IPMA Handout

Workshop
on
PROJECT MANAGEMENT
COMPETENCE
DEVELOPMENT
for
PUBLIC PROGRAM
8 - 9 & 15 - 16 Jul 2022
ICB4-V02-042022
Four Days Training Program
On
Project Management Competence Development
DAY 1
0930-1115 Inauguration
Introduction
 Opening Test
 Project, Programmes, Portfolio and Operations
1115-1130 Tea Break
1130-1315 Governance, Structure and Process

 Apply project management principles and guidelines
 Apply programme management principles and guidelines
 Apply portfolio management principles and guidelines
 Follow the guidelines for reports, decisions and quality
 Follow the guidelines for personnel
 Follow the guidelines for financial management
Project Organization and Permanent Organization
Project Management Success
 KRAs
1315-1400 Lunch Break
1400-1515 Strategy
 Gain more in-depth knowledge about the mission and vision of
the organization
 Bring the goals and benefits of your initiative in line with those
 Ensure that this remains the case throughout the execution
 Develop measurement tools to keep track of this
 Ensure that initiatives deliver benefits
 Strategy implementation through projects
 Case Study – Scandinavian Airlines
1515-1530 Tea Break
1530-1745 Creation of project

 Need analysis
 Business Case
 Project Charter
Evaluation of proposed projects
Design
Home Work
On
DAY 2
0930-1115 Revision, Home Work Discussion

Requirements, Objectives & Benefits
 Hierarchy of goals and benefits
 Benefit mapping
 Planning
1115-1130 Tea Break
1130-1315 Scope
 PBS
 WBS
 Scope baseline
 Configuration management
 Change Management
1315-1400 Lunch
1400-1515 Time Management

 Lifecycle
 AOA (ADM)
 AON (PDM)
 CPM
 Floats
 Network Exercises
 Gantt Charts
 Bar Charts
 PERT
Managing Schedules in Project
 Crashing
 Fast Tracking
 Numerical Exercises
1515-1530 Tea Break
1530-1745 Resources
 Resource Calendar
 Resource Histogram
Constraint Optimization
 Leveling, Smoothening
Finance
 Types of cost
 Cost Baseline
 Cost Reserves
 Control Account
Chart of Accounts
Home Work
On
DAY 3

Controlling
Handling Changes
Phase end and Close out
Earned Value Management System
 Variances, SPI & CPI
Milestone Slip Chart
1115-1130 Tea Break
1130-1315 Quality Management

 Quality Planning
 Quality Assurance
 Quality Control
 Quality Tools
o Pareto Chart
o Control Chart
o Inspections
o Benchmarking
1315-1400 Lunch
1400-1515 Procurement & Partnerships

 Legal imperatives
 Procurement planning
o Make or buy
o Free issues to contractor
o Logistics management of items
 Process of contracting
o Types of contract
o Fixed price & Cost reimbursement
o EPC Contracts
 Managing contractors & PMC
 Compliance issues like payments to labour
1515-1530 Tea Break
1530-1745 Risk & Opportunity

 Risk categories
 Identification
 Risk Analysis
 Qualitative tools & Quantitative tools
Home Work
On
DAY 4

Organization and Information
Stakeholder Management
1115-1130 Tea Break
1130-1315 Compliance, standards and regulations

Power and Interest
Culture and Values
1315-1400 Lunch
1400-1515 Self - reflection and Self – management

Personal integrity and reliability
Personal communication
 Communication Planning
 Communication methods
 Communication barriers
Tea Break
1515-1530
1530-1745 Relations and engagements

Leadership & Case Study – Good man in a storm
Teamwork & Case Study – Skunk Works (Lockheed Martin)
Conflict and crisis
Resourcefulness
Negotiation
Result Orientation
IPMA
International Project Management Association (IPMA) is a professional body founded in

1965. It is a non-profit, Swiss-registered organisation, headquarter in Amsterdam,
Netherland. As part of its objective, the organisation promotes Project Management
internationally.
Vision
• For promoting competence in society to enable a world in which all projects
succeed.
Mission
• Facilitate co-creation and lever the diversity of our global network into benefits
for the profession, economy, society and environment.
• Offer know-how, products and services to the benefit of individuals, projects
and organisations across public, private and community sectors.
• Maximise the synergies in our global network to help all member associations
develop according to their needs.
• Promote the recognition of the project management and engage stakeholders
around the world in advancing the discipline.
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Some facts about IPMA
• IPMA is leading the evaluation of the project management profession and the maturity
of its practice.
• A unique global network that thinks globally and acts regionally as well as locally.
• Advanced competence based certification underpins a unique service portfolio offered
through its network.
• Recognise, respect and build on diversity as the foundation for a global network.
• Alliance with those having complementary visions.
• Your partner for knowledge, competence and performance in Project Management.
PMA India
PMA has been established in 73 nations following the guidelines drawn by IPMA.
PMA was established in India in 1993 as a non-profit association with objective to
propagating project management ideas and practices in India, to create awareness
amongst all the stakeholders the imperative of sound project management
methodology as the backbone for the growth of the society, to conduct examinations
or tests in one of the more aspects of project management to promote certification in
the field of project management.
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Benefits of Certification
• Expand and improve knowledge and
experience
• Continue education and training
• Improve the quality of project
management
• Achieve the project objectives more
effectively
• For the project personnel: To obtain

an internationally recognised
certificate acknowledging their
competence in project management
• For suppliers project management
services: to demonstrate their
employees’ professional competence
• For the customers: to increase
certainty that they will receive state-
of-the-art services from a project
manager 5
IPMA 4 Level Certification (4LC)
5 years
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Some Points to be Noted
Be prepared for the EXPECTATIONS OF AN INTERNATIONAL CERTIFICATION

You will be tested for your project competence = knowledge + experience + behaviour
Need to UNDERSTAND …… UNLEARN..at times if required ……. & LEARN
Be present in the class both physically and mentally
ASK QUESTIONS & SHARE EXPERIENCES
Home work and Preparation for the test
Exam 30% Workshop 20% ESR & Interview 50%
PASS IN ALL INDIVIDUALLY (60% MARKS)
Level C – Paper 1(2 hrs) 100 Marks

True/False, Fill in the blanks, Subjective questions,
Case study
Paper 2 (2 hrs) 125 Marks – Only Mathematical Questions

…Do any 5 out of 8
PASS MARKS = 60% INDIVIDUALLY IN EACH PAPER – NO

NEGATIVE MARKING 11
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IPMA Level D Examination

Paper 1: (Duration ‐ 2 hours) This paper has 2 sections ‐ Section 1 and Section 2 (Max Marks 150)
 Section 1: (Max. 120 Marks) This section contains 120 multiple choice objective type questions covering
all the competence elements. Each question will have 4 choices and only one answer to be chosen.
 Section 2 (Max. 30 Marks) This section will have 10 detailed objective type questions requiring multiple
selection in the answer. On an average, every question will have 8 to 10 options and you may have to select
on average 3 or 4 best answers.
Paper 2: (Duration ‐ 2 hours) This paper also has 2 Parts – Part A and Part B (Max Marks 150)

 Part A: (Max. 100 Marks) This Part contain 6 questions out of which any 4 are to be answered. The
questions will be numerical type, based on Calculations / Graphs etc.
 Part B: (Max 50 Marks) This part contains 25 open questions. You have to answer all the questions. Each
question will have short answer, to be written in space provided in the Examination paper itself.
The pass marks are 60% i.e. 90 marks out of 150 marks in each paper. There is no negative marking.
Note: Candidates must clear (Pass Marks are 60%) both papers independently for getting Level D certification.
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Introduction
Perspective 1 – Strategy
Perspective 2 – Governance, structure and process
Practice 1 – Design
Practice 2 – Requirements, Objectives & Benefits
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What is project management?
• It is the management of projects.

• So there are two aspects:
• Management &
• Projects
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What is management?
Management in all business and organizational
activities is the act of getting people together to
accomplish desired goals and objectives using
available resources efficiently and effectively.
Management comprises planning, organizing,
staffing, leading or directing, and controlling an
organization (a group of one or more people or
entities) or effort for the purpose of accomplishing a
goal. Resourcing encompasses the deployment and
manipulation of human resources, financial
resources, technological resources and natural
resources.
Since organizations can be viewed as systems,

management can also be defined as human action,
including design, to facilitate the production of useful
outcomes from a system.
Mary Parker Follett (1868–1933), defined

management as "the art of getting things done
through people". 15
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What is a project?
A project may be defined as the systematic process through which we transform our
dreams/vision into reality - it changes status-quo
• An activity that changes status-quo

•The systematic manner through which vision is converted to reality
•A temporary endeavor undertaken to create a unique product , service or result
•Projects can be undertaken for:
•New products / services / Business processes / Infrastructure
•Changes in existing products and services
•Projects are undertaken for diverse reasons by – Government - Social Organizations –
Businesses - Industry
ICB 4
A project is a unique, temporary, multidisciplinary and organised endeavour to realise agreed
deliverables within predefined requirements and constraints. Project management typically
involves personnel from project management associates up to senior project managers.
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What are the characteristics of a project?
•Projects manage change

•Projects are temporary – projects have a definite
beginning and an end – are an entity by themselves
•Projects are unique – no two projects are identical
•Have predefined goals & objectives – financial/
social /economic
•Have budgets & schedules – prefixed budget and
timeframe
•Use Resources & Manpower – both are limited
•Have Quality / Performance – determined at
beginning
•Face Risks – known and unknown risks
•Have a Project Life cycle – many phases from start
to end
•Projects are team work - co-ordination and
communication within the team and with
environment is essential for accomplishing the
project objectives.
•Projects may require separate organization for its
management and conduct.
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What do you think has

happened?
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Aspects of a Project
Technical/Hard Sociocultural/Soft
Aspects Aspects
Scope Leadership
WBS Problem solving
Schedules Teamwork
Resource Allocation Negotiation
Baseline Budgets Politics
Status Reports Customer expectation
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Some other terms
Asset
•Operations – Carrying out the day-today work
of the organization OPERATIONS
Routine, repetitive, PROJECT
maintaining status quo
•Programmes – Achieve Strategic Goal -

Management of a coherent group or a collection PROGRAMME
of projects that are related to a common objective

to deliver a business benefit or change
PORTFOLIO
•Portfolio – A set of projects and /or programmes,

which are not necessarily related, brought
together for the sake of control, coordination and
optimisation of the portfolio in its totality
Aim is to achieve overall benefits for the business
Programme management covers:
not just for a project
A set of projects related to a common objectives An interdependency exists between the projects of a
e.g. business aim programme
An organizations business strategy is often required Resource allocation/ reallocation amongst projects
to be implemented through projects
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Programmes create more benefit for the organization
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Project Operations
Asset
Investment < Returns
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36
months
35 years
Project
Operations
ASSET
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35 years
Project
Operations 30
months
ASSET
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35.5 years
Project
Operations 30
months
ASSET
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35.5 years
Project
Operations 30 65 years
months
ASSET
Operational Projects
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Perspective 2 – Governance, structure and process
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Governance, structure and process
Definition
The governance, structures and processes competence element defines the understanding of and
the alignment with the established structures, systems and processes of the organisation that
provide support for projects and influence the way they are organised, implemented and
managed. The governance, structures and processes of an organisation may comprise both
temporary systems (such as projects) and permanent systems (such as project portfolio
management systems, financial/administrative systems, supporting systems, reporting systems,
and decision making and auditing systems). Sometimes these systems can even form the strategic
reason for a project, for example, when a project is initiated for the purpose of improving
business processes or establishing new systems.
Purpose
The purpose of this competence element is to enable the individual to effectively participate in,
and manage the impact of, governance, structures and processes on projects.
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Governance, structure and process
Action
Apply project management principles and guidelines
Apply programme management principles and guidelines
Apply portfolio management principles and guidelines
Follow the guidelines for reports, decisions and quality
Follow the guidelines for personnel
Follow the guidelines for financial management
Not adequate to have strategy – need a three stage approach – from strategy to portfolio –
from portfolio to programmes / or directly to project – from programme to project – this is
how organizations manage non‐routine jobs
Portfolio management is a line function (it is integral part of permanent organization) whereas
programmes and projects are temporary – it is the portfolio that creates the connect
One or more One or more Several Organizational

Strategy portfolios projects capability
programmes
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Apply project management principles and guidelines

Action
Study project management principles and guidelines
Explain to your team members what it means to work in a project
Translate guidelines into a project specific approach
Explain project management principles to the permanent organization
Take account of maturity in the organization
Project Management is the planning, organizing, staffing, leading or directing, and controlling all aspects of a
project for the purpose of accomplishing the goal of the Project; safely, and within the agreed time, cost,
scope and quality/ performance criteria.
It is the application of knowledge, skills, tools & techniques and resources to meet the project objective.
Rationale
Understanding project management principles makes you more successful
There are a number of tools and techniques – knowledge and understanding of these is
important for the project team
There are a number of approaches to project management and the project manager has to
apply and adapt the appropriate one for his project as each project is unique
Important not to apply project management in a bureaucratic manner – be flexible
Project management is a skill of the whole organization – the level of maturity decides how it
organises its work
The work flow, the structure, the culture, and the power equations all have an impact on how
smoothly and efficiently organizations conceive, plan and execute projects 30
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Guidelines for Projects
Guidelines for projects
 Assess need to perform existing/additional projects through SWOT Analysis.
 Identify the most suitable organizational form
 Identify necessary changes in the organisational structure, policies, culture and processes
in relation to various projects.
 Identify qualifications, experience and competencies required for each position and lay
down performance evaluation standards.
 Prepare business case for implementing the project in the organisation.
 Allocate resources.
 Monitor progress, learn from each project and apply learning to future projects.
 Prepare schedules of reshuffling of manpower and other resources on closure.
Project Management Office Project Office

 Organization wide function  Project specific for large projects
 Codifies PM methodology, tools, techniques,  Supports project management team
databank (lessons learnt)
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 Project reporting processes, channels etc
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Operations Vs Projects
Projects Operations
Temporary Ongoing/ Permanent
Unique Repetitive
Orientation is for Present

Orientation is for Future
Project Management Operations Management
Create new products/services Maintain existing products/services
Aim is to achieve the objectives of the Objective of operation is to sustain the

project & then close the project business 32
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Apply programme management principles and guidelines
Action
Develop general understanding of programme management
Describe the typical characteristics of the programme
Explain this to the parties involved PROJECT
Make the project become a vital part of the programme PROGRAMME
Rationale
The reason (input) for starting a programme and continuing it PROJECT
A delivery (output) of the projects which are a part of the programme
The end result (outcome) resulting from the use of the delivery
The impact of what is finally intended to be achieved with this programme
The benefits and disadvantages arising from the programme
A programme is set up to achieve a strategic goal. A programme is a temporary organisation of interrelated
programme components managed in a coordinated way to enable the implementation of change and the
realisation of benefits. Programme management typically involves senior project managers or project
directors. ICB4
The project manager manages only suppliers and sub projects – programme manager is involved
with various managers and their departments – also has greater involvement in organizational
politics – as a project manager you have to be aware of the goals of the programme you are a
part of; but only ensure your own projects deliverable – the programme manager has to ensure
benefit realization; ensure the projects deliver; ensure integration of the deliverables and ensure
relationships between projects are well managed; also the relationship with the permanent 33
organization is managed well.
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Guidelines for Programmes

Guidelines for Programmes
• Projects are part of the programmes; some not identified at the beginning.
• Some later projects in the programme depend on the outcome of an earlier project.
• End dates are defined only where the benefits are realised or when the benefits are
handed over.
• A programme oriented organization experiences frequent addition of new programmes
PROGRAMME MAY END AFTER DELIVERABLES OR CAN INCLUDE BENEFIT REALIZATION
PROGRAMME MANAGEMENT IS THE APPLICATION OF KNOWLEDGE, SKILLS, TOOLS & TECHNIQUES FOR
THE SUCCESS OF PROGRAMME (INCLUDING BENEFITS)….INVOLVES PROJECT GOVERNANCE, CONTROL
INTERDEPENDENCIES, TIME SYNCHRONIZATION, RESOURCE ALLOCATION, BENEFIT REALIZATION,
INTERFACING WITH OPERATIONS & HARMONIZING
Programme Management Office Programme Office

Company wide function Pgm specific for large
Establish Pgm Mgmt methodology, programmes
techniques, tools Support Programme Management
Pgm Reporting Team
Pgm databank (including lessons

learnt) 34
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Apply portfolio management principles and guidelines
Action
Investigate which portfolio your project/ programme belongs to
Study the critical success factors and indicators
Study the portfolio management process used
Provide information for portfolio management process
Portfolio
Program Program
Project
me me
Project Project Project Project
Rationale
The portfolio aligns projects and programmes with the priorities of the organization
The decision to start or stop a project/ programme is a portfolio decision
As the organization grows, so do the number of projects and programmes – along with this
grows the bureaucracy and more formal procedures – this is unavoidable – this competence
means you know how to handle it 35
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Guidelines for portfolio
• List and prioritise programmes and projects in line with the organisation’s strategies and
goals
• Allocate resources to the portfolio. Balance supply with demand.
• Define standard processes, tools and reporting schemes to be used in all
Programmes/projects of the portfolio and establish support functions.
• Continuously monitor and control the programmes/projects of the portfolio.
• Initiate corrective actions.
• Delete programmes/projects from the portfolio when not relevant ; Or when business
strategy has changed - Key Performance Indicators (KPI) can be used to assess Project/
Programmes business case to check its continuing relevance
• Ensure there is a feedback mechanism for lessons learnt.
• Select and add new projects/programmes to the portfolio.
• Portfolio Management is ongoing

