We should have good understanding of these interfaces while planning. We should not depend on
assumptions.
Organizational interfaces
Which organizations / departments will participate in the project?

What are present working arrangements among them?
What formal / informal relationships prevail among them (could be highly complex or quite simple)?
Project interfaces: REAL LIFE SCENARIO
A Metro Project had engaged 38 contractors (33 Indian, 5 International) to work over several years. The
reporting relationships are pretty complex. Various technical disciplines also interface.
One Telecom Voice Clarity Project at Greater Noida site was a simple in-house project that did not offer such
interface complexity.
Technical interfaces
What are different technical disciplines and specialties that will be required to accomplish the project? Are
there various types of Engineering approaches, Software languages, Equipments ALL THAT NEED TO BE
COORDINATED!
Whether transitions from one life cycle phase to other pose unique challenges? TECHNICAL INTERFACES EXIST
BETWEEN PHASES AS WELL AS WITHIN PHASES.
Project interfaces: REAL LIFE SCENARIO
In one Cement Plant Project, the site design made by civil engineers needed to correspond with the
superstructure developed by structural experts.
In one Automobile Plant Project, the fabrication design team passed work results to construction team
to begin plant construction.
Interpersonal interfaces
What types of formal and informal reporting relationships obtain among the prospective project team
members?
What are their superior-subordinate relationships?
What are their supplier-customer relationships?
What cultural and language differences will impact working relationships among them?
What levels of mutual trust and respect presently exists?
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Logistical
How much distance separates project people and units? Are project people located in different Buildings, Time
zones and Countries?
Political
What are the individual goals and agendas of Prospective project stakeholders?
Which groups and people possess informal power in the areas significant to the project?
What informal alliances exist?
4. Organizational process assets provide us information that helps development of human resource
plan:
Policies and procedures for HR Planning

Role descriptions (to avoid confusion on who is responsible for what)
Templates* and checklists**. Templates and checklists save time in the beginning and
keep us from missing important responsibilities.
Lessons learned in HR Planning in previous projects (what went wrong, what went right)
Escalation procedure for managing team issues and other role conflict issues with
functional departments
*Templates help HR planning and include:
Project organization charts

Position descriptions
Project performance appraisals
A standard conflict management approach
Checklists help HR planning and include:
Common project roles and responsibilities

Typical competencies
Training programs
Team ground rules
Compliance & safety issues
Reward ideas
How do we do it?
1. Organization charts and position. Objective: Each work package must have an unambiguous owner
and all team members should have clear roles and responsibilities! Roles and responsibilities can be
displayed in three ways:
a) Hierarchical
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b) Matrix form
c) Text form
a) Hierarchy-type chart
Project
Manager
Team Team
leader leader
Team Team Team Team

member member member member
b) Matrix-based chart: RACI Chart. Acronyms: R= Responsible, A= Accountable, C= Consult, I=Inform
Activity Rajeev Vikas Rekha Vandana Sameer

Concept A R I I I
Design I A R C C
Development I A R R C
Test A C I I R
Deploy C A I R R
c) Text-oriented chart: Detailed description in outline form, with responsibilities, authority,

competencies, and qualifications.
Role________________
Responsibilities___________________________
_______________________________________
________
Authority_______________________________
____
Competencies____________________________
____
Qualifications____________________________
____
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Hierarchical-type charts Matrix-based charts Text-oriented charts or position
descriptions or role-
responsibility-authority forms
1. Show positions and 1. Responsibility assignment 1. Used for team member
relationships in top down matrix is a grid that represents responsibilities those require
manner. resources assigned to Each Work detailed description.
2. Organizational breakdown Package. 2. It is outline format showing
structure is a special type of 2. RAM can be made at various responsibilities, authority,
organization chart which is made levels, Project Level showing competencies, and
by combining WBS with Project roles for phases, Work Package qualifications.
Organization chart. OBS Work of Level showing roles for activities.
WBS with departments, units or
teams responsible for that work.
3. RAM avoids confusion of
responsibility by ensuring that
ONLY ONE PERSON IS
ACCOUTABLE FOR ANY ONE
TASK! Remember!
4. Matrix format shows all
activities associate with person
and all persons associated with
one activity!
Matrix form is quite popular. Example: Responsibility Assignment Matrix (RAM)
[RAMs of larger projects: RAMs on larger projects are developed at various levels of WBS. High-level
RAM describes the group or unit accountable for each component of WBS. Lower-level RAMs assigns
roles and responsibilities for specific activities to concerned persons.]
RAM shows connection between work and team members! RAM shows roles and responsibilities but
not time when these roles will be performed. Time is shown by Resource Histogram, which a resource
calendar, describing timeframes in which roles will be performed.
2. Networking: For effectiveness of staffing management plan options, we must understand political
and interpersonal factors that may impact them. So, we need to use networking, such as:
 Proactive correspondence
 Luncheon meetings
 Informal conversations
 Trade conferences
Networking pays from the start of the project till its completion!
3. Organization theory (OB): Informs us on the ways people, teams and organizational units behave. We
must use proven principles to shorten the time needed to arrive at outputs of HR planning. It makes
planning more effective. Goal-setting, Group Dynamics, Personality types, Situational Leadership, Team
development.
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4. Meetings: Project management team conducts planning meetings to reach consensus on the human
resource plan, because lack of role clarity and professional HR Management adversely impacts project
success. You can use various tools in planning meetings to generate ideas and bring consensus.
5. Expert judgment. Involve people who specialize in development of HR management to:
Understand preliminary requirements for skills needed

Understand preliminary effort level and quantity of resources for achieving project
objectives
Understand lead time for staffing (on the basis of lessons learned and market conditions
of availability- this brings reality and avoids assumptions!)
Understand risk involved in staff acquisition, retention, and release plans
Understand compliance with government regulations and union contracts
Assessing roles, based on organization’s standard role descriptions
Deciding reporting relationships (based on organization structure- functional single boss
reporting; matrix two boss reporting)
What do we achieve?
1. *Human Resource Management. A component document of the project management plan that
describes how the roles and responsibilities, reporting relationships, and staffing management will be
addressed and structured. [* This definition is taken from the Glossary of the Project Management Institute, A Guide to the Project
Management Body of Knowledge, (PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013.]
Human Resource Plan contains:
Role and responsibilities

Project organization chart
Staffing management plan
Discussion on roles and responsibilities.
*Role: A defined function to be performed by a project team member, such as testing, filing, inspecting, or
coding. [*This definition is taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of
Example of Project Roles: business analyst, electrical engineer, mechanical engineer, electronics
engineer, instrumentation & automation engineer, civil engineer, testing coordinator.
Role clarity is vital for project success:
Authority
Responsibilities
Boundaries
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*Authority: The right to apply project resources, expend funds, make decisions, or give approvals. [*This definition is
Edition, Project Management Institute, Inc., 2013.]
Clarity on authority is necessary for project success. Examples of decisions requiring Clear Authority:
quality acceptance
how to respond to project variances
*Responsibility: An assignment that can be delegated within a project management plan such that the
assigned resources incur a duty to perform the requirements of the assignment. [*This definition is taken
®
from the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK
Guide)–Fifth Edition, Project Management Institute, Inc., 2013.]
Responsibility is the work team member is expected to perform to complete project activities.
Competency:
Skill and capacity needed to accomplish project activities.

Project performance will be adversely affected if team members do not have necessary
competencies.
Must identify mismatches and make up through: training, hiring, schedule changes, or
scope changes.
Discussion on Project organization chart. Graphic display of project team member and their reporting
relationships.
Discussion on Staffing Management Plan
Describes how and when HR requirements will be met. Updated regularly during the project to
ONGOING PROJECT TEAM ACQUISITION AND DEVELOPEMNT. Made as per the project needs: detailed or
broad, formal or informal.
Contents:
1) Staff acquisition: many questions need to be answered when planning acquisition of team members:
Will they come from within the organization or outside?

Will they need to work at a central location or distant ones?
What costs are entailed with each level of expertise required?
How much help HR depart will extend to project management team?
2) Resource Calendar: necessary time frames they will be used, plus when recruitment should begin. Example of
resource calendar: Resource Histogram. A vertical bar chart showing number of hours that a person, department,
or whole project team will be required each week or month during the project.
Resource Histogram: may include a horizontal line maximum number of hours available from a particular resource.
If bars extend beyond the available resource hours, we need to use resource leveling (adding more resources or
extending schedule).
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100
50
0
1st 2nd 3rd 4th
Qtr Qtr Qtr Qtr
3) Release criteria: determining method and timing. Benefits project and team members.
Special Attention should be paid to releasing persons or groups when their work completes.
Benefits of proper reassignment procedures:
Lowers costs by reducing the tendency to make work to fill the time between present
and the next assignments
Boosts morale by eliminating uncertainty about future employment
4) Training needs: If the team members assigned do not possess the necessary competencies, we need
to develop a training plan to help them acquire the required skills. Plus team building activities are also
included.
5) Recognition & rewards: Clear criteria and planned system to encourage and reinforce DESIRED
BEHAVIORS. Must be based on activities and performance under one’s control. Should define
timeframes to ensure timely recognition for good performance!
[Example: If someone is to be rewarded for meeting cost objectives, then he/she must be given
authority on matters that affect expenses.]
6) Compliance: strategies for complying with applicable government regulations, union contracts, and
other HR policies.
7) Safety: policies and procedures to protect team members from hazards. Include in Risk Register also.
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Additional literature on HR Challenges, Soft Skills, Role of sponsor
HR Challenges: THE CHALLENGES
Generally, project staff comes from various functional areas and do not report to the project manager. But the project
manager has to take work from them. Project manager’s powers and ability to motivate, lead, and resolve conflicts
become important. Exam questions assume most organizations are matrix, unless specified otherwise. Read powers
of project manager, motivation theories, leadership styles, and conflict resolution techniques well. Also please note
a proper reward and recognition system is necessary to motivate team members and is essential part of HR Plan.
Team-building is another very important area.
Team-building must be planned as part of project planning and implemented during execution. Many project
managers either do not know or ignore this point altogether and expect a group of team members will automatically
act as good team. Read stages of team development well.
Project manger’s role is so important. He/she has to wear different hats. He/she has to be an integrator,
communicator, decision maker, motivator, entrepreneur, and change agent.
The Project Manager has to make most effective use of all project stakeholders: sponsor, customer, functional
managers, individual contributors, etc. Please read roles of all these stakeholders properly, including the role of the
project manager.
Caution: Most project managers do not realize the value of involving the project team during
planning. Such planning is deprived of the expert contribution that could come from the
knowledge and experience of the team members. Further, the team members do not get ‘buy-
in’.
Question: What is the role of sponsor?
Answer: Sponsor is the authority authorizing funds for the project. He/she is the key stakeholder whose
requirements must be met. Sponsor signs the project charter for a project that leads to realization of
Strategic Plan of an organization. Sponsor helps work organize into projects. Sponsor’s role is spread
from initiation to closing:
Role during initiating:
Leads project selection and obtains support (buy-in) for the project to get project approved for
selection
Authorizes project, gives authority to the project manager, and signs project charter. Only
sponsor can decide if it necessary to change charter, nobody else can do so.
Provide funds for the project
Champions project during initiation and acts as Voice of the Project
Provides description of initial scope/requirements and decides milestones, project end date, and
priorities between constraints (scope, time, cost, and quality)
Role during planning:
Permit time for planning. Does your company allow you time for proper planning? Who will you
approach to get time for planning? If your answer is Sponsor, you are in good shape.
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Give expert judgment. Sponsor position comes after lot of experience. Sponsor will provide help
of his/her expert knowledge wherever thought necessary, as sponsor is concerned about success
of the project. Sponsor can help you by sharing with you list of risks involved according to his/her
knowledge.
Review and approve Scope Statement and WBS.
Facilitates evaluating trade-offs during schedule compression.
Decides what reports are needed for reporting status, progress of the project to the
management.
Approve project management plan. Project management plan is developed by involving team,
functional manager, experts, and consultant, but final approval is given by the sponsor.
Role during execution and controlling:
Provide conflict resolution if it is beyond the project manager

Protect project from unfavorable influences
Approve or reject changes to protect project from too many changes. A change control board
functions on behalf of the sponsor.
Monitors progress
Resolves scope issues
Enforce policies and procedures must be followed (quality policy, quality assurance, quality
control, risk policy and procedures, scheduling policy and procedures, costing policies and
procedures, etc)
Facilitates evaluating trade-offs during schedule compression.
Give expert judgment. Sponsor position comes after lot of experience. Sponsor will provide help
of his/her expert knowledge wherever thought necessary, as sponsor is concerned about success
of the project.
Closing
Formal acceptance of deliverables (all deliverables that project was to produce)

Participate in compilation of lessons learned
Participate in celebration of success party
Remember sponsor may be authorizing many projects, therefore he/she determines priority between
projects.
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Communication: Plan communication management
Before we talk about the process, we should know:
1. Communication is one of the critical success factors.
2. Communication needs of all project stakeholders must be identified in advance:
What they need to be communicated

How they are going to be communicated
When they will to be communicated
Who will communicate
4. Communication pitfalls:
Delay in message delivery

Communication of information to wrong audiences
Insufficient communication
Misunderstanding
Misinterpretation
7. A project manager’s:
80% of time is spent in communicating

Half of communicating is listening, 40%
Other tasks, 20%
8. Effective Listening:
Put the speaker at ease

Appear interested
Cut out distractions
Periodically sum up what is said
Pay attention to nonverbal language
9. For effective communication, you should know:
Sender-receiver models
Choice of media
Writing style
Presentation techniques
Meeting management techniques
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1. Sender-receiver model
8 (FEEDBACK
Communication barriers
Personal barriers:
Human emotions
Values
Poor listening habits
Differences in education, culture, sex
Socioeconomic status
Physical barriers:
Distance
Noise
Walls
Static that interferes with electronic messages
2. Choice of media (depends on situation)
Written or oral, Informal memo or formal report, Face-to-face or email / video conference
3. Writing style: active or passive voice, sentence structure, word choice.
4. Presentation techniques
Body language/ non-verbal (55% of communication is nonverbal; hence it is of major importance)

visual aids
5. Meeting management techniques/rules: (will provide many questions in exam on poorly

conducted meetings)
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set a time limit and maintain it
schedule agenda in advance and stick to agenda
chair and lead with set rules
assign deliverables and time limits for resulting tasks
bring right people together
Communication channels
The project manager needs to consider the number of potential communication channels to grasp the
complexity of a project’s Communications: 20 people, 190 channels.
Communication channels = N (N-1) / 2 N stands for number of stakeholders
Communication types
Type Description
Internal Within project
External Customers, vendors, organizations, public, other projects
Formal Reports, minutes, briefings
Informal Emails, memos, ad-hoc discussions
Written Mails, reports
Oral and verbal *voice Discussions, instructions
inflections)
Nonverbal Body language
Plan Communications Management

*The process of develop in an appropriate approach and plan for project communications based on
stakeholder’s information needs and requirements and available organizational assets. [*This definition is
Edition, Project Management Institute, Inc., 2013.]
Question: Why Plan Communications process is tightly linked with Enterprise Environmental Factors.
Answer: Because organization’s structure will have a major effect on the project’s communication requirements.
Question: Can you describe what important considerations should be taken into account while developing
communications management plan?
Answer: For developing communications management plan, we must take into account following considerations:
a) Who needs what information
b) When do they need it
c) In what format
d) Consider time zone, language barriers, and cross-cultural differences
e) Who will provide it
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f) Where and what format information should be stored and how it can be retrieved
What do we need?
1. Stakeholder register provides information on the list of stakeholders, their interests, and influence. We
develop communications management plan to meet their communication requirements.
2. Project management plan describes requirements of the stakeholders, methodologies for how
project execution, monitoring and controlling, and closing. This information helps development of
communications management plan.
3. Enterprise environmental factors: All enterprise environmental factors are used to adapt
communication to the project environment. Example: Organization structure and culture will have major
impact on communication requirements.
4. Organizational process assets: All organizational process assets are used as inputs. Particularly
important:
 Lessons Learned and Historical Information, as they give insights on both the decisions
taken regarding communication issues and the results of those decisions.
How we perform it?
1. Communications requirements analysis: For establishing project communications requirements, we

normally need to know:
Organization charts
Project organization and the stakeholder responsibility relationships
Departments disciplines, specialties concerned with the project
People logistics and locations
Internal communication needs
External communication needs
Stakeholder information
Question: Whom do we need to send Project Information?
Answer: Customer, Sponsor, Senior management, Functional managers, Team members, Other project
managers, Regulatory authorities, Media, Society, Outside specific interest groups, organizations, Any
other stakeholder stakeholders.
Question: What do we need to communicate on our project?
Answer: We need to communicate:
Status
Performance baselines
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Achievements (major milestones, intermediate milestones, etc.)
Problems
Changes to scope, schedule, cost, etc.
Adherence to standards and regulations
New risks uncovered
Team members’ performance
Project phase deliverable’s acceptance, project’s product acceptance, etc.
THROUGH:
Status reports
Progress reports
Trend report
Forecasting report
Variance report
Earned value analysis reports
Compliance to regulations, and so on
2. Communications technology: What factors decide your choice of communications methods? General
factors are: Urgency for information, Availability of technology, Ease of use, Confidentiality and
sensitivity of information, Project environment (face-to-face or virtual, time-zones, languages,
cultures, organization structures, and profile and experience level of people who will communicate).
3. Communication Models. We have discussed.
The sender: Make the message clear and complete so that the receiver can receive it correctly, and for confirming
that it is properly understood.
The Receiver: Make sure that the message is received in its entirety, understood correctly, and acknowledged.
A failure in communication negatively impacts the project.
4. Communication Methods. 3 methods:
a) Interactive Communication: Between two or more parties performing a multidirectional exchange of

information. Most effective way to ensure common understanding. Meeting, Phone Calls, Video
Conferencing, etc.
b) Push Communication: Sent to specific recipients who need to know the information. This ensures that the
information is distributed but does not certify that it has actually reached or was understood by the
intended audience. Letter, Memos, Reports, Emails, Faxes, Voice Mails, Press Releases, etc.
c) Pull Communication: Used for very large audiences that requires recipients to access the content at their
own discretion. Intranet Sites, e-learning, Knowledge Repositories.
Based on the requirements, project manager decides what, how, and when communication methods are to be
used on the project.
5. Meetings. We conduct meetings with for discussion with team to decide appropriate ways to
communicate, update, and respond to requests from stakeholders for project information.
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What do we achieve?
1. *Communications management plan. A component document of the project, program, or portfolio

management plan that describes how, when, and by whom information about the project will be
administered and disseminated. [*This definition is taken from the Glossary of the Project Management Institute, A Guide to the
Project Management Body of Knowledge, (PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013.]
Communications management plan includes guidelines for
Project status meetings

Project team meetings
E-meetings
E-mail
This plan is a subsidiary plan of overall project management plan.
Contents- 12 items
Stakeholder communication requirements

Information to be communicated, format, content, level of detail
Person responsible
Person/group who will receive
Methods and Frequency
Resources allocated, plus time and budget
Escalation process: defining timeframes and management chain (names) for escalation of issues
that can’t be resolved at lower levels
Procedure for updating and refining this plan as project progresses
Glossary of common terminology (very important)
Communication constraints (emerging from regulation, technology, and organizational policies)
Flow charts of information, workflows (with sequence of authorization)
Meeting plans, list of reports
Project Schedule update

Stakeholder Register update
Remember: Communication planning involves creation of additional deliverables (reports, charts,

etc). Time and effort required for this must be reflected in WBS, schedule, and budget. Update them
accordingly.
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Risk: Plan risk management, identify risks, perform qualitative risk analysis perform quantitative risk
analysis, plan risk responses
Risk management involves six processes. Review what they are and what do we do in each process.
Serial Risk Management Processes What do we do?

1 Plan Risk Management We define how to conduct risk
management processes from serial 2
to 6 to enhance probability of success.
We also decide resources and time
needed for these processes to set
agreed-upon basis for evaluating risks.
2 Identify Risks Identify threats and opportunities
which have an effect on project
objectives and document their
characteristics and root causes.
3 Perform Qualitative risk analysis Prioritize risks by assessing and
combining their probability and
impact.
4 Perform Quantitative risk analysis Numerically analyze the effect of risks
on project objectives and decide a
quantitative approach to decision-
making amidst uncertainties.
5 Plan Risk responses Determine response plans to
maximize opportunities and minimize
threats. Assign risk owner.
6 Monitor and control Risks Implement risk response plans. Track
risks. Identify new risks. Monitor
residual risks. Evaluate effectiveness
of risk management actions
throughout the project and
recommend corrective or preventive
actions, and workaround actions.
What is a risk?
Risk is an uncertain event or condition that, if it occurs, may have a positive or negative effect on the
project objectives. There are four objectives of any project: Scope Objective, Time Objective, Cost
Objective, and Quality Objective. A risk can act either as a threat or opportunity in relation to these
objectives.
THE CONCEPT
Project risk has its origin in the UNCERTAINTY that is present in ALL projects!
Risks could be positive (opportunities). Examples: Equipment is cheaper than planned, a work package is
accomplished earlier than expected, achieving quality level on a work package takes lesser time than
expected, and work can be done faster as we were able to acquire a more productive resource!
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Risks could be negative (threats)
Risks could be known or unknown
Risk is a function of the UNIQUENESS of a project and the EXPERIENCE of the project team.
When activities are routine, you can anticipate the range of potential outcomes.
When project activities are non-routine (not performed before and your team is inexperienced), the
potential outcomes are more uncertain, making it difficult for you to know what may go wrong and how
to avoid problems.
Even in routine projects, the outcomes may be influenced by new factors, or those beyond your control.
Persons (by extension organizations) have attitudes towards risks that affect both accuracy of the
perception of the risk and the way they respond!
A consistent approach to risk that meets organization’s requirements) must be developed for EACH
PROJECT! And communication about risk must be made open and honest!
Risk responses reflect an organization’s perceived balance between risk-taking and risk avoidance!
TO BE SUCCESSFUL, we must manage risks proactively and consistently throughout the project!
Now let us discuss how do we plan risk management, identify them, perform qualitative and
quantitative risk analysis, and then develop risk response plans.
Plan Risk Management

Plan Risk Management. *The process of defining how to conduct risk management activities for a
project.
Grow your thinking: Why risk management planning?
CAREFUL AND EXPLICIT planning increases the possibility of SUCCESS of five other risk management
processes! Should be completed EARLY during project planning because it is CRUCIAL to performing
other risk management activities!
 Decide how to approach and conduct risk management activities on the project.
 Provide sufficient time and resources for risk management activities.
 Establish an agreed-upon basis for evaluating risks.
What do we need?
1. Project Management Plan. Risk management planning can be done only after considering all
baselines and management plans contained in the project management plan!
a) Project scope statement:
Based on complexity in scope, we decide methodology or approach to be s used in risk

management processes.
Provides a clear sense of the range of possibilities related to the project and its deliverables.
Establishes the framework for how significant the risk management effort may ultimately
become!
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b) Baselines, scope/schedule/cost/quality/HR/Communication Plans, and current risk-affected
areas of scope, schedule, cost, and quality help us develop risk management plan- to make risk
management plan consistent with them.
2. Project Charter. For developing risk management plan, charter gives us information on high-level
risks, project description, and requirements, assumptions, and constraints.
3. Stakeholder register. Information on the roles, interests, influences helps us develop risk
management plan.
4. Enterprise environmental factors. The attitudes toward risk and risk tolerance of the organizations
and the people involved in the project will influence the project management plan. Risk attitudes and
tolerances can be found in policy statements or in actions.
5. Organizational process assets provide predefined approaches to risk management, such as:
1. Risk categories
2. Common definition of concepts and terms
3. Standard templates
4. Roles and responsibilities
5. Authority levels for decision-making
1. Expert judgment. We use expert judgment of experienced professionals to develop risk management
plan.
2. Meetings. We hold meetings for developing risk management plan. Project manager, selected team
members, people responsible for risk planning and executing activities, and other stakeholders as
necessary. We discuss and decide all the contents of the risk management plan.
Question: What do we do in the meetings?
Answer:
1. Define basic plans for risk management activities.
2. Develop risk cost elements and schedule activities for including in project budget and schedule.
3. Assign risk responsibilities.
4. Tailor to the project: templates for risk categories and definitions of terms like ‘Levels of Risk’, ‘Probability by
type of Risk’, ‘Impact by type of objectives’, plus probability and impact matrix.
3. Analytical techniques. We take the help of analytical techniques to grasp overall risk context of the
project. Examples: Stakeholder Risk Profile Analysis, Strategic Risk Scoring Sheets. Assessments from
these techniques help us allocate appropriate resources and attention to the risk management
activities!
Question: What does risk context of a project constitute?

Answer: A combination of risk attitudes and strategic risk exposure-based on overall context of the
project.
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Question: For what do we conduct a stakeholder risk profile analysis?
Answer: To grade and qualify risk appetite and risk tolerance of the stakeholder!
Question: For what do we use strategic risk scoring sheets?