• Dedicated pool of resources
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Programmes Vs Portfolio
Portfolios Programmes
All projects & programmes in a portfolio All projects in a programme are related to
are un - related a common objective
Portfolio manages continuity of projects
Programmes implement strategic change
and portfolio in an organization
Portfolios are aligned to the goals of an
organization
Develops and delivers projects and

programmes within budget and
resource constraints
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Follow the guidelines for reporting, decisions and quality
Action
Work within the boundary of your authority
Bring the reporting in line with the needs of decision makers
Follow the reporting lines within the organization
Understand the way in which the organization has implemented quality assurance
Rationale
Mature organizations have the will to deliver quality
They develop special organization units that develop and lay down the guidelines – which if
followed contribute to the ultimate quality
Those working in projects/ programmes need to be aware of these guidelines and follow them
Every organization wants consistency in management – hence they organise responsibilities
and authority in a way which makes it clear who can decide what and who has to do what – so
that people consciously or unconsciously do not mess up things
Senior management takes decisions based on the information provided by others – good
reports in the hands of competent people lead to substantiated decisions 38
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Follow the guidelines for personnel
Action
Use the department managers to recruit the right team members
Respect the boundaries between project and permanent organization
Ensure you have good relationship with departmental managers
Use existing processes to train and develop people in the projects/ programmes
Rationale
Projects/ programmes are temporary organizations ‐ it starts with selection of team members
who inevitably come from the departments
Some project/ programme team members may be freshly recruited from outside – even here
the PM may not be doing the selection on his own
Since project outcome is strongly dependent on the skill of the team members – it is
pragmatic for PM to maintain good relationship with the line managers
PM must know the procedures for requesting for and hiring manpower
The responsibility for professional development of their employees – normally rests with the
departmental heads
Appraisal of employees often rests with the departmental heads; even of those working in
projects – hence the PM needs to closely coordinate with line managers
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Follow the guidelines for financial management
Action
Understanding the characteristics of financial controls present
Determine the obligatory and optional guidelines
Ensure the project satisfies all financial guidelines
Report clearly and objectively on financial status
Rationale
Projects cost money – the permanent organization normally has to arrange this money and
make payments
Normally this is done through its financial division/ department
The two connected concepts are – 1. Budget 2. Financing
The Budget is a strict budget – the budget holder can incur costs as long as they remain within
the budget
The payment of the bills may be by the financial division – the person who spends is not the
person who pays
The money to pay for the project has to be generated by the parent organization through its
revenues or through fresh capital – subsidies, loans, partnerships, share emission etc.
The method of financing has an influence on the method of cost control in projects/
programmes
Knowledge and insight of finance flows through the organization; how the accounting works;
the guidelines; the way senior management takes financial decisions are a must know 40
knowledge for PM
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Permanent Organizations
This element covers the relationship between temporary organisations and the permanent
entities of the line managed organisation contributing to or interfacing with the project work.
• Relationship
with Project/ •Permanent organizations have a long term
Programme
Permanent organization purpose
Organization • Contribute to/ •Projects, programmes and portfolios are used
interface with to manage changes or to execute the core
Project Work business in a project oriented organisation.
•The working procedures of the permanent
organisation (work tasks, hierarchy, levels of
authority, responsibilities, organisational
• Get resources
structures, and decision making) exert an
from permanent influence on project work and vice-versa.
Project/ organization •Need to understand organizational structure;
Programme • Products/
results are for
interested parties …..contd
Organization the permanent
organization
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Permanent Organizations
•Temporary organizations have the ability to

• Relationship bring change in the organization while
with Project/
Programme permanent organizations resist change.
Permanent organization •The management in the permanent
Organization • Contribute to/ organization is backward looking while that of
interface with temporary organizations is forward looking.
Project Work
•Temporary employees work for a specific
length of time while permanent employees
have no specified end date for employment.
•With permanent employees, organization
• Get resources saves time in training and gains stability and
from permanent help in the growth of organization as they get
Project/ organization
more efficient at their jobs through familiarity
Programme • Products/
results are for with the processes.
Organization the permanent •Need between two to discuss, decide,
organization communicate and implement
•Need for continuous improvement
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Project Organization
Various forms of Project Organizations
- Project as part of Functional Organization
staff from existing departments is temporarily pooled & placed under a project
coordinator (generally he is not called a project manager) for the duration of the project.
 Function or Line – most common. Is traditional hierarchical structure.
- Pure Project Organization

project organization which is separated from its parent organization and is an
independent unit with its own staff, budget and other resources.
 Project or Task Force – geared for projects
- Matrix Organization
A combination of the above two structures and thus has flexibility in adopting different
forms as per the requirements of different projects and programmes.
 Matrix – weak matrix, balanced matrix and strong matrix. PM’s authority increases
from Weak to Strong matrix
Project’s organizational structure will impact the roles and responsibilities as well as the
availability of project resources 43
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Functional Organization
 Grouped by function or
department
 Each employee has clear
boss
 Interdepartmental
communication via
Functional head
 Staff & Project lead assigned
part time to project
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Functional Structures
Advantages
 Best for routine operations, occasional projects
 Broad manpower base, flexibility
 Better technical control
 Better functional support / technical base
 Communication channels good
 Easier budget, cost control
Disadvantages
 No direct responsibility for project
 Cumbersome coordination between departments
 Stronger group wins
 Less innovation
 Slow customer response / focus
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Matrix Organization
 Staff assigned to project

report to both Functional and
Project Manager
 PM assigned full time to
project
 PM and Functional Managers
share decision making and
authority
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Organization – Balance of Power
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Matrix Structures
Advantages
 PM has good control and authority
 Strong technical base available to projects
 Better utilization of resources
 PM can commit company’s resources
 Good for doing both projects & operations
 Project staff have a ‘home’ so their career path secure after project completed
Disadvantages
 Dual reporting system – two bosses PM and Functional manager
 Needs more top management involvement initially
 Structure more difficult to implement
 Multidimensional work & information flow
 Conflicting / changing priorities between PM and Functional manager
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 Projects main work of

organization and structure
geared for projects
 All staff report to PM
 PM has complete authority and
independence
 Project work given maximum
importance
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Advantages
 PM has complete functional authority over project
 Good communication channels
 Fast reaction time
 Needs less top management involvement
 All resources available to PM as and when needed
Disadvantages
 Duplication of effort, resources, facilities
 Technical base less strong as no line department looking out to maintain skills
 Slower career growth
 Technical skill and knowledge remains in same group
 People retained unnecessarily after project as they may not have another project
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Summary – Advantages & Disadvantages
Org. Type Advantages Disadvantages
Matrix Highly visible project objectives Not cost effective because of extra administrative personnel
Better Project Manager control over resources More than ONE boss for project teams
Better coordination More complex to monitor and control
Team members maintain “a home” Higher potential for conflict and duplication of effort and
functional managers have different priorities
Functional Team members report to one supervisor and No career path in Project Management
clearly defined career paths
Easier management specialists People place more emphasis on their functional specialty to
the determent of the project
Projectized Efficient project organization No “Home” when project is completed
More effective communication than functional Duplication of facilities and job functions
Loyalty to the project Lack of professionalism in disciplines and less efficient use of
resources
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Organizational Influence
Functional Weak Matrix Balanced Matrix Strong Matrix Projectized

Organization Organisation Organisation Organisation Organisation
PM’s Title Expediter Expediter/ Project Manager Project Manager Project Manager
Coordinator/
PM
Decision Making Functional manager Functional manager PM and the Project Manager Project Manager
Power plays a major role, Functional Manager
but PM will make will have equal
some decisions power
Resources From within a Dept. Project members are Project members are Project members are Project based only
from different from different from different
departments departments departments
Resource Allocation As needed Only 25% will be About 50% will be About 80% will be About 100% will be
assigned to the assigned to the assigned to the assigned to the
projects projects projects projects
Resources Reports to Functional manager Functional manager Two manager (FM Project Manager Project Manager
and PM)
PM Reports to Functional manager Functional manager Functional manager Company Senior Company senior
and his/her senior manager manager/ higher
manager authority
After Project Team go back to Team go back to Team go back to Team go back to No home – move to
Completion their Dept. (home) their Dept. (home) their Dept. (home) their Dept. (home) different project or
get laid off
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Perspective 1 – Strategy
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Strategy
A clear example of a set of formal, explicit and present drivers of projects, programmes
and portfolios is the strategy of an organisation. The Strategy generally has clear goals
and objectives and, more often than not, projects and programmes contribute to these
goals and objectives, while project and programme portfolios are prioritised according
to these goals and objectives. ICB4
The competence makes a strong appeal to the entrepreneurial skills of Project,

Programme and Portfolio Managers to…..
Bring the Projects/ Programme/ Portfolio in line with the mission and vision
Make use of all the options for influencing the organizational strategy
Regularly validate the justification
Keep sight of the critical success factors (CSF) the benefits
Develop and track performance indicators
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Bring the Projects/ Programme/ Portfolio in line with the mission and vision
Gain more in-depth knowledge about the mission and vision of Mission statement –
the organization the management
Bring the goals and benefits of your initiative in line with those makes known the
Ensure that this remains the case throughout the execution reason why the
Develop measurement tools to keep track of this company exists
Ensure that initiatives deliver benefits Vision – management
You need a vision to fulfil your mission; You describes the desired

need a strategy to achieve your vision; First future
you have a mission, followed by a vision
which is then followed by a strategy.
The Present
The Desired
Mission Future The Future
(Vision)
Strategy
Programmes
Line Activities
/ Projects 56
(Operations)
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One or more One or more Several Organization
Strategy portfolios projects al capability
programmes
Asset
Asset
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Make use of all the options for influencing the organizational strategy
Study the way in which the organization develops strategy

Recognise the threats and opportunities for this strategy
Involve the team in stretching or reducing the strategic goals
Develop measurement tools to keep track of this
Influence the decision forming process by submitting improvement suggestions
Senior
Management
Ideas Strategy
Influence
Team Projects
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Regularly validate the justification
How to gain the competence …..
Understand the business and organizational justification

Ensure that this justification is recorded
Translate the justification into a list of benefits
Set objectives that make achieving these benefits possible
Assess and validate these in their context
For programmes and portfolios further add …..

Ensure benefits are achieved
Start new initiatives when these are needed
Stop initiatives when these are no longer needed
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Keep sight of critical success factors
Determine the critical success factors (CSFs)

Use both formal and informal factors
Involve team members to challenge the strategy
Use CSFs to keep the initiative in line with the strategy
Use CSFs to manage stakeholders
Use CSFs to develop a motivational culture
Validate CSFs regularly
Deliverables
Success Time
The initiative
criteria Cost
+ tailor made
Critical success factors
Relevant stakeholders
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30
Develop and track performance indicators
Deduce performance indicators

Use performance indicators at all levels
Use performance indicators to influence stakeholders
Use performance indicators for personal development
Use performance indicators for reward systems
Use performance indicators for achieving benefits
Teams and individuals may be given a list of Key performance indicators (KPIs) that
they must track on priority – their performance is evaluated on the basis of the KPIs
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Functional strategies in project, programme and portfolio management
Planning
Finances
Materials
Internal and external environment
The terms tactics and strategy are often confused: tactics are the actual means used to
gain an objective, while strategy is the overall campaign plan, which may involve
complex operational patterns, activity, and decision-making that govern tactical
execution.
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Strategic Level, Tactical Level and Operational Level
The organization’s business and legal context are linked with projects at all three levels
– Strategic, Tactical and Operational
Strategic Level – Establish connect with Business; Organizational Structure - Line and PPP
Strategic standards & guidelines for legal, finance, marketing, sales, HR & IT
Organizational set up
Cost & Revenue accounting
Communication and Reporting Channels
Resource allocation
Tactical Level – Establish Business Case
Through Business Case - cost, timeframe, risks, resource requirement etc…. & how
programme/project will be evaluated – guidelines/standards
What different departments need to provide to the project and what they could expect from the
project on completion
Operational Level
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Provides the business requirements of the deliverables; acceptance; management reporting
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Critical Success Factors
CSFs are the conditions that are required for making the initiative a success. That means…
They need your constant attention

You do this by recognising, describing, and prioritising them.
There are different ways of looking at success…

Classical approach – within time, budget and specifications (IRON TRIANGLE)
Better way – what is required for the organization to be successful
Initially what has been formally decided
Depends mainly on what relevant stakeholders involved think of it
We have to include informal aspects when determining CSF
In general CSFs are issues you have no control over – they are conditions others have take
care of
They have direct consequences on the success of your project – keep a close eye on them
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Diagnostic and Interactive Control Management Systems
Porter’s Value Chain

SWOT analysis
Balanced scorecard
Benchmarking
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Strategy
Senior Through the Line

Through the Portfolio
Management
Portfolio Management
(Strategy) Targets
Programme Management Middle Management
Project Management Operational Management
Project Deliverables Benefits
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Portfolio: Set of projects or Programme & Project Portfolio Management
programmes, not necessarily selection and alignment with
related, brought together to strategic goals •Balance
provide optimum use of the •Risk
organisation’s resources and •Budget
to achieve the organisation’s Prioritise
•Time
strategic goals while •Priority
minimising portfolio risk. Resource Allocation
Important issues on a •Resource Management
portfolio level are reported to •Establish Support
the senior management of the Monitor & Control Functions
organisation by the portfolio •Reporting Structures
manager, together with
options to resolve the issues.
Portfolio management: Report to top
Develops a balanced set of Milestone Reviews management/ Re-
projects and programmes that Prioritise
can be delivered within
budgetary and resource Terminate Close-out
constraints, through a tailored
model that aligns project
selection with strategic goals.
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Business/ Organizations exist to serve needs aligned with the MISSION
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BCG Matrix
Star Question Mark
Strategy
High
Cow Dog
? Projects
Potential
for
Market
Growth Cash Cow Under Dog
Low
High Market Share Low 68
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•Review and define the organizational mission Review
Mission
External Internal
Environment Environment
•Set long range goals and objectives New Goals
Portfolio of
strategic choices
Strategy
•Analyze and formulate strategies to reach Implementation
objectives
Project
Selection
•Implement strategies through projects Projects
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Types of Projects
Compliance
Projects
Strategic Projects Operational Projects
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Evolution of Projects
Market/ Economy
(threats/opportunities)
Environmental Analysis
Customer both Internal & external Stakeholders (other)

Firm
Market demand Mission, Goal, Strategy Business need
Customer request Legal
Technology imperatives Projects Environmental
System Environment &
Scope Culture
Work Breakdown Organization
Networks Leadership
Resources Teams
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Cost Partners
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Birds eye view of projects
External Environment
Financial & Non‐
Financial Analysis Project Environment
Environment Scan
Strategy Review Project
Project Options
Pre‐Project
Project Approval Plan & Design Operations
Emergence Execute
Monitor & Test
Close Project
Integrate
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Market/ Economy
(threats/opportunities)
Environmental Analysis
Customer both Internal & external Stakeholders (other)

to Firm Needs EMERGE
Mission, Goal, Strategy Needs are RECOGNISED
Project Formulation & are analysed
•Conceptualization Needs are ARTICULATED
•Project Definition Projects
•Proposal Formulation Need Statement gives rise
to Business Case
Planning & Organization
Likely project is analysed
Execution for Financial and Non
•implementation/perfor Financial viability
mance Project Charter emerges
Evaluation
•Post accomplished
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Scan Environment Stakeholder Strategy Analysis

Analysis
Need Emergence
Recognition
Articulation Need Analysis Cycle
Business Case
PESTLE Analysis
Yes No
Project Charter
Project Plan
Yes No
Initiative/ Execution
Yes No
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Go Live
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PESTLE Analysis
 Political
 Economic
 Societal
 Technological
 Legal
 Environmental
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Role of Business Case
 To identify the interested parties (stakeholders) and their needs
 The key requirements of the project to achieve the stated business goals
 Prioritize projects in view of the business/corporate strategy
 Document the scope of the project, constraints and the assumptions made
 Document the financial and non-financial feasibility of the project
 Carry out PESTLE analysis
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Contents of Business Case
 The Need for taking up the project from business perspective
Objectives of the project & Product / service to be delivered by the project
Project’s overall time, cost and quality objectives
Organization’s strategy for implementing project & Key resource requirements
Investment appraisal data including cost of the project and the income expected from
project after it is completed
The project’s success criteria and Key Performance Indicators (KPIs)
Social & Environmental impact of the project, if any
Major risks perceived and opportunities
Assumptions and constraints

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Investment Appraisal
 Financial factors cover investment appraisal using techniques like:
 Payback Period
 Discounted Cash Flow
 Net Present Value
 Internal Rate of Return
 Non- Financial factors like:
 Operational survival
 Competitive position
 Comparative analysis
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Project Operations
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Payback Period
Payback Period is the time expected to be taken by the proposed project to get a
financial return equal to the original investment made
 Payback Period is achieved when the cumulative cash flow

becomes equal to the initial investment
 Payback Period does not consider the whole life span of the
project - calculation stops once the original investment has been
recovered
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Payback Period
Initial Investment (year 0) =

200K
Initial Investment = Rs. 200,000 Cash Flow up to year 4 =

170K
All figures are in Rs. ‘000 Shortfall of 30K (200K -
Year Income Expense Cash Cumulative 170K)
Inflow Outflow flow Cash flow
Cash Flow in year 5 = 140K
1 90 40 50 50 Per month cash Flow in year
2 120 70 50 100 5
3 130 90 40 140 = 140K / 12 = 11,667
30K / 11667 = 2.57 months
4 200 170 30 170
5 320 180 140 310
Cash Flow = 200,000 in 4
years 2.57 months
Payback period for Project A is 4 years 2.57 months 81
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Payback Period – Advantages & Disadvantages
Advantages
 It is simple to use
 Good as an initial filter
 Standard technique used worldwide
 Favours projects with faster returns, better for company liquidity
 Effective for high risk situations
Disadvantages
 Ignores the Time Value of money
 Does not consider project cash flows after Payback Period has been reached
 Not good for long term projects
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Discounted Cash Flow (DCF)
DCF Relates future cash flows over the project’s life to a common base value
 DCF based on fact that the value of money depreciates with time
 Expected Cash flows are adjusted for money over time
 Discounting Cash Flow gives more realistic picture of potential project’s feasibility
 Two techniques
 Net Present Value (NPV)
 Internal Rate of Return (IRR)
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Net Present Value (NPV)
NPV shows project’s net value in today's monetary terms
Expected Cash flows of future adjusted for money value
NPV helps to compare viability of projects that:
Differ in Time spans, Initial Investments and Cash Flows
Quantifies expected profit in absolute terms (adjusted for time value of money)
Higher the NPV - better the project
Any project having Negative NPV should be rejected
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Net Present Value (NPV)
Present Value (PV) = FV

(1 + r)n
FV = Future Value; r = Discount rate; n = No. of years
1: Calculate Cash Flow for each year (Income - Expenses)
2: Calculate the PV for each year - discount annual cash flow by the given Discount Rate
3: Sum up the Present Values calculated for each year
4: Subtract project's Initial Investment from cumulative Present Values to obtain the project’s
NPV
4: Discount factor can be used for easier calculations –
Discount factor (DF) = 1/ (1 + r)n
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Calculating NPV
Discount (Interest) Rate is 10%
• Year 0 = Initial Investment
Discount Factor @ 10% is given
All figures are in Rs. ‘000 • Year 1 = 50 x .91 or 50 /
Year Discount Income Expense Cash Present 1.10 = 45.5
Factor Inflow Outflow flow Value of
Cash • Year 2 = 50 x .83 or 50 /
flow 1.210 (1.10 x 1.10) = 41.5
0 1.00 200 -200 -200 • Year 3 = 40 x .75 or 40 /

1 0.91 90 40 50 45.5 1.331 (1.10 x 1.10 x 1.10) =
2 0.83 120 70 50 41.5 30.0
3 0.75 130 90 40 30.0 • Year 4 = 30 x .68 or 30 /

4 0.68 200 170 30 20.4 1.464 (1.10 x 1.10 x 1.10 x
1.10) =20.4
5 0.62 320 180 140 86.8
Net Present Value (NPV) 24.2 • Year 5 = 140 x .62 or 140 /
1.610 (1.10 x 1.10 x 1.10 x
Cumulative PV = 224,200 1.10 x 1.10) = 86.8
NPV =224,200 less 200,000 = 24,200 86
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Net Present Value - Advantages
Advantages
 NPV more realistic – considers time value of money
 All future cash flows are compared in today’s values
 Considers whole time span of project from beginning to end
Disadvantages
 Accuracy depends on how well future cash flows and future interest rate is predicted
 Does not consider non financial data
 Has bias toward short term projects
Higher the Interest rate ‐ Lower the NPV
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Internal Rate of Return (IRR)
 IRR is the Discount Rate at which NPV for project will be = 0
 Shows the break even Discount Rate at which project will have zero profit or loss
 IRR expresses profitability as a percentage while NPV expressed profitability in absolute

terms
 Higher the IRR, better the project
 IRR arrived at by trial and error – or by using software
 Higher the Discount rate (Interest rate) lower the NPV
 Calculated to nullify impact of time value of money on proposed project
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External Environment
Financial & Non‐
Financial Analysis Project Environment
Environment Scan
Strategy Review Project
Project Options
Pre‐Project
Project Approval Plan & Design Operations
Emergence Execute
Monitor & Test
Close Project
Integrate
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Analysis
Need Emergence
Recognition
Articulation
Business Case
PESTLE Analysis
Project Charter
Project Plan
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Project Charter
 The Project Charter formally authorizes the project to go ahead – gives authority to the
Project Manager to use the organization’s resources - without a project charter the
project cannot be started
 An approved Business Case can act as the Project Charter or a separate Charter is
documented
 A contract can also act as the Charter
 Charter is the basis of allocation of resources to the project and thus forms link between
project and the on-going work of the organization
 The Sponsor is responsible to issue the Project Charter
 Project Charter can also be issued by another person / organization associated with
funding e.g. government dept./ funding agency
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Contents of Project Charter
 Vision & mission statement of the organizations
 Business need – why the project is needed
 Justification of the project and results of feasibility study
 Expected investment required
 Customer’s requirements & expectations
 Likely Stakeholder influences
 Broad outline of risks
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Contents of Project Charter
 Project Manager – nominated by name
 Project budget - expected approximate figures (less accurate at this stage)
 Assumptions / constraints
 Description of product/ service to be delivered by the project – a high level description
 Summary of required completion dates - Milestone schedule
 Allocation of responsibility - Organizations/departments / personnel to be involved
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Practice 1 – Design
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Design
Refers to the management approach developed to ensure that the project/ programme/
portfolio satisfies the expectations and remains controllable from start to finish. It is a
description of the organization that executes the work and delivers a concrete result
from the original idea.
The competence calls for your
The Approach
inventiveness , can be expressed in the
Rules with respect to decision making
following actions
The ways of gathering information
Recognise success criteria, classify and
The different meeting structures
discuss these
The hiring policy
Discuss lessons learned, apply and
The responsibilities and accountabilities
exchange these
The make and buy decision
Determine complexities and
The way in which purchasing will take
consequences for management approach
place
Choose the best management approach
The interface with permanent organization
and discuss it
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Standards &
Regulations Power &
Structure &
Processes Interest
Strategy Culture &
Values
Develop
Approach
Lessons Learned Approach Complexity
Manage
Initiative/
Project
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Success Criteria
Refers to standards used by a person to decide if something has been successful
Different interested parties/ stakeholders have different success criterion for the same
Project – which may be conflicting (must be defined at the beginning of the project):-
From the different perspective elements – Strategy; structures and processes;

standards and regulations; power and interest; culture and values: we can derive a
set of success criterion:
Most obvious – Duration, Budget, Delivered Quality (Classic triple constraint) + Add
Benefits to be achieved
Approach will be oriented to the above four – time, budget, quality & scope
Management success – are we managing successfully?

•Level of appreciation shown by key players involved
•Informal criteria – hidden agenda driven by powerful people in the organization
We prioritise various success criteria and orient approach towards it – organise those
success factors necessary to achieve the associated success criteria
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Success Criteria
Action
Classify all the criteria based on the five elements of the contextual perspective
Assess formal and informal influences that have been identified
Use the identified success factors
If necessary amend the success criteria
If necessary amend the success factors
SUCCESS FACTORS = A CONDITION THAT INCREASE THE PROBABILITY OF

ACHIEVING SUCCESS
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Lessons Learned
Even though each project is unique – we may find lessons learned from similar
initiatives in the past : seek knowledge & help of
•Colleagues
•PMO
•Team
•Line Departments (Knowledge base)
•Internet; Industry studies; Reports
•The execution process gives us huge teachings
Application
Collect together experience of colleagues
Apply that experience
Use existing research to improve performance
Share experience gained
Benchmarking is another useful tool

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Complexity & Consequences

Approach strongly dependent on complexity. There are different causes of complexity
•Organization’s internal processes
•The techniques we use
•The number of people involved
•The number of decision makers
•The number of suppliers
•The uncertainty of all estimates
•The short duration
•An insufficient budget
•The number of people available
•The political and economic climate
Application
Use a methodology to assess the level of complexity
Identify those aspects that make the project/P/P complex
Identify both internal and external complicating factors
Reduce the complexity
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Choose Best Management Approach
Approach should have greatest chance of success – translation of success criteria into
success factors : we are dealing with probability – make an assessment of
•The amount of work to be carried out

•The correct sequence of this
•How long the work will take
•The budget required for this
•The stakeholders who exercise influence
•The uncertainties that exist
•The risks that manifest themselves
•The number of people they need
THE RISKS IDENTIFIED HERE ARE THE THOSE FOUND OUT FROM THE
CONTEXTUAL PERSPECTIVE
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Choose Best Management Approach

Determine main risks and translate the necessary risk response into an outline vision approach
– contains the following
The Benefits and organizational goal
Stakeholder approach
What are we going to achieve (the Scope)
The quality expectations and requirements
A high level description of the project/ programme organization
Communication and documentation
Make or buy & internal or external people
Method of delivery
The life cycle
Risk tolerance
These all may not be in one document but may exist in various reports, notes, minutes etc.
Detailed plans build on these starting points
Actions/ Application
 Assess the different alternate approaches
 Choose the approach providing the greatest chance of success
 Explain and defend the chosen approach
 Explain the effects of the chosen approach on the organization involved
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 If necessary revise the approach
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Management Approach
Project & Programmes start with the goal we want to achieve…followed by product,
services or result we are going to deliver within the framework of the initiative - for a
project we describe the requirements that the delivery has to satisfy; for programmes,
we describe the benefits and how they contribute to the strategy.
We have to design the execution process that lies between definition and realization.
The design together with the implementation forms the Approach.
Which approach we choose depends on various factors:

Available people and resources
Complexity and uncertainty
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Management Approach
After discussing with important stakeholders Sponsor decides:

1. Produce ourselves
2. Purchase
3. Hire in
4. Outsource
For first three – we remain responsible for management and integration of work, and
delivered product. For the outsourcing we transfer complete production, the
management, and the most important delivery risks to a third party supplier. Which
approach is best depends on the situation.
Complexity; Uncertainty and availability of resources present a choice between:

1. The waterfall approach
2. The agile approach
3. The pragmatic approach
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Management Approach
Waterfall Method: Assumption is that the lifecycle (sequence of phases) can be

predicted . We define what we are going to do, and develop and build the product or
service in several phases – a working end result is delivered: creation takes place slowly
but surely.
Agile method: Assumption is that due to uncertainty it is not possible to predict and
design everything. Work progresses on the basis of short clear-cut cycles – each time
delivering something that works or is valuable to the organization (shippable product).
The cycle may be 2 to 3 weeks and is called a sprint. Work is reprioritised before each
sprint and team agrees to achieve a shippable product based on current actual situation.
The important difference between waterfall and agile is that in waterfall approach
both priority and sequence are decided beforehand.
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Management Approach
By definition programmes are more agile than projects as they are regularly re-
prioritised. In place of sprints we talk about tranches and plateaus, in which the benefits
become visible.
Both have some standard methodologies – PRINCE2; MSP; Scrum and others – these
can serve as starting points for a customised approach. Disadvantage of standard
methods are that they are dogmatic. Projects should be least dogmatic … hence the
Pragmatic Approach
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Management Approach
Pragmatic Method: Assumption is one of parsimony of not using any procedures, that
do not contribute to the end result. It also restricts the number of people and meetings to
a minimum; but has flexibility and willingness to adapt when necessary. Pragmatic
Approach is easily applicable in a combination of both waterfall and agile approaches –
thus so attractive.
The Pragmatic Manifesto: Stop looking for the best approach – find a workable
approach. Choose pragmatism over methodological rules. Seven simple Principles:
1. Only use what is necessary
2. Speak about matter of facts
3. Search for better practices
4. Redefine goals into learning objectives
5. Un-paradigm yourself
6. Work with what is available
7. Communicate in nine minutes
… hence the Pragmatic Approach

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Project Success
Project Success: There are several ways of looking at success. Most well known –
Delivers agreed quality on time and within budget.
Reality is more complex – so look for the extent to which the players are satisfied with
the project results.
Two concepts – criteria to measure success & Factors that enable success
Von Aken Success Factors:

1. For projects that are not tangible, structuring is required
2. For tangible projects the opposite is true, less structuring is required
3. A goal oriented style of working has a positive influence on project success
4. The more tools that are used, the less chance there is of project success
5. Small projects have a higher success rate than larger projects
6. Projects with a shorter time scale have a higher chance of success
7. A small team has a higher chance of success than a larger team
… good guidelines to keep in mind when designing the strategy and approach
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Project Success
Standish Group: Research on success and Shenhar & Davir: Research into Project
failure of IT Projects.. names the following and Programme successs.. name the
Success Criteria: following criteria for measuring success:
•Ready on time •Efficiency – on time, within budget,
•Within budget workabilty
•Achievement of objectives and goals •Impact – on the customer
•The added value of the result •Directly measurable business successes
•Satisfaction about the result •Preparation for the future
Success Factors: The Diamond Approach: Research of

Involvement of higher management Shenhar & Davir led to determining factors
Emotional maturity for successful approach :
Involvement of users Novelty
Optimization Technology
Capable team members Complexity
Standard architecture Pace
Agile processes Known as the NTCP or Diamond Model
Thrift
Project Management Expertise
Clear Business goal
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The Diamond Approach

Novelty
Improvement on existing product/service
New generation product
Breakthrough project – something new created
Technology
Clear proven technology (low tech)
A few new technologies (medium tech)
Many recently developed technologies (high tech)
Required technology does not exist when we start super –high tech
Complexity
Assembly in which a stand alone result is produced
System in which a complex project integrates many sub projects
A series (or programme) of projects, in which an integrated single entity is achieved
Pace
Regular projects – not time critical
Competitive projects that maintain or enhance organizations strategic position
Time critical – whereby every overrun results in failure of the project
Blitz projects – so urgent that they should have been completed yesterday rather than110
today
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Organizational models –and contingency theory
An organizational structure defines how activities; such as task allocation, coordination

and supervision are directed toward the achievement of organizational aims.
... Organizational structure can also be considered as the viewing glass or perspective
through which individuals see their organization and its environment.
A contingency theory is an organizational theory that claims that there is no best

way to organize a corporation, to lead a company, or to make decisions. Instead, the
optimal course of action is contingent (dependent) upon the internal and external
situation. A contingent leader effectively applies their own style of leadership to the
right situation.
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Initiation Documentation
For success the following need to be clear in advance
Project management plan
What the team will deliver
also has
The way in which this will be achieved
 Planning baseline
 Budget
This depends on
 Scope description
Expected benefits
Uncertainties present in this
In bigger projects separate
plans may be made for:
Found in Project Initiation Documents
 Scope
Business case
 Requirements
Project management plan
 Schedule
 Budget
Project management plan provides an overall idea of
 Quality
 The project life cycle
 Process improvements
 The customised project management processes
 Personnel policy
 The execution of work
 Communication
 The procedures for changes & configuration
 Risks
management
 Purchases
 The way in which project performance is made
transparent
 The manner of stakeholder management 112
 The most important decision points in the project
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Initiation Documentation
Business case summarises the expected benefits and project effort. It is one of the
many investment decisions that management needs to take. It contains the following
information:
Management summary
Description of the project
Financial analysis
Project approach
Risks and assumptions
Critical success factors
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Practice 2 – Requirements, objectives & benefits
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Requirements
What are we going to deliver
The competence element is

We plan about you describing what
you need to deliver
We start working

Analysis
Need Emergence
Recognition Need Analysis Cycle
Articulation
Needs translated into Project Requirements

requirements and goals & benefits
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Stakeholders
Negotiation between stakeholders Support created for the project
Feel that if requirements can

be achieved through the
delivery
Record the compromises
Business Case
(basis of all decision making)
The competence manifests in the following actions:

Introduce a hierarchy into the goals and benefits
Identify and analyze stakeholder needs and requirements
Prioritize the requirements and determine acceptance criteria
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Introduce hierarchy into goals and benefits
Ultimately this competency element is concerned with ensuring a requirements
document is created. Strategic Objectives of
the organization
Have a clear understanding Align strategic plan of the div/unit
Ensure the delivery is in line

Goal Breakdown with the organizational goal
Structure (GBS)
Project Mission Statement Business case
Requirements
Project goals
Objectives Objectives Objectives Objectives Benefits Benefits Benefits
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Introduce hierarchy into goals and benefits

Traditionally objectives always are: Actions :
The scope of the project •Relate the goals to those of the organization
The duration •Relate project objectives to project goals
The budget •Define hierarchy of the goals
•Explain the goal hierarchy and relevance of it
Scope
Triple constraints
Duration Budget
Sponsor considers which of the

three / four are most important Quadruple constraints
Benefits
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Identify and analyze stakeholder needs and requirements
Different stakeholders have different requirements – some of these are not well
defined in the beginning of the project; but are refined / changed as execution
progresses; these requirements may be considered as constraints, for example:
The effect on the organization’s cash flow
The method of financing
The use of external personnel
The size of the budget
The long term costs
Keeping jobs intact
The compulsory cooperation with partners
Minimising conflicts within the branch
The training of staff
The organizational diary
The permitted suppliers
Steps to be taken by Project Manager:
Keep track of the difference between need, expectation and requirement
Record the needs and requirements of the stakeholders
Record the needs associated with the requirements
Analyze the stakeholders’ needs and requirements
REQUIREMENTS ARE SET FOR THE PRODUCT/SERVICE & RESTRICTIONS119

ON HOW WE MAKE THEM
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Prioritize the requirements and determine acceptance criteria

There will be a large list of requirements; but finally it will be the sponsor who will
decide what is in and what is out. This is a negotiation process to be carried out in the
first stage of the project.
The prioritization may be based on – must haves, should haves, would haves and nice-
to-haves.
Every requirement will have a corresponding acceptance criterion. Acceptance comes

in small steps and the stakeholders are given the opportunity to check whether results
(including interim ones) continue to conform to the defined requirements and their
expectations.
The following actions need to be taken:

Prioritise the needs and requirements of stakeholders
Request approval for the definitive requirements
Ensure requirements are translated into acceptance criterion
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Benefit Mapping
It is often said that not all benefits can be measured – but we started the project because
we wanted to achieve a benefit
The fact is that if some thing matters, then it can be observed – if you can observe it,
you can count it and, therefore, it has become measureable – this measurability is
important as you cannot manage what you cannot measure
Less errors Decrease Cost

in software service calls reduction
More profit
Increased Higher sales
customer
visits
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Benefit Mapping
Tracking and monitoring the benefits:
1. Develop a benefits map

2. Determine the benefits to be tracked
3. Identify associated measurement criteria
4. Design improvement goals for each measurement criteria
5. Determine the method of reporting on the benefits
6. Start tracking and monitoring
7. Investigate missed goals
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Value Management
Actual Quality Resources Available
Expected Quality Resources needed
Quality Coefficient Resource Coefficient
In order to find right balance, team concentrates on functions required to meet the needs. The
functions are described by a verb and a measureable noun, eg. Houses a family, relocates a
weight, archives personal files; instead of focusing directly on technical solutions like a house,
lorry, filing cabinet – this way potentially more valuable solutions may be found. The approach
is:
Advantages of Value Management
1. Describe the need Better understanding of business need
2. Translate this into functions Simple & clear definition
3. Generate alternative solutions All options, alternatives & innovations considered
4. Make a cost benefit analysis Best value for money
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Improved cooperation ‐ common ownership
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Practice 10 – Plan and Control
Planning 124
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Analysis
Need Emergence
Recognition
Articulation
Business Case
PESTLE Analysis
Project Charter
Project Plan
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Plan and Control

This competency relies strongly on your level of flexibility, actions are:
 Draw up the project management plan and get it approved
 Initiate and manage the transition to a new phase
 Compare the actual situation to the plan and take action
 Report on the progress
 Handle change requests
 Closeout a phase or project and evaluate it
Business Case Project Charter
Secure Resources & Project Management
Finance Plan
The commencement of any project needs meticulous planning and identification of
various requirements. The project starts with need identification and analysis followed
by feasibility study to establish the project need including stakeholders requirements,
success criteria
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Draw up the project management plan and get it approved
Actions:
 Organize the startup process
 Collect the necessary information from the people involved
 Analyze, value and prioritize this information
 Organize and facilitate a project startup workshop
 Obtain approval for the mandate or project management plan
 Communicate about the plan
Start-up phase helps create a shared vision of the project or programme. The requirements and
expectations are finalised, the Business Case is developed, the Project Charter is issued and
Project Management Plan is drafted, developed and finalized
Get the team together