Answer: To obtain high-level assessment of project risk exposure (based on overall project context).
What do we achieve?
1. *Risk management plan. *The document describing how project risk management will be structured
and performed on the project. It is contained in or is a subsidiary plan of the project management plan.
Information in the risk management plan varies by application area and project size. The risk
management plan is different from the risk register that contains the list of project risks, the results of
analysis, and the risk responses.”
[*This definition is taken from the Glossary of the Project Management Institute, A Guide to the Project
®
Management Body of Knowledge, (PMBOK Guide)–Fourth Edition, Project Management Institute, Inc., 2008.]
Do not confuse Risk management Plan and Risk Register!
Risk Management Plan contains Methodology, Budgeting, Timing, Roles and Responsibilities, Reporting
formats, Tracking System, Definitions of Probability and Impact, Probability and Impact Matrix, Risk
categories, Revised risk tolerances of the stakeholder. It is created in Plan Risk Management processes
and used as input to subsequent risk management processes.
Risk register contains results of risk identification, qualitative risk analysis, quantitative risk analysis, risk
response planning, and risk monitoring and controlling. It is created during Identify Risks processes, and
updated in subsequent risk management processes.
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Template of Risk Management Plan
Serial Item Description

Number
1. Methodology What approaches, tools, and data will you use in risk management
processes from risk identification to risk monitoring and
controlling?
2. Budgeting Funds and resources required for risk management activities. Add
it in cost performance baseline. Describe procedure for using cost
contingencies.
3. Timing Time required for risk management activities. Add it in schedule
baseline. Describe procedure for using time contingencies.
4. Roles and responsibilities Describe lead, tem, support for risk management activities and
their responsibilities
5. Reporting formats Describe formats for reporting work being done during risk
management processes.
6. Tracking system Describe how performance of activities and their results will be
tracked and recorded for serving for benefit in current project and
lessons learned for future projects.
7. Definitions of probability Ratings are decided for low, medium, and high probabilities and
and impact impacts to help classification of identified risks into low, medium,
and high during Perform Qualitative Risk Analysis later.
8. Probability and impact A table showing combinations of ratings of probabilities and
matrix impacts. This table will help in prioritization of risks into low,
medium, and high during Perform Qualitative Risk Analysis process
later.
9. Risk categories A structure for organized risk identification during Identify Risks
process later. Example: Risk Break Down Structure (RBS).
10. Revised risk tolerances of When you develop risk management plan, stakeholders are
the stakeholders involved. This may lead to revision in their risk tolerances.
Document them.
Read again!
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Sample RBS Categorizing risks
Base figure
Identify Risks Process

*Identify Risks. The process of determining which risk may affect the project and documenting their
characteristics.
*Risk. An uncertain event or condition that, if occurs, has a positive or negative effect on one or more a
project objectives. [*These two definitions are taken from the Glossary of the Project Management Institute, A Guide to the Project
Management Body of Knowledge, (PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013]
Answer: This process provides knowledge and ability to project team to anticipate opportunities and
threats, and document them with their characteristics and root causes.
Before we discuss the process, please note:
Identify Risk process DETERMINES which risks might affect project objectives and document their
characteristics. Is it a one time job? No, it’s an iterative job. New risks may appear just as the project
moves ahead in project life cycle!
Risk identification SHOULD not be done alone. MUST INCLUDE:

 your project team (for a sense of ownership/responsibility)
 Risk management team (can you tell why?)
 subject matter experts (from other parts of your organization)
 Other project managers (can you tell why?)
 outside experts
 customers
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 end users (very important)
 other stakeholders
Risks cannot be identified by conducting the exercise once. You have to iterate it to bring all risks to your
grip. Risk identification iterations:
a) First iteration- by a part of your project team.

b) Second iteration- by entire project team and primary stakeholders.
c) Final iteration- by people not involved in your project (to remove the chances of any biased analysis).
Identify Risks process discussion

What do we need?
1. Risk management plan provides
Approach, tools, data to be used here

Team responsible for risk identification
Cost and time allowed for Identify Risks process
Categories of risks for organized risk identification here. Look at 4 Sample Risk Categories:
1. Technical / Quality / Performance Risks. Examples: dependence on new, or complex, or

unproven technology, unrealistic performance objectives, etc.
2. External Risks. Examples: weather, legal/regulatory changes, country-related risk, labor unrests,
shifting owner priorities. FORCE MAJEURE RISKS: floods, earthquakes, civil riots, cyclones, etc.
force majeure risks need disaster recovery actions.
3. Organizational Risks. Examples: internal inconsistency with scope, time, and cost objectives,
poor project prioritization, funding problems, resource conflict due to multiple projects in the
organization, etc.
4. Project Management Risks. Examples: inadequate application of project management
disciplines, Poor quality of project plan, insufficient allocation of resources and time, etc.
2. Cost management plan describes processes and controls that are used to identify risks.
3. Schedule management plan describes schedule objectives. We try to identify risks which may impact
these objectives.
4. Quality management plan describes a baseline of quality measures and metrics which can used to
help us identify risks.
5. Human resource management plan. The information contained in the HRM Plan is one of the key
inputs for identifying risks. HRM Plan provides information on roles and responsibilities, reporting
relationships, and staffing management plan (how resources will be acquired, managed, and released).
We use this information to identify risks.
6. Scope baseline: to understand risk related to scope, along with assumptions mentioned in scope
statement.
7. Activity duration estimates: to understand risk related to time.
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8. Activity cost estimates: to understand risk related to cost.
9. Stakeholder Register provides names of the stakeholders who can help us in risk identification.
10. Project documents help us identify risks:
 Project Charter, Project Schedule, Network Diagram, Issue Log, Quality Checklists, and other
information as relevant.
11. Procurement Documents help us identify risks as the complexity and level of detail mentioned in the
procurement documents needs to be consistent with the value of, and risk associated with, the
procurements we planned for the project.
12. Enterprise Environmental Factors. Very important resource! From EEFs, we get rich info: Published
Literature/checklists, industry studies, benchmarking information, and commercially available
databases. One more important item: Risk Attitudes of stakeholders and concerned organizations.
13. Organizational Process Assets provide great help:
 What risk were identified in similar projects in the past and valuable historical
information about previous projects
 Lessons learned
 Risk identification policies and procedures
 Risk register templates
1. Documentation Review. This is primary technique but mostly ignored. Review of outputs of planning
performed in the current project; along with what happened in previous projects provide us great
insight into what could be opportunities and threats in our project. Look at input number 2 mentioned
above.
2. Information-gathering techniques
The aim: to obtain a comprehensive list of risks that can be later addressed in risk assessment processes.
TECHNIQUES:
Brainstorming (frequently used)
Delphi- to reach consensus of experts anonymously. Reduces bias and undue influence of any
one person. A facilitator sends a questionnaire to gather ideas about important project risks,
summarizes responses and sends them again. Consensus is reached in few rounds, but
without experts knowing names of participants.
Interviewing: experienced project participants and subject matter experts
Root cause analysis- to document root causes of identified risks for designing proper actions
3. SWOT Analysis (project’s strengths, weaknesses, opportunities, threats are analyzed to give a much
wider view of the risks under consideration).
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4. Checklist Analysis. Most handy and generally liked by people as checklist help identify risks quickly.
Paaki pakaayi kheer! Checklists are made, based on: Historical information, knowledge derived from
experience on prior projects, and other sources.
[Caution! It is not possible to make an exhaustive checklist containing all the risks that may be there in all
future projects. There may be some important, additional risks in future projects which may not be mentioned in
the standard checklist! Hence, though it’s a quick technique but do not rely on checklists alone. Use other risk
identification methods. Plus, update the checklists when you close the project so that it becomes more matured
for future.]
5. Assumptions Analysis: You have made so many assumptions while initiating the project, defining
scope, planning resources, estimating time and cost, etc. What if these assumptions turn out to be
inaccurate, inconsistent, and incomplete later? These assumptions would then become risks. Hence,
you must analyze their validity to assess how far they will stand to be true.
6. Diagramming techniques help you greatly in identifying the risks.
You can use:
Cause-and-effect diagrams (Ishikawa / fishbone diagrams)

System / Process Flow Charts
Influence Diagrams
Cause and Effect Diagram- help identify causes of risks that may occur in future in order to design
appropriate response.
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System/ process flow charts- depict interrelationship of elements and mechanism of causation.
Influence diagrams- show a problem with casual influences, time ordering, and other linkages among
variables and results.
You can find those risks that make other risks even bigger and concentrate on them.
7. Expert judgment. Experts with relevant experience help us identify risks.
What do we achieve?
1. Risk Register. During Identify Risk process, we make Risk Register to document results of risk
management processes. The first entries in this register are results of Identify Risks process:
 List of identified risks with their characteristics and root causes

 List of potential responses- thoughts about potential actions that may be taken to deal
with the identified risks. These thoughts help us finalizing our actions.
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Please remember that the risk register is first developed in the Identify Risks process and then updated
during rest of the risk management processes!
Sample Risk Register
Results of risk Results of Results of Results of risk Results of risk

identification qualitative risk quantitative risk response planning controlling
analysis analysis
1. List of identified
risks with their
characteristics and
root causes
2. List of potential
responses
Perform Qualitative Risk Analysis process

*The process of prioritizing risks for further analysis or action by assessing and combining their
probability of occurrence and impact.
[*This definition is taken from the Glossary of the Project Management Institute, A Guide to the Project
®
Management Body of Knowledge, (PMBOK Guide)–Fifth Edition, Project Management Institute, Inc., 2013 ]
Answer: Helps reduce level of uncertainty. Ensures attention to high priority risk. Also helps assess
urgency of risks.
Purpose of qualitative risk analysis
 Prioritize risks according to their potential effect on project objectives

 Sort out high or moderate risks for more analysis, their quantification, and management
 Find trends in qualitative risk analysis results to see urgency and significance for risk response and
further analysis.
 Determine overall risk ranking of the project.
 Remove biases in the project plan
Remember about qualitative risk analysis:
Organizations can IMPROVE POJECT’S PERFORMANCE effectively by focusing on HIGH-

PRIORITY RISKS. A quick and cost-effective method of establishing priorities for: RISK
RESPONSE PLANNING.
Lays foundation for Quantitative Risk Analysis.
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MUST be revisited during project life cycle to remain current with the changes in the
project risks.
Definitions of the levels of probability and impact, and expert interviewing correct the
element of bias present in the data utilized in this process.
Time criticality of risk actions highlight the significance of A RISK
This process can lead to quantitative risk analysis or go directly into risk response
planning.
Perform Qualitative Risk Analysis process discussion

What do we need?
1. Organizational process assets provide data about risks on the past projects and lessons learned
knowledge base for use here
2. Scope baseline. Common or recurring type projects have well-understood Risks. Projects using state-
of-the-art, first-of-its-kind technology, or highly complex ones have more certainty. We can know this
from scope statement.
3. Risk management plan provides following information for this process:
Approach, tools, data to use

Roles & responsibilities
Budgets and schedule for this process
Definition of probability & impact
P & I matrix
Revised stakeholders’ tolerances
4. Risk register provides
 LIST OF IDENTIFIED RISKS. These risks need to be prioritized into Low, Medium, and High by combining
their probability and impact as assessed during this process.
 The risk register also provides information on the characteristics and root causes of the identified risks.
5. Enterprise environmental factors. We get insight and context to risk assessment (Industry studies of same
type of projects by risk experts, Risk databases from industry sources).
1. Risk Probability and Impact Assessment. We assess probability and impact of each risk and assign
rating by using Definitions of Risk Probability and Impact contained in the risk management plan.
2. Probability and Impact Matrix. We combine probability and impact ratings for prioritization of risks
into low, medium, and high. For this, we use Probability and Impact Matrix contained in the risk
management plan.
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Probability and Impact Scales:
Probability scale: 0.0 – 1.0. 0.0 means no probability, 1.0 means certainty. Ordinal scale defines relative
probability from very unlikely to almost certain, can also be used. Alternatively, specific probabilities
could be denoted general scale: .1/.3/.5/.7/.9.
Impact scale can be Cardinal: assigning linear values .1/.3/.5/.7/.9, or non-linear values .05/.1/.2/.4/.8
showing an organization’s desire to avoid high impact risks. Ordinal: simply rank-ordering, such as very
low, low, moderate, high, very high.
Probability/impact rating matrix
Each risk is rated on its probability and impact on a project objective (cost, schedule, scope, and quality) if
it occurs.
An organization’s thresholds for low, moderate, or high are depicted in PI Matrix.
*Probability and Impact Matrix
Base figure
3. Risk Data quality assessment. We need accurate and unbiased data for our analysis of risks to be
really useful. So we must test them for their degree of correctness by determining:
Extent of understanding of the risk

Data availability on the risk
Quality of data
Reliability and integrity of data
4. Risk categorization. We try to determine project areas most affected by risks. For this we categorize
risk by sources of risk, WBS element, or phase. This may also help us group risks by common root causes
for designing effective action plans.
5. Risk urgency assessment tells which risks require attention in near term, and accordingly define:
Time to effect a risk response

Symptoms and warning signals
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Risk rating
6. Expert judgment. Experts help assessing probability and impact based on their experience of
managing similar projects. But we should be careful about the bias of experts.
What do we achieve?
1. Project document updates (risk register and assumptions log)
Risk Register Update: We had initiated the risk register during risk identification. We fill up the
relevant information from this process in it. Thus we update it, writing:
Relative ranking or priority of list of the project risks
Risks grouped by categories
List of risks needing near-term response
List of risk for additional analysis and response
Watch lists of low priority risks
Trends in qualitative risk analysis
Sample Risk Register Update
Results of risk Results of Results of Results of risk Results of risk

identification qualitative risk quantitative risk response planning controlling
analysis analysis
1. List of identified 1.Relative ranking
risks with their or priority of list of
characteristics and the project risks
root causes
2. List of potential 2. Risks grouped
responses by categories
3. List of risks
needing near-term
response
4. List of risk for
additional analysis
and response
5. Watchlist of low
priority risks
6. Trends in
qualitative risk
analysis
Assumptions Log Update: New information from qualitative risk analysis changes assumptions. We
record it in scope statement or separate assumptions log.
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Perform QUANTITATIVE RISK ANALYSIS
*The process of numerically analyzing the effect of identified risks on overall project objectives.
Remember about quantitative risk analysis:
The main benefit of this process is that it supports decision making for reducing project
uncertainty.
We numerically analyze impact of identified risks on overall project objectives by using
Modeling and Simulation Technique called Monte Carlo. Examples: Schedule Risk
Simulation, Cost Risk Simulation. These simulations predict the probability of achieving
time and cost targets. Such a numerical analysis is called Probabilistic Analysis of the
project. We use risks that are prioritized through qualitative risk analysis.
We try to find severity level of each risk in relation to project objectives by using
Sensitivity Analysis which displays Tornado Diagram. This helps us know specific risks
that have the most impact on the project objectives.
We find numerical values of probability and impact of identified risks to calculate
contingencies of time and cost. Contingency = Probability X Impact.
We use Expected Monetary value to understand best course of action under
uncertainties.
Exercise:
What is cost contingency in following analysis of a product modification project?
30% probability of delay in components receipt with a cost to the project of Rs.9, 000/-
20% probability that components will be Rs.10, 000 cheaper than expected.
25% probability that two parts will pose installation issue costing extra Rs.3, 500/-
30% probability that production will be simpler than expected, saving Rs.2, 500/-
5% probability of a design-defect causing Rs.5, 000 rework
Solution:
30% X Rs.9, 000 = Rs.2, 700 outflow, add

20% X Rs.10, 000 = Rs.2, 000 saving, subtract
25% X Rs.3, 500 = Rs.875 outflow, add
30% X Rs.2, 500 = Rs. 750 saving, subtract
5% X Rs.5, 000 = Rs.250 outflow, add
OUTFLOW TOTAL Rs.3825, SAVING TOTAL Rs.2750
Contingency amount = 3825 – 2750 = Rs.1075
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Perform Quantitative Risk Analysis process discussion
What do we need?
1. Organizational process assets provide from industry or proprietary sources:
Information on previous similar projects

Studies of similar projects
Risk databases
2. Risk management plan provides for this process:
Methodology, tools, data to use here

Roles and responsibilities of team accountable for this process
Budgets and time allowed
Revised stakeholders’ tolerances
3. Risk register provides key inputs:
List of identified risks

Priority list of project risks which will be used in Monte Carlo and Sensitivity Analysis
4. Schedule management plan provides criteria for schedule development and control. Those controls
help establish structure and approach for quantitative analysis of schedule. Schedule itself is required
for numerically analyzing impact of identified and prioritized risks on overall project objectives through
Monte Carlo. Schedule must have been a separate input therefore. Assume it is.
5. Cost management plan provides sets the format and establishes criteria for estimating costs,
determining budget, and controlling costs. Those control help establish structure and approach for
quantitative analysis of budget. Approved budget or cost baseline is required for numerically analyzing
impact of identified and prioritized risks on overall project objectives (here cost objective) through
Monte Carlo. Budget/cost estimates/cost baseline must have been a separate input therefore. Assume it
is.
6. Enterprise environmental factors. We get insight and context to risk assessment (Industry studies of same
type of projects by risk experts, Risk databases from industry sources).
How do we do it?
1. Data gathering & representation techniques
Interviewing
Probability distributions
Expert judgment
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Interviewing. Derive information from stakeholders and subject matter experts by interviewing them.
Information needed depends on what type of probability distribution we are going to use.
Quantifying risks? What is your first step? Conduct risk interview with stakeholders and subject matter
experts.
Probability distributions:
 Triangular distribution/Mean and Standard deviation for Normal and Log Distributions: For these, we
gather information on the optimistic (low), pessimistic (high), and most likely scenarios, shown ahead.
 Continuous probability distributions: show both probability and consequences of project component.
 Common distribution types: uniform, normal, triangular, beta, and log normal.
[Don’t forget to document The RATIONALE OF RISK RANGES! Why? Because it will help you make “Effective Risk
Response Strategies “during risk response planning!]
[Risk interview breaks the myth of conventional estimate (arrived at totaling most likely estimates). Actually,
conventional estimate is relatively unlikely. Identifies three point estimates for each WBS element!]
EXAMPLE: INTERVIEW DEPLOYING BETA DISTRIBUTION
EXAMPLE: INTERVIEW DEPLOYING TRIANGULAR DISTRIBUTION
2. Expert judgment is used to validate data and techniques. Experts could be internal or external.
Experts needed: engineering or statistical experts.
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3. Quantitative risk analysis and modeling techniques:
Sensitivity analysis
Expected monetary value analysis
Decision tree analysis
Modeling and simulation
Sensitivity Analysis. Do you want to know which risks have the most potential impact on the project?
Sensitivity analysis does the same for you. It builds a tornado diagram. How? Well, it examines the
extent to which the uncertainty of each project element impacts the objective you are examining.
(Caution: keep all other uncertain elements at their baseline values).
Expected monetary value analysis. A statistical concept, an analysis under uncertainty. Calculates
average outcome scenarios that may or may not happen. Commonly used in decision tree analysis. But
modeling and simulation are more powerful and cannot be misused compared to it.
EMV of opportunity shown as positive values

EMV of threats shown as negative values
EMV = Value of each possible outcome x Probability, and add them together.
Decision tree analysis. Build or upgrade an existing plant? Make or outsource? Or any other such
dilemmas face you! Don’t worry; take the help of Decision Tree.
Decision Tree
It’s a tree-like diagram.

Begins with the decision to be evaluated, say Build or upgrade.
Branches are logical path of available alternatives.
Each branch shows probabilities of risks and associated costs or rewards.
Solving three shows you which of the decisions provide “greatest expected value” to
you (after quantifying all uncertain implications, costs, rewards, and subsequent
decisions).
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Example of Decision Tree Analysis
[*Source: The Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide)–Fifth Edition, Project
Management Institute, Inc., 2013. Figure 11-16, page 339.] USD mentioned as Rs.
Simulation. Simulation translates uncertainties (specified at a detail level) into potential impacts on
project objectives expressed at whole project level. We use Monte Carlo Simulation Software.
WBS is used for simulation for cost risk analysis

PDM schedule is used for schedule risk analysis
1. Project Document Updates (Risk register updates). We had initiated the risk register during risk
identification. We fill up the relevant information from this process in it. Thus we update it further,
writing:
Probabilistic analysis of the project

Probability of achieving cost and time objectives
Prioritized List of quantified risk
Trends in quantitative risk analysis results
PROBALISTIC ANALYSIS OF THE PROJECT
Provides predictions of potential project schedule and cost results detailing expected completion dates
or project duration and costs- along with concerned confidence levels
PROBABILITY OF ACHIEVING THE COST AND TIME OBJECTIVES
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Using quantitative risk analysis, we can estimate the probability of achieving the project objectives-
under the current plan and given knowledge of the risks.
Prioritized list of quantified. Risks (with a measure of their impact)
This list contains the risks that indicate:
Major threat, or
Major opportunity
Trends in Quantitative Risk Analysis: With the repetition of the quantitative risk analysis, a trend in its
results emerges.
PLAN RISK RESPONSES process

*The process of developing options and actions to ENHANCE Opportunities and REDUCE threats to the
project objectives.
Points to consider: PLAN RISK RESPONSES
 Involves identification of risk response owners to carry through the responsibility of each agreed
and funded risk response
 Deals with risks as per their priority
Incorporates needed activities, time, cost, and resources into:
WBS,
schedule,
budget, and
project management plan
Risk response plans MUST be:
Appropriate the importance of risk

Timely
Cost-effective
Agreed upon by “ALL PARTIES”
Owned by a responsible person
KEY PONITS NEED EMPHASIS AGAIN!
Risk response planning:
Should correspond to severity of risk
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Should be cost effective
Should be realistic
Should be consented by all involved parties
Should be owned by a responsible person
“MOST OFTEN RISK RESPONSE DOES NOT GIVE US INTENDED RESULTS BECAUSE ONE OR MORE OF
THESE KEY PONITS ARE IGNORED!
Plan Risk Responses process discussion
What do we need?
1. Risk management plan provides:
Roles & responsibilities

Risk threshold for L, M, H risks
Time and budget for project risk management
Risk analysis definitions
2. Risk register was created in risk identification process, updated with outputs of qualitative and
quantitative risk analysis. We use these outputs here:
From Identify Risk process:
Identified Risks, their root causes

List of potential responses
Risk owners
Symptoms & warning signs
From qualitative risk analysis
Priority list of risks

Risks needing near-term response
Risks for additional analysis and response
Trends in qualitative risk analysis results
Watchlist of low priority risks
From quantitative risk analysis
Probabilistic analysis of the project

Probability of achieving cost and time objectives
Prioritized list of quantified risks
Trends in quantitative risk analysis results
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RISK OWNERS MUST PARTICIPATE IN DEVELOPING RISK RESPONSES!
Tips for response planning: WHICH STRATEGIES WILL YOU CHOOSE?
Tips:
First, the MOST EFFECTIVE STRATEGY for each risk

Then, BACKUP STRATEGIES in case the best one fails
After choosing Primary and Backup Strategies, develop actions to implement them
A fallback plan if selected strategy not fully effective, or if accepted risk occurs
1. Strategies for negative risks or threats
Avoid
Eliminate threat by eliminating the cause! You change project plan to eliminate the threat, to isolate the
project objective from its impact, or to relax the objective that is in jeopardy.
Extending schedule or reducing scope
Some risks that arise early can be avoided by:
Clarifying requirements
Obtaining information
Improving communication or Acquiring expertise
Transfer
You can shift it to third party for its ownership. But remember, it is just shifted, the risk remains. Only its
ownership and management is off-loaded to the third party for which due premium is paid by you. Risk
transference is found most effective in transferring financial risk exposure.
EXAMPLES
Insurance,
performance bonds,
warranties,
guarantees
Contracts (a fixed-price contract has least with the buyer. A cost reimbursable one
leaves more risk with the buyer)
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Mitigate
Here, we attempt to reduce the probability and/or consequence of a negative risk to acceptable
threshold. CARDINAL PRINCIPLE Take early action to reduce probability of a risk’s occurrence or its
consequence on the project objectives. It is far better than making whole lot of repairs after defect
having occurred. “A STICH IN TIME SAVES NINE”!
Mitigation costs should be justified in view of the likely risk probability and its impact.
EXAMPLES
Implementing a new course of action

Adopting a less complex process
Conducting more seismic/engineering tests
Choosing more reliable seller
Adding resources/time to schedule
Developing prototypes
Designing redundancy into a system
Accept
This approach shows your project team has agreed not to change project plan in order to deal with a
risk, or is unable to find out any appropriate response strategy. Remember: This approach may be
adopted both for threats and opportunities.
Example: Most common risk acceptance response is establishing a contingency plan/reserve that
incorporates amounts of:
Money
Time
Resources
Types of acceptance:
ACTIVE ACCEPTANCE; Risk accepted and contingency and fallback plans made.
PASSIVE ACCEPTANCE: Risk accepted but no plans made. Do nothing- leaving the project team to deal
with the risks as they happen.
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Let’s do this exercise: CALCULATING COST RESERVE/Contingency
Risk Probability IMPACT Expected

COST = - tive Monetary
Benefits = + tive Value (EMV)
A 20% - INR 4,000 - INR 800
B 45% + INR 3,000 + INR 1,350
C 10% + INR 2,100 - INR 210
D 65% - INR 2,500 - INR 1,625
Solution:
BENEFIT: INR + 1560, WE WILL SAVE
COST: INR - 2425, WE WILL SPEND
CONTINGENCY AMOUNT NEEDED: Rs. 865
You may similar questions in the exam.
2. Strategies for positive risks or opportunities
Exploit- eliminating uncertainty related to an upside risk

Positive risks are opportunities. You can also call it Upside Risk. To really avail opportunities, you should
eliminate the uncertainty related to such opportunities.
Examples:
Suppose you want to avail the opportunity of Reducing Time to Complete the Project. You can make it
happen if you eliminate uncertainty related to such opportunity by assigning more talented resources.
Another example. You want to avail the opportunity of Reducing the Cost to Complete the Project’.
Again, you can make it happen if you eliminate uncertainty related to such opportunity by assigning
more talented resources.
Enhance- increasing probability and impact of an upside risk

You should find key drivers of an opportunity- the factors which can increase its probability and impact
and therefore modify the size of the opportunity.
Example
Opportunity: Early finishing of an activity
Enhance strategy: Add more resources. Adding more resources will increase the probability (chances of
completing it early) and impact (more reduction in completion time).
Share- engaging competent third party to capture opportunities
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You can engage a third party that specializes in capturing opportunities. In such relationship both parties
gain.
Examples:
Risk-sharing partnerships or joint ventures

Special purpose companies
Accept- agreeing to take advantage of an opportunity but making any specific action plan to avail it.
Remember that acceptance strategy is common to both threats and opportunities. In the case of
threats, it can be both: Active Acceptance and passive Acceptance. But in the case of opportunities, it is
only Passive Acceptance.
3. Contingent response strategy
Response strategy for implementation only under certain predefined conditions, such as:
Missing Intermediate Milestones

Gaining higher priority with a supplier for meeting objectives of a business critical project
You should define events that would trigger the contingency response. Then you should track these
events.
4. Expert Judgment- Involve experts to help you plan responses for specific and defined risks.
What do we achieve?
1. Project Document Updates (Risk register updates, Assumptions Log Update, Technical
Documentation Update, and Change Requests)
Risk Register Update
Responses planned are updated in the risk register. The entries made are:
Agreed Risk Response Plans (We go back and work we will do (our risk response plans) in WBS. This
revises WBS and Scope Baseline. Remember: Planning is an iterative process)!
Residual Risks- Few left-over risks whose responses we are not able to plan at this point of time.
Deliberately accepted risks are also called residual risks.
Secondary Risks- Those risks which occur on implementation of a risk response plan
Time and cost needed (contingency reserves) for implementing Risk Response Plans. (We go back
and add this time in schedule which revises schedule baseline. In the same way, we go back and add
this cost in budget which revises budget and cost baseline. Remember: Planning is an iterative
process)!
Risk triggers-Symptoms and warning signals of risks occurrence
Fallback plans in case primary response plan proves inadequate
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[All responses are planned based on complexity of the project, the organization’s risk thresholds and risk
tolerances of the stakeholders.]
Other project documents update
Do you know that application of risk responses changes Assumptions and Technical Documentation? Do you know
that planning for possible risk responses results in change requests whose approval leads to updates to many
project documents? Yes, it does. As you apply risk responses, your assumptions change plus your technical
documentation also changes (technical approaches and physical deliverables). You also revise resource
requirements, etc.
Assumptions log update. Record changes in Assumptions in assumptions log if you have
made separately. Otherwise assumptions are mentioned in scope statement.
Technical documentation update. Record changes that happen to your technical
approaches and physical deliverables.
Revision of other project documents due to approval of change requests, such as activity
duration estimates, activity cost estimates, and resource requirements.
2. Project management plan updates
Major iteration happens in planning after risk response plans are developed. All baselines are revised, 5
management plans are revised.
Risk response plans are nothing but the work we will do for dealing with identified and analyzed risks. This
work was part of WBS when we created WBS. Time and cost (contingency reserves) needed for implementing risk
response plans were not part of budget or schedule when we created budget and schedule. So we go back and add
work in WBs, time in schedule, and cost in budget. This revises all three baselines- scope baseline, schedule
baseline and cost baseline. We can call it project management plan update. But remember such revision happens
only after review and approval by Integrated Change Control process.
As a result of risk response planning, work may be added or deleted-depends on the response strategy.
Can you answer what is the meaning of this statement, ‘Risk response strategies are fed back into
concerned processes in other knowledge areas (WBS, budget, and schedule)’?
Risk responses we have planned also require change in the process and practice described in schedule
management plan, cost management plan and quality management plan. Responses also require
changes in procurement management plan and human resource plan.
Example of changes:
Schedule management plan- change in tolerance for resource loading and leveling,
change in schedule itself
Cost management plan- change in tolerance for cost accounting and leveling, change in
budget itself
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Quality management plan- change in tolerance for requirements, quality assurance,
quality control, change in requirements documentation itself
Procurement management plan- change in procurement strategy, such as Make-or-Buy
decisions and contract types
Human Resource Plan- change in staff allocation and resource assignments
Summary of project management plan updates:
Scope baseline update

Schedule baseline update
Cost baseline update
Procurement: Plan procurement management
Before we discuss Plan Procurement Management process, let’s talk about Procurement Management
to grow our understanding.
Project Procurement Management
*Project Procurement Management. Project Procurement Management includes the processes to

purchase or acquire the products, services, or results needed from outside the project team. [*This
definition is taken from the Glossary of The Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK®
Guide)-Fifth Edition, Project Management Institute Inc., 2013}
Procurement has two perspectives:
The buyer organization