Start-up workshop should be held in the planning phase to:
Prepare detailed Project Management Plan – Full Plan/ Progressive elaboration (Rolling wave
plan)
Set out and clarify team roles – In a Kick-off Meeting
As per ICB the Start-up of the project accounts for approximately 30% of the project success
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Project Management Success Project Management Plan
ICB has defined Project Management Success as ‘The appreciation of Project Management
Results by the relevant interested parties
Project Management Success refers to achieving the aims of the project within the agreed upon
constraints – i.e. time, cost, quality, etc. through effective management of the project
Project success refers to fulfilling the business need for which the project was undertaken
It is the extent to which project result satisfies the actors involved
Different interested parties/ stakeholders have different success criterion for the same Project – which may be
conflicting (must be defined at the beginning of the project):-
Business objective for undertaking the project
Key deliverables
Key parameters like time & cost
Customer satisfaction
Quality specifications
KPIs meeting stakeholder specification….KPIs are measurable values of success criterion
PM can increase success rate of the project):-
#Better stakeholder relationship #Improvise success factors #Reduce risk (anti success factors)
#Integration is crucial 128
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Project Management Success Project Management Plan
PM must translate (with the help of the team) the broad outline of the assignment into a workable
approach. This approach is detailed in the project management plan, for which approval has to be
gained – ideally this should be done before execution starts.
PM must ensure buy-in by all team members on the plan and approval of the sponsor. The plan
works as a mandate to work accordingly.
The project approach consists of pragmatically applying methods, techniques and tools:
Methods: a carefully thought out way of working in order to reach the result that that contributes
towards the goal
Techniques: a way in which a certain activity or piece of work is carried out
Tools: are resources that help with this
Detailed planning done for different aspects of project & integrated into a single plan is
known as the Project Management Plan (PMP) – it establishes - Why – Management’s
statement of success criteria ……What – What are we going to accomplish….Who – Who will
do the work……When – Schedules to do work…..How – PM’s vision of doing the work:
Resources, Tools & techniques, IT needs, Technical issues, Quality, validation & testing, Risk
management, Procurement, Change management etc……How much – project costs and
budget
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Project Management Plan (PMP)
 PMP is key document of the project - used to control the project - Forms the baseline of project
 Is owned by the Project Manager - Developed by Project Manager with project team
 Approved by the Sponsor / client - Should be accepted by Sponsor & project team
 Guide the project's execution
 Document assumptions made in planning the project
 Document planning decisions & alternatives selected
 Facilitate communication amongst different stakeholders
 Define key management reviews content, extent and timing
 Provide baseline for progress measurement and control
 Provide guidelines to team / management on development phases and estimates related to

cost, schedule, resources etc.
 Provides reference regarding quality expectations of the projects output i.e. the product of the
project 130
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Project Management Plan (PMP) …contd
Key contents :
Executive summary
Highlighting key aspects of project
Benefits expected from project
Project's Success Criteria
A full list of all deliverables ordered by time with their responsible owners
The scope of project and Statement of Work
The Work Breakdown Structure (WBS) and the Product Breakdown Structure (PBS)
The Time schedule of work with key milestones
Health Safety & environment Plans
 Organizational structure
Responsibility Assignment Matrix
Subsidiary Management plans e.g.: Scope, Schedule, Cost, Quality, Risk, Procurement,
Communication, Staffing, Process improvement etc. 131
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Project Management Plan (PMP) …contd
Baselines:
Planning Process :- Planning  Establish Budget
Scope baseline
by Network
Execute
Schedule baseline
 Define Work Package
Monitor Progress
Cost baseline  Produce Work Schedule

Control Project Cost & Schedule
 Decide Best Way of

Quality baseline
Utilizing Resources
Other important documents:
Risk Register Change Mgmt Plan
Milestone List Configuration Mgmt Plan
Resource calendar
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Initiate and manage transition to a new phase
Actions:
 Organize the control process for the next phase
 Define the project result and objective of the next phase
 Manage the phase transition
 Organize and facilitate a kick off meeting
Typical project phasing looks like………
Requirements Feasibility
Plan Design Build Test Deliver
Document Study
We treat each phase like starting a new project

Continue building on what you already know
Update the plan and build a detailed plan for the next phase
We evaluate the business case again
Responsible managers make a choice whether to continue with the project or terminate it
Adjust the project as per the circumstances 133
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Considerations for the plan
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Practice 3 – Scope
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Scope
Scope defines the total work required to execute a project and is the constraining factor
within which the project has to perform
•Project Manager and project team must have clear understanding of the scope
•Scope covers two aspects:
 The product or service to be delivered by project
 The project work that will have to be done to successfully deliver the product or
service
The Scope Statement - A detailed, chronological description of the work required to be

done to deliver the project’s product or service
 First a broad, macro level planning done then the micro level detailed planning done
 Scope statement acts as agreement for understanding between project team & customer
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Scope gathering methodologies
Gather requirements is part of scope definition, and it can be done using one or more
of following techniques:
• Interviews
• Focus groups
• Facilitated groups
• Group creativity techniques: brainstorming, nominal groups, delphi, mind map,
affinity diagnose
• Prototyping
• Observation
• Questions and surveys
• Group decision making techniques: unanimity, majority, plurality, dictatorship
• Use of case scenarios
• History writing
Agile development of the scope may be required in certain projects

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Scope Management Plan
• Scope Management Plan describes the various steps needed to manage project’s scope
and the scope changes
• How total scope will be managed & controlled
• How scope will be identified, defined, classified, documented, managed and integrated
into the project
• How WBS will be developed
• How scope changes made after WBS finalized will be managed & integrated into
project
Scope Creep - Uncontrolled changes in scope, without getting a corresponding increase
in the time and budget allowances.
Gold Plating – Delivering more scope than what is agreed upon; in order to please
customer is known as GOLD PLATING… it increases risk and uncertainty and may inject
problems
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Scope
The delimitation of the products and services to be delivered, and the activities to be
carried out.
ICB describes scope as the boundaries of the project/ programme/ portfolio.
Deliverables are the specific output of the project.
The competence manifests in the following actions:
1. Describe the deliverables
2. Structuring the scope
3. Describe the work packages
4. Determine and maintain the configuration
Project Mission Statement
Project goals
Requirement/Objectives Benefits
Requirement 1 Requirement 2 Requirement 3
Deliverable 1
Deliverable 2
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Requirement –Deliverable matrix
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Describe the deliverables
A project cannot be started unless there is an agreement on what it should deliver, how
long it should take and how much it will cost. In one way or another the work has to be
defined.
Actions required:
1. Define the project deliverables
2. Differentiate between goals and deliverables
3. Group goals and associated deliverables
4. Utilize the goal hierarchy
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Describe the deliverables
Project Scope Statement 4. Project Deliverables- 7. Project assumptions

should include : Product, Services or Results 8. Project Boundaries (What
1.Product Scope Description- of the project including is not included in the scope)
Characteristics of the Product, ancillary results (Reports and 9. Initial Project
Services or Result that the Documentation) Organization
Project is undertaken to 5. Project Requirement- 10. Initial Identified Risk
produce Conditions or capabilities that 11. Schedule Milestone
2.Product acceptance Criteria must be satisfied by the 12. Preliminary Cost estimate
3.Project Objectives - Deliverables as specified in 13. Approval Requirement
Measurable success criteria the contract ,specification or 14. Escalation process
e.g. Cost, schedule , quality or Stakeholder analyses. (especially in case of
business objectives 6. Project Constraints- Pre- contracts)
defined budget , imposed
schedule end date
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Structure the Scope

Project Structures - a key mechanism - to create order in the project and ensure nothing
is omitted from the project.
Product Breakdown structure (PBS)

Hierarchical breakdown of the components, sub-components of machinery/ software/
equipment / building etc. to be produced by the project or to be procured for the project
 Useful for procuring different parts at best possible rates
Useful for estimating likely costs of each component – thus final cost
Gives an idea of the work required to be done for the project
Laptop
Screen Base
Motherbo Mouse
Display Cover Keyboard CPU Speaker Casing
ard pad
XXXX YYYYY XXXX YYYYY XXXX YYYYY
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Work Breakdown Structure (WBS)
 After scope statement is prepared, entire scope is reviewed and all deliverables are
decomposed into smaller more manageable components giving rise to what is known as the
Work Breakdown Structure – these are nouns/adjectives (not verbs) – WBS is about what and
not yet about how
 Each descending level shows greater detail
 WBS developed by project team based on collective experience and by brainstorming with
other stakeholders to list out all possible tasks to be performed
 WBS Key tool to PLAN and CONTROL the project - Provides common understanding and
clarity of work and the total project among all the team members and other stakeholders -
Helps to assign work and track project progress
 Basis for making network schedule and bar charts
 Basis for budget, schedule and resources data required for determining the earned value criteria
for the project
The WBS is a task oriented hierarchical decomposition showing all the work to be done by
project team to deliver the project’s product / service and achieve the project objectives 143
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WBS Levels
WBS Levels : The Top most Level is the Name of the Project
 Level 2 Can be Phases – concept/design/test or Product – object oriented – software/ hardware
or Functions required –marketing/ finance/ research or Phases or Location where performed or
all four combined used in same WBS
 Lowest Level – known as Work Package - have scheduled start & finish dates ‐ A single
owner ‐A time phased budget assigned to it
 Decomposition done till level where possible to allocate the work, estimate the time and cost
and manage and control the work
 WBS developed using Top-down approach, Bottom-up approach or both
Work Packages
 Work Package is the lowest level in the WBS – work is assigned and controlled at this level
 A single owner responsible for each work package; the owner can own many work packages
 Should have scheduled start & finish dates
 Work package is further broken down into activities for the project’s network schedule
 A time phased budget assigned to it
Planning Packages – A component about which we still have insufficient information to split
up further
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Anything missed out will not get done - Work not included in WBS NOT part of project
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Sample WBS
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Some key advantages of using a WBS
 Risk identification and management can be done more effectively

 Using lowest level of WBS an accurate bottom-up cost estimation can be done
 Identifies project's key milestones & deliverables
 Basis for developing the Organizational, Risk, Communication, Cost Breakdown
structures and Responsibility Assignment Matrix
 Work package assignment to the right person/team members
 WBS Key tool to PLAN and CONTROL the project
 Provides common understanding and clarity of work and the total project among all the
team members and other stakeholders
 Helps to assign work and track project progress
 Basis for making network schedule and bar charts
 Basis for budget, schedule and resources data required for determining the earned value
criteria for the project
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Describe the Work Packages
• Each WBS component or work package is described fully .
• The project team have means of identifying and accessing such information.
• This is facilitated by an index system known as the WBS Dictionary.
• Each entry in the dictionary contains attribute information about the specific task, activity or
deliverable that has a corresponding entry in the WBS chart.
Each WBS dictionary entry generally includes following details about the Work Package
: Status of Work Packages
• Code of account identifier; 1. Not yet started
• Description of work; 2. Started in the last period
3. Finished in the last period planning
• Responsible organization /department/Unit
packages
• Quality requirements; 4. Finished in the previous periods
• Technical information relevant to the performance of the task;
• A charge number ( Control Account )
• A list of related schedule activities;
• Resource requirements Actions
1. Differentiate between work packages and
• Cost estimate.
planning packages
2. Explain the goal of well defined work package
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3. Describe the work package
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Determine and Maintain Configuration

Configuration management is the bridge between the design and the rest of the world. It
ensures that the actual physical delivery is in line with the documentation delivered. By
using configuration management it is ensured that everyone works with the same versions
of the products and the “value” of the product remains at the required level.
The framework and responsibilities of configuration management are:

• The project manager is ultimately responsible and draws up the configuration management
plan
• The configuration manager prevents working on the wrong versions; checks the correctness
of versions (administrative checks) and verifies that everybody is keeping to the rules
• All deliveries are to the configuration manager (with appropriate signatures)
Actions to be taken
• Identify the configuration items
• Manage the scope configuration
• Record the roles and responsibilities
• Relate the configuration to the project approach
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Configuration Management
“Configuration management encompasses the administration activities concerned with the

creation, maintenance, controlling change and quality control of the scope of work”
ICB defines Configuration as:

The functional and physical structure of deliverables as described in the project
documentation and realised in the deliverables produced by the project
Configuration Management:
•Configuration management helps to minimise deficiencies and errors in the configuration
•Deliverables and all its associated documents, designs, test suites/results, codes & procedure for
changes for any item
Sub processes: Configuration

•Planning Management
•Identification
•Change control Configuration Configuration Change
Status Reports
Configuration
•Status reports Planning Identification Control Audit
•Configuration audits
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Configuration Sub Processes
Planning
 The configuration items
 Roles and responsibilities
 Procedures for version control
 How to determine the documented reality (verification)
 The change procedure
Identification
 Start early and to ensure you have enough information. Several considerations
may be used; ISO 10007:2003 standard names, purchase order, maintainence and
management.
Change Control (ensure changes applied in a structured manner)

 Identifying
 Evaluating
 Deciding
 Implementing and verifying
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Configuration Sub Processes
Status Reports
 What is included in the configuration
 The actual configuration compared to the baseline
 The change history
 The concessions granted
Configuration Audit
 Physical Audit
 Functional Audit
 System Audit
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Configuration Status Accounting
Configuration status accounting:

 This is done to maintain full traceability of the changes made. A history is kept of all
changes made in the configuration item as well as of the current status
 It ensures latest version of drawings and plans etc are used in the project and for doing
quality acceptance tests
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Change Management
 All projects are faced with some changes

 A formal Change Management Process is crucial to have proper control of the project
as changes generally increase project cost
 Proposed changes should go through change management process
 Use of common form
 All proposed changes are kept track of in a formal log
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Change Control
Some common reasons for Changes:

 Customer requests
 Events external to the project – e.g. New Regulation
 Engineering Design Changes due to omission, redesign, improvements etc. that may or
may not alter project deliverables
 Error of omission in defining the scope of the project – scope not fully defined
 Changes that add value to the project e.g. taking advantage of latest innovations that was
not available earlier
 Lack of due diligence and proper planning
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Change Control Process – Ready Reckoner
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Change Control Process
Change Control Board (CCB)

 CCB given the authority to approve or deny change requests as defined the
organization
 CCB may meet once a week; or once a fortnight or once a month depending on the
types of project
 When emergencies arise PM is authorized to implement changes as per pre-
established procedures
 CCB members may or may not be directly involved with the project but CCB
includes stakeholders, managers, project team members and others
 Some other names of CCB are Technical Assessment Board (TAB); Technical
Review Board (TRB) and Engineering Review Board (ERB)
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Practice 4 – Time
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Time
The competence element is about being able to develop a clearly laid out plan which is
easily readable and understandable. It also has to inspire sufficient confidence in
decision makers to give approval. During execution it is important to start activities on
time, release finances & resources on time, monitor and complete on time.
WBS work packages is the basis for drawing up detailed schedules. The competence
calls for structuring skills, expressed in the following actions
 Determine the necessary activities
 Determine the necessary effort and duration
 Determine the approach to the phases
 Sequence the activities and plan the duration
 Manage the duration
Schedule Baseline
Activity Planned Planned
Start Date End Date
A
B
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Determine the necessary activities
To complete the project on time a schedule of the project work must be fully planned in detail
Work packages are further broken down to activities that are used to estimate, schedule, assign,
implement and control project work
Activities are described as verbs; as opposed to work packages being described as nouns or
adjectives.
Action to be taken
Determine the necessary activities
Relate activities to work packages
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Determine the necessary effort and duration
A project schedule developed of total work required to be done to plan and control the time
Buffers/Reserves/Contingency kept in schedule to meet unanticipated delays
The PM uses a formal change control process to control any changes in the schedule
First an estimate of the work required to be done is made
The accuracy of the estimate improves with time
Durations are worked out based on the resources planned to be deployed
The following steps are to be followed

Determine the actual effort
Identify which resources you need
Make a choice as who you are going to request
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Determining the approach to the phasing
The most important reason for implementing phases in a project is to do with uncertainty. The
further you have to estimate ahead the more uncertain the accuracy of the estimates.

Study the relevant phasing model
Choose the appropriate scheduling technique
Determine the appropriate phasing
Estimate the effect of uncertainty
Start Middle End
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Different options for creating phasing
1. Waterfall
2. Iterative or cyclic phases
3. Agile
4. Versions
5. Management phases
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Project Life Cycle
Phase 1 Phase 2 Phase 3 Phase 4
Hand over
Phase Phase Phase Final
& Closure
Deliverable Deliverable Deliverable Deliverable
of Project
We only go to the next phase once the deliverable of previous phase has been achieved
Project Life Cycle (PLC):

Project Life Cycle is a sequence of phases from project start to project end ‐ a start, a middle
and an end
Each phase associated with major processes and deliverables
 Length of each phase will vary with project
Terminology used to describe each phase not fixed
Start or Concept phase, Intermediate phases & a Closeout phase 163
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Project Life Cycle

Some Advantages of a Project Life Cycle:
 Allows better planning, scheduling, estimating & control
 Work can be broken up into manageable pieces or phases - each phase has specific
deliverables
 More efficient allocation of all resources –requirements vary with phase / schedule only
what can be reasonably monitored
 Better cost control – funds needed for next phase, procurement can be planned &
released as needed
 Allows progress review by stakeholders before going to next phase - go/no-go decision
gates / clear decision points
 Allows for better risk management
 Tasks are identified more easily
Some Disadvantages of a Project Life Cycle:
 Loss of total picture
 Estimates of later phases less accurate
 Later decision points sometimes seen as “fakes” because of the high investment already
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made; you cannot really stop and go back anymore
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Life Cycle - Characteristics
Opportunity to add Value

High
Low Cost to make change
Time
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Life Cycle - Characteristics
Uncertainty of Success/ Risk

High
Low Amount at Stake/ Sunk Cost
Time
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Project Management Life Cycle
•Project objectives to be ensured

•Overlapping processes
•Planning is iterative and team - work
Start-up
Initiate
Planning
Execution
Monitor and Control
Close-out
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Sequence the activities and plan the duration

Draw up a network with dependencies
Determine the critical path
Process the availability
Advantages of network technique

• Facilitates through Planning
• Ensures Logic of a Plan
• Make Plan Intelligible
• Facilitates Communication of Plan
• Defines Sequence & Interdependencies
• Provides Adequate Control
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Activity Relationships
3 types of logical relationships possible:
• Mandatory or ‘hard’ logic’ – work requires a specific sequence ….. first code the software
then test it
• Discretionary or ‘soft logic’ – based on experience or best practices ….. First paint wall and
then carpet
• External – based on outside factors e.g. political, govt. rules, other projects ….. First obtain
Fire Dept. NOC then start work in the factory
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Types Of Interrelationships
 FINISH TO START (FS)

 FINISH TO FINISH (FF)
 START TO START (SS)
 START TO FINISH (SF)
 MODIFIERS - LAG & LEAD
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Types Of Interrelationships
Task Relationships
Predecessor i Finish to Start
Successor j
Predecessor
i
Successor j Start to Finish
Predecessor
i Finish to Finish
Successor
j
Predecessor
Start to Start
Successor i
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Task Relationships – Lead & Lag
Predecessor Finish to Start

i lag
Successor
5d
j
Predecessor
i
lead
Finish to Start
5d
Successor
j
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Some Network Related Words
• Networks are a schematic representation of the activities required to be done

• Are the most powerful tool to control the project work as project progresses
 Activity on Arrow Network also Called AOA
 Activity on Node Network (Precedence) also Called AON
• (PERT/CPM)
•CPM is a project scheduling method that helps to determine the Early Start, Early Finish, Late
Start, Late Finish for individual tasks.
•The Critical Path determines the earliest possible completion date of the project
•Name / Description INPUT FOR AN ACTIVITY / TASK

eg. 3 days
•Early Start(ES) Early Finish(EF)
•Duration ES Duration EF
•Late Start(ES) Late Finish(EF)
Name: eg. A
•Float
•Interrelationships LS Float LF 173
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REPRESENTATION OF A CPM NETWORK CAN BE DONE IN THE FOLLOWING TWO WAYS
 ARROW DIAGRAMING METHOD (ADM)
or ACTIVITY On ARROW (AOA)
PRECEDENCE DIAGRAMING METHOD (PDM)
or ACTIVITY ON NODE (AON)
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ARROW DIAGRAMMING METHOD (ADM)
Or ACTIVITY On ARROW (AOA)
B Dummy
3 4
A C
2 7 8
D
F
E
5 6
1
Finish
Start
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Arrow Diagramming Method (ADM)
 Arrows represent the Activity

 Nodes (Event) represent the activity completion
 ADM allows only Finish-to-Start dependencies
 Dummy activities i.e. dotted arrows used to show logical dependency
 Dummy activities consume NO Time or Resources
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PRECEDENCE DIAGRAMMING METHOD (PDM)
Or ACTIVITY ON NODE (AON)
A B C
Start Finish
D E F
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Precedence Diagramming Method (PDM)
also called ACTIVITY ON NODE (AON)
 Node represents the Activity

 Arrow used to show logical dependency
 Allows use of all 4 logical dependencies
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Outputs from Critical Path Method
 EARLY START (ES)  TOTAL FLOAT

 EARLY FINISH (EF)  FREE FLOAT
 LATE START (LS)  CRITICAL PATH
 LATE FINISH (LF)
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EARLY START
The earliest date a task can start based on the network logic and schedule constraints.
EARLY FINISH
The earliest date an activity can finish based on network logic and schedule constraints.
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LATE START
The latest date a task can start or delayed without affecting the present end date
LATE FINISH
The last day the task can end without delaying the completion of the project or any
terminating task
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FLOAT / TOTAL FLOAT/ PATH FLOAT

Length of time a non-critical task can be delayed or extended without affecting the
project end date. Is measure of time flexibility available in performance of an Activity
For an activity:
FLOAT = LF - EF or LS - ES
ES EF
9 12
A
Activity A has a Float of 7 days
16 19
LS LF
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FREE FLOAT
Length of time a non-critical task can be delayed or extended without affecting earliest
start date of any subsequent activity and the project end date.
ES EF ES EF
3 6 6 9
FREE FLOAT of Activity A B
10 13 13 16
= ESb – EFc LS LS
LF LF
ES EF
Early Start of succeeding activity
3 5 Activity C has a Free
minus Early Finish of preceding C Float of 1 day
activity
11 13
LS LF
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Critical Path
The sequence of tasks in the network diagram that has the longest duration with float less or
equal to specified value or zero.
The critical path determines the earliest possible completion of the project
THE CRITICAL PATH Is:

 The Longest path in the network
 Has zero float
 Can have more than one Critical Path
 Critical path can change through project
 Negative float in critical path shows project is behind schedule
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The early start and early finish dates for all the network activities is calculated in the
FORWARD PASS
The late start and late finish dates for all the network activities is calculated in the
BACKWARD PASS
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Building the Schedule baseline / Network

ES ES EF
EF
3 4
B D
ES EF
ES EF LS LF LS LF
2
7 F
A
ES EF ES LS LF
EF
LS LF 5 7
C E
Activity Duration Predecessor

LS LF LS LF
A 7 ‐
B 3 A
C 5 A
Build the Framework
D 4 B
E 7 C
F 2 D,E
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ES ES EF
EF
7 3 10 4 14
10
B D
ES EF
ES EF LS LF LS LF 19 2 21
0 7 7 F
A
ES EF ES LS LF
EF
LS LF 7 5 12 12 7 19
C E

LS LF LS LF
A 7 ‐
B 3 A
C 5 A
Forward pass for ES & EF
D 4 B
E 7 C
F 2 D,E
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ES ES EF
EF
7 3 10 4 14
10
B D
12 15 15 19 ES EF
0 7 7 F
A
19 21
0 7 ES EF ES LS LF
EF
LS LF 7 5 12 12 7 19
C E
7 12
12 19
LS LF LS LF
A 7 ‐
B 3 A
C 5 A
Backward pass for LS & LF
D 4 B
E 7 C
F 2 D,E
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5
ES ES EF
EF
7 3 10 4 14
10
B D
12 5 15 15 5 19 ES EF
0 7 7 F
A
19 0 21
0 0 7 ES EF ES LS LF
EF
LS LF 7 5 12 12 7 19
C E
7 0 12 0
12 19
Activity Float Free Float
LS LF LS LF
A 0 ‐
B 5 ‐
C 0 ‐
Find Float & Free Float
D 5 5
Critical Path = A,C,E,F E 0 ‐
F 0 ‐
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Critical Path Method
ES EF ES EF ES EF
Duration 4 Duration 4 Duration 4

Task D Task E Task F
LS LF LS LF LS LF ES EF
ES EF
Duration 3
Start Task H
Finish
Duration 3
Task G
LS LF
LS LF
ES EF ES EF ES EF

Task A Task B Task C
LS LF LS LF LS LF
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ES EF ES EF ES EF
0 4 4 8 8 12
19 22
ES EF
Duration 3
Start 4 7 Task H
Finish
Duration 3
Task G
LS LF
LS LF
ES EF ES EF ES EF
0 8 8 15 15 19
LS LF LS LF LS LF
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ES EF ES EF ES EF
0 4 4 8 8 12
7 11 11 15 15 19
19 22
ES EF
Duration 3
Start 4 7 Task H
Finish
Duration 3 19 22
Task G
LS LF
12 15
LS LF
ES EF ES EF ES EF
0 8 8 15 15 19
0 8 8 15 15 19
LS LF LS LF LS LF
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ES EF ES EF ES EF
0 4 4 8 8 12 FF = 7
7 11 11 15 15 19
LS 7 LF LS 7 LF LS 7 LF ES EF
19 22
ES EF
Duration 3
Start 4 7 FF = 1 Task H
Finish
Duration 3 19 22
Task G
LS 0 LF
12 15
LS 8 LF
ES EF ES EF ES EF
0 8 8 15 15 19
0 8 8 15 15 19
LS 0 LF LS 0 LF LS 0 LF
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Gantt / Bar Charts
Show summary level /activity level activities against time, drawn to a common time scale
Drawback – Bar charts do not show activity dependencies
• Easy to draw, read and understand

• Provide a clear picture of the project status
• Summary of ten's of activities can be depicted by one bar
• Easily view the planned time schedule versus the progress at a glance
• Excellent tool for management reporting of project progress
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Project A
Task Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7
Plan
Design
Build
Test
Deliver
Close
Planned
Executed
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Project B
Weeks
Task 1 2 3 4 5 6 7 8 9
1
2
3
4
5
6
7
8
Planned
Linked Bar Chart
The dependencies between activities is
Executed shown by arrows and the floats are
depicted by single lines drawn after the bar
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Project B
Weeks
Task 1 2 3 4 5 6 7 8 9
1
2
3
4
5
6
7
8
Planned
Linked Bar Chart
The dependencies between activities is
Executed shown by arrows and the floats are
depicted by single lines drawn after the bar
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Techniques of time estimation
Step 1: Understand What's Required Estimation of Activity Duration
Step 2: Order These Activities Work Breakdown

Historical
Step 3: Decide Who You Need to Involve Analogy
Expert Judgment
Step 4: Make Your Estimates Effort
Units
Methods for Estimating Time
Bottom-Up Estimating
Top-Down Estimating
Parametric Estimating
Three-Point Estimating
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Program Evaluation and Review technique (PERT)
 Also known as 3 Time estimates

 Used for time and cost estimating when it is difficult to arrive at an estimate due to
lack of knowledge or experience
 Arrives at an estimate using a weighted average to reduce the risk
 Formula for PERT is: Optimistic + (4 x Most likely) + Pessimistic} / 6
 Standard deviation ..SD = (P-O)/6
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Example - PERT
The PERT duration is the Mean. In the example, the PERT duration (Mean) for Activity 1 is 30 days,
for Activity 2 it is 116 days and for Activity 3 it is 52 days. PERT of the Project is 198
To calculate the standard deviation of the group of activities we cannot just add up all the
standard deviations of each activity in the path. We need to calculate the Variance for each
activity first:
•Step 1 – Calculate each activities PERT duration and it’s Standard Deviation
•Step 2 - calculate the variance of each activity separately. Variance of an activity is calculated as
{(P - O) / 6}^2 i.e. the Variance is the standard deviation squared.
•Step 3 - add the variances for the group of activities and get a path variance
•Step 4 - take the square root of the total of the variances (calculated in step 3)
This will give us the standard deviation for the group of activities / the entire project. In our
example, the total path duration is 198 days (30+116+53) and the standard deviation for the path
is the Square root of the path Variance (10.9 + 158.8 + 28.1). This comes to about 14.1.
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Standard Deviation (SD) or Sigma is measured as 1 SD, 2 SD, 3 SD up to 6 SD and the SD is
taken equally on both sides of the mean or average line in a normal distribution curve.
•One standard deviation away from the mean in either direction of the mean line shows that
68.26% of the total data or population falls in this group. In our example 1 SD is ‘+/-‘ 14.1 which
means at 1 SD the project is likely to be completed between 183.9 – 212.1 days.
•Two standard deviations away from the mean in either direction of the mean line shows that
95.46% of the population falls in this range. In our project 2 SD is 28.2 and at 2 SD the chances
are of completing the project between 169.8 – 226.2 days.
•Three standard deviations means 99.73% of the population falls in this range.
•Six standard deviations means 99.99985% of the population falls in this range. This means
having only 3.74 errors in 1 million
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Monitoring the Project Schedule
• Monitoring the project helps the project manager to control it and keep the project from going
over the deadlines. Progress monitoring strategy and process must be in place during the
initial phases of the project itself and should include:
• Tracking the project on the network
- Taking regular feedback from the team
- Having regular reviews with the team on the project success
- Documentation process for project progress reporting
- Using some project reporting tools for every team member to log on the progress
An useful tool that may be used is that of ‘exception reporting’ and having a ‘recovery
plan’ in place
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Manage the Duration - Controlling the Project Schedule - Issues
• The Critical Path: Every overrun of an activity will result in project overrun
• The Actual Situation: During planning the number of uncertainties are large and they reduce
during execution. There is need to process new information into the schedule. eg. We may get
an inexperienced team; or we may have overlooked a dependency; the effect of these need to
be factored into the schedule.
• Uncertain Paths & Potential Risks: Non-critical activities too need to be monitored as delay
beyond the slack/float may lead to project delay.
• Scope Creep: Many small changes, if permitted, may end up delaying schedule, cost
overruns and / or quality.
• Monument Building: When a lot of professionals are allowed to do their own things; things
are never good or elaborate enough. However, principles of project based working is that you
have to deliver the agreed scope – no more and no less.
• External Dependencies: These are outside the PM’s sphere of influence; they are included in
the schedule but every assumption or condition must be monitored separately to provide
counter measures.
Application
• Set up control systems for the schedule
• Process actual events in this schedule
• Compare actual progress with baseline 203
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Managing the Schedule
What would you do if your project is behind schedule?
Crash and/or Fast Track Critical Path activities to reduce the project’s end date
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Fast Tracking
Fast Tracking:
 Overlap work normally done sequentially e.g. order equipment before design
finalized
 Critical Path activities are carried out in parallel to accelerate the project end
date
 Fast tracking requires much more control and co-ordination
 Risky due to possibility of rework
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Crashing
Crashing:
 Extra resources added to Critical Path activities to reduce their duration
 Activities that will cost minimum to crash should be selected first
 Use more overtime / faster worked materials
 Costs likely to increase
 Crashing possible only up to a point – law of Diminishing Returns
Law of
diminishing
Satisfaction returns
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Gulab jamuns
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Practice 8 – Resources
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Resources
Resource Management comprises of identification, planning and allocation of resources
with appropriate competencies
Resource include PEOPLE, FACILITIES, TOOLING, INSTRUMENTS, MATERIAL

AND INFRASTRUCTURE
 Are crucial in managing projects

 Personnel should have necessary technical, behavioural and contextual
competencies
 Optimization of usage of resources for project work must be ensured
 Resources require monitoring and control
 Project Manager has to manage with temporary staff and resources – at the start of
each phase he may need to reconstruct the team or at least change it to meet
requirements of each phase
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Resources
This competence relies strongly on the PM’s knowledge of the playing field in question
– expresses itself in the following actions:
 Develop strategic resource plan

 Determine quality and quantity of resources
 Acquire the required resources
 Allocate the required resources
 Monitor resource usage
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Develop strategic resource plan
Different ways to recruit people or acquire resources

 From permanent organization
 Temporary hire from third party
 Temporary hire of a freelancer
Actions to be taken
 Estimate the necessary resource needs
 Record the resource requirements in a baseline
 Analyse the resource capacity of the organizations involved
 Coordinate the relationship with existing processes
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Determine quality and quantity of resources
This activity uses the following criteria for determining the capacity requirements:
 The scope and project deliverables
 The Project/ Programme/ Portfolio organization
 The schedule
 The quality plan
 The available budgets
 The available resources
Requirement may be physical man days and financial cost of resources
Action steps:
 Describe the required resource
 Produce a resource schedule
 Record the quality and quantity of the resources
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Acquire the required resources

The PM goes shopping with his resource plan to internal suppliers like the line
managers or to external suppliers like contractors etc.
Factors which influence the availability (availability determines the duration)
Following factors can increase the number of available resources:

 Hiring of sub-contractors
 Working more hours per day
 Working in shifts
 Increasing the productivity
 Amending the scope
Factors decreasing number of available resources:

 Team member taken off work
 Holidays or sickness
 Team member attending training
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Acquire the required resources
Selection of team members – Either PM selects or will be nominated by line managers:

PM must form a picture of the team members – collect evidence about each competence
 In which SITUATION the individual made use of the competence
 What his TASK was
 What ACTIONS or behaviour he displayed
 What the RESULT was of that behaviour STAR
Action: Identify internal and external resources

Make contact with internal and external resource supplier
Negotiate on the availability
Make the acquaintance of potential team member
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Allocate the required resources

This competence relies on:
 Management of resources in an orderly way
 Tasks are derived from WBS and persons from OBS
 The roles are reflected in the RAM and RACI
 Expectations from the team members is explained on his first day in the team
(Kickoff meeting/ personal interview)
 PM or Team leaders have to personally interact with team members to to agree on
their work activities – this is a hygiene factor
 Coherent schedules help in delegating work
 Ideal to have self managing teams
Actions to be taken
 Link the resources with organizational structure
 Produce a schedule as per resource
 Instruct team members
 Negotiate on resource conflicts
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Monitor resource usage
Actions to be taken plan

actual
 Use systematic approach to evaluate people
 Look for opportunities to develop their competency
 Address a shortage of skills to their manager
Additional factors to be kept in mind

 Competence management
 Training
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Monitor resource usage
There are different ways keeping track of the assignment:

 Ask how much time someone has spent on the task
 Study the time sheets
 Keep track of actual progress (against physical man days and financial cost of
resources)
Check planned versus actual performance per team member:

 Question to be asked – if I could do the selection for this person again,
would I still take him on?
Maintain contact with the responsible HR person + Line Manager

 Development of the employee
 His personal performance
 Possible issues & problems
 Illness and other domestic problems
Discharge team member personally at close out 216
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Resource Calendar
ES ES EF 5
EF
7 3 10 4 14
10
B D
12 5 15 15 5 19 ES EF
0 7 7 F
A
19 0 21
EF
LS LF 7 5 12 12 7 19
C E
7 0 12 0
12 19
LS LF LS LF
A 0 ‐
B 5 ‐
C 0 ‐
Assume that a 200 ton crane is required for both
Activity B & C; But we have only one crane D 5 5
Original Critical Path = A,C,E,F E 0 ‐
We utilize the crane for C followed by B; thus B F 0 ‐
begins at 12; utilizing the Float available 217
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Resource Calendar
ES ES EF 0
EF
12 3 15 4 19
15
B D
12 0 15 15 0 19 ES EF
0 7 7 F
A Crane
19 0 21
EF
LS LF 7 5 12 12 7 19
C E
7 0 12 0
12 19
LS LF LS LF
A 0 ‐
Assume that a 200 ton crane is required for both B 0 ‐

Activity B & C; But we have only one crane C 0 ‐
Original Critical Path = A,C,E,F D 0 ‐
We utilize the crane for C followed by B; thus B E 0 ‐

begins at 12; utilizing the Float available
F 0 ‐
Path = A,B,D,F also becomes critical 218
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Resource - Histogram
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Resource-Limited Scheduling
• The maximum number of resources available to the project is fixed and cannot be
exceeded by hiring more persons, using overtime or using contract labor. This
situation could arise due to factors such as availability of limited
facilities/equipment and health and safety requirements
• Activities are always scheduled so that the pre-determined level of resources is
never exceeded
• Resource Limited Scheduling often causes the specified project duration or project
end date to be extended
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Time-Limited Scheduling
• Used when project’s end date is fixed and cannot be extended e.g. opening of events like
Olympic games, heavy penalties for time overruns
• All resource constraints are relaxed to avoid any delays in the project’s end date
• Activities are scheduled so that the specified project duration or any imposed date is not
extended
• Helps project manager to meet an agreed upon finish date
• In Time-limited situations the project manager tries to calculate resources so that they
can be available when needed and secondly to schedule the activities keeping in mind
that the resources can be loaded as smoothly as possible.
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Resource Leveling
• This addresses issues of over allocation and under allocation of resources.