The seller organization
Procurement Management processes:
CONTRACT LIFE CYCLE BRIEF
1. Plan Procurement Management: Make or buy decision made, contract type selected, scope of work
drafted. Procurement management plan developed. Procurement documents created. Potential buyers
identified.
2. Conduct procurements: Proposals requested and received. Sellers selected and Contract awarded.
3. Control procurements: Managing procurement relationships, monitoring contract performance, and
making changes and corrections as required.
4. Close procurements: Seller provides contracted product, buyer accepts and makes final payment, lessons
learned documented, contract file archived. This is completion of procurement for each item.
Must-knows about CONTRACT
Contract: Ushers a legal relationship between Buyer and seller.
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 It obligates the seller to provide the contracted item, and it obligates the buyer to pay for it.
 Hence, contract is a legal document and must be prepared by the buyer with due care. It is subject to
remedy in the courts.
 Contract comes into force only after it is accepted and signed by both the parties.
 SOW of the contracted item (CSOW)
 Terms and conditions.
 Seller’s proposal
 Seller’s marketing literature, and
 Any other documentation buyer is relying upon to establish what the seller is to perform or provide.
Contract: project management team is responsible to tailor the contract to the specific needs of the
project. It is subjected to extensive reviewing process before approval to ensure THAT THE CONTRACT
LANGUAGE DESCRIBES THE CONTRACTED PRODUCTS, SERVICES, OR RESULTS THAT SATISFY THE
IDENTIFIED PROJECT NEED!
Contract: project management team should take help of specialists in contracting, purchasing
and law! See:
Most organizations have policies and procedures defining who can sign and administer such
agreements on behalf of the organization!
By actively managing the contract life cycle and carefully wording the contract, we can avoid or
mitigate some identifiable project risks. Contracting is one way of transferring the risk to seller.
Contract is also called: An agreement or Subcontract or Purchase order. A seller can also be called-
Contractor, vendor, service provider, supplier, or subcontractor. A buyer can also be called- Client,
acquiring organization, customer, acquiring organization, service requester, purchaser, government
agency, prime contractor, contractor
Contract: A complex project may involve multiple contracts or subcontracts! Each contract life cycle
may complete during any phase of the project life cycle.
Contract: Except for the purchase of materials, goods, or common products, a seller will manage the
work as a project:
Seller’s project management team will follow all knowledge areas and project management process
groups to mange it as a project.
SELLER in contract life cycle
First Then And thereafter

A bidder Selected source Contracted vendor
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Plan Procurement Management
Points to consider: While planning purchases and acquisitions, we must not forget to consider
issues like:
 Who is responsible for obtaining or holding any applicable permits and professional licenses required by
LEGISLATION, REGULATION, and OR YOUR ORGANIZATION’S PLOICY!
 Project Schedule greatly influences this process.
 Plus your decisions in procurement management plan may also influence project schedule and therefore
must be considered when developing project schedule and activity resource estimating, and make-or-buy
decisions!
 The type of contract you plan to use in relation to MITIGATING RISKS AND TRANSFERRING THEM TO THE
SELLER!
Plan Procurement Management. *The process of documenting project purchasing decisions, specifying
the approach, and identifying the potential sellers.
What do we need?
1. Enterprise Environmental Factors provide information on
The marketplace
What product, services are available in the market and under what terms and conditions
Procurement resources: If you don’t have a purchasing group, then the project team has to supply both
resources and expertise for project procurement activities.
2. Organizational Process Assets provide formal/informal procurement policies, procedures, guidelines,

and management systems for use in making Procurement Plan and deciding Contract Types. They act as
constraints:
a) The ability to make specific make-or-buy decisions.

b) May require specific types or sizes of sellers.
c) Some organizations have multi-tier system of selected and pre-qualified sellers to decrease the number of
direct sellers and establish an extended supply chain.
Different contract types suit different types of purchases. Degree of risk assessed by both buyer and
seller decides the choice of a Contract Type.
Common contract types:
Fixed-price or lump-sum
Cost-reimbursable
Time and Material ( T & M )
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Fixed-price or lump-sum
1. Fixed total price for a well-defined product

2. Buyer at least cost risk as seller bears the risk of cost escalation
3. Seller most concerned about scope
4. Suitable if buyer can fully describe scope
5. May add incentives in fixed-price contracts to synchronize objectives of the buyer and seller
Example: Fixed-price or lump-sum
a) Fixed-price Contract INR 5,500,00

b) Fixed-price-incentive-fee (FPIF). Contract INR 5,500,000 plus Incentive INR 50,000 for every month for
finishing contracted work earlier than time mentioned in the contract.
c) Fixed-price-economic-price-adjustment (FP-EPA). Contract INR 5,500,000 plus buyer agrees for price
increase based on National Price Index for material price escalation, increase in Statutory Variable
Dearness Allowance for labor. Example: Contract for installation of elevators in a building.
Cost-reimbursable
1. Buyer reimburses seller’s actual costs plus a fee as seller’s profit.

2. Buyer at highest cost risk as complete scope is not clear and total contracted costs are unknown.
3. Such contracts are awarded when buyers can only describe what they need and not what to do.
Examples of CR:
Cost Plus Fixed Fee: CPFF

Buyer reimburses all allowable costs and paid a fee (profit) fixed at a percentage of the initial estimated
project cost. Fee does not vary with seller performance as it is paid only for the work completed. Fee can
change only when scope changes, not otherwise.
Example: Cost Plus 5% of initial estimated project cost
Cost Plus Incentive Fee: CPIF

Buyer reimburses all allowable costs + an agreed-upon fee + an incentive bonus, based on achieving
certain performance objective levels. Costs + fee, say INR 500,000 + INR 50,000 (for every month if the
project is performed earlier than agreed). In some cases, if the final costs are less than expected costs,
then both buyer and seller benefit from the savings, base on mutually agreed sharing formula, say 80/20,
70/30. The same sharing may apply for over target cost also.
Cost Plus Award Fee: CPAF

Buyer reimburses all allowable costs but majority of fee is paid on completion of some broad subjective
performance criteria, as defined in the contract.
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Time and Material (T & M)
Hybrid of cost-reimbursable and fixed-price. Full value and exact quantity of items to be delivered are not defined
by buyer, but unit rate of the category of item is settled. Buyer has medium cost risk. Example: INR 1000 per hour,
INR 300 per square feet of tiles.
3. Project management plan provides Scope Baseline (Scope Statement, WBS, and WBS Dictionary)
Project Scope Statement provides important information on project needs and strategies (that we must
consider when during what to procure), List of deliverables, acceptance criteria for the project and its
products, plus any technical issues relating to the product of the project. All these factors must be
considered in the procurement. Plus scope statement describes project boundaries, requirements,
constraints and assumptions concerning project scope.
Constraints: availability of funds.

Assumptions: availability of multiple sellers or sole seller.
Requirements with legal and contractual obligations: performance, intellectual property
rights, insurance, licenses, equal employment opportunities, health, safety, and security.
WBS describes relationship among all the components of the project and project deliverables. We will
outsource some portion of it, or we may outsource entire project also.
WBS dictionary provides detailed SOWs identifying deliverables plus description of work within each
WBS component needed to be done to produce that deliverable.
4. Requirements documentation provides
Important information about project requirements which need to be considered when we plan
procurements
Requirements with legal and contractual implications: health, safety, security, performance, IPR,
insurance, environmental, licenses, permits, equal-employment- opportunity, etc.
5. Risk register. Risk register provides information on identified risks, their analysis, and risk response
plans. This information is also used in planning procurements, especially if we need to transfer the risks
to a vendor.
6. Activity resource requirements. Some of these requirements we may decide to outsource.
7. Project schedule. While planning procurements, we need to be aware of milestones and completion
date of the project.
8. Activity cost estimates. Cost plays important part in planning procurement. Estimated cost will help
us decide how much we are ready to spend and plan procurements accordingly, plus our cost estimates
will help us in evaluating the reasonableness of proposals of the sellers.
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9. Stakeholder register. Help us understand interests of the stakeholders in the project and we use this
information while planning procurements.
1. Make-or-buy analysis: Analysis to decide whether a particular product/service can be produced

(COST EFFECTIVELY) by the project team or need to be purchased from outside. Budget constraints are
factored in. Considers both direct and indirect costs.
Example
Buy-side of analysis includes actual
 Direct out-of-pocket costs to procure the product, and

 Indirect costs of managing the purchasing process.
Reflects perspective of the performing organization, immediate project needs, and long range strategy.
Buying an item (say material handling equipments or computers) or leasing it may or may be cost
effective on the current project. But, if performing organization requires it on regular basis and buys the
item, then the part of the purchase cost apportioned to the project may be less than the leasing cost.
(Margin Analysis helps allocate such costs).
Example of long range strategy
Certain items needed for performing the project may not be with the organization. But having regard to future
requirements (for such items) and the business plans, the organization may decide to purchase them despite
project requirements and constraints. If this happens, then the only marginal cost is charged to the project and
difference is treated as investment for future.
2. Expert judgment
1. Expert technical judgment to access inputs and outputs from this process.
2. Expert purchasing judgment to develop or modify evaluation criteria.
3. Expert legal judgment to make terms and conditions for non-standard procurement items.
3. Market research is important while planning procurements to know industry and specific vendor
capabilities. Research sources: Conferences, Online reviews.
Question: What is benefit of market research while planning procurements?
Answer: We get knowledge of market capabilities of vendors-the equipments, tools, technologies. We

can leverage maturing technologies with balancing risks associated with wide vendor base.
4. Meetings. Help us decide procurement strategy by meetings with potential sellers. We get lot of
additional information on procurements items which cannot be obtained only through market research.
We get better insights on designing procurement SOW, RFP, Source selection criteria.
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What do we achieve?
1. Make-or-buy decisions. Decisions about what would be procured from outside sources and what
would be done by internally. For managing certain risks, purchase of insurance policies, performance
bond contracts can also be decided.
2. Procurement Statement of work defines the portion of the project scope to be acquired through the
contract and developed from by studying Scope baseline, Activity resource requirements, and
Requirements documentation. You should describe the procurement item in sufficient detail TO ALLOW
THE PROSPECTIVE SELLERS TO DETERMINE IF THEY ARE CAPABLE OF PROVIDING THE ITEM!
Procurement SOW should be clear and complete with: Specifications, Quantity, Quality levels,
Performance data, Period of performance, Location, etc.
3. Source Selection Criteria (Evaluation criteria) - Developed and used to rate or score Proposals.
 FOR THE ITEMS READILY AVAILABLE FROM MANY SELLERS. Evaluation Criteria limited to purchase price.
Purchase Price means landed cost (cost of the item and ancillary expenses, such as freight).
 FOR A MORE COMPLEX PRODUCT OR SERVICE. Understanding of need, Overall life cycle cost, Technical
capability, Management approach, Financial capacity, Production capacity and interest, Business size and
type, References, Intellectual property rights, Proprietary rights, etc.
4. Procurement documents- designed for requesting proposals from prospective seller. Termed
differently:
Request for proposal (RFP)

Invitation for bid (IFB)
Request for quotation (RFQ)
Invitation for negotiation
Tender notice
Contactor initial response
Term proposal is often used when other considerations, such as seller’s technical skills or technical
approach, experience, background, etc., are considered important.
Term quotation, bid, tender is often used when buyer selects seller based on price, and off-the-shelf
items. Example: Standard or commercial items.
STRUCTURE OF PROCUREMENT DOCUMENTS MUST facilitate:
An accurate and complete response from each prospective seller

Easy evaluation of the bids
Suggestions from the sellers regarding better ways to satisfy requirements.
5. Procurement Management Plan. *A component of the project or program management plan that
describes how a project team will acquire goods and services from outside the performing organization.
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6. Change Requests. Plan Procurements process may lead to requested changes to the project
management plan and its subsidiary plans. These changes are processed for approval through Integrated
Change Control process.
7. Project documents updates. Planning procurements process may result into updating Requirements
documentation, Traceability matrix, and Risk register.
Integration: Develop project management plan
Develop Project Management Plan

*The process of defining, preparing, and coordinating all subsidiary plans and integrating them into a
comprehensive project management plan. [*This definition is taken from the Glossary of the Project Management Institute, A
Guide to the Project Management Body of Knowledge, (PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013]
Project management plan defines how project will be:

Executed,
Monitored and controlled, and
Closed
It is developed through integration of planning processes. It can be revised, updated upto project
closure as changes are to it are found necessary and approved by CCB for inclusion in the project
management plan.
IMPORTANT RECAP
Before we discuss this process, we need to recap planning portion of nine knowledge areas that have
been covered in our interactions so far.
Project management plan is developed by integrating outputs of planning performed in the area of
stakeholder, scope, time, cost, quality, HR, communication, risk, and procurement.
What we have done so far
1. Planned stakeholder management.

2. Established TOTAL SCOPE OF THE EFFORT (WBS).
3. Defined and refined the objectives, by creating baselines.
4. Developed the course of action required to attain those objectives, by developing management plans.
5. Refined planning by updates as our understanding improved. These updates provided greater precision to
schedule, costs, and resource requirements!
6. We had involved all appropriate stakeholders.
7. Project Management Plan and Project Documents are developed to carry out the project.
Question: Is planning on time affair?
Answer: No, planning and documentation are iterative and ongoing processes! As more information or
characteristics are gathered and understood, additional planning may be required. Plus significant
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changes during the project may trigger a need to revisit one or more planning processes, and some of
the initiating processes. This progressive detailing of the project Management plan is called “Rolling
Wave Planning”. This proves that planning and documentation are iterative and ongoing processes.
Example
For some projects, there might be little or no identifiable risk until after significant planning has been
done. This would mean that time and cost targets are overly aggressive, thus involving considerably
more risk than earlier understood. So, additional time and cost need to be added in the schedule and
budget.
Important points:
Project Management Plan is developed through integration and iteration of planning processes. It is
progressively elaborated.
The project management plan is revised through Perform Integrated Change Control process to reflect
approved changes, both during planning and monitoring and controlling.
Contents of Project Management Plan:
 All baselines (scope baseline, schedule baseline, cost baseline)

 Life cycle selected
 Results of tailoring
 How work will be executed
 Key management reviews (for addressing open issues and pending issues).
 All Management Plans (Scope management plan, Requirements management plan, Schedule
management plan, Cost management plan, Quality management plan, Process improvement plan,
Human resource plan, Communication management plan, Risk management plan, Procurement
management plan, Change management plan, and Configuration management plan)
Contents under Project Documents (all other outputs of planning processes that are not entered in the
Project Management Plan, but we do require them for managing the project):
Activity attributes
Activity cost estimates
Activity list
Assumptions log
Basis of estimates
Change log
Charter
Contracts
Duration estimates
Forecasts
Issue log
Milestone list
Performance reports
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Project funding requirements
Proposals
Procurement documents
Project organization structure
QC measurements
Quality checklists
Quality metrics
Requirements traceability matrix
RBS
Resource calendars
Risk register
Roles and responsibilities
Sellers list
Source selection criteria
Stakeholder analysis
Stakeholder management strategy
Stakeholder register
Stakeholder requirements
Statement of work
Teaming agreements
Team performance assessments
Work performance data
Work performance information
Develop Project Management Plan Process Discussion

What do we need?
1. Project charter
2. Outputs from planning processes
3. Enterprise environmental factors considered here:
 Standards and regulations

 PMIS
 Organization structure and culture
 Organizational Infrastructure and Resource Pool
 Personnel administration
4) Organizational Process Assets considered here:
Knowledge base. Historical information on how project management plan was developed in previous
projects and lessons learned.
Policies and procedures for developing project management plan. Organization’s work instructions.
Monitoring and controlling policies and procedures. , Project or phase closure guidelines.
Project Management Plan Templates.
How do we perform it? Techniques
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1. EXPERT JUDGMENT Utilized to
 tailor the process to meet project needs,

 Develop technical and management details to include in project management plan,
 Determine resources and skills needed to perform the project work,
 Define the level of configuration management to apply on the project, and
 Determine which project documents will be subject to formal change control process.
2. Facilitation techniques help us reduce differences and bring consensus on the contents of the project
management plan. You can use brainstorming, conflict resolution, problem solving, meeting
management, and facilitated workshops. You need a qualified facilitator to do it.
What do we achieve?
1. Project Management plan. We have already discussed about Project Management Plan. Please get it
approved and then we are ready for Execution! ‘Hold kick-off meeting’ as last step in planning and
before beginning execution so that everyone is on the same page!
Obtain approval
Hold kick-off meeting to ensure that everyone is the same page!
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EXECUTING PROCESS GROUP
THE PURPOSE
1. Perform activities to accomplish project requirements

2. Create project deliverables
3. Acquire, train, and manage team members.
4. Obtain and manage resources
5. Implement planned methods and standards
6. Establish and manage communication
7. Generate project data for status and forecasting
8. Issue change request
9. Adapt approved changes into project’s scope, plans and environment
10. Manage risks and execute response activities
11. Manage sellers and suppliers
12. Execute approved process improvement activities
13. Collect and record lessons learned
14. Manage stakeholder engagement
Processes: 8
Integration: Direct and manage project work

HR: acquire project team, develop project team, and manage project team
Quality: perform quality assurance
Communications: manage communications
Stakeholder: manage stakeholder engagement
Procurement: conduct procurements
Direct and Manage Project Work

*“The process of leading and performing the work defined in the project management plan and
implementing approved changes to achieve the project’s objectives.” **This definition is taken from the Glossary of
the Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide)–Fifth Edition, Project Management
Institute, Inc., 2013]
Before we discuss this process, let’s build up basic understanding:
Execution and Monitoring and Controlling happen together.

Direct and Manage Project Work provides:
Deliverables
Work Performance data (actual performance data)
Change Requests
Monitor and Control Project Work process inspects deliverables, compares work performance
data with the plan, and evaluates change request. In case of defect in any deliverable or
variance in performance of time and cost, Monitor and Control Project Work process,
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recommends change requests for defect repair or corrective action for review and approval by
Perform Integrated Change Control process. Also after evaluation change request is
recommended for approval. Perform Integrated Change Control process reviews and approves
recommended defect repair, corrective action and then approves and returns. After approval,
approved defect repair, corrective action, and change requests are provided to Execution for
implementation.
Please understand that Direct and Manage Project work process is main process of execution
and it is supported by 7 more:
HR: acquire project team, develop project team, and manage project team
Quality: perform quality assurance
Communications: manage communications
Stakeholder: manage stakeholder engagement
Procurement: conduct procurements
The accountability of what 7 more processes do lies with this main process, therefore, we can
sum up activities performed by this main process inclusive of what is done by 7 more supporting
processes of execution:
Use work authorization system to assign work

Use and implement planned methods and standards for doing the work
Perform activities to accomplish project objectives
Create project deliverables
Generate work performance data (actual performance data relating to scope, time, cost,
and quality) for comparison with plan and generation work performance information
and status and forecasting
Issue change request (relating to scope, time, cost, or quality as found necessary by
stakeholders)
Implement approved change requests, including approved defect repair, corrective
action, preventive action, and change in scope, schedule, cost, quality, and process
improvement activities.
 Obtain and manage resources (materials, tools, facilities)

 Acquire, train, and manage team members
 Ensure processes are deployed, identify gasp and shortcomings, and improve process
 Manage communication
 Manage stakeholders and their engagement
 Implement risk response activities, and manage risks
 Obtain proposals, select sellers, and award contracts
 Collect and record lessons learned
[Remember: Project manager, along with project management team, directs the performance of
planned activities, and manages various Technical and Organizational Interfaces that exist within the
project!]
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Please remember for exam and real-life success! During Direct and Manage Project Work process, you
have to interact with all the stakeholders. They should have common understanding. If they don’t have
common understanding, you will face many problems and not get their cooperation plus it may also
lead to rework, increasing time and cost.
Steps to develop common understanding:
Provide latest version of project management plan to all stakeholders, which includes revised
scope, schedule, and budget. Use project management tools suggested by PMBOK® Guide for
communication and common understanding: Scope Baseline (WBS, WBS dictionary, Scope
Statement), Schedule Baseline, Cost Baseline, Network Diagram, Management Plans (scope
management plan, schedule management plan, cost management plan, quality management plan,
communications management plan, HR plan, risk management plan, and procurement management
plan).
All stakeholders should have a copy of communications management plan so that they know how
they will be informed about status, progress of the project. They also need to know escalation
procedure.
Keep stakeholders informed, take their feedback, and further inform actions you are taking to
honor their feedback. If someone has not given feedback, go and meet. Everybody’s involvement
and satisfaction is important.
Keep expectations clear. If somebody’s scope/ requirements were not approved and not included in
the project management plan, let them be clear that part will not be done.
Projects are performed with the help of functional departments- they provide resources and
functional area contribution. Functional managers must be informed in advance next month’s
schedule and what is their part in it. Functional managers have to provide resources and
contribution on the project- they must be well informed when their help is going to affect their
departmental work.
Team members should also be informed in advance next jobs they need to do in coming week,
month, and quarter.
If you want success, you must act as service provider to the team members:
Provide them data, tool, and environment for completing activities

Ask for their difficulties and problems and resolve them
Share information that concerns them and their work
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Direct and Manage Project Work process discussion
What do we need?
1. Project Management Plan. We work according to it and produce deliverables.
2. 3. Enterprise environmental factors provide to facilitate execution:
Work Authorization System- to ensure that work begins at the right time and in the right sequence.
This system may be formal or informal.
Project Management Information System (PMIS). AN AUTOMATED TOOL. PMIS has features for
scheduling, costing, configuration management, web interfaces, and information collection and
distribution.
Please note use of PMIS (project management software) in managing a project:
Process Group Use of PMIS

During Planning Process Group To facilitate estimation of resources, cost, and schedule
development, etc.
During Executing Process Group To assign work, enter work performance information, and
distribute reports
During Monitoring and Controlling To perform variance analysis and generate performance
Process Group reports
During Closing Process Group To reflect final results, and record them for archival.
Other Enterprise Environmental Factors which we should consider during Execution:
Organizational, company or customer culture and structure- to help project manager

decide how to interact and obtain cooperation.
Infrastructure (existing facilities and capital equipments) for executing the project.
Personnel administration (hiring and firing, guidelines, employee performance review,
and training records) - for managing human resources on the project.
Stakeholder risk tolerances- to determine where to place maximum or minimum
attention. Also helps in trade-offs.
 Work policies and procedures

 Communication policies and procedures with defined media, record retention, and
security requirements
 Issue and defect management procedures
 Process measurement databases
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 Historical information about previous projects for guidance Project files from previous
projects.
4. Approved Change Requests (secondary inputs): Approved change requests (approved defect repair,
approved corrective action, approved preventive action, or any other type of approved change request
relating to changes to scope, time, cost, and quality) come to Direct and Manage Project Execution
process for implementation.
1. EXPERT JUDGMENT. The expertise and experience of project manager and project management team
is utilized in this process. If required, we may get the expertise from consultants, other units in the
organization, stakeholders. Expertise and experience is used for evaluating inputs required for this
process.
2. Project Management Information System is used here. Details we have already discussed.
3. Meetings. During execution, meetings help us discuss various matters pertaining to successful
performance of activities. Each participant in the meeting must have a defined role.
Question: How many types of meetings are there?
Answer: Meetings are generally, three types:
Information Exchange
Brainstorming
Decision-making
Effective meetings: Meetings are waste of time if they are not effective!
 Have well-defined agenda, purpose, objective, and timeframe

 Document minutes of meeting and action items
 Face-to-face meetings with co-located participants are most effective
 Virtual meetings are not as effective as face-to-face. To achieve same effectiveness as
face-to-face meetings, you can try to use audio/video tools, additional preparation, and
organization.
What do we achieve?
1. Deliverables are produced as a result of performance of activities by the project team. These
deliverables go for inspection and validation by monitoring and controlling processes. After validation,
deliverables are approved and accepted. In case of defect, project team implements approved defect
repair solution. Validation of repaired defects is conducted by Perform Quality Control process. .
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Question: How do you define deliverable?
Answer: A deliverable is any unique and verifiable product, result or capability to perform a service that
must be produced to complete a process, phase, or project.
2. Work Performance data includes information such as which deliverables have been completed, time
and cost expanded, quality requirements met. This information shows actual performance in the area of
scope, time, cost, and quality. It is compared to the project management plan through Monitoring and
Controlling processes to identify variances. In case of variance, corrective actions are designed and
recommended (as change request) for approval by Perform Integrated Change Control. After approval,
project team implements approved change requests. Implementation of approved change requests are
validated by Perform Quality Control process.
3. Changes Requests: When issues are found while work is being performed, change requests are
issued.
Remember: Changes requests may to expand modify project policies or procedures, project cost or
budget, project schedule or project quality. Other change requests cover required preventive or
corrective actions to forestall negative impact later in the project.
Please note: requests for a change can be direct or indirect, externally or internally initiated, and
can be optional or legally/contractually mandated. They can include:
 Corrective action (to bring expected future performance in line with the project
management plan).
 Preventive action (to reduce the probability of negative consequences associated with
project risks).
 Defect repair
 Updates (changes to formally controlled documentation, plans to reflect modified or
additional ideas or content).
4. Project Management Plan Updates. Approved change requests lead to revision of the project
management plan, such as baselines and management plans. These revisions are managed through
configuration management system, and we get new versions of the project management plan.
5. Project Document Updates. Approved change requests may result updates project documents also
(Requirements documentation, Project logs (issue, assumptions, etc.), Risk register, and Stakeholder
register).
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Acquire Project Team
*The process of confirming human resource availability and obtaining the team necessary to complete
project activities.
[This definition is taken from the Glossary of the Project Management Institute, A Guide to the Project
®
Management Body of Knowledge, (PMBOK Guide)–Fifth Edition, Project Management Institute, Inc., 2013.]
Points to remember:
 The project management team may or may not have control over team members! WHY?
Because of collective bargaining agreements, use of subcontractor personnel, matrix
organization, internal or external reporting relationships, or other various reasons!!
 The project manager or project management team should effectively negotiate with others who
are in a position to project human resources for the project.
 Failure to acquire necessary human resources may affect project schedules, budgets, customer
satisfaction, quality, and risks! It could decrease probability of success and finally lead to project
cancellation.
 If human resources are not available due to constraints, economic factors, or previous
assignments to other projects, the project manager may be required to assign alternative
resources with lower competencies, provided there is no violation of legal, regulatory,
mandatory, or other specific criteria. The project manager or project management team should
reflect Impact of any unavailability of required human resources in the project schedule, project
budget, project risks, project quality, training plans, and other project management plans!!!
Acquire Project Team Process discussion

What do we need?
1. Human Resource Management Plan. HR Plan defines how human resources should be identified,
staffed, managed, controlled, and released. HR Management Plan helps us identify right people for the
right job according to the information contained in this plan:
Roles and responsibilities, positions, skills, and competencies required

Project organization charts showing the number and hierarchy of people
Staffing management plan (time periods of engagement, and other necessary
information).
2. Enterprise Environmental Factors provide information availability, competency levels, experience,

interest, and cost. We also get to know Personnel administration policies that affect outsourcing, site
locations, and organizational structure.
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3. Organizational process assets provide hiring policies and procedures for hiring staff.
How do we acquire people?
1. Negotiation. Resources for the project may come from 3 sources:
Functional departments
Other projects
External organizations, vendors, suppliers, contractors
In each case, you need to negotiate for getting the right resources at the right time, and in the right
number.
Negotiation with functional managers: Generally organizations are matrix. Team members are to be
drawn from various functions. Promised resources (during planning) are never provided. Getting
resources with right skills, at the right time and in the right number is always a big issue. You need to
negotiate with the functional managers and impress them about your requirement. If you have involved
functional managers during planning and developed good relationships, you are comfortable. One trick
is to tell the functional managers how they will benefit if they contribute on your project.
Negotiation with other project management team: There might be some scarce or specialized resources
that are shared on other projects. In this case, you need to negotiate with project managers of those
projects.
Negotiation with external agencies: You need to negotiate for appropriate, specialized, qualified, or
scarce human resources. When you negotiate with external agencies, you must follow external
negotiation policies and practices, including legal guidelines.
2. Pre-assignment. If you are handling a business critical project and project demands some special
expertise, resources can be pre-assigned. It also happens when project team is promised as part of
competitive bid.
3. Acquisition. Recruit or hire or subcontract work if the performing organization lacks the in-house staff
required to complete the project.
4. Multi-criteria decision analysis. When you acquire project team, you use multi-criteria decision
analysis. You develop criteria to rate potential team members. The criteria are weighted as per relative
importance of the needs of skills and experience, keeping in view availability and cost. Selection criteria
deployed to score team members include: Skills, ability, knowledge, and attitude. You also keep in mind
availability, cost prescribed within budget, and international factors.
5. Virtual teams. Creates new possibilities when acquiring project team members! These teams are
groups of people, though not meeting face to face, but share common goal and fulfill their roles. Video-
conferencing, emails, etc. have really helped success of such teams. In IBM, CSC and many other
companies, team members are engaged in a virtual manner and work on projects from their remote
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locations. Caution: When you use virtual teams, you must SET CLEAR EXPECTATIONS, DEVELOP
PROTOCOLS FOR CONFRONTING CONFLICTS, INVOLVE PEOPLE IN DECISION-MAKING, and SHARE
CREDIT for SUCCESS. Communication planning becomes very important here!! Please remember!
What do we achieve?
1. Project staff assignments. Project is staffed when necessary people are assigned to work on it!
Project staff assignments includes following documentation: Project team directory, Memos to team
members, and their names written in organization charts and schedules.
2. Resource Calendars. After we acquire project team, we develop resource calendars showing time
periods when each team member will work on the project.
3. Project management plan updates. After actual acquisition of staff, we get real idea of competencies
of people who made available for the project. If some of the acquired people do not fit the
requirements of roles, and gaps occur, we may have to change team structure, roles, or responsibilities
by revision to the HR Management Plan.
Develop Project Team (Be Amir Khan!)
Points to remember:
Project manager is responsible for improving the competencies, team interaction, and overall
team environment to enhance project performance.
Project managers should acquire skills to identify, build, maintain, motivate, lead, and inspire
project teams to achieve high performance and meet project objectives.
Developing effective project team is primary responsibility of the project manager!
Project managers should create an environment that facilitates teamwork.
Project Manager should continually motivate their team by:
Providing challenges and opportunities,
Timely feedback,
Support as needed, and
Recognizing and rewarding good performance
HIGH Team Performance can developed by Using open and effective communication,
Using open and effective communication,
Developing trust among team members,
Managing conflict in a constructive manner, and
Encouraging collaborative problem-solving and decision making
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The project manager should request support and influence stakeholders to get resources for
developing effective project teams.
HR Challenges:
Global environment, cultural diversity. Team members often have diverse industry
experience, multiple languages, and sometimes operate in the ‘team language’ or ‘norm’ that is
a different language than their native one. What should be done to tackle this?
The project management team should:
Capitalize on cultural differences,

Focus developing and sustaining the project team throughout the project life cycle, and
Promote working interdependently in a climate of mutual trust.
Team Development
Developing the project team improves people skills, technical competencies, and overall team
environment and project performance! It requires clear, timely, effective and efficient
communication between team members throughout the project lifecycle!
Objectives of developing a project team:

Improve knowledge and skills to increase ability to complete project deliverables, while
lowering costs, reducing schedules, and improving quality.
Improve feelings of trust and agreement among team members to raise morale, lower
conflict, and increase teamwork, and
Create a dynamic and cohesive team culture to improve individual and team
productivity, team spirit, and cooperation, and allow cross-training and mentoring to
share knowledge and expertise.
Stage of Team Development (FS-NPA). This is Tuckman ladder of team development:
1. Forming- come together, learn about project, roles, not open

2. Storming- not collaborative, different opinions, ideas, perspectives, begin to address
project work, technical decisions, approach
3. Norming- adjust habits, begin to work together, trust begins
4. Performing- function as good team, interdependent, resolve issues smoothly
5. Adjourning- complete work and move to another project
These stages occur in order but a team may get stuck up at one stage or slip to an earlier one. Team
Members who have worked in the past may even skip a stage!
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Develop Project Team process discussion
*The process of improving the competencies, team member interaction, and overall team environment
to enhance project performance. [*This definition is taken from the Glossary of the Project Management Institute, A Guide to the
Project Management Body of Knowledge, (PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013.]
What do we need?
1. Project staff assignments (Project Team Acquired) provides list of team members who have acquired
for the project. Team development starts with the list of the project team members, project staff
assignments documents identify the people who are on the team.
2. Human Resource Management Plan describes training strategies and plans for developing project
team members.
3. Resource Calendars describe time for team development activities.
How do we develop Project Team?
1. Training to enhance competencies of team members. Training is planned and documented in the
staffing management. It can also be unplanned if you discover an additional need later.
Planned training:
Class room, online, computer-based, on-the-job assisted by another team member,

mentoring, and coaching.
Please remember if anyone lacks necessary managerial or technical skills, these skills
must be developed as part of project work.
Unplanned Training results from:
Observation,
Conversations,
Performance appraisal
2. Team-building activities vary from five minute agenda item in status review meetings to off-site
TEAMBUILDING WORKSHOPs. Involving team members in planning also develops team spirit, such as
WBS creation, Schedule Development, etc.
Project manager should encourage informal communication and activities as they establish trust and
build good working relationships! Please remember team building strategies are quite necessary for
virtual team as they don’t get the benefit of face-to-face contact!
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Team building is an ongoing process and very important for project success. Changes in project
environment are inevitable, and to manage them effectively, a continued or a renewed team building
effort must be applied!
Project Manager must continually monitor team functioning and performance to determine if any
actions are needed to prevent or correct team problems!
3. Ground rules establish clear expectations of acceptable behavior by project team members! Early
commitment to these guidelines reduces misunderstanding and increases productivity!
Sample Ground Rules used:
Respect diversity and support fellow team members

Honest communications- without hidden agendas
Understand perspective of fellow team members
No back-biting
Work within defined roles and authorities, do not out step
Observe meeting etiquettes
How should team members resolve conflicts with each other
When and how an issue can be escalated?
4. Co-location (also known as tight matrix). Placing all or most of the active team members at
same location increases their ability to work as a team. It may be: temporary, at strategically important
times, or for the entire project.
Co-location strategy includes: “A meeting room, sometimes called war room”, having electronic
devices, place to post schedules, and other conveniences to EHNHANCE COMMUNICATION and A SENSE
OF COMMUNITY! HiTech Gear, Biwadi has a War Room for sharing plant progress, deviations, and
corrective actions.
5. Recognition and Rewards. Project manager must recognize and reward desirable behavior and
performance of the team members. He/she should take these decisions through performance appraisals
conducted during Manage Project Team Process. HR Plan describes what recognition and reward
system, project manager would use. Rewards encourage and reinforce team development process.
Recognition and rewards motivate and provide feeling that they are valued.
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Caution:
Reward good performance only- reward if someone has met an aggressive timeline or
saved cost. Do not reward if you find some people are putting in extra efforts due to
poor planning.
Avoid Win-lose (zero sum) rewards- only some team members are rewarded (like
employee of the month). This will affect team spirit.
Reward win-win behavior that everyone can achieve (like progress reports in time). This
will increase team spirit.
Consider cultural differences! Team rewards in a culture of individualism will be difficult
to work.
You should be careful about a situation where team members face unrealistic
expectations imposed by senior management. In such a situation, team members will
work hard but will not be able to meet expectation and hence rewards. It is your duty as
project manager to ensure that targets are realistic and achievable. Example: One
Matakee during Janmasthmai in Mumbai has a reward of INR 5, 00, 000/-. Since last five
years money is in Bank FD. Nobody has reached that Matakee!
6. Interpersonal skills (soft skills) play important role in team development. The project manager can
GREATLY REDUCE problems and increase cooperation by understanding the SENTIMENTS OF TEAM
MEMEBRS, ANTICIPATING THEIR ACTIONS, ACKNOWLEDGING THEIR CONCERNS, and FOLLOWING UP
ON THEIR ISSUES. Skills that help you managing team members:
Empathy
Influence
Creativity
Group facilitation
7. Personnel Assessment Tools (attitudinal surveys, structured interviews, ability tests, focus groups,
employee satisfaction surveys, etc) help us obtain following information about the project team
members:
How they process and organize information

How they make decisions
How they prefer to interact
Their strengths and weaknesses
Team preferences and aspirations
This information increases understanding about team members, their communications, commitments
and motivations. We use this information to create more productive teams during the span of the
project.
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1. Team performance assessment. After investing time and cost in developing project team, project
manager must know effectiveness of these efforts. For this, he/she assesses team performance in
achieving agreed-upon project objectives of scope, time, cost, and quality. If team performance is good,
efforts are effective. Team performance assessment procedure is developed and provided as input. You
should involve contractor for developing this criteria if the project work is being done under contract.
You should involve employee unions if the work is being done by workers bound by a collective
agreement.
Question: What does indicate team’s effectiveness?
Answer: Project manager uses following indicators:
More effective performance of assignments (due to improvement in skills)

Team members perform better as a team- (due to improvement in teamwork competencies)
Less employee turnover
Enhanced team cohesiveness
Team performance assessments may also suggest what more is required to improve performance of
individuals and their performance as a team. These improvement suggestions along with time and
resources required are recommended to concerned parties (vendors/ union leaders/functional
managers).
2. Enterprise Environmental Factors Updates. Training provided and skills assessed are posted in the
personnel records of the employees. Since personnel records come under Enterprise Environmental
Factors, we say these factors are updated. Do not get confused with the new terms used by PMI® , rather
learn and remember.
Manage Project Team

How well do you do all this in your projects?
 Keep in touch, talk to them and observe team member’s work performance and
behavior
 Appraise team member’s performance by using formal appraisal system
 Find root causes if there is gap in performance and recommend corrective actions (train
more, etc)
 Implement corrective actions after approval
 Update project management plan by incorporating approved changes
 Update organization process assets by incorporating lessons learned
 Manage conflicts that are beyond team members
 Encourage interactions and communication
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 Resolves issues by using an issue log. This addresses issues of team members. Team
members feel valued
 Show good leadership, negotiating and influencing skills
Real-life scenario 1: You observe that a team member’s performance is not satisfactory because he was
not involved in planning and he does not find time and cost are sufficient. He does not know his role
clearly. He complains WBS dictionary does not provide clear details of work assigned. You are thinking of
using penalty to for nonperformance. What would have ensured his cooperation and prevented this
situation?
Answer: It is your mistake. A project manager must involve team members in planning to gain buy-in
and use their experience and expertise in creation of WBS and right estimation of resources, time, cost
and identification of risks involved pertaining to scope, time, cost, and quality.
Real-life scenario 2: Your team members are not cooperating. What could be likely reasons?
Answer: Following are reason for non-cooperation of team members:
Lack of their involvement in planning

Lack of buy-in of project management plan
Poor listening habits and lack of trust
Lack of support for resolving issues and problems team members face
Lack of proper reward and recognition system
Lack of project manager’s leadership
If you do all this, you would probably:
Find whether a team member is performing well or there is a variance in team member’s
performance (by observation and conversation or performance appraisal). If yes, you will find
causes, design a solution, and recommend it to Perform Integrated Change Control process for
approval so that you can implement it and improve the performance of the team member. Approve
changes you will incorporate in the staffing management plan in terms of more training needs, or
replacement. Staffing management plan is updated.
When team members work and project execution happens, there might be conflicts. You will use
conflict resolution techniques to resolve the conflicts.
You will also take care of HR Issues of the team members and resolve them too. This gives a feeling
of respect to the team members and they feel motivated to work on your project.
You record causes of variances and reasoning behind corrective action taken to improve the
performance of the team members. You will post it as lessons learned to update organizational
process assets.
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CAUTION!
Managing team members becomes difficult when they report to two bosses! Functional Managers
and Project Managers in matrix organization. Assume those questions you are asked belong to
matrix organization even if it is not written as most of the organizations today are balanced matrix
and the term matrix by default means balance matrix.
Project success largely depends on how well this dual reporting relationship is managed.
It’s responsibility of Project Manager to manage and motivate borrowed resources. Remember
exam assumes your organization is matrix where resources are taken from various functional areas.
Team Management requires a combination of skills with special emphasis on Communication,
Conflict Management, Negotiation, and Leadership. Project Managers should provide challenging
assignments to the team members and provide recognition for high performance.
Manage Project Team process

*The process of tracking team member performance, providing feedback, resolving issues, and
managing changes to optimize project performance
What do we need?
1. Project staff assignments provide a list of team members whose performance is to be evaluated,
conflicts to be resolved, and issues are to be addressed.
2. Human resource management plan describes roles and responsibilities, project organization chart,
and staffing management plan. We take performance report related to the work done by these team
members and compare with what was planned and written in the HR Management Plan.
In case of gap in the performance of any team member, we find causes, corrective action, and
recommend it as change request to Perform Integrated Change Control process for approval. After
approval, we take corrective action to improve performance of the team members.
We incorporate approved changes in the project management plan (time and cost allowed for corrective
action).
We also document causes of variance in the performance of team members and reasoning behind
corrective actions chosen and post it in Organizational Process Assets as Lessons Learned.
3. Work performance reports are collected from monitoring and controlling processes (Control Scope,
Control Schedule, Control Costs, Perform Quality Control, Verify Scope, Monitor and Control Risks, and
Administer Procurements). These performance reports indicate project performance as a result work
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done by the team members. It helps in comparing work done by team members against work planned to
be done by the team members- to evaluate their performance.
Question: What do you do with the information contained in the performance reports including
forecasts?
Answer: We use this information for following purposes:
Checking team members’ performance

Deciding recognition and reward
Determining future resource requirements
Determining update to the staffing management plan (resource calendar, training needs, staff
acquisition and release plan)
4. Team Performance Assessments (ongoing, formal/informal) help take actions to resolve issues,
modify communication, address conflict, and improve team interactions.
5. Organizational process assets. When team members perform well we need to show appreciation
according to policies and procedures of our organization as mentioned in OPAs. The procedures may
include: certificate of commendation, bonus, perquisites, corporate tokens (high performing team shirts,
hats, bands, and badges), and publishing success stories in newsletters or website.
6. Issue log. Issues that arise during managing project team are recorded in issue log. Responsibility and
target date for resolution is set. Issue log helps in monitoring issue resolution.
1. Observation and Conversation. Do you just sit in office or go around and see progress towards
deliverables and accomplishments? Do you talk to them about their work, interpersonal issues,
solutions, your support and help? Do you stay in touch with your team members to know their work,
attitudes, and feelings?
2. Project Performance Appraisals. Do you have effective system for project performance appraisal?
What is the objective? If you do not have effective appraisal system and if you do not know its objective,
it will result into:
Lack of constructive feedback

Conflict on roles
Lack of goals for remaining period in the project
Lack of individual training plans to improve their performance
Unknown issues remain undiscovered
Unresolved issues remain unnoticed
It is an important topic. Attempt the exercises.
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Exercise 1
What is the objective of project performance appraisal system?
Solution: The objective of project performance appraisal system:
1. Constructive feedback to the team members

2. Clarification of roles and responsibilities (once again)
3. Setting goals for remaining period in the project
4. Determination of individual training plans
5. Discovery of unknown issues
Fill up this box6.without
Discovery of unresolved
looking at answer issues
Exercise 2
What are the driving factors for designing a project performance appraisal system?
Answer
Solution: The driving factors for designing a project performance appraisal system are:
1. Complexity
2. Length
3. Communication Requirements (quantity and quantity)
4. Labor agreements (if unionized labor is used for the project)
5. Contract terms (where vendors are involved)
6. Organizational policy
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3. Conflict management. You should remember ‘Essentials about Conflict Management Conflict’ to
solve situational questions in the exam and also to manage projects effectively in real-life. If you
manage conflicts successfully, it will bring positive working relationships and increase productivity. If
you don’t, then there will be chaos, delays, overruns, issues.
Essentials of Conflict Management
You cannot have a project without conflicts

Conflict is inevitable
Conflict is a team issue and your success in managing team largely depends on how you
resolve conflicts
Difference of opinion increases creativity and finds new solutions, if managed properly
Team members are initially responsible for resolving differences themselves
When differences are escalated, then project manager should intervene and find
solution
Conflict should be resolved early and in private
Use direct approach
Use collaborative approach- jointly find root causes and jointly find resolution
Sources of conflict: Schedule, Project Priorities, Resources, Technical Opinions,
Administrative Procedures, Cost, Personality (personal working styles)
Conflict requires you to search for alternatives for resolution
You should focus on issues not personalities, present not past
Openness resolves conflict and you must consider following factors while choosing a
Conflict Resolution Technique:
Time pressure
Position taking by conflicting parties
Reward of resolving conflict (long term and short term benefits)
Intensity and importance
Many conflicts can be avoided if you observe your professional responsibility:

Clear, unambiguous and non-overlapping assignments
Assignments should be interesting and challenging (but not unrealistic)
Communication Planning (what reports to send, whom to send, when to send, and who
will send plus escalation procedure)
Team Ground Rules (set during Develop Project Team process)
Implementation of Project Management Best Practices right from Initiation through
Closing.
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Right and timely communication with team about project’s progress, constraints,
objectives, key decisions, changes, future, and what accomplishments would bring what
rewards
Who should resolve conflict? Exam will ask questions on this.
Exam provides various conflict situations:
Not enough resources

An activity faces some issue and likely to be delayed
New requirements are added for which no time and cost provision in the project
management plan
Functional manager is wanting to take a team member away
Team is conflicting on project priorities on what needs to be done first
Project is behind schedule
Project is facing funds shortage
Team members disagree with each other
Thumb Rules:
Thumb Rule 1: Parties involved in the conflict should resolve it.
Thumb Rule 2: If escalated, then project manager should intervene.
Thumb Rule 3: Those who have control/authority over the conflicting parties or issues under conflict
should resolve it. Example: If a team member is taken from a functional area and not performing well,
project manager should ask concerned functional manager to resolve it. If functional managers are not
cooperating, then sponsor should be requested to resolve it.
Thumb Rule 4: If it is a question of professional responsibility (conflict of interest, discrimination,

violations, etc), then project manager is entirely responsible to address such conflict issues. Whenever
there is a conflict among the stakeholders, decision should be taken in favor of the customer. Project
manager MUST serve the interest of the customer. Customer is the reason why your company is in
business!
Please read these thumb rules once again and attempt exercise on next page.
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Exercise
Now reply who should resolve conflict without seeing answer.
S. Conflict Person responsible Thumb Rule Used

No.
1. Not enough resources
2. An activity faces some issue and likely to be

delayed
3. New requirements are added for which no

time and cost provision in the project
management plan
4. Functional manager is wanting to take a
team member away
5. Team is conflicting on project priorities on

what needs to be done first
6. Project is behind schedule
7. Project is facing funds shortage
8. Team members disagree with each other
Following page provides answers. Please check.
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Answers:
S. Conflict Person responsible Thumb Rule

No. Used
1. Not enough resources Resources are controlled by Sponsor 3
and Functional Managers. Project
manager should contact Sponsor and
Functional Managers.
2. An activity faces some issue and likely to be Read the words likely to be delayed, it 2
delayed not delayed so far. Project Manager
should find solution along with Team.
This problem would have been
escalated.
3. New requirements are added for which no Sponsor provides funds for the 3
cost provision in the project management project. He/she should provide more
plan funds.
4. Functional manager is wanting to take a Functional Manager has not taken the 1
team member away team member away, he is wanting.
Team members should have enough
knowledge about importance of their
work in project solve it by interacting
with her functional manager.
5. Team is conflicting on project priorities on Project Manager must clarify project’s 3
what needs to be done first priorities through network diagram.
6. Project is behind schedule Project Manager controls schedule. It 3
is his duty to take corrective actions to
resolve.
7. Project is facing funds shortage Sponsor provides funds for the 3
project. Project Manager should
contact Sponsor.
8. Team members disagree with each other Team members should solve their 1
disagreement themselves. Parties
involved in the conflict should resolve
it.
Conflict Resolution Techniques: To be used according to the situation. Normally best technique is
Problem Solving which is also called Confrontation. But some situations may require some other
techniques.
Withdrawal/avoiding
Smoothing/accommodating
Compromising
Forcing
Collaborating
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Confronting/Problem Solving
Withdrawal / Avoiding: Retreating from an actual or potential conflict situation.
Smoothing / Accommodating: When conflicting parties are too agitated to listen to anything, you need
to first cool down the situation by emphasizing areas of agreement/similarities rather than areas of
differences or dissimilarities. It smoothes the situation.
Compromising: Here you are searching for solution that brings some degree of satisfaction to all parties.
But both parties have to sacrifice something thing. No one gets all that is desired. It is a Lose-Lose
Technique.
Forcing: Do you push your point of view in resolving a conflict? You don’t care what others say? Then
you are forcing. It is a Win-Lose Technique.
Collaborating: You encourage multiple points of views and insights from differing perspectives. Leads to
consensus, commitment. Everybody feels heard, everybody feels his/her point has been addressed.
Confronting/Problem Solving: Treating conflict as a problem and using problem solving method is the
best technique. It leads to Win-Win situation where professional procedure is adopted:
Define a problem by root cause analysis

Find solutions by examining alternatives
Choose the right solution by open dialogue with Give-and-take Attitude
Implement and solve by a target date
Crosscheck solution has solved the problem to be solved
4. Interpersonal Skills. Project Management requires interacting with lots of people for taking their help
and contribution. A project manager needs to have excellent People Skills. Your interpersonal skills help
you interact properly, lead, convince, and utilize strengths of team members. But this is a huge gap area!
What interpersonal skills you require? Organization behavior describes many topics to be understood
and used for success:
 Leadership styles
 Motivation theories
 Influencing
 Effective decision making
 Powers of project manager
Leadership styles
Leadership means communicating the vision and inspiring the team to achieve high performance!
Leadership is required throughout the project to inspire project team. There are various leadership
styles. You should choose right leadership for right situation keeping in mind needs of the team
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members. Successful project managers adapt their behavior to meet the demands of unique situation.
See 10 Leadership styles:
Situational Leadership: Blanchard & Hersey Situational Leadership® Model (4 styles

depending on the ability of the person to do the job (Skill) —has the necessary knowledge and
skills to do the work and the willingness of the person to do the job (Will) —has the necessary
confidence and commitment to do the work.
 Telling/Directing — a project managers uses in early phases of the project. He/she provides detailed
instruction and closely coaches people who are both unable and either unwilling or too insecure to
take responsibility to do something. Here project team is not too confident.
 Selling/Coaching— a leader provides explanations and principles, engages the follower in a
discussion of the work, and coaches as needed. People who are having less skill level, but willing to
do necessary job. They are motivated but currently lack of the appropriate skills. Used in the
execution stage begins.
 Facilitating/Counseling — project manager assists team with goal clarification and ideas, then
coaches as needed. People who are able but unwilling or too apprehensive to do what the project
manager wants. Used in execution stage.
 Delegating— team members make decision. People who are both able and willing to take
responsibility and do what is asked of them. Used in execution as it progress at good pace. Used
when team members are able to analyze situation and decide what needs to be done. You cannot
do everything. You should delegate.
 Authoritarian or autocratic- you tell what you want accomplished without advice from others. Used
when you have limited time and only you know what is to be done to solve a problem and team is
motivated. Not very good style.
 Participative or democratic- team participation in decision making. Use it when you have part of
information and your team has parts of information. You can’t have all the knowledge yourself.
 Laissez-faire (French term means ‘allow to do’, ‘let do’, ‘Free Reign’) - a form of delegating style
where you give complete freedom to team. May provide support sometimes. Works only with self-
motivated and highly skilled team.
 Driver/Pace Setter- pushes team to achieve.
 Consensus- group problem solving style, decision based on team agreement
 Consultative- invite ideas and decide based on those ideas. Consultative-Autocratic invites ideas but
decision is mine.
 Bureaucratic- strictly follows policies, procedures. Used for safety matters or compliance to
government norms.
 Analytical- project managers who have lot of technical background go deep into an issue and make
technical decisions themselves.
 Transactional- Focus on motivating through rewards and punishments. There are two factors which
form the basis for this system, Contingent Reward and management-by-exception.
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Influencing- Ability to influence stakeholders in a timely manner, especially in a matrix environment
where project managers have little or no direct authority. Key Influencing skills:
Ability to be persuasive and clearly articulate points and positions

High levels of active and effective listening habits
Consideration of various perspectives
Gathering relevant and critical information to address important issues and reach
agreements.
Effective decision making
There are many situations where a project manager has to make right decisions. If decisions are
improper, project targets will be impacted. Effective decision making required good negotiation and
influencing skills. You should follow a decision making process and consider following tips:
Focus on project targets

Analyze internal and external environmental factors
Develop competencies of the team members
Develop team creativity
Manage opportunities and threats
Motivation theories
1. Maslow’s Hierarchy of Needs

2. McGregor’s Theory X and Theory Y
3. Herzberg’s Theory
4. McClelland’s Theory of Needs (Acquired Needs Theory)
5. Vroom’ Expectancy Theory
6. Alderfer's ERG Theory
Maslow’s Hierarchy of Needs- Abraham Maslow was a great behavioral scientist. He propounded that
people have hierarchy of needs and are motivated if you identify and meet these needs. He also pointed
out that your lower levels needs are to be satisfied first and then only your higher level needs emerge.
Higher Order to Lower Order:
 Self-actualization (self-fulfillment, becoming all one is capable of becoming)

 Esteem (respect, recognition)
 Social (association, love, friends)
 Safety (freedom from harm)
 Physiological (food, air, water, clothing, shelter)
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McGregor’s Theory X and Theory Y- McGregor brought revolution in human resource management
through his book ‘Human Side of Enterprise. He observed the way employees were being treated at the
workplace; he called this management style Theory X. He then opined Theory Y negating all the views of
Theory X. for exam you should know Theory X and Y.
Theory X
People are inherently lazy and avoid work and responsibility

They cannot direct their own efforts
They need to be commanded and controlled
Theory Y
People are intelligent and willing to work

They can direct their own efforts
They need to appreciated and motivated
Herzberg’s Two Factor Theory (intrinsic/extrinsic motivation) – Herzberg said that there are two
factors: Hygiene Factors and Motivating factors. If you do not maintain hygiene factors, it will de-
motivate. But enhancement of hygiene factors does not motivate. What really motivates is Motivating
Factors. Remember these two factors for exam:
Hygiene factors:
Working conditions
Status
Job security
Salary
Fringe benefits
Personal relationships at workplace
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Motivating factors/agents
Challenging work
Responsibility
Appreciation
Professional growth
Recognition
This theory is also called the "Motivator-Hygiene Theory" and/or "The Dual Structure Theory."
McClelland’s Theory of Needs (Acquired Needs Theory) - People are motivated by one of the three
needs:
Need for Achievement (like to take up challenging assignments, seek recognition)

Need for Affiliation (like to socialize, seek approval)
Need for Power (like to organize, seek opportunity to manage others)
You should allocate project assignments accordingly.
Vroom’ Expectancy Theory- people work in expectation of getting what they desire.
Alderfer's ERG theory- expanded on Maslow's hierarchy of needs, created the ERG theory. There are
three groups of core needs — existence, relatedness, and growth.
What do we achieve from Manage Project Team process?
1. Change Requests. Managing project team may require staffing changes whether as a chosen solution
or due to uncontrollable events:
Allocate different assignments to team members

Outsourcing some work either to accelerate or it becomes difficult for our people to do properly
Replacement of team members
Cross-training to reduce problems during team member absences
Further role clarification
These changes will also require additional time and cost to implement changes. Therefore we raise
change request with due impact analysis and recommend to Perform Integrated Change Control process
for approval. After approval, we implement staffing changes; we incorporate approved changes in the
project management plan.
2. Project Management Plan Update. We incorporate approved changes in the project management
plan. Human Resource Plan is specially updated.
3. Organizational Process Assets Updates. Historical information about issues and their resolution, and
lessons learned are posted so that we can better manage people next time in the current project as well
as future projects.
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4. Project Documents Update: as a result of Manage Project Team process, we need to update Issue
Log, Role Descriptions, and Project Staff Assignments!
5. Enterprise Environmental Factors Updates. The appraisal reports and personnel skill updates are
recorded in the personal profiles of people maintain under EEFs.
Perform Quality Assurance