• Float should be used to optimize the schedule between the Early Start and Late
Finish of each activity
• Project completion date may be delayed in resource leveling.
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Resource Smoothing
• Scheduling of activities within the limits of their float so that fluctuations in

individual resource requirements are minimized. As opposed to resource leveling
the project completion date may not be delayed.
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Practice 7 – Finance
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Finance
Investors ultimately want value for their money – therefore their investment has to provide
them profit – Projects/ Programmes are also investments -!!
There are a number of decision points at which management will decide whether to make
money available – first of these is even before the PM draws up a budget – the key question
is whether it is worth spending any time to even produce a plan? – this is the decision to
justify ‐ after the plan is drawn up PM goes back to senior management and a courting ritual
repeats itself – is senior management willing to invest? – an assessment is regularly made as
to whether the investment is still profitable
In not fully mature organizations – investment decisions take place only when faced with a
setback or when money threatens to run out – mature organizations develop the habit of
allocating budgets per phase and at the end of each phase – and then acting as if they are
starting again for the first time – this means that the project always receives just enough
budget for each phase and not for the whole project – for the programme manager – budget
is given for a specific tranche – at the end of tranche/ phase decision is made how much
budget there is available for the next phase
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Finance
• This competence ensures that there is a clear overview of the amount of money that has to be
made available at each point of time
• The time schedule and costs incurred converge; and the organization has to ensure that
sufficient financial resources are made available to satisfy the commitments that the
project/programme enters into
• These resources are either released internally (funding) or acquired externally (financing)
• PM should not look at the budget as a pot of money to be spent – the expression spending the
budget or using the budget needs a re-look
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Finance
• A budget is an agreement made to ensure that you stay within it – preferably spend a little
less than expected; this competence relies strongly on your qualities of financial prudence
the following actions are required:
– Estimate the project/ programme/ portfolio costs
– Determine the project/ programme/ portfolio budgets
– Secure the financial resources
– Establish the management and reporting of the finances
– Monitor the finances
– Monitor performance against spend
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Estimate the project/ programme/ portfolio costs
Project Cost Management

• Conceptual estimates - these estimates are generally made in the early phase of the
project, during the pre-tender stage
• Budget/ Preliminary estimates - these estimates are generally made in between the
conceptual and detailed estimates. Budget estimates are made once the scope and
schedule has been made and preliminary designs finalized. Such estimates are used for
bid proposal, bid evaluation and contract change etc. It is not a detailed enough estimate
for controlling the project.
• Detailed estimates – it is commonly called “quantity take-off” where quantities needed
are estimated from WBS and then multiplied by selected unit cost, and the resulting sum
represents the estimated direct cost of the facility.
• Definitive estimates – are prepared after the project has achieved substantial progress
and the major works has been more or less confirmed
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 Done prior to making budget to get likely cost for all the resources needed for project work
 Shown in units of currency
 Accuracy of estimate improves through the project
 Include likely costs of all resources and work effort
 Prefer estimates made by functional groups – or those who will do the work – found to be
more accurate
Analogous estimating technique

 Generally used in early phases when minimum information available
 Estimate arrived at by comparing proposed project with a similar project that was done in past
 ROM type of estimate prepared
 Is a top-down estimate
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Parametric estimating technique

 Uses project characteristics in a mathematical model to calculate an estimate for activity
parameters
 Used for top down and bottom up estimates
 Common for construction, software
 Parametric models are used to estimate how much the product (or project) will cost based on
physical attributes e.g. weight, volume, power, lines of code, price per sq. foot
Bottom up estimating technique

 A detailed estimate built up from the knowledge of the design of the system
 Uses the WBS work packages details
 Most expensive method but also most accurate estimate
 Resources needed first estimated and are then converted into monetary terms.
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500K
200K Planning package
150K 150K
Work package 50K 50K 50K 75K 25K 50K
 Rough Order of Magnitude (ROM) is in the range of -30% to + 75% of expected/actual

cost
 Preliminary/ Budget estimate is in the range -15% to + 30% 0f expected/actual cost
 Definitive / Detailed estimate is in the range -5% to + 15% 0f expected/actual cost
 ROM used during Project Inception when only high level information is available
 Budget estimates are used for Bid, Proposal, Contract Change Orders and not for Project
Control
 Definitive estimates are provided at the end of planning phase or early in the execution
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phase with greater accuracy as the plan allows for greater accuracy in estimating costs
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Bottom-up estimating
Project Budget 3500
Management Reserve 500
Cost Baseline 3000
Contingency Reserve 450
2550
Control Account
850 750 950
Work Package 250 150 350
Activities 50 50 50
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Types of Cost
 Capital Costs
 Revenue Costs
 People Costs
 Control Costs
 Contingencies & Reserve
Costs directly related to project Costs indirectly related to project

 Labour  Overhead & administration
 Material  Training
 Insurance
 Plant & Equipment
 Inflation & Exchange rate
 Subcontractors
 Taxes
 Freight
 Licenses
 Contingencies
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• There is an uncertainty related to any cost estimate. Thus we should work with a upper limit
and a lower limit for each cost. The gap will be higher in the ear ly phases and the limits
converge towards the end of the project
Two other considerations are

• Underutilization of resources hired
– Using scheduling software for bottom up wrapping up of resources/ costs need to be
physically checked for idle time.
– These will have to be debited to the project
Gantt Chart
Wk 1 Wk 2 Wk 3 Wk 4 Wk5 Wk6 Wk 7 Wk8 Wk9
Design X24.01
Design x25.01
Resource Idle time
Designer
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• Total lifecycle costs (total cost of ownership)

– Instead of falling into trap of focusing only on project/ programme and buying the
cheapest part – buy the part that is cheapest in the long run of it’s life; including
maintenance cost etc.
– In cost conscious design you take all costs into account
• Action – select the estimating method to be used – set up a cost structure and identify cost
categories – produce a realistic cost summary
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Determine project/ programme/ portfolio budget

 Costs are allocated to schedule activities or work packages
 A time phased budget created for costs by aligning costs with the project schedule
 A cost baseline is established to measure the project’s performance
 Cost Baseline is the time phased budget for the project.
 It is used to measure, monitor and control project’s overall cost performance
 It is the total estimated cost for project
 Shown as an ‘S’ curve
 Large projects can have different cost baselines for the project e.g. internal labour costs,
contractor labour costs, material costs
A monetary provision kept for mitigating cost and/or schedule risks

Contingency Reserve
Estimated costs used at PM’s discretion to deal with anticipated, but not certain, events. These
events are "known unknowns" and are part of the project scope and cost baselines."
Management Reserves
Budget kept for unpredictable parts of project - "unknown unknowns." Use of the management
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reserve generally requires a baseline change.
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Determine project/ programme/ portfolio budget
Control Accounts
Scope, budget, schedule and actual cost are integrated at this level to measure work
performance using “earned value”
Selected components of the WBS are used for management control
Are kept above the work package level. Each control account contain more than one work
package but each work package should be included in only one CA.
Chart of Account
Any numbering system used to monitor project cost by category e.g. Material, Labour,
Equipment; is based on organizations Chart of Accounts.
Cash flow
The inflow minus outflow for a time period (normally a year)
Actions
Obtain approval for the budget
Develop different budget scenarios
Ensure necessary reserves are made available
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Secure financial resources

Actions
Produce a cash flow overview
Identify the possible sources to acquire the funds
Act according to financial decision making process
Work together with potential sponsorsin order to acquire funds
Period 1 Period 2 Period 3 Period 4
Capital investment
Hiring 3rd parties
etc
Cash flow out
Sources of fund
Internal funding
External financing
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Establish the management and reporting of the finances
Cost control
 A collection of control measures to control costs
 Dependent on the result of risk analysis – stricter when risk of cost increase are high
 Another factor is the organization’s view on costs
Once estimate approved – budget is fixed – budget is the cost baseline – compare actual
against planned – disbursing of funds are normally the responsibility of financial
department
Action
 Link the project/ programme and portfolio costs to the organization’s cost structure
 Determine management process for the finances
 Decide financial indicators you are going to use
 Develop workable reports
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Monitor the finances

Cycles that impact one another
 The permanent organization’s annual budget cycle
 The setting and amendment of project/ programme/ portfolio budget
 The setting and amendment of the phase budget
 The PM’s control cycle
 The control cycle of the delivering teams
Validation of budget normally takes place at the start of each stage/ tranche – statement by PM
 The actual cost to date
 An estimate of costs for the whole project/ programme
 A specified budget for the next stage
 The external commitments that will be taken on
 Reporting financial data – inputs required for report
 Budgeted cost for the progress achieved
 The actual cost
 Invoices and cross charges to be expected
 Commitments entered into
 Prediction of costs for current phase/ tranche and whole project/ programme
 This data is used for the EVMS management
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Monitor the finances
Cost tolerance
 This is a pre-determined limit that senior management allows budget to be exceeded
 The PM reports any breaching of the cost tolerance (even if that is the predicted figure) as
part of management by exception
 The tolerance is different from reserves – reserves are used to meet increase in budget for
unforeseen events whereas tolerance is the limit above which the PM has to report an
exception
 Enables senior management to take timely action
 Tolerance limits are set for each phase/ tranche (and for the total)
 PM and the team may also take corrective action when the forecast shows that tolerance
may be breached
Annual budget cycle

 Project budgets often come from departmental budgets – these follow the permanent
organization’s annual budget cycle
 Project/ programme budgets often extend over the year boundaries
 PM must ensure that the project/ programme budget gets included in the yearly budget
Action
 Produce cost reports
 Analyze and explain financial situation
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 Make use of performance indicators
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Cost Breakdown Structure & Project / Pgme Financing

Cost Classifications – by types of cost
 Cost of raw and ancillary material
 Cost of human labour
 Cost for machines
 Cost for land
 Cost for third-party services and taxes
 Interest cost
Project/ Programme Financing

 SPV Mode – could be PPP like BOT, BOOT, BOO
 Low risk (short term loans, medium to long term
loans, bonds, long term mortgage, current account,
leasing of machines, buildings, etc. factoring – banks
take over risks of debtor) and high risk financing
(shares, subordinated loans, ADB etc. govt
guaranteed loan, venture capital)
Price Risks
 Costs may be incurred in different currencies
 Budget set in home currency
 Exchange rate fluctuations need to be catered out of
reserves 242
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Relevant conventions, legislation & regulations
• Taxation
• Currency exchange
• Bilateral or regional trade agreements
• International commercial terms
• World Trade Organisation
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Controlling
Practice 10 – Plan and Control
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Compare the actual situation to the plan and take action
Actions:
The core to project control is the control cycle derived
 Implement a reporting structure from PDCA cycle of Deming
 Produce a progress report
 Produce a forecast Periodically you look at the ….
 Produce a phase transition report Actual deliverables
Progress report to sponsor/board has: Planned results
Costs incurred
Impression of the progress
Also look at the …
Deliverables Hours spend
Quality achieved Foreseen risks
Financials New risks
Earned value analysis Problems that have arisen
Plus Changes to the assumptions
Forecast
Duration versus results
Milestones achieved in previous period
Milestones for coming period
Forecast Project control consists of
Risks  Recognizing and reacting to changes compared
Manifested risks to the plan
Changed risks  Keeping stakeholders updated o the progress
Corrective responses  This is planned out in the communication plan
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Miscellaneous
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Handle change requests
Ask for advice Ask for decision
no yes
yes
issue yes no no
Determine
change severe Severe implement
impact
Changes are related to: The origin of each change is an issue:

Project results  A concern someone expresses
Budgeted costs  A deviation from the plan
Agreed progress  A specific request for change
The chosen management approach We then investigate whether or not this should lead
to an actual change – changes that are necessary -
Source of change those that are not
The sponsors Change control policy
The users  Issues that are included in change control
Internal suppliers  Procedure to be followed for changes
External suppliers  Who can submit changes – who gives approval
Project management team  Which forms to be used - how progress is reported
 How changes are to be dealt with in case 246 of
The project context
emergency
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Handle change requests
Steps to be followed for a change: Determine the impact
 Identify the change How does it impact my project?
 Determine the impact of the change How does it impact other projects?
study the impact on the relevant work packages in the
 Obtain a decision
WBS – its impact on resources – costs – time – work
 Implement the decision involved – change in support from sponsor/ users – risks
Identify the change arising from the change (what if analysis helps in this)
– use Change Control Form
Date – ID No – Author – Proposed change – Obtain a decision
Reason for change – Amendment of scope or As decision makers have to give a go – no go decision
repair – Expected benefits from change – it is best to provide them alternative solutions with clear
Priority of the change: How much will it cost?
How long it will take?
Low priority
What will I get in return?
Normal How does it impact the business case?
High
Show-stopper Levels of authorization
Change Control Form also has headings In advance with the help of contingency reserves
related to further handling – impact of the (PM)
change – sharing common ground with other Approval of sponsor required
parts/ projects – necessary work – costs and Approval outside sponsor’s sphere of influence
planning – required speed of decision making –
approval or rejection – reason for rejection
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Close-out of a phase or project – and evaluate it
Action:
 Organize the close-out
 Organize the close-out workshop
 Facilitate the evaluation
 Produce a closeout document
Close-out of a phase or the project

Each phase delivers something needed for the next phase – last phase …definitive final result
This happens structurally in a number of steps
Users continually ensure that the correct project result has been delivered
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PM and team to ensure that next party in the chain can use what has been delivered in the way
it is intended – morally obliged to ‘guarantee’ the work delivered
In order to start next or close-out the present phase PM needs to obtain discharge from his work
A formalized procedure is preferable – it motivates stakeholders involved to carefully consider
their decision to accept
Necessary to determine whether everything has been delivered - of right quality (quality
register) – as mentioned in WBS – and as per acceptance document
If yes – initiate formal completion – review previous phase and preview next phase
Stage end report – PM outlines how project progressed – compares actual with baseline
Documents lessons learned – recommends whether to continue the project
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Terminate a contract – determine whether everything has been delivered as per contract:
Everything has been delivered according to expectation
Something has been delivered according to expectation
Large insufficient delivery according to expectation
Formally terminate each contract – discharge supplier from his responsibilities; warranty may be
required from supplier
Finalize financial transactions
Outstanding invoices forwarded to relevant departments
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Obtain customer feedback

Customer refers to the persons who are going to use the product – the end user
They may be represented in decision making but will have less say than the sponsor
Sponsor weighs costs, delivery times, quality and expected returns – whereas end user is
predominantly interested in quality and ease of use
PM must give sufficient inputs to end user and involve him in specification and acceptance
Get inputs from end user at the end of the project and observe how he reacts to delivered results
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Plan the hand over

Implies user has been well trained and are aware of any changed work procedure
This should be included in the scope
Support and maintenance staff often forgotten – should be incorporated
Involve user before technical solution is finalised – or at least from the time it is finalised
Support and maintenance staff – besides training must have sufficient resources to carry out
their tasks – includes documentation, updated configuration database etc. this too should be
project team responsibility
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Hold close-out meeting

Objective to make completion of the project visible
Content depends on which way the project has come to an end
Evaluate the project

Review should be done at each stage end
Improvements in small steps is more effective
Two forces that hinder good project evaluation – 1. the PM himself may not want to be
confronted with mistakes 2. may be in a hurry to start a new project.
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Archive Project Documentation – Project File:

Management documents
Project (Management) plans
Technical plans
Technical documentation
Contract documentation
Minutes and reports
Commissioning documents
Initial signatures of equipment and processes documents
Reliability and test documents
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Issue End Report

Final report is just not a bureaucratic requirement
Forced self-reflection on the project – you cannot write it down unless you have understood
Since multiple people provide inputs – it becomes a robust history of the project
Subjects covered:
 Review by the project manager on the project performance
 Evaluation of the business case
 Evaluation of the project objectives
 Evaluation of the team performance
 Evaluation of the products delivered
 Description of the lessons learnt
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Earned Value Management System (EVMS)
 EVMS measures project performance by

examining cost and schedule variances concurrently 3 Key variables:–
enabling a holistic view of project progress
 An integrated baseline is formed against which PV or BCWS
performance is measured
 It represents physical work achieved on the project EV or BCWP
in terms of a cost based Structure
 Costs can be in Money or Man-Hours AC or ACWP
BAC - Budget At Completion

EAC – Estimate at Completion (Predicted budget)
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Variances
 Schedule Variance (SV) = EV – PV
 Cost Variance (CV) = EV – AC
Performance Indices
TIME PLANE : SPI: SCHEDULE PERFORMANCE INDEX

EV (BCWP) >1 is good performance
= PV (BCWS) =1 is on target
<1 is poor performance
COST PLANE : CPI: COST PERFORMANCE INDEX

EV (BCWP) >1 is good performance
= AC (ACWP) =1 is on target
<1 is poor performance
Compares work performed (EV) with Actual Costs
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EAC can be calculated either as:
EAC = BAC/CPI to-date

or
= AC + (BAC – EV)
CPI assumed
or
= AC + ETC new
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To forecast new completion time based on current performance:
Original Duration / SPI
To forecast new completion time if future performance expected to be different

= Current month + [(Backlog Time + Remaining months) / SPI Assumed]
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Earned Value Management through S-curve
BAC
Cost
Cost CV
AC or ACWP SV
PV or BCWS Progress Review
EV or BCWP
Slippage
Time 260
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Project Status Determination
Under Budget Under Budget

1.5
& Behind & Ahead of
Schedule Schedule
CPI 1.0
Over Budget Over Budget

.5
& Behind & Ahead of
Schedule schedule
0
.5 1.0 1.5 2
SPI
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Milestone Slip Chart

A 80 week project has been divided
into 20 equal monitoring periods at
the end of 4 weeks each. There are 5
major milestones A, B, C, D and E.
These 5 milestones were planned to be
completed in the weeks 15, 28, 40, 64
and 72 respectively.
The following trend is observed:
•Milestone A slipped by 1 week at

each of the first 5 monitoring periods.
•Milestone B slipped by 4 weeks in
the first monitoring period only.
•Milestone C slipped by 2 weeks each
in the 7th and the 8th monitoring
periods.
•Milestones D and E slip by 1 week
each from the 12th to 16th (both
inclusive) monitoring periods.
Prepare the milestone slip chart as at

the end of the project
As seen at the close of the project 262
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Practices
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Practice 6 – Quality
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Project Quality
What is Quality?
Quality is “the totality of characteristics of an entity that bear on its ability to satisfy stated
or implied needs” - ISO
“Degree to which a set of inherent characteristics fulfill requirements”

- American Society for Quality
Quality in projects has two key drivers. On the one hand, it is about the quality of the
process, the way in which the project is organised. This is about developing, implementing
and reviewing standards for the way quality is addressed in component (sub‐)projects and
tasks. On the other hand, it is about managing, assuring and controlling the quality of the
output and outcome of the project. Quality encompasses the entire project from initiation to
post‐transition, throughout the whole life cycle. - ICB 4.0
Quality – meaning:
Delivery in accordance with the specifications
Fit for purpose
Minimum cost for society
Satisfies all expectations
A good feeling 265
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Quality
Steps in making quality measurable
 Needs translated into requirements
 Customer stipulates requirements for delivered product/ product result
 Something is always lost in translation
 Customer requirements also change somewhat over the course of time
Not adequate to write good specifications – PM must develop “effective” quality

management process – effective means that what is delivered matches expectations – from
the start this process helps the customer to match his expectations to what is possible
within the agreed budget and timeframe
Quality in daily practice for every team member

 Focus on the customer
 Demonstrating leadership
 Involvement in the team
 Continuous improvement
 Making decisions based on facts
 Common interests
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Quality Culture
Actions
 Develop and use a quality plan
 Assess the quality of the deliverables
 Verify the quality performance
 Plan and organize the validation of the deliverables
ISO 21500 Guideline for Project Management – this guideline differentiates between the
following quality processes:
Planning: goals: standards: instruments: processes: methods: technique: quality plan
Assurance: communication; execution of plan; correct use of tools, techniques and procedures
Control: verify the actual quality; preventive and corrective actions
project Quality expectations
Plan
deliverable Acceptance criteria
Product
Work package Quality criteria description
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Develop and use a quality plan

Context of quality concerned with the quality systems of :
 Own organization Quality Management
 Customer’s organization
 Suppliers’ organization
 Other partners’ organization
Quality system is designed by team members – it consists of