*Perform Quality Assurance. The process of auditing the quality requirements and the results from
quality control measurements to ensure that appropriate quality standards and operational definitions
are used. [*This definition is taken from the Glossary of the Project Management Institute, A Guide to the Project
®
Question: What is the advantage of quality assurance?
Answer: Quality assurance facilitates improvement of quality processes. Quality assurance develops
confidence that project will meet quality requirements. Quality assurance contributes to the state of
being certain about quality (preventing defects through the planning and inspecting defects through
control during work-in-progress stage of implementation). For quality assurance you need data from
quality planning and control.
Remember: Quality assurance work is conformance work in cost of quality. Quality assurance has
prevention and inspection aspects-with highly visible impact on the project’s success. Many project
managers do not know the function quality assurance plays? Quality Assurance Department is outside
the project but you must take its services.
What do we need?
1. Quality Management Plan describes how quality assurance will be performed within the project.
2. Process Improvement Plan describes methods for process improvement -steps for analyzing
processes to identify activities that do not add value. We conduct process analysis with the help of
knowledge about non-value adding activities from QC Measurements and Work Performance
Information. Then we eliminate these activities from the process to improve the process. Process
improvement is continuous process and increases productivity.
3. Quality Metrics. What quality Metrics mean? How using these Metrics help us in quality assurance?
Operational definitions describing tolerance limits, upper and lower limits for quality/time/cost
performance are known as quality metrics. These metrics mean the targets should stay within these
limits. Say stay within +/- 10% budget. Other examples of quality metrics: Defect frequency, failure rate,
availability, reliability, test coverage, on-time performance, and budget control limits. How using these
metrics help here? Quality control measures performance within these prescribed limits. If quality
control measurements indicate deviations, it means quality processes are inefficient and ineffective. We
need to find causes and recommend corrective actions to make them effective.
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4. Project documents that may impact quality assurance work should be monitored.
5. Quality Control Measurements. Purpose of quality assurance is to audit quality requirements and
results from quality control measurement to ensure that right quality standards and quality metrics are
used. Review whether organizational policies, procedures and procedures are being complied or not. QC
Measurements tell us about correctness of deliverables, defects in the deliverables, repairs suggested
and performed. If lot of defects are reported, it means appropriate standards and quality metrics are not
used. Quality policy processes, and procedures are not followed. Quality assurance conducts quality to
find gaps and shortcomings due to either non-compliance or due to processes/procedures not being
effective and efficient.
1. Quality audits. A review to:
Find whether policies, processes, and procedures are being followed or not!
Find gaps and shortcoming and inefficient or ineffective quality processes, policies, procedures and
recommend corrective and preventive actions!
Assist to improve implementation of processes to increase productivity.
Share best practices.
Show importance of quality audits in compiling Lessons Learned.
Confirm implementation of approved change requests (defect repairs, corrective or preventive actions)
Question: What is advantage of quality audits?
Answer: Gaps and shortcoming are highlighted and corrected and reduce cost of quality and enhance
sponsor or customer acceptance of project’s product. Highlight and share good practices.
2. Process analysis. Another responsibility of quality assurance is process improvement from

technical and organizational point of view. It is done by following steps written in the process
improvement plan.
Process Analysis:
Examine problems and constraints faced

Examine non-value adding activities found during process operation
Conduct root cause analysis of the problems
Design preventive actions
Recommend for approval and implementation
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3. Plan Management and Control Tools. These tools have been in use since many decades and helped
successful management of quality assurance and control of projects worldwide. These tools are also
known as New 7QC tools:
1. Affinity diagrams
2. Process decision program charts (PDPC)
3. Interrelationship diagraphs
4. Tree diagram
5. Prioritization matrices
6. Activity network diagrams
7. Matrix diagrams.
Benefits of New 7QC tools
Express verbal data diagrammatically

Make information visible
Organize information intelligibly
Clarify overall picture and fine details
Get more people involved
Raise People’s Problem Solving Confidence an increase People’s Ability to Predict Future
Events
Affinity diagrams:
Purpose: Organize large number of ideas into a logical way; make them into a systematic order to help
you plan actions. The purpose of an affinity diagram is to provide a visual representation of grouping of
a large number of ideas or factors or requirements into logical sets of related items to help one organize
action plans in a systematic manner. Affinity diagrams resemble mind mapping as they generate ideas
and their link to form patterns of thoughts for a problem.
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Process:
SUBJECT TOPICS 
Generate a Large Number of IDEAS 
Decide # and Title, create a CARD 
Distribute all the ideas among the cards 
Arrange the cards according to the relationships between the groups 
Title it 
Applications:
Break up any complex problem or task into smaller more easily manageable bits 
You can use it in WBS creation also as it provides structure for decomposing scope.
Process decision program charts (PDPC):
Purpose：To  prepare for abnormal occurrences with low probability which may otherwise be overlooke
and to present the occurrences as well as the necessary countermeasures to guard against such occurren
ces in the form of a visual chart.
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Applications:
1. This tool has the widest range of applications from the simplest to the most complex.
The tool can be used to prevent problems by identifying opportunities for error and devising 
measures to avoid failure. It can be used during the implementation of solutions
for predicting resistance and for planning measures to overcome the resistance.
2. You can also use it for contingency planning as PDPC helps us anticipate intermediate steps that hinder
goal achievement.
Interrelationship diagraphs: Adapted from relationship diagrams and used for moderately complex
scenarios that show intertwined relationships for upto 50 relevant items. You can make interrelationship
diagraph from the data generated from Affinity diagram, fishbone diagram, or tree diagram.
Interrelationship Digraph Example: The quality issue is the potential causes or factors contributing to
late deliveries.
After making the interrelationship digraph, we should interpret its meaning:
What are the key factors or causes to investigate and improve?

Recall that we called the entries in the digraph concerns.
A concern with a high number of output arrows is a driver or key cause. A key cause affects a
large number of other items. The above diagram shows the following key causes:
‘Poor scheduling practices’ (6 outgoing arrows)
‘Late order from customer’ (5 outgoing arrows), and
‘Equipment breakdown (3 outgoing arrows).
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A concern with a large number of input arrows is affected by a large number of other concerns.
Thus, it could be a source of a quality or performance metric. „Poor scheduling of the trucker‟
has 4 input arrows. A measure of poor scheduling performance of the trucker could indicate the
magnitude of system problems causing late delivery.
Process:
Decide EFFECTS, Decide IMMEDIATE CAUSES,
Connect IMMEDIATE CAUSES to Effects Taking Immediate Causes as effect to find 
o CAUSES for them  
Explore RELATIONSHIP of Causes and Connect them 
Finding more important causes and prominent  links 
Make the link SHORT,  make the diagram COMPACT 
Title it 
Applications:
1. Explore cause and effect relationships, used especially for complex situations where the causes are
likely to be mutually related.
Tree diagram: The purpose of the tree diagram is to explore ways and means to achieve an objective,
develop a list of alternate means to reach the desired situation in a sequential order and to present
them in a visual form. Tree diagrams show parent-to-child relationships and define nesting relationship,
with nesting branches that end up into single decision point! You can show them horizontally- Risk
Breakdown Structure, Decision tree diagram. You can show them vertically- Organization Chart, OBS,
WBS.
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Process
Identify a high PRIORITY PROBLEM that need to be solved earliest. 
Choose FORM: Tree or Cascade?  
Identify PRIMARY MEANS 
Identify SECENDARY MEANS for primary means 
TERTIARY MEANS for secondary means
Continue the process till the group feels that the END of the line has been reached 
Use of POST‐IT PAD 
Consensus of MEANS 
Title it
Applications:
1. Known as systematic diagrams.
Develop a systematic step by step strategy to achieve an objective.
Devise solution for problem.
2. Tree diagram can also be used to represent decomposition hierarchies (WBS, OBS, BOM, Risk
Breakdown Structure, and Resource Breakdown Structure).
Prioritization matrices: We use them for identifying key issues and alternatives. Then we prioritize
alternatives for implementation to resolve issues. Criteria are prioritized and weighted and then applied
to alternatives to get a mathematical score to rank the available alternatives/options.
Applications:
Used to suggest solutions (with prioritized options) to remove gaps and shortcomings observed
though quality audits.
212
Activity network diagrams: Earlier called arrow diagrams (AOA and AON).
Purpose:
To create a visual presentation of the steps of a process or tasks necessary to complete a pro
ject with special emphasis on the time taken for these activities.
Sample Activity Network diagram
Application
1. Used in project scheduling methodologies (CPM, PERT, PDM).
Matrix diagrams: We create an organization structure in the matrix and do data analysis to represent
strength of relationships, in the rows and columns, between:
Factors
Causes, and
Objectives
Purpose: Explore the existence and the extent of  relations  between  individual  items  in  2  sets 

of factors  or  features  and  characteristics  and express  them  in  a  symbolic  form  that  is  easy 
to understand. Mostly used to understand the relations between the  customer  expectations  as 
expressed  by  the customers  and  product  characteristics  as designed,   manufactured  and  tested  by 
the manufacturer. The purpose of a matrix diagram is to explore the existence and the extent of relations
between individual items in two sets of factors or features or characteristics and express them in a symbolic form
that is easy to understand. The purpose for which the tool is most frequently used is to understand the relation
between customer expectations as expressed by the customers and product characteristics as designed,
manufactured and tested by the manufacturer.
Process:
Determine 2 sets of factors for which the rela@ons are needed to be established.  
Divide the features and characteristics into primary, secondary and tertiary characteristics.
Place features vertically on the leg side of the matrix and characteristics horizontally
on top of the matrix. 
Enter the importance of the features on the column ager that for the tertiary features.
In the main body of the matrix, use the symbols to represent the degree of connections between the
features and the characteristics.
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Sample Matrix Diagram
Application
Matrix diagram can be used to solve problems by arranging data to bring relations between
relevant in sharp focus.
There is no limit to the use of the tool.  
The most important application of matrix diagram is in clarifying relations between 
individual features of customer requirements and individual product characteristics.
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What do we achieve?
1. Change Requests. Requests for actions for increasing the effectiveness and efficiency of policies,
processes, and procedures and for improving productivity of the process. These change requests are
recommended to Perform Integrated Change Control process for approval. After approval, necessary
improvement, corrective or preventive actions are implemented. Improved processes of quality,
schedule and cost are then incorporated in the respective management plans (quality management
plan, schedule management plan and cost management plan).
2. Project Management Plan updates. We add improved policies, processes and procedures in Quality
Management Plan, Schedule Management Plan, and Cost Management Plan which are subsidiary plans
of the project management plan.
Recap:
What are these changes?
Answer: These changes relate to two categories of improvements:
Improvement in policies, processes and procedures where gaps and shortcomings were identified.
Improvement in processes that have been through continuous process improvement.
These changes can lead to Additions, Modifications, and Deletions.
3. Organizational Process Assets Updates. Quality Standards, which are part of OPAs, are revised.
4. Project Document Updates. Process Documentation, Quality Audit Reports, and Training Plans are
updated into Project Documents.
Manage Communications
*The process of creating, collecting, distributing, storing, retrieving, and ultimate disposition of project
information in accordance with the communications management plan.
Question: What is the main benefit of Manage Communications process?
Answer: It ensures effective and efficient flow of information between stakeholders.
Purpose of Manage Communications process:
Appropriate generation of information

Timely communication of needed information to project stakeholders
Ensure it is received and understood
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Provides opportunity to the stakeholders to make requests for further information, clarification, and
further discussion (very important)
Using techniques for effective communication, such as Sender-receiver models, choice of media, writing
style, meeting management, presentation, listening, facilitation (duty of project manager and project
management team to use all these techniques and ensure effective communication)
Implementing communications management plan
Attending to unexpected requests for information
What information do you distribute?
Answer: Project information distributed includes:
status
progress, success
forecast
variance report
corrective action
problems, new risks discovered
updated project plans/ components of project plan
team members’ performance meeting schedule , etc
Whom do you distribute information?
Answer: We distribute information to the stakeholders:
internal to the project

external to the project
management
Sponsor
functional managers
team
team member’s managers
other project managers (because your project is impacted by other projects and also your project impacts
other projects, there might be shared resources, or a functionality may be contributed)
project manager
other stakeholders
Manage Communications process discussion

What do we need?
1. Communications management plan. We distribute the information to the stakeholders according to the
communication requirements documented in the Communications Management Plan.
2. Work Performance Reports. Performance reports generated by Report Performance process are distributed
to the stakeholders, as per the communications management plan.
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3. Organizational Process Assets. While distributing information, we follow organizations
Communication Policies, Procedures, and Guidelines! We use Information Distribution Templates also.
Historical Information and Lessons Learned also guide us.
4. Enterprise environmental factors provide important information about Organizational culture,

standards and regulations, and PMIS to be used for managing communications.
1. Communication Methods. We use communication methods we had decided during Plan Communications
Management process. Our choice of these methods is important so that we remove communication barriers and
ensure that it is understood to get right response and feedback.
2. Communication Technology. We use appropriate communication technology to ensure effective

communication.
3. Communication Models. We choose right communication model as components of communication model

ensure effective and efficient communication. The purpose is to choose appropriate communication model to
identify and remove barriers (noise).
4. Information Management Systems. We may use variety of tools to send project information to
the stakeholders as per their needs documented in the communications management plan:
project meetings
videoconferencing, web conferencing
voice mail, fax, telephone
email, shared networked databases
hard copy, web publishing
Web interfaces, virtual office, portals, scheduling and project management software,
etc.
5. Performance reporting. Performance reporting means collection of performance information and distribution
according to the communications management plan. It requires you to collection and analysis of baseline versus
actual data to communicate status, progress, and forecasts. You may send:
Simple status report showing performance information:
Percentage complete
Status dashboards for scope, schedule, cost, and quality
Elaborate report showing project information:
Work completed during the period and work to be completed in the next period
Current status of risks and issues (happened, resolved, pending)
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Analysis of past performance and forecasts of time and cost
Summary of changes approved
Other information
What do we achieve?
1. Project Communications. This process results into communication of performance reports, deliverables
status, schedule progress, and costs incurred.
2. Project Management Plan Update. Manage Communications process informs Current performance of the
project against *PMB (performance management baseline). This results into updating:
Project baselines
Stakeholder management Plan
Communication Management Plan
*PMB is nothing but integrated scope, schedule, and cost baseline. It also includes technical and quality
parameters.
3. Organizational Process Assets Updates consist of
Lessons learned documentation

Project records
Project reports
Project presentations
Feedback from stakeholders
Stakeholder notifications
Let us see each update:
Lessons learned documentation: Causes of issues, reasoning behind corrective action chose, and other types of
lessons learned about information distribution.
Project records are documents that describe the project. They are arranged and kept in an organized manner.
Project record Examples: correspondence, memos, documents describing the project.
Project reports consist of Formal or Informal project reports detailing: Project status, Lessons learned Issue logs,
and Project closure reports.
Project presentations are made by the project team to the stakeholders to satisfy their information needs by using
appropriate formal or informal methods.
Feedback from stakeholders is the Information received from stakeholders concerning project progress.
Distributed and used to improve future project performance!
Stakeholder notifications are Information provided to stakeholders about: approved changes, resolved issues, and
General project status.
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4. Project Documents Updates. Managing communications results into updating of Issue log, Schedule,
and Funding requirements.
Conduct Procurements
*The process of obtaining seller responses, selecting a seller, and awarding a contract.
Please remember: that this process helps you align expectations of internal and external stakeholders by entering
agreements!
What do we need?
1. Organizational Process Assets. List or files with information on prospective or previously qualified sellers.
We can invite them to bid, propose or quote on work. Provides information on prospective sellers’ past experience
and other characteristics. Some companies maintain ‘preferred sellers list’, selected through some qualification
method.
2. Procurement management plan provides procedure to be used for inviting proposals, evaluating sellers, and
awarding contract.
3. Procurement documents. We have discussed about procurement documents during Plan Procurements
process. Procurement documents are sent to the prospective sellers for obtaining their proposals.
4. Source selection criteria. We use it to evaluate seller proposals and award contract.
 Involves examining samples of the suppliers (previously produced products) to evaluate their capabilities
and product quality
 Involves reviewing supplier’s past record with the contracting organization and other buyers
5. Procurement SOW clarifies description of product or service you have decided to procure, for which you
invite proposals, select sellers, and award contract.
6. Seller Proposals (quotations/bids). Seller-prepared documents made in accordance with the requirements
of procurement documents. Describe seller’s ability and willingness to provide the requested products, as
described in the procurement documents. Reflect the application of applicable contract principles.
7. Project documents. We consider the following documents:
a) Risk register
b) Risk-related contract decisions
8. Make-or-buy decisions. We have discussed already. We invite proposals, select sellers and award contract
based on what we decided to buy. These decisions contain rationale behind procurement.
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1. Bidder conferences (pre-bid/vendor/contractor conferences). Meetings with prospective sellers prior to
preparation of a proposal by sellers in response to buyer’s RFP. Bidder conferences aim at ensuring that:
Each prospective seller has a common understanding of the procurement (technical requirements,
contract requirements, etc.).
All potential sellers must remain on equal standing during the process.
Responses to questions may be incorporated into the Procurement documents as amendments.
2. Advertising. Inviting proposals from prospective sellers by putting advertisements in newspapers or

professional journals. The purpose of this method is to have a wider base than the existing list of potential sellers.
For certain government departments, it is mandatory to advertise in order to procure the goods or services.
Example: All defense purchases, contract awards. Caution: Many commodities, and off-the-shelf items can be
quickly located and secured at a fixed price on the net BUT the high-risk, highly complex, procurement effort that
needs to be closely monitored cannot be accomplished through net.
3. Proposal evaluation techniques. On complex procurements, source selection is done based on previously
defined weighted criteria! Buyer’s procurement policies define a formal evaluation process!
The evaluation committee makes their selection for approval by management prior to the award!
Weighting system. Evaluates proposals based on quantifying qualitative data. Minimizes the effect of
personal prejudice on source selection.
THE PROCESS
Assigns a weight to each criterion;

Rates prospective proposals on each criterion;
Multiplies rates with weight; and
Totals the results to arrive at proposal-wise score.
Sample Weighting System
4. Independent estimates serve as benchmark on proposed responses. Buyer can make its own independent
estimates (can also get it prepared by an outside professional estimator).
Question: What does it mean if the difference between independent estimate made by buyer and the
one submitted by seller?
Answer: Read following and remember!
SOW was deficient or ambiguous! Or
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Prospective seller has misunderstood, OR
Prospective seller failed to respond fully to the procurement SOW.
5. Expert judgment Used in evaluating proposals. It may consist of multi-discipline review team in each of the
areas covered by procurement documents and proposed contract. Expert may come from functional disciplines,
such as: Contracting, Legal, Finance, Accounting, Engineering, Design, R&D, Sales, and Manufacturing!
6. Analytical techniques. Vendors must bring value through their offerings. We must make sure that
needs will be met by vendors. For this we use analytical techniques to identify readiness of a vendor to:
 Provide the desired end state

 Establish the cost expected to support budgeting
 Avoid cost overruns because of changes
 Analyze past performance to identify areas having more risk and need more monitoring for project
success
7. Procurement negotiations
Clarify structure, requirements and other terms for mutual agreement before contract is signed!
Final contract language shows all agreements reached, covering: Responsibilities, authority to
make changes, applicable terms and governing laws, technical & business management
approaches, propriety rights, contract financing, technical solutions, overall schedule, payments,
price.
Contract negotiations for complex items are taken up as an independent process! Inputs may be
issues and open items list and output would be memorandum of understanding.
What do we achieve?
1. Selected sellers
Question: Who are selected sellers?
Answer: Read and remember that selected sellers are:
Those who are in the competitive range.

Those who have negotiated a draft contract, and terms and conditions, including performance
criteria.
2. Agreements. *A document or communication that defines the initial intentions of a project. This can take the
form of a contract, memorandum of understanding (MOU) , letters of agreement, verbal agreements, email, etc.
Agreement is mutually binding and obligates the seller to provide the specified product or services or
result and obligates the buyer to pay for it. For simplicity, let us call agreements as a contract.
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Contract defines:
Complete details of the work to be performed, or service or results to be provided;

Schedule of performance;
Schedule of payment;
Performance and acceptance criteria;
Penalties and definitions of default;
Dispute resolution procedure;
Contract change control procedure and closure criteria.
Remember for a contract to be legally binding it should have an offer and acceptance.
3. Resource calendars. As the contracts are awarded, we get clarity on resource availability with timings.
4. Change requests. Conducting procurements may require some changes to the project schedule, and
procurement management plan, etc. We request these changes and incorporate them after due approval through
Perform Integrated Change Control process.
5. Project management plan updates. Conduct procurements process may require revising our project
management plan:
Cost baseline, scope baseline, schedule baseline, and procurement management plan. The revisions are done after
approval from the Perform Integrated Change Control process.
6. Project Documents updates. Conduct procurements process requires revision to our Project Documents as
well, such as Requirements Documentation, Traceability Matrix, and Risk Register.
Stakeholder: Manage Stakeholder Engagement
Manage Stakeholder Engagement

*The process of communicating and working with stakeholders to meet their needs/expectations,
address their issues as they occur, and foster appropriate stakeholder engagement in project activities
throughout the project life cycle.
Purpose:
Actively manage expectations

Address concerns that have not become issues yet
Clarify and resolve issues.
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ADVANTAGES:
Increases the probability of project success;

Stakeholders comprehend project benefits and risks;
We minimize potential negative impacts and disruptions due to unresolved issues;
We win active support of the stakeholders.
Question: What is the key benefit of this process?
Answer: This process helps project manager to increase support and minimize resistance from
stakeholders and thereby increases chances of achieving project success!
What do we need?
1. Stakeholder Management Plan guides how various stakeholders can be engaged on the project, the levels of
interactions, strategy to identify and manage stakeholders throughout the project, and also methods and
technologies for communication with them.
2. Communications management plan. The needs and expectations are identified, analyzed, and documented
in the communications management plan. Communication management plan gives important guidance and
knowledge for managing stakeholder expectations:
Check what information is contained in communication management plan and you will understand its
importance!
Sample communications management plan

Project:
Project manager:
Project objectives:
Escalation procedure:
Method for updating:
Stakeholder Communication Information to distribute Reason for Timeframe &

requirements (language, format, content, distribution frequency
level of detail)
Stakeholder 1
Stakeholder 2
Stakeholder 3
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3. Change Log is used to record changes that occur during the project. These changes and their impact (time,
cost, and risk) must be communicated to the concerned stakeholders.
4. Organizational Process Assets that help us here are:
Organization communication requirements

Issue mismanagement procedures
Change control procedures
Historical information
How do we do it?
1. Communication Methods. Methods of communication identified for each stakeholder (in communication
management plan) are used during stakeholder management.
2. Interpersonal Skills. Project Manager uses interpersonal skills for:
Building Trust,
Resolving conflict,
Active listening, and
Overcoming resistance to change.
Do you do all this? If yes, then you are in good shape for the exam.
3. Management Skills. Do you think you need management skills for managing stakeholders? Managing is the
act of directing and controlling a group of people for coordinating a harmonizing toward achieving a goal that is
beyond the scope of individual effort! How much is your expertise in this direction?
Project Manager uses these management skills:
Presentation skills (read ‘I am Jones’ series in Readers Digest)

Negotiating (buy book titled ‘Getting to Yes’)
Writing skills (how to write mails, reports, clarification?)
Public Speaking (buy Dale Carnegie’s book titled Public Speaking)
What do we get?
1. Issue log (action-item log). For managing stakeholder engagement, we develop an issue log to record
and monitor “Resolution of Issues”!
Please note:
The purpose of issue resolution is to maintain good, constructive working relationships among
different stakeholders (including team members!).
An issue must be stated in such a way that its resolution becomes feasible.
For each issue the responsibility is assigned and a target date is fixed for closure!
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Unresolved issues can become major source of conflict and may delay project!
2. Change requests. Managing stakeholder engagement may result in a change request to the product or the
project. It may also include corrective or preventive actions to the project or even interactions with impacted
stakeholders.
3. Organizational process updates. Posting lessons learned like causes of issues and logic behind corrective
action chosen, plus other type of lessons learned about stakeholder management!
4. Project Management Plan updates. We may have to update Stakeholder Management Plan as new or
changed stakeholders’ requirements are identified. *Communication Management plan, a part of the project
management plan, may be updated when NEW Communication Requirements are identified!]
EXAMPLES:
 Some communication may no longer be necessary,

 An ineffective method is replaced,
 A new communication requirement identified.
5. Project Documents updates
Stakeholder register is updated as information on stakeholders change.
Example: New stakeholders identified, if registered stakeholders are no longer involved in or

impacted by the project or other updates for any stakeholder.
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MONITORING AND CONTROLLING PROCESS GROUP- 11 processes
Integration: Monitor and control project work, perform integrated change control
Scope: Validate Scope, control scope, control
Time: schedule, control costs
Quality: Control Quality
Communication: Control Communications
Risk: Control Risk, Control Procurements
Stakeholder: Control Stakeholder Engagement
THE PURPOSE
PROJECT PERFORMANCE IS OBSERVED AND MEASURED REGULARLY TO IDENTIFY VARIANCES FROM THE
PROJECT MANAGEMENT PLAN. Monitor and control project activities! Influence the factor that could
circumvent integrated change control to ensure only approved changes are executed!
1. Track, review, and regulate progress and performance

2. Identify areas where changes to the plan are needed. And initiate such changes.
3. The project team gets insight into the health of the project!
4. Highlights areas needing additional care!
5. Helps monitoring and controlling ENTIRE PROJECT EFFORT!
6. When variances threaten the project objectives, recommend updates to the project plan to rescue the
project. For example, a missed activity completion date requires Trade-offs between schedule & budget
targets, Dependence on over time, and Adjustments to present staffing plan.
7. Control stakeholder engagement
Before we discuss individual processes, let’s understand the concept! This concept can be applied to all
the 10 processes.
The concept of Monitoring and Controlling

1. Check performance
2. Manage changes
Check performance against the plan or baselines by conducting variance analysis. Variance analysis
means comparing actual with the plan. Formula = Plan – Actual.
In case of variance:
Find causes of variance,

Find corrective action to recover,
Recommend it for approval. Perform Integrated Change Control process will review it and then
approve.
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Once approved, then:
 Give it execution for implementation,

 Write approved changes in the project management plan. This is called versioning and done with
the help of configuration management system. You had original project management plan and
when you write approved changes, its version or configuration changes. You must retain all
versions! This will help us understand evolution of project management plan through approved
changes during the project life cycle. Also update project documents. We will learn more on it as
we proceed. Right now, we are talking about the concept.
 Post lessons learned in Organizational Process Assets.
 Inform concerned stakeholders.
Manage Changes (changes in scope, schedule, cost, and quality). There is a standard change control
procedure:
Step 1: Change request

Step 2: Evaluation and Impact Analysis
Step 3: Recommend it to the Perform Change Control process for approval
Step 5: Perform Change Control process reviews and then approves or rejects
Once a change request is approved, then:
Give it to execution for implementation

Write approved changes in project management plan
Update project documents
Update Organizational Process Assets with historical data about changes
Inform concerned stakeholders about approved changes.
Dynamics of Project Management Process Groups
Question: What is the difference between monitoring and controlling?
Answer:
Monitoring Controlling
Includes collecting, measuring, and distributing Includes determining corrective or preventive actions or
performance information. Assessing measurements and replanning and following up on action plans to
trends to effect process improvements. determine whether the actions taken resolved the
performance issue.
Continuous monitoring gives insight into the health of
the project and identifies areas that require attention!
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Monitor and Control Project Work
*The process of tracking, reviewing, and reporting the progress to meet the project the performance
objectives defined in the project management plan.
For reporting progress and preparing work performance reports, this process collects work performance
information from Validate Scope, Control Scope, Control Communications, Control Risks, Control
Procurements, and Control Stakeholder Engagements processes. This process also collects schedule
forecasts, cost forecasts, and validated changes from Control Schedule, Control Costs, and Control
Quality processes. After making performance reports, this process sends performance reports to:
Manage Project Team process for checking performance of the team members
Manage Communications process for distribution of performance reports to the stakeholders
Control Risks process to conduct risk reassessment, risk audit, technical performance review,
variance analysis, a reserve analysis, and status meeting.
Control Procurements process to know performance of the contractor and its impact on the
project.
Overview Diagram of Monitor and Control Project Work process
OPAs, EEFs
Work
performance Manage
Validate Scope Work
Project team
Control Scope performance reports
Manage
Control Communications information Communicati
Control Risks Monitor and ons
Control Procurements Control Control Risks
Control Stakeholder Project Work Control
Engagement Procurements
Schedule
forecasts
Control Schedule Perform
Control Costs Cost Integrated Change
Control Quality forecasts Change Control
requests
Develop Project Management Validated
OPAs
Plan changes Work
performance Project
reports documents
PM plan
OPAs updates, Project documents updates

PM plan updates
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On the basis of above diagram, inputs and outputs:
Inputs Outputs
Project management plan  Work performance reports
Work performance information  Change requests
Schedule forecasts  Project management plan updates
Cost forecasts  Project document updates
Validated changes
Organizational process assets
Enterprise environmental factors
Monitor and Control Work process is duly supported by other monitoring and controlling processes,
such as:
Scope: Validate Scope, control scope

Time: Control schedule,
Cost: control costs
Quality: Control Quality
Communication: Control Communications
Risk: Control Risk, Control Procurements
The accountability of what these 8 processes do lies with this main process, Monitor and Control Project
Work, therefore, we can sum up activities performed by this main process inclusive of what is done by
9 more supporting processes of monitoring and controlling:
Compare actual performance against the project management plan

Assess performance to determine whether any corrective or preventive actions are required
Recommend these actions to Perform Integrated Change Control process for approval
After approval from ICC:
- Give it execution for implementation
- Enter approved changes in the project management plan
- Enter lessons learned in OPAs
- Inform concerned stakeholder
 Provide information to support status reporting, progress measurement, and forecasting.

 Provide forecasts to update current cost and schedule information.
 Monitor implementation of approved changes.
 Maintain an accurate, timely information base relating to project’s product and associated documentation
through completion.
 Identify new risks. Analyze, track, and monitor existing risks to ensure that risks are identified, their status
reported, and response plans are implemented.
 Provide reporting on project’s progress and status to program management if the project is part of a
program.
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Monitor and Control Project Work process discussion
What do we need?
1. Project Management Plan provides baselines for measuring performance and managing changes.
2. Work Performance Information is generated by collecting performance data from various controlling
processes, analyzed in context, and integrated based on relationship across all areas. The actual performance is
compared to the project management plan to give work performance information which is used for decision
making.
Work performance information is prepared by the project team detailing activities, accomplishments, milestones,
identified issues, and problems. Work performance information describes:
Current status of deliverables,

Significant accomplishments for the period,
Scheduled activities,
Forecasted estimates to complete the project
Issues,
Implementation status of change requests
3. Schedule forecasts. Computed Time Estimate to complete (ETC). Calculated by comparing actual schedule
progress with schedule baseline to give you SV and SPI. If you are not using EVM, you can provide variances against
the planned finish dates and forecasted finish dates! Forecasts help you understand whether project is still within
tolerance range or you need to raise change requests to either recover variances, or get a new forecasted schedule
approved.
4. Cost forecasts. EAC, ETC. Computed Cost Estimate to complete (ETC). Calculated by comparing actual schedule
progress with cost baseline to give you CV and CPI.
Forecasts help you understand whether project is still within tolerance range or you need to raise change requests
to either recover variances, or get a new forecasted budget approved.
5. Validated changes are those change requests which have been approved and duly verified for their
implementation. This information is considered while monitoring and controlling project work.
6. Enterprise environmental factors provide:
PMIS used for variance analysis and evaluation of impact on the project;
Risk tolerance limits of the stakeholders;
Work authorization system; and
Standards and regulations for compliance.
7. Organizational process assets provide policies and procedures for monitoring and controlling the project
work, and Lessons learned database.
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How do we do it?
1. Expert judgment for evaluation and analysis of work performance information, the project management team
applies own expertise and also involves experts to determine:
 The actions required to ensure that the future project performance matches with the expectations
detailed in the project management plan.
2. PMIS. We use automated tool here. Examples: Scheduling, cost, and resourcing tools, performance indicators,
databases, project records, and financials. MS Project and Primavera are popular project management software
which help performance measurement, forecasting, and change control.
3. Meetings (review meetings, focus groups). These meeting are basically held for reviewing performance,
suggesting corrective or preventive actions to complete the projects successfully. These meetings are face-to-face,
virtual, formal, or informal.
4. Analytical techniques. We use these techniques to forecast potential outcomes due to anticipated
variations of project or environmental variables and their relationships with other variables. Many
analytical techniques help us do so:
 Forecasting methods (time series, scenario building, simulation)

 FEMA (failure mode and effect analysis)
 EVM
 Trend analysis
 FTA (fault tree analysis)
 Regression analysis, casual analysis, grouping analysis
 Reserve analysis
What do we achieve?
1. Work Performance reports. *The physical or electronic representation of work performance

information compiled in project documents, intended to generate decisions, actions, or awareness. [*This
definition is taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK®
Guide)–Fifth Edition, Project Management Institute, Inc., 2013]
This is the main output:
 Status reports
 Justifications
 Information notes
 Updates
 Memos
 Recommendations
2. Change requests: Variance Measurements may lead to following change requests:
 Corrective actions
 Preventive actions
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 Defect repair solutions
Change requests are sent for review and approval. Change requests, if approved, may:
 Revise project or product scope,

 Revise project management plan,
 Revise project documents, or
 Revise product deliverables
3. Project management plan updates. You know it already that requested changes when approved lead
to revisions of:
 Baselines (Scope baseline, schedule baseline, cost performance baseline).

 Subsidiary plans (such as schedule management plan, cost management plan, quality management plan).
4. Project document updates. You know it already that requested changes when approved lead to
revisions:
- Schedule and cost forecasts

- Work Performance Reports
- Issue log
PERFORM INTEGRATED CHANGE CONTROL

*”Perform integrated change control. The process of reviewing all change requests; approving changes
and managing changes to the deliverables, organizational process assets, project documents, and the
project management plan; and communicating their disposition.”
Remember: PERFORM INTEGRATED CHANGE CONTROL PROCESS IS CONDUCTED FROM PROJECT INCEPTION
THROUGH COMPLETION. During planning also, all updates, refining, maturing of the project management plan and
other project documents happens only after the information is reviewed and allowed for inclusion.
One of the major jobs of this process is to carefully and continuously manage changes and permit only approved
changes to revise a baseline.
This is the only way to maintain the project management plan, the project scope statement, and other
deliverables!
Question: How does this process ensure such an important function?
Answer: This process is able to perform such an important function by:
 Timely review and approval of the change requests which are required in favor of meeting the
project objectives.
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 Timely review and denial of those change requests which have potential to jeopardize the project
objectives
Responsibility of Perform Integrated Change Control process:
Maintain the integrity of the baselines by allowing controlled changes.

Watches out that uncontrolled change are not implemented.
Coordinate changes across the entire project. For instance, a schedule change will require cost,
risk, quality, and staffing.
Every documented change request must be either approved or rejected by some authority within the project
management team or an external organization. On some projects, the project manager may be given authority to
approve certain types of changes! And this would be mentioned in the roles and responsibilities document.
The ‘Perform Change Control’ process may include a Change Control Board (CCB). Then, CCB will approve or reject
change requests. The roles and responsibilities of CCBs are defined in Configuration Control and Change Control
Procedures with due consent of appropriate stakeholders. Large organizations may have multi-tier board
structure!
THE NEED FOR A CONFIGURATION MANAGEMENT SYSTEM
“Configuration Management System. A subsystem of the overall project management system. It a collection
of formal documented procedures used to apply technical and administrative direction and surveillance to: identify
and document the functional and physical characteristics of a product, result, service, or component; control any
changes to such characteristics; record and report each change and its implementation status; support the audit
of the product, results, or components to verify conformance to requirements. It includes the documentation,
tracking systems, and defined approval levels necessary for authorizing and controlling changes.”
QUESTION: What is the difference between configuration control and change control?
ANSWER: Configuration control is focused on the specification of both the deliverables and the
processes. Change control is focused on identifying, documenting and controlling changes to the project
and the product baselines.
Question: What objectives does a configuration management system accomplish?
Answer: Following objectives are accomplished-
Standardized and Evolutionary method to revise baselines though Configuration Identification Configuration
Status Accounting, and Configuration Verification and Audit.
Provides opportunities to continuously validate impact of changes!
Provides organized mechanism to communicate all changes to the stakeholders!
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Perform Integrated Change Control Process Discussion
What do we need?
1. Project management plan provides basis for review of change requests, and also describes procedure for
approving changes, and updating plan.
2. Work performance reports provide status of project, which is important for reviewing and approving
changes.
3. Change requests
Recommended corrective action

Recommended preventive action
Recommended defect repair
Any other type of change request regarding scope, time, cost, quality addition or deletion.
All monitoring and controlling processes and many of executing processes produce change requests!
4. Enterprise environmental factors provide PMIS for:
 Managing the Integrated Change Control Process for the project;

 Facilitating FEEDBACK for the project;
 Controlling changes across the project;
 Documenting impacts and results emerging from proposed and approved changes
 Change Control policies and procedures to be followed in the change control meetings
 Configuration management knowledge base for guidance
1. Expert judgment. In addition to the project management team’s expert judgment, stakeholders may be
requested to provide advantage of their expertise. They may be invited by the CCB. Perform Change Control
process acts as Change Control Board (CCB).
CCB can use expertise from various sources:
 Subject matter experts

 Project Management Office
 Stakeholders (including customers or sponsors)
 Consultants
 Professional and technical associations
 Industry groups
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2. Meetings (Change control meetings). Change control board conducts meetings and reviews change
requests. Then, approves or rejects them. All CCB decisions are recorded and communicated to the stakeholders
for information and follow-up actions.
3. Change control tools. We may use manual or automated tools to facilitate configuration and change
management. These tools are useful in managing change requests, resulting decisions from Perform Integrated
Change Control process, and communication of decisions of CCB to appropriate stakeholders. Selection of these
tools depends on the needs of the project, OPA and EEFs considerations.
What do we achieve?
1. Approved Change Requests. Change requests are processed according to the change control system by the
project manager or assigned team member. Approved change requests are implemented by the Direct and
Manage Project Execution process.
2. Change log. We enter approved changes in the change log, along with rejected change requests. We
communicate these changes to the stakeholders, including impact of these changes on scope, time, cost, quality,
and risk.
3. Project Management Plan Updates
 Baselines are updated

 Subsidiary Management Plans are updated
Please note: Changes to the baselines must only show the CHANGES FROM THE CURRENT TIME
FORWARD. Past performance may not be changed! This protects the integrity of the baselines and the
data of past performance!
- Change Request Log

- Any other project document (as applicable)
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Validate Scope
*The process of formalizing acceptance of the completed project deliverables.
[*This definition is taken from the Glossary of The Project Management Institute, A Guide to the Project Management Body of Knowledge
(PMBOK® Guide)-Fifth Edition, Project Management Institute Inc., 2013.]
PURPOSE
To obtain stakeholders’ formal acceptance of the completed project scope and associated
deliverables! The main benefit of the process is that verification and acceptance of deliverables, as they
are produced and passed by quality control, brings objectivity and increases changes of a successful final
outcome.
HOW IS IT DONE?
By verifying the project scope and reviewing deliverables to make sure each one is completed
satisfactorily!
Please remember! IF PROJECT IS TERMINATED EARLY, SCOPE VERIFICATION MUST BE DONE TO ESTABLISH THE
LEVEL AND EXTENT OF COMPLETION!
Question: WHAT IS THE DIFFERENCE BETWEEN SCOPE VERIFICATION AND QUALITY CONTROL?
Answer: SCOPE VERIFICATION IS CONCERNED WITH ACCEPTANCE OF DELIVERABLES! QUALITY

CONTROL IS CONCERNED WITH QUALITY REQUIREMENTS FOR THESE DELIVERABLES!
Question: WHEN IS QUALITY CONTROL PERFORMED?
Answer: Generally before SCOPE VERIFICATION. But these two can be performed parallel also if the
customer or sponsor demands it.
Validate Scope process discussion

What do we need?
1. Project management plan provides scope management plan and scope baseline:
 Scope management plan defines procedure for obtaining formal acceptance of deliverables. This
procedure is used here.
 Scope baseline contains scope statement, WBS, and WBS dictionary and used for comparison in
order to obtain formal acceptance:
 Project scope statement for product scope description, product deliverables, and acceptance
criteria.
 WBS defines each deliverable and its decomposition into work packages.
 WBS dictionary for detailed technical description for each WBS element.
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2. Work performance data provides information on degree of compliance with requirements, number and
severity of non-conformities, number of validation cycles conducted in a timeframe.
3. Requirements documentation provides information on all the project, product, technical and other types of
requirements that must be present in the deliverables along with their acceptance criteria.
4. Requirements traceability matrix links requirements to their origin and tracks them throughout the project
life cycle.
5. Validated deliverables are all those deliverables that are duly checked for their correctness by QC and offered
for inspection and formal acceptance.
1. Inspection. Includes measuring, examining, and verifying to determine whether work and deliverables meets
requirements and product acceptance criteria! Termed as reviews, product reviews, audits, and walkthroughs.
Remember this!
2. Group Decision-Making Techniques. Help us decide that deliverables have met all the requirements and
may be accepted. Acceptance of requirements is an important issue and many stakeholders may be involved on
behalf of the customer or sponsor. These stakeholders are normally those who will use the product of the project.
They need to jointly agree.
What do we achieve?
1. Accepted deliverables. Those completed deliverables that have been accepted through the inspection
methods! After acceptance, these deliverables are moved to Close Project or Phase process.
2. Change Requests. Completed deliverables that are not accepted are recorded with reasons for non-
acceptance. A change request is raised for defect repair. After approval, defect repair is performed and then these
deliverables are again offered for formal acceptance. All supporting documents from customer or sponsor are
maintained. The change requests are forwarded for review and approval from Perform Integrated Change Control
process.
3. Work performance information. It may look like a Kanban Board: Deliverables Completed, Deliverables-in-
Progress, and Deliverables Yet to Start. It shows progress. This information is duly communicated to the
stakeholders to keep them updated and engaged.
4. Project document updates. Any document that defines the product or report status on product completion
may require updating as a result of this process! But this updated is done only after approval and sign-off from the
customer or sponsor.
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Control Scope
*Control Scope- The process of monitoring the status of the project and product scope and managing
changes to scope baseline.
Points to remember:
 The main advantage of Control scope process it helps maintain scope baseline throughout the
project:
 Manage factors that create scope changes;
 Control impact of changes;
 Ensure that only approved changes are implemented; and
 Integrate approved scope changes with other controlling processes.
Uncontrolled changes are called scope creep! Read the above points once again. Devote time to think over each
point!
Control Scope process discussion

What do we need?
1. Project management plan provides information necessary for controlling scope:
a) Scope baseline (compared to actual results to decide if a change, corrective action, or preventive
action is required)!
b) Scope management plan (describes how project scope will be managed and controlled)
c) Change management plan for handling changes
d) Configuration management plan defines-
 items that are configurable
 items that require formal change control
 process to control changes to such items
e) Requirements management plan includes-
 how requirements activities will be planned, tracked and informed
 how changes to requirements will be initiated
 how impacts will be analyzed
 authorization level for approving these changes
2. Work performance data
 Number of deliverables completed

 Number of change requests received
 Number of change requests approved
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3. Requirements documentation is needed to check accomplishment of the requirements.
4. Requirements traceability matrix is needed to trace requirements to their origin.
5. Organizational Process Assets
 Scope control policies, procedures

 Monitoring and reporting methods and templates
1. Variance analysis (comparing actual with what was planned).
Assess magnitude of variation

Determine cause of variance from scope baseline.
Decide if corrective or preventive action is required
Read 3 points of variance analysis again.
What do we achieve?
1. Work performance information. Work performance data is analyzed and contextualized by

comparison with scope baseline. Planned vs. Actual technical performance, or other scope performance
measurements! Also informed to stakeholders! Work performance information includes:
Identified scope variances and their causes

Impact of these variances on schedule and cost (as it will take time and cost to recover these
variances)
Forecast of future scope performance
Category of changes received (as known from work performance data)
2. Change Requests. Your analysis of scope performance can lead to a change request to scope baseline or other
components of project management plan. Examples: Requested Corrective or preventive action or defect repair, or
any other type of change request. Change requests are sent to ICC for approval.
3. Project management plan updates
 Scope baseline updates

 Other baseline updates
If approved change request have an effect on project scope, then scope statement, WBS, and WBS dictionary are
revised and reissued to show the approved changes. Corresponding cost baseline and schedule baseline are also
revised and reissued to reflect the approved changes.
4. Organizational Process Assets updates. Lessons learned are posted in the organization’s ‘Lessons
Learned’ database:
 causes of scope variances,

 logic behind action chosen, and
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 any other type of lessons learned
This provides help to Current projects as well as Future projects! One can just access this database from OPAs!
5. Project Document Updates. Scope changes result in corresponding updates to:
 Requirements documentation
 Requirements traceability matrix
Control Schedule
*Control Schedule: The process of monitoring the status of the project activities to update project
progress and manage changes to schedule baseline to achieve the plan.

Answer: It gives us means to identify deviation from the plan and recommend corrective and preventive
actions for mitigating risk.
Points to remember:
For traditional projects
 Find current status of project schedule-variance from the plan

 Manage factors that create schedule changes;
 Control impact of changes;
 Ensure that only approved changes are implemented; and
 Integrate approved schedule changes with other controlling processes.
For agile projects, controlling schedule is different and means:
 Unlike traditional projects, agile projects welcome changes. Upfront planning is not done for
entire project. Plan adapts to changes (adaptive planning) from iteration to iteration. Product
owner describes Product Backlog, then release planning and iteration planning is done. An
iteration is time-boxed to 2 to 4 weeks. After each iteration, iteration review is conducted for
accepting the features delivered by iteration. In iteration retrospective, lessons learned are
documented.
 Checking current status of project schedule is determined by comparing total work (iterations)
delivered and accepted against the estimates of work (iterations) for the elapsed cycle time.
 Performing retrospective
 Reprioritizing product backlog (Must Have, Should Have, Could Have User Stories)
 Determining team velocity (average rate stories completed in iterations)
 Managing changes by emphasizing on delivering value, MMFs, stakeholder engagement
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We are discussing the topic as it related to traditional projects, not agile projects. But please remember that our
grounding into project management best practices will help us manage any type of project more professionally and
effectively.
Control Schedule process discussion

What do we need?
1. Project management plan provides
 Schedule baseline
 Schedule management plan
Actual results are compared with schedule baseline to determine if a change, corrective or preventive action is
necessary.
Schedule management plan tells how the schedule will be managed and controlled.
2. Project schedule provides the most current version of the project schedule with notations to show updates,
completed activities, and started activities as of indicated data date!
3. Work Performance Data provides information on project progress- which activities have started, their
progress, and which activities have finished. The actual duration taken for comparing against what duration was
planned. Work performance data also remaining duration and percentage completion of work.
4. Organizational process assets provide
 Organization’s Schedule control policies, procedures

 Schedule control tools
 Monitoring and reporting methods to be used.
5. Project calendars are used for calculating Schedule Forecasts. We may use more than one project calendar for
different work periods for some activities for calculating such forecasts.
6. Schedule data. During Control Schedule Process, schedule data is reviewed and updated.
1. Performance reviews
2. Project management software
3. Resource optimization techniques (Resource leveling and Resource Smoothing)
4. Modeling techniques (What-if scenario analysis and Simulation)
5. Adjusting leads and lags
6. Schedule compression
7. Scheduling tool
Discussion on techniques
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*Performance reviews. A technique that is used to measure, compare, and analyze actual performance of work
in progress on the project against the baseline. [*This definition is taken from the Glossary of the Project Management Institute, A
Guide to the Project Management Body of Knowledge, (PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013]
Here, we measure, compare, and analyze actual start and finish dates, percent complete, and remaining duration
for work in progress-against schedule baseline to know variance. For the purpose of performance review, we can
use Trend Analysis, Critical Path Method, Critical Chain Method, and EVM. Let’s check each one:
Trend analysis: Trend analysis shows whether performance is improving or going down over time.
Trend analysis (graphical technique) helps us understand performance to date and its comparison to
future goals (completion dates).
CPM: Variance on critical path impacts project end date. We compare progress along the critical path
to check variance. Further, we do not overlook near critical paths too. Near critical path activities, if
completed late, may mean new risks! So we evaluate near critical path activities also.
CCM: If we use Critical chain scheduling method, then we compare the amount of buffer remaining
to the amount of buffer needed to protect the delivery date. Buffer variance can decide whether
corrective action required or not.
EVM: If we use EVM, then SV and SPI provide magnitude of variance. SV and SPI help us to know
magnitude of variance. Total float variance also gives an idea of time performance. We then find
causes of variances and necessary corrective or preventive actions.
PM Software: Project management software is commonly used to track planned dates versus actual dates, and to
forecast the effects of changes to the project schedule. You can generate variance reports too.
Resource Optimization Techniques (Resource leveling and Resource Smoothing): If there are issues of
resource availability during performance of the project, these techniques may again be tried here, besides their
use in planning, to optimize distribution of work among resources. We have talked about these techniques.
Modeling Techniques (What-if scenario analysis and Simulation): Risk monitoring keeps guiding us about
various adverse conditions/scenarios which may be emerging. Modeling techniques help us review them for
potential effect on schedule and accordingly develop mitigation plans to bring schedule model into alignment with
the plan. We have talked about these techniques.
Adjusting leads and lags: Adjustment of Leads and lags help us find ways to bring project activities that are
behind into alignment with the plan, as shown by following examples.
Example of adjusting lead and lag:
1) School Building Construction Project. You can increase the lead time by starting landscaping before exterior
work of school building is complete. This will increase lead time and reduce duration.
2) Launch of a New Book. Editing of content writing is stared immediately after the document is completed. This
will eliminate or decrease lag time, and reduce duration.
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Schedule compression
Crashing
Fast tracking
We have talked about them.
Scheduling tool
Actual progress of the project and remaining work is shown by updating and compiling schedule data into the
schedule model. To perform network analysis and generate and updated schedule, we use scheduling tool and
supporting data in conjunction with manual methods or other PM Software.
What do we achieve?
1. Work performance information. SV and SPI values for WBS components (Work Packages and Control
Accounts) are recorded and informed to the stakeholders.
2. Schedule forecasts. Based on past performance (work performance information), we develop schedule
forecasts for expected future performance (expected SPI) and inform stakeholders.
In some cases, project schedule delays can be so severe that development of a new target schedule with
forecasted start and finish dates is needed to provide realistic data for directing the work, and for measuring
performance and progress!!!
3. Change requests. Schedule variance analysis, review of progress reports, results of performance measures,
and modifications to the project schedule can result into change requests to schedule baseline and other
components of the project plan!! Recommended to the Perform Integrated Change Control process for approval!
4. Project management plan. Updates after due approvals:
 Schedule baseline
 Schedule management plan
 Cost baseline.
Schedule baseline- changes to the schedule baseline are incorporated IN RESPONSE TO Approved Changes related
to:
 Project scope changes

 Activity durations
 Activity resources
Schedule management plan- May be updated to reflect a change in the way the schedule is managed!
Cost baseline- The cost baseline may be updated to reflect changes caused by compression or crashing
techniques!
5. Project document Updates
 Schedule data
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 Project schedule
 Risk register
Schedule data update: New network diagrams may be developed to display approved remaining durations and
modifications to the work plan.
Project schedule update: An updated project schedule will be generated from the updated schedule data to reflect
the schedule changes and manage the project.
6. Organizational process assets update With the entry of Lessons Learned:
o Causes of variances
o Corrective action chosen and reasoning behind
o Other types of lessons learned. The calculated SV and SPI values
Control Costs
*Control Costs: The process of monitoring the status of the project to update the project costs and
managing changes to the cost baseline.

Answer: It helps us with the techniques to measure variance from the plan in order to take corrective
and preventive actions and minimize risk.
Points to remember:
1. Check variance from the plan

2. Monitor work performance against funds spent
3. Bring expected cost overruns within acceptable limits
4. Ensure all change requests are acted in a timely manner
5. Manage actual changes as they happen
6. Manage factors that create changes to the cost baseline and ensure that expenditures do not exceed
authorized funding by period or WBS component, or by activity, or in total for the project
7. Prevent unapproved changes from inclusion in the reported cost or resource usage
8. Inform stakeholders about approved changes and their associated cost
9. Integrate approved cost changes with other controlling processes
THE CONCEPT:
Cost control tracks expenditures versus budget to detect variances.