 The quality plan
 Quality reports
 Document control Quality Planning Quality Assurance Quality Control
 Policy, processes, procedures and work instructions
 Involvement in the team
 Continuous improvement
 Making decisions based on facts
 Common interests
firstly the sponsor clarifies main requirements – next PM & team work with and the users
to put everything together in a clear specification
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Several ways of ensuring necessary clarity:
 First reach an agreement on the result to be delivered
 Make a clear list of what is out of scope
 State the conditions, so that sponsor has a clear idea of his resposibilities
 Be clear about norms and standard specifications to be used
 Develop acceptance criteria for all project deliverables, ensure it is clear when the
customer is satisfied
 Take care that the benefits can be achieved with the quality
Users document characteristics of the deliverables in a requirement document; ensuring

the requirements are clear at the start – the customer quality expectations are translated
into specific acceptance criteria – at the level of individual deliverables, they are split into
quality criteria – for WBS work packages we produce product descriptions – for each
product description – record:
 The quality criteria we use to verify this sub-deliverable
 The quality method we use to do this
 The skills required for this
 The responsibilities
 When, outside of the standard reporting, we should report deviations (tolerance)
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For planning quality - quality criteria depends on type of planning:
 Waterfall- use product descriptions and associated quality criteria
 Agile – describe quality criteria for each sprint
Identifies & Determines which
quality standards are applicable to
the project
Identify checkpoints and methods
The quality plan describes the following activities:
 Reviewing before we go any further
 Verifying whether the requirements have been satisfied
 Validating whether the result is usable Preparation, checking and recording
of actions necessary to achieve the
standard of the product or service
Actions that is required by the customer
 Produce quality plan and implement it and law
 Record the various quality objectives Quality audits are planned
 Introduce measures to achieve these objecives
 Explain why a particular quality measure has been taken
 Integrate these measures into all project activities
Quality is driven by company’s quality policy

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Assess (Review) the quality of deliverables
Actions
 Quality standard to be achieved
 Explain the manner in which you assess the
 Product Acceptance Criteria
quality
 Roles and responsibilities
 Name those elements which are necessary
 Procedures, processes, tools &
for the assessment
techniques and standards to be
 Make clear how quality objectives will be
followed
communicated
 Metrics that will be used
 Carry out and analyze quality audits
 Carry out corrective action to restore
quality
Projects consist of integrating interim results – output of one team may be the input for the
next – small deficiencies in quality can start a chain leading to large defects in quality –
therefore advisable to assess part products at critical moments – team proceeds only on
quality test being passed – the requirements in the product description forms the basis for
an assessment – review points are many – first of these before approving the project – last
after delivery of results (also known as validation) – also at important transition between
stages, in event of large changes or accumulation of small changes and calamities.
Examples are – design reviews; risk analysis; HAZOP (hazardous and operability);
FMECA (failure mode, effects and criticality analysis) and environmental impact analysis.
Approaches for review 271

 Brainstorm; Delphi method; Peer review, Official auditors, Second opinion
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Verify the quality performance

Actions
 Record the results of verification
 Carry out an analysis of the root cause of defect
 Implement a process of assessment by colleagues
 Produce recommendation for corrective action
When verifying we check for conformance to specifications – result complies with the
specifications set in the product description – testing result carried out in a number of
steps – last test called acceptance test – the customer tests whether predefined acceptance
criteria has been met – deviations from specifications or defects – non-conformance must
be corrected or repaired – before proceeding with next process – good practice to
document course of events in the quality register
Concession
 If during testing the result does not conform to the specification but is suitable for use in
practice (fit-for-use) and we leave it as it is
 We have made a concession in this case
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Plan and organize validation of deliverables
Actions
 Emphasize that validation should be carried out as well even after verification
 Document the quality objectives as an aid to the validation activity
 During the delivery, carry out validation
 Obtain an acceptance document
Whereas verification covers satisfying the requirements; validation is an answer to the

question as to whether the result delivered enables the organization to achieve its goal (fit-
for-purpose). This, therefore, goes beyond and is about a good feeling. Since there are
potential changing requirements of the users – is the result we deliver what is needed?
 Under waterfall method the answer will emerge only after actual use, in a programme –
validation is part of the programme – knowledge of the following needed:
 The use
 The way in which he uses the product
 Risk for the product, safety and environment
 The urgency of delivery
 Validation can take place in a number of ways at various times – where possible during the
project – strength of agile – team delivers result in a number of small steps – validation
has to be carried out always before result is put to operational use – when checking results
against business case – has the result come up short? Difficult time for a PM and his team
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to face.
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Quality Gurus
Key Quality Gurus who have shaped the Quality movement are:
 Deming – 1900-1993
 Juran – 1904-2008
 Crosby – 1926-2001
 Ishikawa – 1915-1989
 Taguchi – 1924-1987
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Quality Gurus – W. Edwards Deming
 Deming’s Plan-Do-Check-Act (PDCA) cycle
Plan - see how to improve present practices
Do - implement improvement plan on small scale
Check - test to check got desired results or not
Act - implement corrective actions needed in plan
 Management commitment essential
85% of meeting quality is management responsibility
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Total Quality Management TQM)
Total Quality Management (TQM) - TQM is an approach used to implement

quality improvement programme involving everyone across the organization
Get ideas from employees
 Environment of participative leadership
 Improve the customer service
 Benchmark major activities to improve
 Reduce cycle time
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Quality Gurus – Joseph M Juran
Juran advocated Three key concepts

 Fitness for Use – can the customer make use of the product?
 Trilogy of:
 Quality Planning
 Identify the customer
 Determine and translate his need
 Quality Control
 Produce a product in which the needs of the customer and those
of the delivering organization are optimized
 Develop a process for producing the product
 Quality improvement
Optimize the process
Prove that the process is capable of producing the product
Start using the process
 Cost of Quality 277
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Quality Gurus – Philip B. Crosby
Crosby advocated Four absolutes of quality
 Prevention over inspection
 Zero defects
 Conformance to requirements
 Cost of nonconformance
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Quality Gurus – Dr. Genichi Taguchi
Advocated Productivity improvements
 Quality should be designed in process, not inspected in

 System design
 Parameter design
 Tolerance design
 Reduce deviations from target
 Cost of quality to be measured against a standard
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Quality Concepts
Quality & Grade
• Grade is the level or functionality of the product or service
• Quality is achieved by meeting the stated requirements
Customer Satisfaction
• Meet customer needs through evaluation, defining and managing of

their expectations
• Project aims to satisfy customer’s quality expectations
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Quality Concepts
Zero Defects
• Goal is to improve processes to avoid all defects
• Management to establish a defect free environment
Prevention vs. Inspection
• Cheaper to do things correctly at the first time.

• Rework after removing defects after inspection more costly
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Quality Assurance
Quality Assurance is:
The set of processes and procedures that demonstrate that the work is being done according to
the quality plan and will satisfy the relevant quality standards
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Quality Assurance
QA ensures compliance of the process not the product result
Pre planned Audits and Reviews used to check compliance that all
procedures are being met as planned
Performed by QA department or line organization personnel or separate

organization
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Quality Control
Quality Control
Processes for planning & monitoring specific project results to verify if they comply with
relevant quality standards, and identifying ways to eliminate causes of unsatisfactory results
Not limited to defect elimination.. Should lead to process improvement
To control quality
• Project results regularly monitored
• Check whether results comply with the required quality standard
• See how causes for defects can be removed
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Quality Assurance & Quality Control
Item QA QC
Goal Do right first time; Defect prevention Defect identification in end product
Definition QA is a set of activities for ensuring QC is a set of activities for ensuring

quality in the processes by which quality in products. Focus on
products are developed identifying defects in the actual
product produced.
Theme Proactive and process based approach Reactive and product based approach
Tools Maintenance of machines, Audit, Unit Testing/ Validation, Inspection,

Testing, Reviews, Training, good Sampling
processes, providing adequate time
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Quality Management
Quality Policy Quality Statutory
Requirement Requirement
Define Quality
Standard
Quality Planning
What Action/ Feedback to

Processes/Procedures QA & QP
Are we following the right processes? Quality

Do we need to change / modify the processes? Assurance
Quality Control
End Result complying Defect Repair/
with standard? No Rework
Yes
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Cost of Quality
Broken into three main categories:

Cost of conformance
1. Prevention costs e.g. quality planning; new products review; process

planning and control; quality audits, supplier quality evaluation; training;
equipment maintenance
2. Appraisal costs e.g. incoming inspections & test; in-process inspections &
test; final inspections & test; document review; balancing, quality audits;
maintaining accuracy of test eqpt; inspection and test material and
service; evaluation of stocks
Cost of nonconformance
3. Failure costs
• Internal failure costs – before leaving organization e.g. rework,

scrap
• External failure costs – customer determines their requirements not

satisfied e.g. liabilities, warranty work 287
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Quality Tools & Techniques
Seven Key Quality Control Tools

• Checklists/ check sheets
• Histograms
• Cause-and-effect diagrams
• Scatter diagram
• Control charts
• Flow charts/ diagrams
• Pareto analysis/ diagrams
Other tools
• Inspection
• Benchmarking
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Cause & Effect Diagram (Fishbone Diagram)
• Graphical technique that helps team group ideas and identify the causes of a
problem
• Breaks problems down for analysis
• Shows the relationships among different variables and the effect

(problem)
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Example of Cause and Effect Diagram
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Example of Cause and Effect Diagram
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Pareto Chart
• Histogram ranking no. of defects in order of frequency or importance
• Helps to identify key problems - "vital few" 80/20 rule
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Pareto Chart
• The chart drawn using 3 axis:
 Left hand vertical axis representing the unit of comparison selected e.g.
frequency, cost, time
 Horizontal axis representing different categories of data from max (L) to min.
(R)
 Right hand axis represents the cumulative percent from 0% to 100%
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Control Chart
• Used to decide whether the product or service is “in control” i.e. within a
specified, acceptable range
• Graphically displays results of a process
• Does not provide causes for deviations or solutions
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Control Chart
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Control Chart
The chart has a Upper Control Limit (UCL) and a Lower Control Limits (LCL)
showing acceptable process limits e.g. weight, length, temperature .
The Upper Specification Limit (USL) and Lower Specification Limit (LSL) are set
by Stakeholder requirement .
Allowable process range lies between UCL & LCL and UCL & LCL lie within
Specification Limits.
If all data points lie within UCL and LCL process is “in control”. Chart also shows the
data trend.
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Control Chart
• Common causes : This source of random variation is always present in any
process. It is that part of the variability inherent in the process itself. The cause of
this variation can be corrected only by a management decision to change the basic
process.
• Special causes : This variation can be controlled at the local or operational level.
Special causes are indicated by a point on the control chart that is beyond the
control limit or by a persistent trend approaching the control limit.
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• Rule of Seven : When several successive points line up on one side of the central
line, this pattern is called a run. As a rule of thumb, if the run has a length of seven
points, there is an abnormality in the process.
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Inspection
• Used to determine the level of performance as per a predetermined

standard
• Includes measuring, examining, and testing
Benchmarking
• Used for process and product improvement
• Can be done within organization or with other organizations which

have similar processes
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Risk-based testing
Risk-based testing is the idea that we can organize our testing efforts in a way
that reduces the residual level of product risk when the system is deployed.
Risk-based testing starts early in the project, identifying risks to system quality
and using that knowledge of risk to guide testing planning, specification,
preparation and execution.
Risk-based testing involves both mitigation – testing to provide opportunities to

reduce the likelihood of defects, especially high-impact defects – and contingency
– testing to identify work-arounds to make the defects that do get past as less
painful.
Risk-based testing also involves measuring how well we are doing at finding
and removing defects in critical areas.
Risk-based testing can also involve using risk analysis to identify proactive
opportunities to remove or prevent defects through non-testing activities and to
help us select which test activities to perform.
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Practice 9 – Procurement and Partnerships
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Procurement & Partnerships

“ Procurement provides link between suppliers to customers i.e. right product, in the right
quality and condition is delivered at the right place, at the right time, at the right cost, to
the right consumer. This is also the concept of Logistic Management or Supply Chain
Management (SCM)”
Procurement is a process of buying or obtaining goods and/or services from external parties.
It includes all processes, from purchase planning to making the purchase and contract
administration. Because procurement focuses on the suppliers outside the parent
organisation, it procures resources (people, tools, material, and sub-deliverables) that are not
available from within the organisation. This competence element also includes choosing or
taking the optimal procurement routes, which should fit the long-term objective of the
client but also the organisation (e.g. partnership, joint ventures, etc.). These routes can
mean sharing funding, expertise, etc., but also entail the risks of failing on the market.
ICB4
Procurement is acquiring of goods and services required for the project from
outside the performing organization
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Procurement and Partnerships
Rationale
 Projects are like temporary companies within the permanent organization
 Project personnel may often be screened from the permanent organization
 Procurement of goods and services is where the two converge
 Even though the PM and his team may like to do all procurement themselves, without any
bureaucratic red tape; in most cases they have to consult the organization’s procurement
department…. Often the physical procurement is done by them
 The procurement department is normally more knowledgeable about laws, legal and statutory
regulations, organization’s own policies and during the purchase they are independent’ which is an
advantage during negotiations
 The PM and his team will however, not relinquish control over the procurement for projects; on the
contrary, procurements will succeed only when there is good cooperation
 Always better to treat suppliers and contractors as your partner – the role and type of contract is often
dependent on the dominant culture of the country and the organization
Project/ Programme personnel must display ability to cooperate, through the following actions
 Reach agreement on procurement Process of Procurement
 Participate in supplier selection  Planning for the procurement
 Participate in negotiations  Identifying prospective sellers
 Manage the contracts  Prepare and send Procurement documents e.g. RFP,RFQ to
prospective sellers
 Reviewing the seller responses
 Selecting the sellers Administering the contract
 Closing the contract 303
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Agree on needs, options and processes

Actions
 Determine the necessity of procurement or partnering
 Collect the necessary information for the procurement process
 Determine the necessary procurement documents and processes
 Support the whole procurement process
Buy decision advantages

 Supplier can bring in specific knowledge and skills not available in the team
 Supplier can broaden the product offering of the main contractor
 Availability of resources more flexible
Buy decision disadvantages

 Authority and influence of the project/ programme manager is less in the suppliers org
 The sponsor becomes worried when large parts of the project contract are outsourced to
sub contractors
 Greater dependency on suppliers
 The supplier has less knowledge of the organization
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Agree on needs, options and processes
Procurement plan
 Where and how to make use of suppliers
 Which issues do we have to consider when involving suppliers
 What are the advantages connected with this
 What are the risks involved
 How do we establish contact with the project/ programme team
 How do we coordinate the work of the suppliers
How contracting will be done, is one of the early stage decisions to be taken….. The
design of documents to support the procurement process is dependent on this.
There is a big difference between a supplier and a partner … even though the
paperwork and processes may be similar…. The differences are in mindset; attitudes;
approach between being distant ……. and embarking on a approach to jointly achieve
the results
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Contract
“A contract is nothing but a legally binding agreement between two or more parties”
A Contract is:
Agreement between two or more parties that is binding on all the parties
concerned consists of:
 An Offer – between the parties for performance of a service, procurement of

supplies or a combination of both service and supplies
 The Agreement - actual agreement or contract that has been entered into
 The Consideration - normally in terms of money is paid in return for

providing the product or service
 Legality of purpose- the intent for which the contract is made should be
legal
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Participate in the supplier selection
Application
 Start the tendering in cooperation with the procurement department
 Determine the specific requirements for the procurement or partnership
 Record the different procurement steps
 Explain the function of the documents used
 Name and use the specified criterion
 Keep in line with the internal and external regulations
Possible selection criteria

 The extent to which the suppliers understand the project requirement
 The total costs (both investment and exploitation)
 The expertise of the suppliers with regard to what is to be delivered
 The management approach of the supplier
 The technical approach of the supplier
 The financial strength of the supplier
 The production capacity of the supplier
 The extent to which the supplier owns the intellectual property
 The size of the supplier’s organization
 References
Determine and finalize an evaluation criteria for selecting appropriate sellers

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Participate in the negotiation

Application
 Determine the negotiation mandate and the objective
 Recognize the effect of various forms of contract on your initiative
 Recognize the effect of various clauses on your initiative
 Negotiate on the contract and customize to your requirements
Procurement Documents Reviewing the seller responses

 Compile relevant documents for sellers  Responses from prospective sellers
- bids, offers, proposals (EOI, RFP ,RFQ) are evaluated against the pre-
- work details, determined criteria
- seller evaluation criteria,  An evaluation criteria is finalized
for selecting sellers
- response forms, procedures
- proposed contract terms and conditions
Actions by project personnel  Explain the function of the documents used
 Start the tendering in cooperation with  Name and use the specified criteria
procurement
 Keep in line with internal and external
 Determine specific requirements for the regulationsand finalize an evaluation criteria
procurement or partnership for selecting appropriate sellers
 Record different procurement steps 308
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Award process
Award process i.e. selecting the sellers

 Seller is selected to fulfill procurement needs after negotiation between buyer
and seller
 Actions for negotiation
 Determine negotiation mandate and objective
 Recognize the effect of various forms of contract on your initiative
 Recognize the effect of various clauses on your initiative
 Negotiate the contract and customize it to your requirements
 What matters is
 What is the level of control you have over the supplier
 Who carries certain risks
 Who carries the impact of certain risks
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Manage the contracts

Administering / Managing the Contract
 Contract Management includes
 Translating the contractual obligation into concrete actions
 Checking that agreed deliveries actually take place
 Carrying out formal assessments, inspections and audits
 Assessing progress reports from the supplier
 Arranging payments
 Fulfilling own contractual obligations
 Administering claims
 Management of formal documentation
 Management of changes
 Formal Change Control System is very important for Contract Modifications.
This includes:
1. Paper work 2. Tracking System 3. Dispute Resolution Procedure 4. Mutual
Consent 5. Approval Level
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Manage the contracts …contd
Closing the Contract
 Formal contract closeout is necessary to verify that all the work and the contract
deliverables are acceptable to the buyer
 Get a formal acceptance from buyer
 Deal with any pending contract issues/claims
 Update each contract file
 Record the lessons learned from each contract for future use and learning
 Closing may happen under the following circumstances
 According to agreement
 Terminated in mutual consultation
 Breach of contract
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Choosing The Type of Contract
 Selecting appropriate contract is essential for successful contract performance

 Type of contract chosen will determine the cost and performance risks placed
on the contractor and will impact his performance
 The amount of monitoring required by buyer will depend on type of contract
selected
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Type of Contracts
Three broad categories of contracts

 Fixed Price contracts
 Cost Reimbursable contracts
 Time and Material contracts
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Cost Risk & Contract Type
COST RISK AND CONTRACT TYPE

Cost Risk High __________________________________ Low
Requirement Vague __________________________________ Well-

Definition defined
Production Concept Exploratory Test/ Full-scale Full Follow-on

Stages Studies & Development Demonstration Development Production Production
Basic
Research
Contract Varied CPFF CPIF, CPIF, FFP, FFP,