It seeks to eliminate unauthorized or inappropriate expenditures, and to minimize or contain cost
changes.
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It identifies WHY variances occur, WHERE changes to cost baselines are necessary, and WHAT cost
changes are reflected in the budgets and cost baselines.
Periodically, the project manager reviews actual and budgeted costs, and compares costs to assessments
of the work completed, and prepares estimates of the completion cost and completion date of the
project.
It is accomplished both at work package level and the project level using the cost account structure.
So, the key to cost control is to:
 Detect and understand variances from the plan by monitoring cost performance.
 Prevent inappropriate, unauthorized, and incorrect modifications from inclusion in the cost
baseline.
 Take action to get expected costs within acceptable range.
 Report approved changes to the concerned stakeholders.
 Search out “REASONS” for positive as well as negative variances.
 Thoroughly integrate cost control with other control processes as we have discussed during
integrated change control:
Scope change control
Schedule control
Quality control, and
Other controlling processes
Remember improper responses to cost variances may lead to schedule or quality issues: Schedule
problems, Quality problems or an unacceptable risk-level in future in the project
Control Costs process discussion

What do we need?
1. Project Management Plan provides
- Cost baseline
- Cost management plan
Cost baseline is used for comparing actual expenditure (we get to know from work performance data) with
planned expenditure as mentioned in the cost baseline.
Cost management plan tells how project cost will be managed and controlled!
2. Project Funding Requirements are used for comparing actual expenditure with planned expenditure as
mentioned in the cost baseline.
3. Work performance data provides information on actual performance so that variance can be established:
Costs incurred
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Deliverables completed and those that yet to be completed (work-in-progress)
Estimate to complete balance work
Percentage complete
4. Organization process assets provide:
- Cost-related policies, procedures, guidelines

- Cost control tools
- Monitoring and reporting methods to be used.
1. Earned Value Management. Integrates scope, time and cost measures to help assess and measure
project performance and progress! Requires formation of an integrated baseline! Measures three
dimensions for each work package and control account.
Earned Value Concept

Costs are budgeted period-by-period for each work package or cost account (time-phased budgeting).
Once project begins, work progress and actual costs are tracked every period and compared to these
budgeted costs. We measure and track work progress using the concept of “earned value”.
The earned value of work completed in a project is determined by the combined status of all work
packages at a given time. Computed by taking:
The sum of the budgeted costs of all work packages thus far completed, plus
The sum of earned value of all open work packages
Say as of August 25, work packages A, B, C had been completed and they were budgeted to cost Rs. 30
K, Rs. 15 K, and 10 K respectively. Work package D budgeted to cost Rs. 40 K was only 75% complete.
Then, THE EARNED VALUE for the project as of August 25 will be:
Rs. 30 K + Rs. 15 K + Rs. 10 K + (0.75) Rs. 40 K = Rs. 85 K
Do you know the purpose of EVM Control Account Plans (CAPs)?
Well, all these CAPs continuously measure project performance by relating to three independent
variables (we have discussed them and refresh again) Planned value (PV), Earned value (EV), and Actual
value (AC).
Planned value (PV). The sum cost of all work, plus apportioned effort, scheduled to be completed within
a given time period as specified in the original budget. Earlier name BCWS (budgeted cost of work
performed). We have discussed the E-Cargo Case Study during Report Performance process. We are
providing relevant details for you to understand PV, EV, and AC.
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Earned value (EV). The budgeted value of the work actually completed as on the date of measurement.
Earlier name BCWP (budgeted cost of work performed).
Actual costs (AC). The total of costs incurred in accomplishing work during a given time period. It is the
sum of the costs for all completed work packages plus all open work packages and overhead. Earlier
known as ACWP (actual cost of work performed).
In E- Cargo Project in week 20 to date:
Cumulative PV = Rs. 512,000 and Weekly PV = Rs. 83,000

Cumulative EV is Rs. 429,000
AC is Rs. 530,000
Real-life Example: E-Cargo Project: “Performance Report Week 20” (cumulative to date)
EVM in Action
At project level, Week 20:
PV = INR 512 K
EV = INR 429 K
AC = INR 530 K
Project status:
Schedule Variance (SV)

SV = EV – PV
= 429 K – 512 K
= - 83 K
We are behind schedule as of week 20
Cost Variance (CV )
CV = EV – AC
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= 429 K – 530 K
= - 101 K
We have spent more than budgeted for the work done as of week 20
Important: Please note that for knowing the status of the project, we need to have information on the
performance for all work packages and participating functional areas. In E Cargo Project as of week 20:
Work packages H, I, J have been completed and are closed accounts

Work packages K through Q are open and in progress
SPI and CPI
Two types of indices are used to assess the schedule and cost performance of the work packages and
the relative size of the problem areas:
Schedule Performance Index (SPI). SPI = EV / PV

Cost Performance Index (CPI). CPI = EV / AC
Values of SPI and CPI and conclusions:
Greater than 1.0 indicate the work is ahead of schedule and under-budget
Lesser than 1.0 shows the work is behind schedule and over-budget
SPI and CPI highlight trouble spots and their relative magnitude! According to the example of E-Cargo
Project, week 20:
Work packages L, M, and Q have fallen the most behind schedule (have smallest SPI)
L and M had the greatest cost overruns relative to their size (they have smallest CPI)
Conclusion:
SPI = EV / PV = 429 K / 512 K = 0.84. SPI is less than 1.
CPI = EV / AC = 429 K / 530 K = 0.81. CPI is less than 1.
The overall project is behind schedule and over cost.
See the following diagram to understand it further.
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E-Cargo Project Status as of week 20
Project level analysis says that the project is about 1 week behind schedule. But work package level
analysis tells that one of the Work packages (M) is behind Schedule. It is on critical path and appears to
be 3 week behind schedule; hence project should also be 3 weeks behind, not 1 Week as shown by
project level analysis.
Review the following Gantt chart:
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Key Points:
1. Focusing on only the project level or only the work package level to determine project status can
be misleading!
2. If the project manager looks only at the project level, good performance of some activities will
overshadow and hide poor performance in others!!
3. If the project manager focuses only on individual work packages, the cumulative effect from
slightly poor performance on many activities can easily be overlooked.
4. Even small cost overruns on many individual work packages can add up to large overruns for the
project!!!
What are the lessons learned from the case study discussed?
THE PROJECT MANAGER MUST SCAN BOTH PROJECT LEVEL AND WORK PACKAGE LEVEL, BACK AND
FORTH.
Percentage complete
Percentage complete is important to measure performance using EVM technique. How do we calculate
percentage complete? What are accepted approaches?
Solution:
50/50 Rule (most common). Half budget of each element is booked at the time the work
is scheduled to start and other half when it is scheduled to finish. Advantage: eliminates
the necessity for continuous determination of percentage complete.
100 percent Rule. Used when work or materials will be planned and earned ON RECEIPT
than usage, or when the start and finish of the efforts happens in a time span short
enough to justify use of 50/50 rule.
N percent completion Rule. Used when we can identify meaningful criteria for reporting
on work packages spanning several months.
2) Forecasting. This is another technique used in Control Costs process. Forecasts are generated,
updated, and re-issued based on work performance information.
As the project progresses, the project team can develop a forecast for the estimate at completion (EAC).
This may differ from budget at completion (BAC).
The project manager develops forecasted EAC if BAC is no longer viable.
EAC is a prediction of conditions and events in future based on knowledge at the time of forecast.
Calculating EAC
Actual cost for work completed plus a new estimate to complete remaining work. EVM work well in
conjunction with manual forecasts of required EAC costs, most common, Bottom-up summation.
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But one has to stop work to do it and there is no separate budget or time included for this. Additional
costs are incurred if you do so.
Equation, EAC = AC + bottom-up ETC
Forecasting illustration
Scenarios of EAC
EAC forecast for ETC work performed at budgeted rate. When we find variances till date will
not recur in future and we complete remaining work at the budgeted rate. In such a scenario,
we find EAC by adding Actual Cost to date (AC) to balance budget (BAC – EV).
EAC = AC + BAC - EV
Example: Say for a project, AC = Rs. 10 K, BAC = Rs. 150 K, EV = Rs. 15 K
Then EAC will be EAC = AC + BAC – EV

= Rs.10 K + Rs.150 K – 15 K
= Rs. 145 K
WHEN ACTUAL PERFORMANCE IS UNFAVOURABLE, THE ASSUMPTION THAT FUTURE PERFORMNCE WILL
IMPROVE SHOULD BE ACCEPTED ONLY WHEN SUPPORTED BY PROJECT RISK ANALYSIS!
EAC forecast for ETC work performed at the present CPI. What project has experienced to date
can be expected to continue in future! ETC work assumed to be performed at the same
cumulative CPI to date! EAC = BAC/ cumulative CPI.
EAC = AC + (BAC –EV) / CPI
Example: Say for a project, AC = Rs. 10 K, BAC = Rs. 150 K, EV = Rs. 15 K, CPI = 0.87
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Then EAC will be: EAC= AC + BAC – EV
= Rs.10 K + Rs.150 K – 15 K / 0.87
= Rs. 145 K / 0.87
= Rs. 167 K
EAC forecast for ETC work performed considering both CPI and SPI. ETC work will be performed
at an efficiency rate that considers both CPI and SPI. Assumes a negative cost performance to
date and a requirement to meet a firm Schedule Commitment! This helps when schedule
impacts ETC effort. Variances of this method weigh CPI and SPI in different values: 80/20, 50/50,
etc., as per project manager’s judgment.
EAC = AC + (BAC-EV) / (cumulative CPI x Cumulative SPI)
Forecasting ETC and VAC
ESTIMATE TO COMPLETE (ETC). HOW MUCH MORE THE PROJECT WILL COST?
CALCULATION FORMULA: ETC = EAC - AC
VARIANCE AT COMPLETION (VAC). HOW MUCH WOULD BE VARIANCE AT COMPLETION?
CALCULATION FORMULA: VAC = BAC – EAC
Real-life example: FORECASTS AS OF WEEK 20, E CARGO PROJECT
Data:
BAC = Rs. 990 K

EV = Rs. 429 K,
CPI = 0.81
AC = Rs. 530,000
Calculate ETC and EAC.
, EAC = AC + ETC
ETC calculation
ETC = BAC – EV / CPI = 990 K – 429 K / 0.81 = Rs. 692,593
EAC calculation
EAC = 530,000 + 692,593 = Rs. 1,222,593
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3. To complete Performance Index (TCPI). This is third technique for controlling costs.
It is the calculated projection of Cost Performance that must be achieved on the remaining work to
meet the specified management goal.
TCPI = work remaining / fund remaining
TCPI = (BAC- EV) / (BAC – AC)
When BAC no longer viable, the project manager will make new estimate to complete balance work and
once approved, the project will work to new EAC value.
4. Performance reviews are meetings activities:
Compare cost performance over time,

Find schedule activities/work packages over running and under running budget (PV),
Check Milestones that have been met and those that are due.
These performance review meetings use:
 Variance Analysis
 Trend Analysis
 Earned Value Analysis
Variance Analysis: comparing actual with planned. Cost and schedule variances are often analyzed but
we must variances in scope, quality, resources, and risk are also equally or sometimes more important.
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Trend analysis: examining project performance over time to see if performance is improving or
deteriorating!
EV technique: compares actual performance with planned performance
Variance Analysis. Cost performance measurements (CV, CPI) are used to assess the magnitude of
variation to the original cost baseline! And then decide if any corrective or preventive action is needed!
Vital part of cost control lies in:
Determining the cause of variance

Deciding if the variance requires corrective action
Example: Variance Analysis
Progress Measurement data date: February 1, 2012
Variance Analysis Results: As of February 1, 2012, the project is behind schedule and over budget. THE
PROJECT IS BEHIND SCHEDLUE AND OVER BUDGET.
Please remember: The percentage range of acceptable variances tends to decrease as more work is
accomplished. The larger percentage variances permitted at the start of the project can decrease as the
project nears completion!
5. Project Management Software is used to monitor three EVM dimensions (PV, EV, and AC) to display
graphical trends and forecast a range of possible final results!
6. Reserve analysis. When the project progresses, the cost reserves are used for managing identified and
unidentified risks. We conduct reserve analysis to monitor the status of contingency or management reserves and
determine if these reserves are still required or do we need some more contingency and management reserves. If
some identified risks do not happen, contingency reserve is saved and unused reserves may be deleted from
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budget to make resources available for other projects or operations. If additional risk analysis shows need for more
reserve, then we raise change request, get approved through change control procedure and add to the budget.
What do we achieve?
1. Work Performance information. Calculated CV, SV, and CPI, SPI values for WBS components (work packages
or control accounts) are recorded and informed to the stakeholders.
2. Cost Forecast (EAC, ETC). Calculated or performing organization-reported EAC value. Is recorded and
informed to the stakeholders!
3. Change Requests. Change requests are initiated for corrective or preventive actions, or for seeking additional
budget.
4. Organizational Process Assets Updates. Lessons learned posted in database. Guide us on our current
project as well as Future ones. Such knowledge management leads to project management maturity of the
performing organization and also helps us avoid reinventing the wheel!
Information posted:
 Causes of variances,
 Logic behind the chosen corrective action, and
 Other types of lessons learnt from cost control
5. Project Management Plan Updates. Control Costs process leads to revision of cost baseline and cost
management plan, after the change requests resulting from this process are reviewed and approved for
implementation.
6. Project Documents Updates. Obviously Cost Estimates and Basis of Estimates are updated as a result of cost
control process.
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Control Quality Process
*“Control Quality. The process of monitoring and recording results of executing the quality activities to
assess performance and recommend necessary changes.”
Question: What is quality?

Answer: *“QUALITY. THE DEGREE TO WHICH A SET OF INHERENT CHARACTERISTICS FULFILLS
REQUIREMENTS.”
Question: What is the main benefit of Control Quality process?
Answer: Control Quality process helps us:

1. Validate that deliverables and work meet the requirements (specified by key stakeholders for final
acceptance through Validate Scope process)
2. Identify causes of poor product quality and recommend/take action to remove them
3. Identify causes of poor process and recommend/take action remove them
Read this again and remember for exam and real-life!
THE CONCEPT
 Quality is synonymous with ability to conform to the requirements of the end-item and work processes and
procedures
 Quality management plan plays a vital role as it describes necessary QUALITY CONDITIONS FOR EVERY WORK
PACKAGE.
 It also specifies the measures and procedures.
 Tests and inspections must be ongoing so that problems/defects are identified as early as possible.
 It is less costly to remedy the defects and problems if they are known early both in the project management
life cycle and product life cycle.
*”The project management team may have a working knowledge of statistical control processes to
evaluate data contained in the quality control outputs. Among other subjects, the team may find it
useful to know the differences between the following pair of terms:
Prevention (keeping errors out of the process) and inspection (keeping errors out of the hands of
the customer).
Attribute Sampling (the result either conforms or does not conform) and variables sampling (the
result is related on a continuous scale that measures the degree of conformity).
Tolerances (specified range of acceptable results) and control limits (that identify the boundaries of
common variation in a statistically stable process or process performance).”
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[*Excerpt Source: The Project Management Institute, A Guide to the Project Management Body of Knowledge (PMBOK® Guide)-Fifth Edition,
Project Management Institute Inc., 2013, Page 250.]
Control Quality process discussion

What do we need?
1) Project management plan. It contains quality management plan which is used to control quality.
Guides us how quality control activities should be performed. Describes responsibilities and resources
for quality control.
2) Quality metrics. Determined during Plan Quality process. We use quality metrics for measuring
quality of deliverables. *”Quality metrics. A description of a project or product attribute and how to
measure it.” [*This definition is taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of
Knowledge, (PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013]
Question: Can you define quality metrics and give some examples?
Answer: Quality metrics is a description of a project or product attribute and how to measure it.
Examples:
Function Points
Mean Time Between Failure (MTBF)
Mean Time To Repair (MTTR)
If you have studied quality management, these terms would be quite familiar, as these terms are in use since many
decades.
3) Quality Checklists. Developed during Plan Quality process and used here.
4) Organizational Process Assets provide
 Quality policy, quality processes, and standards;

 Historical information relating to quality control results from previous projects;
 Lessons learned database.
5) Work performance data provides knowledge of actual Technical performance, actual Schedule
Performance, and actual Cost performance versus what was planned.
6) Approved change requests. Timely implementation of approved change requests needs to be

examined. These change requests are modifications, such as: Revised work methods, or revised
schedule.
7) Deliverables. We have amply talked about them. We examine them here if they meet quality
requirements. Deliverables are key inputs to the quality control.
8) Project documents. During quality control, we need project documents, such as a) Quality Audit
Reports, b) Change Log with related corrective actions, c) Process documentation obtained from using
7QC tools or New 7QC tools, d) Training plans, e) Assessments of effectiveness, and f) Agreements.
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1. Seven Basic Quality Tools (7QC Tools). We have already discussed these tools: Cause and effect
diagrams, Flowcharts, Checksheets, Pareto diagrams, Histograms, Control Charts, Scatter diagrams.
Just a brief discussion of few of them again:
Cause and effect diagram (Ishikawa or fishbone diagrams). It is a brainstorming tool for conducting
root-cause-analysis. We use it here to find root causes of defects. We use it to know causes of other
variances discovered.
SAMPLE CAUSE AND EFFECT DIAGRAM
Control charts
Help us determine whether process is in control or not. There are two conditions in which process is said
to be out-of-control:
Whenever a data point goes outside the upper or lower control limits (accepted range of
process variation).
Whenever seven consecutive data points collect in a series, tough inside the control limits, on
either side of mean. This situation is called Rule of Seven.
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Sample Control Chart
Control charts. Whenever you find that a process is out-of-control, find the Assignable Cause and correct
it. Control charts help you monitor process behavior with repetitive activities, including project
management processes to determine whether these processes are within acceptable range, or not.
Flowcharting
Helps us perform Problem Analysis.

Displays: Activities, Decision points, and Process Flow with interrelationships.
Helps project management team anticipate quality problems and develop approaches for
dealing with them.
Example: Flowcharting
(PROCESS FLOWCHART FOR DESIGN REVIEWS)
Histogram. A vertical bar chart showing distribution of variables to understand frequency of causes of a
problem. An important Problem Solving Tool. Helps identify the causes of a problem and their frequency
of occurrence. Height of each column shows relative frequency of characteristic.
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Pareto charts (a histogram using 80/20 rule)
It says 80% problems are due to 20% causes also called Critical Few Causes or Issues! Pareto’s law
opines that a relatively small number of causes create a large majority of defects/problems. Pareto
diagrams follow this concept.
Sample Pareto Diagram (Chart)
Scatter diagram. Helps understand relationships among two variables over a period of time, for Problem
Analysis and Solution Designing. Dependent variables and independent variables are plotted. Closer they
are to a diagonal line, more closely they are related
2. Statistical sampling. Is used when the production is large or the test is going to be a Destructive Test.
The sample size and frequency of drawing the samples is determined during Plan Quality process.
3. Inspection
Inspection DETERMINES if a work product complies to requirements or not

Inspection ACTIVITIES: testing, examining, and measuring at any level - single activity level or final product
level.
Inspection is KNOWN as: Audits, Walkthroughs, Product Reviews, and Reviews.
4. Approved Change Requests Review is conducted to ensure that product defects are repaired and
brought into compliance with requirements/specifications!
What do we achieve?
1) Quality control measurements are Results of QC. These measurements show: how far we are
meeting the quality requirements, are performance within acceptable range or require corrective or
preventive actions.
These results are also fed back to QA to reevaluate and analyze the efficiency and effectiveness of
quality standards and processes of the performing organization!
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2) Validated Changes. Repaired items re-inspected to confirm if they meeting the quality requirements
now. Rejection again may require further repair. Decision is notified after examination
3) Project Management Plan Updates. The results of quality control activities may necessitate change in
the quality management plan (a component of Project Management Plan). We update it after due
review by the Perform Integrated Change Control process. QC may also lead to incorporation of
approved changes in subsidiary plans.
4) Organizational Process Assets Updates. We enter following information in organizational process

assets for future reference: Completed Checklists, Lessons learned documentation.
5) Verified Deliverables. Quality Control is performed to determine the correctness of deliverables. The
result of execution is validated deliverables. Validated deliverables are presented before sponsor or
customer for formalized acceptance through Verify Scope process.
6) Work performance information. As a result of QC, we get to know:
Project requirements fulfilled

Causes for rejections
Rework required
Process adjustment/correction required
7) Change Requests. If QC Measurements show that technical, schedule, or cost performance is outside
acceptable range, change request are generated for:
Defect repair;
Corrective action; and
Preventive action
8) Project Document Updates. The results of QC may lead to updating of: a) Quality Standards, b)
Quality Audit Reports, c) Change Log with related corrective actions, d) Process documentation obtained
from using 7QC tools or New 7QC tools, e) Training plans, f) Assessments of effectiveness, and g)
Agreements.
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Control Communications
*Control Communications. The process of monitoring and controlling communications throughout the
entire project life cycle to ensure the information needs of the project stakeholders are met.
Please remember:
The main output of this process is generation of work performance information by

comparing actual performance with planned performance.
Control communications process keeps checking whether communication requirements

of the stakeholder are being met as documented in the communications management
plan. The main communication requirement of stakeholders relate to status report,
progress report, and forecast based on planned performance versus actual performance
in the area of scope, time, cost, and quality. If there are variances from the plan, then
change requests are generated for corrective or preventive action to bring expected
future performance in line with the project management plan. Or if the variances are
not recoverable and new forecast of cost and time becomes reality, then revised budget
and schedule is prepared and got approved through change control procedure.
Control communication process also leads to iteration of Plan Communications process

and Manage Communications process. We may need to revise Communications
management Plan to include new communication requirements. We may also need to
distribute new performance information (actual versus planned cost, schedule, and
quality performance indicators) via Manage Communications process.
Work performance data (actual performance) is compared to the project management

plan (planned performance) to generate performance information for distribution to the
stakeholders.
Control Communications process therefore ensure optimal information flow among all
stakeholders.
Work performance information generated through control communications process:

 Status reporting
 Where the project now stands
 Budget metrics
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 Schedule achieved
 Progress reporting
 Work packages complete
 Work packages in progress
 Percentage complete
 Forecasting
 Estimating where it will land in future
 Forecasting schedule and cost based on the trends of current progress
Must provide information on:

 Scope
 Schedule
 Cost
 Quality
Many projects need information on Risk and Procurement also!
What do we need?
1. Project Management Plan contains communications management plan which documents

Stakeholder Communication Requirements, Timeframe, who will receive information, who will provide
information, Reason for distribution. The information required by stakeholders generally pertains to
performance.
Project management plan also contains project baselines. Project execution is compared to these
baselines and deviations are measured for management control. It typically integrates Scope, Schedule,
and Cost parameters of a project but may also include Technical and Quality parameters.
2. *Work performance data. The raw observations and measurements identified during activities being
performed to carry out the project work. [*This definition is taken from the Glossary of the Project Management Institute, A
Guide to the Project Management Body of Knowledge, (PMBOK® Guide)–Fourth Edition, Project Management Institute, Inc., 2008 ]. We get
this data from through work execution and send to controlling processes. This data is actual
performance which is compared to planned performance to generate work performance information-
variance reports/performance reports.
3. Project Communications. Project communications (information collected from Direct and Manage
Project Work process):
 Deliverables Status
 Schedule progress
 Costs incurred
4. Issue log. Issue log acts as repository of issues raised and resolved and also a platform for further
communications to be made. Hence, issue log provide important information for use during control
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communications process. Issue log contains information on resolution of issues, including who is
responsible for resolution and target date for resolution. It is used to record and monitor issue
resolution. It helps communication and ensures common understanding of issues to remove obstacles to
achievement of goals.
4. Organizational process assets provide Reporting templates, Policies and procedures with measures
and indicators for use, and Defined variance limits.
1. *Information Management Systems. Facilities, processes, and procedures used to collect, store, and
distribute information between producers and consumers of information in physical or electronic
format. [*This definition is taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of
Knowledge, (PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013 ]
Information management system is used as a reporting system providing a standard tool for the project
manager to:
 Capture, store, and distribute schedule, cost, progress, and performance to the stakeholders.
Software packages help project manager to consolidate reports from several systems and facilitate
report distribution. Examples of distribution formats: Table Reporting, Spreadsheet Analysis, and
Visual Presentations.
2. Expert judgment. You can use expert judgment to know impact of project communications and then
need for further action or intervention, fixing responsibility and timeframe for action. You can apply
expert judgment to technical and management details.
3. Meetings. Status Review Meetings used to exchange and analyze information about the project
progress and performance. In the meeting we should also decide how to respond to the requests for
information raised by stakeholders. You can hold face-to-face meetings or online with project team
members, customers, suppliers, and other stakeholders.
What do we achieve?
1. *Work Performance Information. The performance data collected from various controlling processes,
analyzed in context and integrated based on relationships across areas.
(PMBOK® Guide)–Fifth Edition, Project Management Institute, Inc., 2013 ]
*Work performance reports. The physical or electronic representation of work performance

information compiled in project documents, intended to generate decisions, actions, or awareness. [*This
definition is taken from the Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK®
Guide)–Fifth Edition, Project Management Institute, Inc., 2013 ]
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You prepare performance reports by organizing and summarizing the performance information gathered
by you and then presenting the results of the analysis in suitable formats:
 Bar Charts (Gantt charts)

 S-curves
 Histograms
 Tables
Variance Analysis, Earned Value Analysis, Forecast Data are included in the report!
Reports must display the type of information and level of detail needed by various stakeholders (as
defined in the communications management plan). Performance reports are issued periodically. They
may be a simple status report or an elaborate one.
Elaborate reports include:
- Analysis of past performance,

- Current status of risks and issues,
- Work to be completed during the next reporting period,
- Summary of approved changes for the period,
- Results of variance analysis,
- Forecasts and other information for review and analysis.
Example: Performance Report in bar chart
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Example: Performance Report in S-curve
Example: Performance Report in Table
2. Change Requests. Analysis of performance often generates Change Requests. They are processed
through the Perform Integrated Change Control process as:
Recommended corrective action

Recommended preventive action
Recommended defect repair, or
Any other type of recommended change request
When change requests are approved, it may lead to:
Revised cost estimates, resource requirements, schedule dates, activity sequences, and
analysis of risk responses options
Revision of project management plan and project documents
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3. Project management plan update. Control communications process may lead to revision of
Communications Management Plan, Stakeholder Management Plan, Human Resource Plan, as well as
baselines.
4. Project document update. Control Communications process may lead to updating project documents,
such as Forecasts, Performance reports, and Issue log.
5. Organizational process assets update. Following documents are posted in historical database:
Report Formats,
Lessons Learned Documentation , including the causes of issues, reasoning behind corrective
action,
Other type of lessons learned about performance reporting.
Control Risks
*Control risks. The process of implementing risk response plans, tracking identified risks, monitoring
residual risks, identifying new risks, and evaluating risk process effectiveness throughout the project.
THE CONCEPT
Collect Work Performance data from Direct and Manage Project Work to perform VARIANCE ANALYSIS,
TREND ANALYSIS, and TECHNICAL PERFORMANCE MEASUREMENT. THE RISK MONITORING AND
CONTROLLING IS AN ONGOING PROCESS DUTING THE LIFE OF THE PROJECT!
Make effective decisions before risk occurs is the crux of risk monitoring and control processes.
You must periodically ascertain the risk acceptability level of project stakeholders by reporting
information.
What do we need?
1. Project Management Plan provides us Risk Management Plan that defines methodology to be
followed while monitoring and controlling risks, roles and responsibilities of people for this process, and
risk tolerances of the stakeholders.
2. Risk Register is the key input here, provides List of identified risks with their analysis, warning signals,
risk reserves, and response plans. It also provides information on residual risks and secondary risks, and
low-priority risks as contained in the Watchlist!
3. Work performance data provides performance results regarding scope performance (deliverables
status), time performance (time taken), cost performance (money spent), and Technical Performance
(quality requirements met). This information helps conducting Variance Analysis, Trend Analysis, and
Technical Performance Measurement!
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4. Work performance reports. Work performance reports are prepared by taking information from
performance measurements and conducting analysis to give performance information including
variance analysis, EV and Forecast data (these data points can influence controlling performance related
risks).
Performance reports are generated through variance analysis (comparing actual with the plan).
The data includes SV, SPI, CV, CPI, EAC, ETC, VAC.
Performance reports help us know how effectively risks are being managed, or if we need to pay
more attention! It also helps conducting trend analysis.
We need to know if any performance analysis impacts the risk management processes!
1. Risk reassessment (identifies new risks, reassesses current ones, and close outdated one).
We reassess whether identified risks are being managed properly or not. If not, then we plan more
corrective actions, get them approved, and implement them.
We reassess whether a new risk is occurring. If yes, then we immediately analyze it, design workaround
plan, get it approved and implement.
Risk reassessment
Additional risk response planning
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2. Risk audits are conducted to check effectiveness of risk management processes and identify lessons
learned.
3. Variance and Trend Analysis
Variance and trend in project execution is reviewed with the help of Performance data, EV Analysis, and
other variance and trend analysis results.
Outcomes from variance and trend analysis may forecast cost and schedule potential deviations at
project completion, as an impact of threats and opportunities!
BEWARE OF SCOPE CHANGES!
Part of variance analysis: Earned value analysis (as already discussed) is used for tracking overall project
performance against a baseline plan. Results tell us about potential deviation of the project at
completion from schedule and cost objectives. If a project deviates substantially from the baseline, an
updated risk identification and analysis must be conducted! At least you don’t get surprises for the
remaining project!
4. Technical performance measurement
Compares technical performance accomplishments during execution to the project plan’s schedule for
technical achievement.
Example: If a functionality planned as a milestone is not demonstrated, it poses risk to attaining

project’s scope!
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5. Reserve analysis
Compares the amount of COST AND SCHEDULE contingency reserve left to the amount of risks
remaining AT ANY TIME IN THE PROJECT is sufficient for remaining risks or not!
6. Meetings (periodic status meetings). VERY IMPORTANT TOOL!
Risk reviews must be done regularly.

All meetings should have it as a necessary agenda!
ALSO, PLEASE REMEMBER: As the project advances, the risk ratings and prioritization may change.
These changes may need additional qualitative and quantitative analysis.
What do we achieve?
1. Project Document Update (only Risk register updates)
Two categories of updates:
Results of risk reassessments, risk audits, and risk views. Examples: updates to Probability, Impact,
priority, response plans, ownership, and other items of risk register.
Actual outcomes of risks and risk responses which help us plan for risk throughout our organization (for
future projects). This concludes the record of risk management on the project and serves as input to
Close Project process and included in project closure documents!
Risk Register Updates
2. Change Requests
Frequently, the implementation of contingency or workaround plans necessitates change to PM Plan!

ICC reviews and approves them. After approval, these change requests are implemented to manage
unclosed identified risk or a new risk!
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Change Request
Change Requests include:
Recommended Corrective Actions- Contingency plans and workaround plans

Preventive Actions- direction to perform an activity to reduce probability of negative impacts of
related project risks
Workaround plans must be properly recorded. They are included in both Direct & Manage Project
Execution process and Monitor & Control Project Work process! Remember!!
Workaround plans are Unplanned Responses to the emerging risks which were not identified or
accepted passively.
3. Organizational Process Assets Updates. Following documents are updated periodically and also at
Project Closure:
Risk management plan template, P & I Matrix template, Risk register template
Risk checklists
Risks can be documented and RBS updated
Risk Lessons Learned can be entered in OPAs
Data on actual costs and durations can be added to organization’s database.
Final versions of risk register and risk management plan templates are included.
4. Project Management Plan Updates
When approved changes impact risk management processes, corresponding component documents of
PM Plan are revised and reissued to reflect those changes
5. Work Performance Information. As a result of controlling risks, we get a new picture of work
performance information. On the basis of this, we can make certain project decisions and also
communicate them to the stakeholders.
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Control Procurements
*Control procurements is the process of managing procurement relationships, monitoring contract
performance, and making changes and corrections to contracts as appropriate.
After a contract is awarded and the contractor starts work. What is your prime responsibility from
buyer’s side?
 Ensure that seller’s performance meets contractual requirements.

 Manage interfaces among various providers if you are procuring multiple products and
services.
 Be absolutely clear of the legal implications of the actions taken while administering the
contract.
How do you ensure that seller’s performance meets your project’s requirements? Well, you apply
suitable project management processes and integrate outputs of these processes into overall
management of the project!
You also integrate and coordinate at many levels if your project involves many sellers and many
products from them.
During controlling procurements, what project management processes do you use, in addition to
Administer Procurements process?
In addition to Control Procurements process, we use 5 more project management processes:
Control Procurements Project Management Process Used

Authorize contractor’s work at appropriate time. Direct and Manage Work
Monitoring contractor’s scope, time, cost, and quality Control Communications
performance.
Checking correctness and quality requirements of Control Quality
seller’s product.
Review and approve changes as appropriate and ensure Perform Integrated Change Control
due information is provided to concerned stakeholders.
Make sure seller is able to minimize risks. Control Risks
During controlling procurements, what financial aspect should be considered by you?
Seller progress has direct linkage with seller payment as defined in the contract. Please remember this while
administering the contract and verifying seller’s work! Otherwise, difference of opinion between you and the seller
will give rise to claims, disputes, and appeals. Therefore seller invoice are input to Control Procurements process.
What do we need? Inputs
1. Procurement documents provide the contract awards, SOW, and all other records required for
administering procurement.
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2. Project management plan contains Procurement management plan which guides us on how to
procurement processes should be managed. Here we use the guidance on controlling procurements. We
have discussed it already.
3. Agreements (Contracts) serve as a baseline against which seller’s scope, schedule, cost, and technical
performance is measured!
4. Work performance data. As contractor begins performing the work, we start getting actual data
regarding scope, schedule, cost, and quality accomplished:
Which deliverables have been completed, which ones are left?

How much quality standards have been met?
Costs incurred
Whether schedules have been met, etc?
5. Work performance reports from Seller provide information on deliverables completed with technical
specifications achieved: status, progress, and forecasting (SV, SPI, CV, CPI, EAC, ETC, VAC). You get
Technical documentation and performance reports.
6. Approved change requests. A contract change request may pertain to scope, time, cost, or quality.
They are evaluated though contract change control system and recommended to Perform Integrated
Change Control. After approval, it becomes input. Then, we give it to the contractor for implementation;
modify the contract to reflect approved changes, update organizational process assets, inform
concerned stakeholders affected by the changes.
[Seller invoices. Yes, when seller is doing work, the invoices for the completed work or as per the terms of the
contract also come and serve as important inputs to administering the procurements. These invoices are
accompanied by all supporting documents to help you approve and make payment. Claims and disputes. We also
need to know claims and disputes of the vendors for resolving them through Claims Administration System. You
can see that Payment systems and Claim Administration are motioned as clear techniques in this process for the
purpose of paying invoices and resolving claims]
1. Procurement performance reviews consist of the following activities by the buyer:
Review of seller’s progress (scope, time, cost, and quality) against what is defined in the
contract;
Review of seller documentation;
Inspections;
Quality audits.
2. Inspection and audits. What is the purpose of inspection and audits conducted by the buyer during
while administering procurements? Read on and remember:
To verify whether seller’s deliverables and processes are in line with those mentioned in the contract!
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The composition of audit team is specified in the contract. Since contract defines technical and
commercial aspects, the team consists of buyer’s subject matter experts and procurement experts.
3. Performance reporting (to management)
Seller’s level of compliance to the contractual objectives! You should not forget to integrate it into
Performance Reporting Process of your project (buyer side).
4. Payment system. Seller provides invoices; authorized person of buyer’s project team certifies and
then sends to the account payable system for payments. The account payable system makes the
payments as per the terms of the contract.
5. Claims administration
Claims (disputes, appeals) are those contested and constructive change requests for which buyer refuses
to compensate or does not agree that change has happened. The claims are managed according to the
clauses of the contract.
An unresolved claim will go for:
ADR (alternative dispute resolution), such as arbitration. Procedures for ADR are well specified in
the contract.
Litigation in court of law.
6. Contract Change Control System. There can be changes to the contract as required by the buyer or
demanded by actual performance of the contractor or any other situation. These changes are managed
according to the contract change control procedure as described in the contract. It defines necessary
documentation, change request formats, impact analysis and evaluation templates, review mechanism
for approval, and authority levels, etc.
CAUTION: PLEASE DON’T FORGET TO INTEGRATE THE CONTRACT CHANGE CONTROL SYSTEM WITH THE
INTEGRATED CHANGE CONTROL SYSTEM of the project!
7. Records Management System. A set of processes to manage contract documentation and records.
Project Management Information System (PMIS) is very useful here.
Records Management System helps us maintain an index of contract documents/correspondence for

their retrieval and archival!
Use of automated PMIS: Enhances efficiency and effectiveness of contract administration by

automating portions of records management system, payment system, claims administration,
performance reporting, and exchange of data between the parties!
What do achieve? Outputs
1. Work performance information provides reporting compliance of contracts in terms of scope, time,
cost, and quality requirements of the client organization, as per the targets in the contract! Contract
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compliance reports are used for improved communication with vendors to resolve potential issues
quickly to the satisfaction of both client and vendor.
Benefits of work performance information:
Reporting on performance of the vendor increases knowledge of the performance of

procurement
Provides a basis for identification of current or potential problems to support
subsequent claims or new procurements
2. Change Requests. Results of controlling procurements may require changes to the project
management plan, such as project schedule, if contractor’s work is experiencing delays. There might be
scope or cost changes, or technical specification changes which are found to be necessary in the interest
of the buyer’s project.
3. Organizational Process Assets Updates. Administering procurements generates lot of documents and
information and all of these must be properly archived in the knowledge base of the organization for
future reference and an organized procurement and project or phase closure.
What do you place in historical information?
Seller performance evaluation documentation

Payment schedules and payments
Correspondence
4. Project Management Plan updates
Procurement management plan is updated to reflect approved change requests that impact and
require its revision.
Schedule baseline is revised if delays impact overall project performance. This shows current
expectations!
Cost baseline is revised if changes impact overall project costs. This shows current expectations.
5. Project document updates. Controlling procurements results in updating of procurement

documentation which consists of:
Contract
Supporting schedules
Requested and approved changes
Requested and unapproved changes
Seller-developed technical documentation
Deliverables
Performance reports
Inspection results
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Warranties
Financial documents (invoices, payment records
Procurement documentation will be required for closing the procurement.
Control Stakeholder Engagement

*Control stakeholder engagement is the process of monitoring overall project stakeholder relationships
and adjusting strategies and plans for engaging stakeholders.
You should continuously control stakeholder engagement by:
Monitoring stakeholder relationships to check efficiency and effectiveness of stakeholder

engagement activities;
Adjusting strategies and plans for engaging them.
Question: What is the key benefit of this process?
Answer: This process helps maintain or increase efficiency and effectiveness of stakeholder engagement
activities as project moves on and environment changes!
What do we need?
1. Project Management Plan. We had used project management plan while developing stakeholder
engagement plan. Again the same information from project management plan is used in Control
Stakeholder Engagement process:
 Life cycle and processes selected for each phase

 Work methods selected to achieve project objectives
 Human resource management plan detailing how human resource requirements will be
satisfied, roles and responsibilities will be defined, reporting relationships will be established,
and staffing management plan will be structured.
 Communication requirements of the stakeholders and techniques for communication with the
stakeholders
 Change management plan for monitoring and controlling changes
2. Issue log shows issues identified and resolved. It helps us in controlling stakeholder engagement.
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*Issue. A point or matter in question or dispute, or a point or matter that is not settled and is under
discussion or over which there are opposing views or disagreements.
*Issue log. A project document used to document and monitor elements under discussion or in
dispute between project stakeholders.
[*These definitions are taken from the Glossary of the Project Management Institute, A Guide to the Project
®
3. Work information data show primary observations and measurements of actual performance of
work, such as:
 Percentage of work complete- actual scope performance

 Technical performance measures- actual quality performance
 Number of defects-poor quality performance
 Start and finish dates of activities, actual durations taken- actual schedule performance
 Costs expanded-actual costs incurred
 Number of change requests
4. Project documents resulting from initiation, planning, execution, or monitoring and controlling
processes are used to control stakeholder engagement- as these documents highlight what was
initiated, what was planned, what has been executed, what variances or changes have happened, etc.
the main documents used here are:, Project Communications, Project Schedule, Change Log, Issue Log,
and Stakeholder Register.
How do we do it?
1. Information Management Information Systems. We use PMIS for capturing, storing, and distributing
performance reports to the stakeholders.
2. Meetings. We conduct meeting meetings for reviewing and analyzing stakeholder engagement
information.
3. Expert judgment. We use expert judgment of qualified and experienced experts for reassessment of
current stakeholders and identification and listing of new stakeholders.
What do we achieve?
1. Change requests. Our analysis of project performance interactions with stakeholders leads to change
requests:
 Recommended corrective actions to Perform Integrated Change control process for approval
277
 Recommended preventive actions Perform Integrated Change control process for approval
These change requests are implemented approved.
2. Work performance information. The actual data of performance is collected, compared with
planned performance, and transformed into work performance information: Status of deliverables, SV,
SPI, CV, CPI, EAC, ETC, Technical Performance, and implementation status of change requests.
3. Project management plan update. We update approved changes in approach or strategy for stakeholder
management, and affected sections of the project management plan to show these changes. This may lead to
revision of almost all management plans: Scope management plan, Requirements management plan, Schedule
management plan, Cost management plan, Quality management plan, Human resource management plan,
Communications management plan, Risk management plan, Procurement management plan, Stakeholder
management plan, and Change management plan.
4. Project document update relate to revising information in the Stakeholder register (information on
stakeholders change) and Issue Log (new issues identified and current one resolved).
5. Organizational process assets update resulting from controlling stakeholder engagement are
 Archival of historical information (stakeholder notifications, project reports, presentations,

records, stakeholder feedbacks)
 Recording lessons learned
278
CLOSING PROCESS GROUP
Procurement: Close procurements
Integration: Close project or phase
In closing process group, two important activities are performed:

1. Product Verification
2. Administrative Closure
THE PURPOSE
Finalize all activities across all PM Process Groups for formal completion of the project, phase, or
contractual obligations.
Hand off the completed product to others (customer if on contract)
Close a cancelled project
Completion of defined processes within all Process Groups is verified
Accomplishment of a project or phase is formally established
Question: What happens during project or phase closure?
Answer:
1. Customer or sponsor acceptance
2. Project-end or phase end review
3. Impacts of tailoring to any process documented
4. Lessons learned recorded
5. Organizational Process Assets updated
6. Documents archived as historical information in project management information system.
7. Procurements are closed out.
Close Procurements
*The process of completing each procurement. [*This definition is taken from the Glossary of the Project
®
Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK Guide)–Fifth Edition, Project
Management Institute, Inc., 2013]
Points to consider:
 SUPPORTS the administrative closure of the project or phase, if any part or whole of a project or
phase is procured from outside seller. The contract may relate to a project or phase. Close
Procurements process will occur in both the cases. The procurements are closed according to
the closing procedure described in the contract.
 ENTAILS administrative closure:
279
1. Documenting final results;
2. Providing formal acceptance;
3. Collecting all documents and historical information or archival;
4. Recording lessons learned;
5. Making final payments and resolving open issues;
6. Releasing resources.
 EARLY TERMINATION of a contract also requires Close Procurement process. It happens

according to the early termination clause described in the contract. Buyer needs to pay for work
done and accepted. The reasons may be:
- Default of one party.
- For cause or convenience (buyer’s).
- Mutual agreement.
 PROVIDES value to the performing organization and the customer and must not be ignored
under any circumstances.
 ALL CONTRACTS must be closed out no matter the circumstances under which they come to an
end whether completed, or terminated.
Close Procurements Process Discussion

*Close Procurements. The process of completing each project procurement. [*This definition is taken from the
®
Glossary of the Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK Guide)–Fifth
Edition, Project Management Institute, Inc., 2013]
What do we need? Inputs
280
1. Project management plan
It is important to verify the need described in the project management plan for which procurements
were undertaken. Is the need fulfilled? Also you need to follow closure guidelines provided in the
procurement management plan contained in the project management plan.
2. Procurement documentation is required to close procurements:
Contract
Supporting schedules
Requested and approved contract changes
Seller-developed technical documentation
Seller performance reports
Financial documents (invoices, payment records)
Inspection reports concerning the contract

1. Procurement Audits
To gather lessons learned in managing this procurement from Plan Procurements process through
Administer Procurement process. What went wrong, what went right! So that we can manage
procurements better Next Time on the same project or other Projects or future projects!
This enhances our maturity in Procurement Management and ensures better project success!
2. Negotiated Settlements
When closing procurements, you need to justifiably resolve and settle all pending issues, claims, or
disputes by negotiation!
Use Alternative Dispute Resolution (ADR) if not settled through negotiation to avoid court of law!
3. Records Management System
All documents resulting from Close Procurements process need to be maintained according to the
record management system of your organization which describes the format, location, indexing,
cataloguing, soft copies, hard copies.
The documents need to be properly organized and archival for future reference and guidance!
281
What do we achieve?
1. Closed Procurements
A closed procurement is the one where following activities have been performed by the buyer as per the
terms of the contact and the contract management plan:
Product verification conducted.

Formal acceptance provided.
All documents collected and organized.
Final payments made and issues/claims resolved.
Lessons learned recorded.
Resources released.
Read once these six items again. Many questions in the exam test what do you do during procurement
closure?
2. Organizational Process Assets Updates
1) We collect and organize all procurement documentation and prepare a Procurement File (which
makes part of the project file). Archive it in organizational process assets.
2) Documentation relating to Formal Acceptance of the procurement deliverables.
3) Documentation relating to successes and failures for archival in project files and managing
procurements better in future!
Know for exam importance of Organizational Process Assets updated during procurement closure:
 Increases our maturity. We learn to manage procurements better in future.

 Less surprises in procurement management.
 Helps avoid same issues we faced in the past.
 Enhances chances of project success.
282
Close Project or Phase
*Close Project or Phase is the process of finalizing all activities across all of the Project Management
Process Groups to formally complete the project or phase. [*This definition is taken from the Glossary of the
®
Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK Guide)–Fifth Edition, Project
Management Institute, Inc., 2013]

Answer: It ensures formal ending of the project work, documentation of lessons learned, historical information,
releasing resources, and taking up new projects.
Points to consider:
1. Ensure that project has met all the objectives for which it was undertaken.
2. Review all work and deliverables completed during all project phases and that exit criteria are satisfied.
3. Review project management plan to ensure project scope has been completed.
4. Administrative Closure of the phase or project involves:
 Meeting exit criteria and providing Formal Acceptance of the phase deliverable or final product of the
project;
 Collecting phase/ project records;
 Analyzing project success or failure;
 Gather lessons learned, and
 Archiving project information for future use.
5. If a project is terminated midway, you need to analyze and record reasons according to the procedure
laid down by Close Project and Phase process.
What do we need?
1. Project management plan provides

Administrative Closure Procedure for closing a project or phase. We have already discussed steps of
administrative closure in detail.
Project scope which needs to be measured before we close a project.
2. Organizational Process Assets provide

Guidelines to be used while closing a project or phase.
Advantage of Historical information and Lessons. Learned relating to closure of previous projects for
proper closure and not repeating the mistakes committed in the past!
3. Accepted Deliverables
Those deliverables which have been provided formal acceptance through Verify Scope process after due testing
and validation from Perform Quality Control process.
During project closure these deliverables constitute the final product, service, or result ready for transition.
283
How do we do it?
1. Expert Judgment
The experts perform product verification and administrative closure to ensure all project or phase
closure guidelines and requirements (as described in the project management plan and organizational
process assets) have been met!
2. Meetings. Type of meetings conducted: Close Out Meeting, User Group Meeting, Review Meting, and
Lessons Learned Meeting.
3. Analytical techniques. To perform product verification, determine success, and administrative

closure, we may use Regression analysis and Trend analysis.
What do we achieve?
1. Final product, service, or result
Handed-over final product, service, or result for which the project was undertaken. In the case of phase, it means
intermediate product, service, or result that the phase was intended to produce.
Including Formal Acceptance that all the project or phase completion criteria have been satisfied!
2. Organizational Process Assets Updates
We organize and archive all Historical Information and Lessons Learned of the project or phase:
 Documentation relating to Formal acceptance;

 Documentation relating to Project files;
 Documentation relating to Project/ phase closure;
 Performance reports, change requests, and all communications;
 Documentation relating to variance analysis and lessons learned.
You should have some idea of each one of the above items:
Formal acceptance documentation: Formal confirmation from customer or sponsor that all
requirements and specifications have been met. Indicates official acceptance.
Project files documentation : Documents resulting from project management, such as-
1. Project management plan with all its versions;

2. All baselines with record of approved changes;
3. Project documents with record of updates (requirement documents, project logs, risk register, stakeholder
register, etc).
Project or phase closure documentation:
Documents indicating completion of project or phase, and transfer of completed deliverables to user
group (operations) or to the subsequent phase.
Documents relating to mid-way termination (whenever applicable) with analysis of reasons for
termination.
284
Performance reports, change requests, and all communications
Documents showing scope, time, cost, and technical performance throughout the project life cycle.
Historical information on change requests and their reviews and implementation. Records relating to all
stakeholder notifications, feedbacks, issues and their resolution.
Documentation relating to variance analysis and lessons learned
Documents showing causes of variances and reasoning behind actions chosen. Take care in future
projects!
Documents showing approaches and techniques which led to successes. Adopt in future projects!
What is the importance of updating Organizational Process Assets during project or phase closure?
1. Increases our maturity. We learn to manage projects better.

2. Makes our life smoother with fewer surprises.
3. Helps avoid reinventing the wheel.
But this is a grey area. In most organizations, people continue to find same problems again and again in
future projects! Historical information and lessons learned are poorly recorded.
285
Professional and Social Responsibility
Be committed to doing what is right and honorable. Set high standards for yourself and aspire to meet
these standards in all aspects of our lives: at work, at home, and in service to our profession.
Think of expectations that we have of ourselves and our fellow practitioners in the global project
management community. Think of ideals to which we aspire as well as the behaviors that are mandatory
in our professional roles.
The credibility and reputation of the project management profession is shaped by the collective conduct
of individual practitioners. All of you there!!!
We can advance both individually and collectively, by embracing PMI®’s Code of Ethics and Professional
Conduct.
This Code will assist us in making wise decisions, particularly when faced with difficult situations where
we may be asked to compromise our integrity or our values.
[PMI®’s Code of Ethics and Professional Conduct is a copy righted document of the Project Management
Institute, Inc. PMI is registered trademark of the Project Management Institute, Inc.]
Professional Responsibility
The four values:
Responsibility. Ownership of decisions and actions.
Respect. Appropriate treatment of people and resources.
Fairness. Being objective and making impartial decisions.
Honesty. Understanding the truth and taking action based on truth.
Responsibility
Make decisions and take actions based on the best interests of society, public safety,
and the environment.
Accept assignments you are qualified for.
Fulfill the commitments that you undertake do what you say you will do.
In case of errors or omissions, take ownership and make corrections promptly. When
you discover errors or omissions caused by others, communicate them to the
appropriate body.
Protect proprietary or confidential information that has been entrusted to us.
Be informed and uphold the policies, rules, regulations and laws that govern our work,
professional, and volunteer activities.
Report unethical behavior or violations.
286
Only file ethics complaints when they are substantiated by facts.
Uphold this Code and hold each other accountable to it.
Question: You are assigned to a US $500 million project and you discover that some of the team
members, experience and skills are not appropriate to the needs of the project, but you have no choice
for any change in the team composition. What is the BEST thing to do?
A. Add time and cost for training and revise baselines.

B. Motivate more experienced members to work overtime.
C. Ensure that key stakeholders receive timely and complete information regarding the
gaps in the skills of the concerned team members to facilitate them to take informed
decisions.
D. Conduct risk analysis and note in the risk register.
Answer: C
Respect- Appropriate treatment of people and resources.

Respect cultural diversity, customs, and norms.
Maintain an attitude of mutual cooperation.
Be direct in dealing with conflict.
Do not use your expertise, power or position to influence others for your own benefit at the
expense of others.
Negotiate in good faith.
It’s our duty to show a high regard for ourselves, others, and the resources entrusted to us. Resources
entrusted to us may include people, money, reputation, the safety of others, and natural or
environmental resources.
An environment of respect engenders trust, confidence, and performance excellence by fostering

mutual cooperation- an environment where diverse perspectives and views are encouraged and valued.
Fairness- Being objective and making impartial decisions. Our conduct must be free from competing
self interest, prejudice, and favoritism.
Do not discriminate against others, based on gender, race, age, religion, disability,
nationality, or sexual orientation.
Always look for conflict of interest and disclose them to the appropriate stakeholders.
Do not hire or fire, reward or punish, or award or deny contracts based on personal
considerations, such as, favoritism, nepotism, or bribery.
Demonstrate transparency in the decision-making process.
What is conflict of interest? A conflict of interest occurs when we are in a position to influence decisions
or other outcomes on behalf of one party when such decisions or outcomes could affect one or more
287
other parties with which we have competing loyalties. For example, when we are acting as an
employee, we have a duty of loyalty to your employer. Even if we believe that we can set aside our
divided loyalties and make decisions impartially, we treat the appearance of a conflict of interest also as
a conflict of interest!
Honesty- Understanding the truth and taking action based on truth.

Seek to understand the truth.
Be truthful in communications and conduct.
Provide accurate information in a timely manner.
Create an environment in which others feel safe to tell the truth.
Make commitments and promises, implied or explicit, in good faith.
Do not engage in or condone behavior that is designed to deceive others, such as, making misleading or
false statements, stating half-truths, providing information out of context or withholding information
that, if known, would render our statements as misleading or incomplete.
Do not engage in dishonest behavior with the intention of personal gain or at the expense of another.
A Game
You will see 25 jumbled up sentences in next pages. Your task is to assign right professional
responsibility value against each sentence choosing from the following:
 Responsibility
 Respect
 Fairness
 Honesty
For example a sentence: ‘Make commitments and promises, implied or explicit, in good faith’. Right
answer: Honesty
288
Exercise: Write your answer against each sentence and then check with answers provided on next page.
1. Do not deceive people.
2. Do not discriminate.
3. Observe laws.
4. Respect cultural diversity.
5. Generate an environment where others follow truth.
6. Make decisions based on best interests of the organization you work for.
7. Obey copyright laws and protect proprietary information.
8. Acknowledge your own errors and omissions.
9. Inform superiors the gap in your experience before accepting assignment.
10. Report unethical behavior.
11. Tell truth in all communications.
12. Maintain an attitude to foster mutual cooperation.
13. Be direct in dealing with conflict, whatsoever!
14. Have you understood reality? Or just swayed away by someone influencing you?
15. Make sure information is truthful.
16. Uncover conflict of interest.
17. Acting impartially.
18. Don’t use position for your own gain.
19. Don’t say negative things that could insult others.
20. Negotiate in good faith.
21. Do not misuse your position for your own gain.
22. Make commitment you can fulfill.
23. Do not agree for assignments you are not qualified for.
24. Follow copyright law, other laws of the land, and propriety information you are using.
25. Report violations.
289
Answers
1. Do not deceive people. Honesty
2. Do not discriminate. Fairness
3. Observe laws. Responsibility
4. Respect cultural diversity. Respect
5. Generate an environment where others follow truth. Honesty
6. Make decisions based on best interests of the organization you work for. Responsibility
7. Obey copyright laws and protect proprietary information. Responsibility
8. Acknowledge your own errors and omissions. Responsibility
9. Inform superiors the gap in your experience before accepting assignment. Responsibility
10. Report unethical behavior. Responsibility
11. Tell truth in all communications. Honesty
12. Maintain an attitude to foster mutual cooperation. Respect
13. Be direct in dealing with conflict, whatsoever! Respect
14. Have you understood reality? Or just swayed away by someone influencing you? Honesty
15. Make sure information is truthful. Honesty
16. Uncover conflict of interest. Fairness
17. Acting impartially. Fairness
18. Don’t use position for your own gain. Fairness
19. Don’t say negative things that could insult others. Respect
20. Negotiate in good faith. Respect
21. Do not misuse your position for your own gain. Respect
22. Make commitment you can fulfill. Responsibility
23. Do not agree for assignments you are not qualified for. Responsibility
24. Follow copyright law, other laws of the land, and propriety information you are using. Responsibility
25. Report violations. Responsibility
290
WE WISH YOU ALL SUCCESS
AND HOPE
YOU WILL ACHIEVE
HIGHER LANDMARKS IN FUTRUE!
Thank you!
291

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P-Mac Consulting

Proven Roadmap Leading PM Training and Consulting Company

Participants of this course qualify for ‘Mentoring Assignments’!

A partial list of companies/organizations whose candidates have attended our programs:

Microsoft SSP (US Information Technology

P-Mac specializes in providing „Project/Program/Portfolio Management Consulting‟ to industries

Special Competence Development (Communication, Leadership, Teamwork)

PMAC Consulting Private Limited

The course serves dual advantage:

1. In-depth learning and competence development for managing projects

Total questions Scored Not scored Exam duration

The percentage distribution of questions, according to PMP Examination Outline published by

Domain Percentage of questions

Objective of the study should be to address following questions:

1. How can I become better professional by understanding good project management as

PMAC Consulting Private Limited

1. Project Management Fundamentals 10-53

2. Project Initiating 54-59

3. Project Planning 60-178

4. Project Executing 179-225

5. Project Monitoring and Controlling 226-278

6. Project Closing 279-285

7. Professional Responsibility 286-290

Importance of Project Management

Innovation too relies on project management. A new product, or a new process, or

Need for a Global Standard

PMBOK is a registered trademark of Project Management Institute, Inc.

The course provided in this book is divided into following modules:

Serial Module Topics

1. Introduction (Project Management Framework)

Introduction (Project Management Framework)

Project Management Body of Knowledge, (PMBOK® Guide)

Project end is reached when:

It meets the objectives for which it was undertaken, or

Projects may be undertaken for:

An occasion: Olympics, Fashion show, Grammy awards

PROJECT TEAMS ARE FORMED AS IT BEGINS AND DISBANDED WHEN IT ENDS.

Projects involve progressive elaboration!

Question: Why projects involve Progressive Elaboration?

Sample Progressive Elaboration

Project management is accomplished by applying and integrating 47 project management

Managing a project involves:

Managing a project requires:

Relationships among Portfolio Management, Program Management, and Project

It is important to understand to understand that project management exists in a broader context of

Managing related projects under a program provides following benefits:

1. Becoming long-term player in these sectors;

What is a program management?

Extends over a longer period of time horizon.

Reliance Industries had a strategic objective: “Grow Real Big”.

What is a Portfolio Management?

*The centralized management of one or more portfolios to achieve strategic objectives.

Project A Project B Project C

Item Projects Programs Portfolios

Projects and strategic planning

Market demand (air conditioners in summer)

 May be undertaken at lower, middle, or higher levels;

Three types of PMO structures: Supportive, Controlling, and Directive.

2. Controlling PMO provides support but require compliance to project management