Type
FPIF FPIF, FPIF, FPIF,
FFP FPEPA FPEPA
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Profile in Contract Risk
Cost-Plus-Fixed-Fee (CPFF)
Greatest Risk on
Cost-Plus-Award-Fee (CPAF) Buyer
Cost-Plus-Incentive-Fee (CPIF)
Cost-Sharing (CS)
Sharing Risk
Fixed-Price-Incentive (FPI)
Firm-Fixed-Price (FFP)
Greatest Risk on
Contractor
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Type of Contracts
Fixed Price (FP) or Lump sum contracts
 Seller understands total work required and quotes a price inclusive of

his profit margin
 Maximum risk faced by seller
 Can have a Fixed Price contract known as Fixed Price Incentive Fee
(FPIF) where seller is given an incentive by Buyer for exceeding required
performance
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Fixed Price Contract Contd..
• Fixed Price Incentive Fee (FPIF)

Here the buyer agrees to pay the seller a Fixed fee PLUS an incentive / penalty
based on performance. Very similar to Cost Plus Incentive Fee except that FPIF has
a Maximum Payout or Ceiling Price.
• Fixed Price with Economic Price Adjustment Contracts (FP-EPA) are used
whenever the seller’s performance period spans a considerable period of years. FP-
EPA is a fixed-price contract, but with a special provision allowing for predefined
final adjustments to the contract price due to changed conditions, such as inflation
changes, or cost increases (or decreases) for specific commodities.
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Type of Contracts
Cost Reimbursable contracts
 Required when project is uncertain and difficult for contractor to

estimate a fixed fair price with sufficient accuracy
 End result to be achieved is clear but work required to be done

not very clear
 Buyer cannot give a detailed CSOW
 Contractor faces minimum risk – is only required to use

his best effort
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Cost Plus Fixed Fee (CPFF )
• In a Cost-Plus Fixed Fee contract the buyer agrees to reimburse the

contractor/seller the actual allowable costs incurred by him plus a fixed fee .
• The fee paid is generally based on a percentage of the estimated costs and does not
vary with the actual cost incurred.
• Such contracts are more common in highly uncertain projects, where it is difficult
to assess and correctly predict what the project will finally cost.
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Cost Plus Percentage of Cost (CPPC)
This type of contract is similar to a cost plus fixed fee contract except that the
contractor’s fee or profit part varies.
• The buyer will reimburse the seller or contractor the actual costs incurred in
undertaking the project plus a certain percentage of the actual cost as the fee or
profit for doing the project.
• In such a contract the contractor has no incentive to reduce project costs as his fee
is based on the actual costs that are incurred.
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Cost Plus Incentive Fee – CPIF contracts
In this sort of contract the buyer reimburses the seller or contractor his actual cost
incurred plus a fee plus an incentive / penalty for good / bad performance.
• Both the buyer and seller share the cost savings that are achieved from good
performance by the contractor.
• A sharing formula between the Buyer and Seller is decided in the beginning of the
contract for awarding of incentive and penalty to both.
• Usually this sharing formula will reflect the amount of risk each party is willing to
take.
• Contractor’s fee is governed by a Minimum Fee And a Maximum Fee
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Terminologies in CPIF & FPIF Contracts
 Target Cost – Cost likely to be incurred by contractor in providing the contracted

product or service. Basis to measure final cost of contractor is pre determined
 Target Fee – the value of profit the contractor expects for the contract, is generally
included in the contract
 Target Price – this is the Target Cost plus Target Fee
 Share Ratio – A pre-fixed ratio for sharing the cost saving/ penalty between the
buyer and the seller
 Maximum & Minimum Fees – the maximum and minimum fee that can be made by
the contractor – used only in CPIF contracts
 Ceiling Price/ Price Ceiling – FPIF Contracts only – Maximum payout by owner for
all actual costs + Contractor Fee – Contractor meets all costs above this limit
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CPIF & FPIF Contracts
 Final Price of Contract = Actual Cost + Contractor Fee

 Contractor Fee = Target Fee +/- Incentive/Penalty
 Incentive/Penalty = (Target Cost – Actual Cost) X Sellers Ratio
– If actual cost is less than target cost the Contractor Fee is increased by the
Share Ratio
– If actual cost is more than target cost the Contractor Fee is decreased by the
Share Ratio
• CPIF – Contractor Fee governed by Maximum and Minimum Fee, Actual cost fully
reimbursed
• FPIF – Contractor Fee + Actual Cost governed by Ceiling Price
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Contract Examples
CPIF Contract…..terms
• Target Cost 210000  Contractor Fee = Target Fee +/- Incentive/Penalty
• Target Fee 25000  Incentive/Penalty = (Target Cost – Actual Cost) X Sellers
Ratio
• Target Price 235000 – If actual cost is less than target cost the Contractor
Fee is increased by the Share Ratio
• Share Ratio 80:20 Buyer:Seller – If actual cost is more than target cost the
Contractor Fee is decreased by the Share Ratio
• Minimum Fee 20000 • CPIF – Contractor Fee governed by Maximum and
Calculate Contractor Fee & Final Price if Minimum Fee, Actual cost fully reimbursed
• FPIF – Contractor Fee + Actual Cost governed by Ceiling
• Option 1 Actual Cost = 200000 Price
• Option 2 Actual Cost = 250000
Option 1
• Contractor Fee = 25000 + 20% of (210000 – 200000)…….Target Cost – Actual Cost
=> 25000 + 2000 = 27000
• Final Price of Contract = Actual Cost + Contractor Fee = 200000 + 27000 = 227000
Option 2
=> 25000 + (‐ 8000 )= 17000…… but minimum fee is 20000 so 20000
• Final Price of Contract = Actual Cost + Contractor Fee = 250000 + 20000 = 270000 324
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Contract Examples
FPIF Contract…..terms
 Incentive/Penalty = (Target Cost – Actual Cost) X Sellers
• Target Fee 10000 Ratio
– If actual cost is less than target cost the Contractor
• Target Price 110000 Fee is increased by the Share Ratio
– If actual cost is more than target cost the
• Share Ratio 75:25 Buyer:Seller Contractor Fee is decreased by the Share Ratio
• Price Ceiling 125000 (Max Payout) • CPIF – Contractor Fee governed by Maximum and
Minimum Fee, Actual cost fully reimbursed
Calculate Contractor Fee & Final Price if • FPIF – Contractor Fee + Actual Cost governed by Ceiling
Price
• Actual Cost = 90000

=> 10000 + 2500 = 12500
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Contract Examples
FPIF Contract…..terms
 Incentive/Penalty = (Target Cost – Actual Cost) X Sellers
• Target Fee 10000 Ratio
– If actual cost is less than target cost the Contractor
• Target Price 160000 Fee is increased by the Share Ratio
– If actual cost is more than target cost the
• Share Ratio 80:20 Buyer:Seller Contractor Fee is decreased by the Share Ratio
• Price Ceiling 175000 (Max Payout) • CPIF – Contractor Fee governed by Maximum and
Minimum Fee, Actual cost fully reimbursed
Calculate Contractor Fee & Final Price if • FPIF – Contractor Fee + Actual Cost governed by Ceiling
Price

=> 10000 + (‐4000) = 6000………but max payout is 175000……thus Contractor Fee = 5000
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Type of Contracts
Time & Material contracts
 Based on completing a fixed amount of work earlier agreed to by

seller and buyer
 Seller paid depending on time taken to complete this fixed work
 Fixed rate paid for services rendered
 Cost of materials reimbursed to contractor by buyer
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Contracts normally include…
Contracts normally include details of:
 Complete Statement of Work (SOW)

 Performance requirements
 Schedule
 Payment terms, pricing adjustments for inflation
 Acceptance criteria
 Penalties, Liabilities
 Handling changes
 Warranties and guaranties
 Contract termination rules, applicable country laws
 Dispute resolution
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Claim management processes, methods and tools
Project contracts describe project claim management procedures because we need

them in implementation and closure phase in order to resolve problem situations that
are not covered by the contracts’ change management clauses. Usually, that means that
the change is already executed but any payment for additional effort or penalties for
delays are not yet agreed upon.
The fundamentals of successful project claim management:

 Contractual Basis
 Records
 Claim Strategy
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Typical Claims Against Owner
• Poor project planning
• Scope changes
• Constructive change orders
• Errors and omissions
• Contract accelerations and stoppages
• Site access or availability
• Other construction interference and delays
• Strikes and acts of God
• Low bidders
Typical Claims Against Contractor
• Late completion - liquidated damages
• Out of specification materials
• Defective work
• Property damage
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Delays
• Excusable Delay
– Beyond control of owner or contractor
• Inexcusable Delay
– Owner caused changes to work
– Differing site conditions
– Suspension or termination of work by owner
• Concurrent Delay
– Two or more delays in same time frame
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Claims Analysis
• Brief of the case
• Owner’s position
• Contractor’s position
• Analysis and evaluation
• Recommendations
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Procurement Audits
 A structured review done to assess whether procurement processes followed

were suitable
 Audit should cover the entire procurement process including contract

administration
 Procurement areas that can be improved are identified and the process can be
improved with lessons learned in future projects.
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Contracts Terms
 Arbitration – Settling a dispute out of court by an independent third party

 Breach of Contract – Violating or breaking of a legal obligation
 Contract – A written or oral agreement made by one party to another that has legal obligations
on both parties
 Condition – A term of fundamental importance in the contract; breach of this condition can
cause the contract to be terminated
 Design Specification – A detailed description of the physical characteristics describing and
specifying what is to be done
 Privity of contract – A contractual relationship that exists between buyer and seller
 Screening system – Determining if contractor meets minimum qualification
 Special clauses – such as non disclosure clause that are legally binding
 Waiver – Voluntarily giving up of a legal right of privilege
 Warranty – A written, verbal or implied promise that gives assurance of a specified provision
in contract; provides buyer protection against breakdown and repairs
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Contracts Terms
 Executed Contract – A contract that has been completed

 Good faith – Transparency and fair dealing between all parties
 Infringement – Violation of legally recognized right
 Indemnity – Compensation as protection against any future loss
 Liquidation Damage – Damages for failure to complete specified contracted work
 Negligence – Not acting in a reasonably accepted manner
 Non-compete clause – Contractor cannot work as a competitor for a given period of time
 Penalty clause – To be paid by the contractor for not performing as per contract terms
 Performance specifications – The measureable capabilities of the product in terms of
operational characteristics to be met by the contractor
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Contracts Terms
 Bid Security – is required to protect the buyer against the risk of bidder’s conduct like
 Withdrawal or modification of the bid during period of validity
 Failure to sign the contract within reasonable time and within period of bid validity
 And/ or failure to furnish Performance Security (PBG)
 Performance Security
 Successful has to furnish a Bank Guarantee for a percentage of total contract value or 1st
year contract value (normally 7.5% to 10%) with a validity at least up to 3 months
beyond warranty period
 Performance security shall be payable as compensation for any loss resulting from
contractors failure to carry out its obligation under the contract
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Contracts Terms
 Retention Money
 Where the performance security is less; like 2.5%of contract value, a retention money
equivalent to a certain percentage of each running bill is deducted till final completion of
work. Normally this percentage is 7.5% to 10%
 Normally small contractors for civil, maintenance, transport, labour contracts are allowed
to furnish Performance Security @2.5%. In such cases 7.5% to 10% of the running bills
are retained towards performance security.
 Liquidated Damages – is a pre-determined/ assessed damage/ losss caused to company due to
failure of contractor
 To mobilise within the stipulated period
 To execute the contract within the stipulated period
 Contractor is liable to pay liquidated damages at a certain percentage (e.g. @0.5% of
contract value) per week; subject to a maximum percentage (e.g. 10% of contract value)
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Practice 11 – Risk and Opportunity
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Risk and opportunity
Definition
Risk and opportunity includes the identification, assessment, response planning, and
implementation and control of risks and opportunities around projects. Risk and
opportunity management helps decision makers to make informed choices, prioritise
actions and distinguish among alternative courses of action. Risk and opportunity
management is an ongoing process taking place throughout the life cycle of the project.
Purpose
The purpose of this competence element is to enable the individual to understand and
effectively handle risks and opportunities, including responses and overall strategies.
Risk and opportunity can also be described as ‘the product of the probability of an event
occurring times its impact if it did.’
Risk – negative effect or threat on project
Opportunity – positive effect on project
Risk management should be done to avoid threats to achieving the project goals as well as to
identify and enhance new opportunities that could be generated
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Risk and opportunity

Project results and the road leading up to it are full of risks and opportunities – both
may turn out to be better than expected or worse than expected – uncertainty is the
biggest opponent in projects
Two types risks/ opportunities
Project risks – which are related to project deliverables and issues that may have a (negative)
impact on the project execution.
Organizational risks – related to the expected benefits which can be achieved with the project
deliverables. Think of the risk an organization runs when a project is not implemented
successfully.
Always carry out assessment of risks and opportunities in relation to the context – the
organization risks determine the severity of project risks.
Actions
Develop and implement a risk management framework
Identify risks and opportunities
Assess the probability and the impact
Select and implement risk responses
Evaluate and monitor risks, opportunities and response
In our appraisal we include risks and opportunities together with cost and benefits. The extent
to which people are willing to run a risk or make use of opportunity – has a significant influence
on the ultimate decision whether to start the project or not. 340
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Develop and implement a risk management framework
ICB ISO 31000
Develop & implement risk framework ISO 31000 splits this up into 5 processes
Establish the context
Identify risks & opportunities Risk identification
Assess probability and the impact Risk analysis
Risk evaluation
Select and implement risk responses Risk treatment
Evaluate & monitor risks, opportunities & Monitoring and review
responses
Communication and consultation
Actions
Identify potential risk management models
Develop a risk management framework
Ensure that this framework is applied consistently
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Identify risks and opportunities

Top down and bottom up – top down focuses on similar projects/ experiences of the past – use
of checklist most common – allows senior management to decide whether to invest – bottom
up is much more detailed method – normally used in the end of planning stage or just before
start of a new stage – when we make or adjust our final project management plan – or the more
detailed plan for the next stage – we look at the detailed risk with respect to
Product description
Planning people and resources
The purchased and outsourced products
Risk identification process is successful only when the above points are clarified ‐ actions : name
the source of risk/ opportunity, identify the risks and opportunities, record these in the register
Risk Register Column Headings
For risk identification -Involve all
Identification code – Title of the risk –
stakeholders & use project documents e.g
Description – Cause or source – Warning
Work Breakdown Structure (WBS) – key tool
signals – Stakeholder owner(s) – Qualitative
Product description
estimate (probability and impact) – Quantitive
Scope statement
estimate (probability and impact) – Number of
Project management plan, Network schedule times it can occur – Proximity or horizon –
Risk management plan Responses taken – Action holder(s) – Estimate
Industry data of the residual risk (probability and impact) –
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Historical information Other comments
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Risk Identification
Risks arise due to the uncertainty prevalent in all projects
• Known risks – can be identified and proactive actions taken

• Unknown risks – cannot be identified and managed proactively
• Contingency plans and budget
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Risk Identification Tools
Information gathering Other techniques

techniques
• Documentation Reviews • Checklists

• Brainstorming • Assumption analysis
• Interviews • Flowcharts
• Delphi technique • Cause-and-effect diagram
• SWOT analysis • Influence diagram
• Root cause identification
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Brainstorming
Brainstorming popular technique
• Use a experienced facilitator

• List all ideas – all are good
• Use WBS and risk categories for identification
• Involve team members, other stakeholders
• What is said important – be non critical
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Delphi Technique
Similar to brainstorming but participants are anonymous
• Facilitator sends participants a questionnaire

• Response collated and circulated few times
• Less bias of other participants
• Can be done from far
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SWOT Analysis
Looks at the project’s:
• Strengths
• Weaknesses
• Opportunities
• Threats
Strengths and Weaknesses are internal

Opportunities and Threats are external
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Assumption Analysis
Assumption about future events like availability of equipment, resources etc. should be
formally recorded in a log
Likelihood of risks in the project increases when the assumptions turn out to be erroneous or
false
It is important to properly review the assumptions made by analyzing the following two
aspects:
The sensitivity (impact) of the assumption is assessed qualitatively on a scale such as
crucial, vital, important and unimportant
The stability (probability) of the assumption checks how likely it is that the assumption
will prove to be wrong or false
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Checklists
Checklists are simple but very useful predetermined lists of risks that are possible for
a given project
Can be obtained from projects done earlier or from industry specific standards
Useful to verify that the specified pre-requisite actions have been taken to ensure
nothing is left out e.g. regularly used by aircraft pilots to check no risk in take off and
landing
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Assess the probability and impact

Dimensions defined in risk analysis
The event or condition
The origin or cause
The probability that the event will occur
The possible consequences
Signals from which we derive a change in the probability
The period within which the risk or the opportunity will manifest itself (proximity)
Qualitative Risk Analysis Quantitative Risk Analysis

 A qualitative risk assessment is  Risk probability assessed using
carried out to prioritize risks specific values
 A risk’s Probability (P) of occurrence  Numerically analyses effect of
and Impact (I) is combined and identified risks on project objectives
assessed
 More rigorous
 Should always be done for all
projects  Optional analysis
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Risk Probability Impact Matrix
 Subjective assessment done separately of a Risk’s Probability and it’s Impact on

project objectives
 Risk ratings then assigned to each risk based on both Probability & Impact
(Probability x Impact)
 Risks rated and ranked in order of importance
 Overall risk ratings prioritize the risks for project
Impact (I) of Risk
PI=3 Category 3 PI=6 Category 2 PI=9 Category1
High 3
PI=2 Category 4 PI=4 Category 3 PI=6 Category 2

Med 2
PI=1Category 4 PI=2Category 4 PI=3 Category 3

Low 1
Low 1 Med 2 High 3
Probability (P) of Risk
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Risk Probability Impact Matrix

Impact (I) of Risk
PI=.09 PI=.27 PI=.45 PI=.63 PI=.81

0.9
Category10 Category6 Category4 Category2 Category1
PI=.07 PI=.21 PI=.35 PI=.49 PI=.63
0.7 Category11 Category8 Category5 Category3 Category2
PI=.05 PI=.15 PI=.25 PI=.35 PI=.45
PI=.03 PI=.09 PI=.15 PI=.21 PI=.27
PI=.01 PI=.03 PI=.05 PI=.07 PI=.09
0.1 0.3 0.5 0.7 0.9

 A PI table is formed Probability (P) of Risk
 Risk rating = Probability * Impact (Probability range is from 0.01 to 0.99)
 High, Medium, Low rating commonly used
 Numeric values can also be used to rate risks 352
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Quantitative Risk Analysis Tools
 Decision Trees
 Sensitivity analysis
 Expected Monetary Value (EMV)
 Monte Carlo simulation
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Decision Tree Analysis

Decision: Will we hold the picnic?
Picnic 4
80%
2
60% probability of good weather, 40% 20%
probability of bad weather. Good No Picnic 5
weather 60%
If good weather, 80% chance of
holding picnic. Bad weather, 30% 1 Picnic 6
chances picnic will be held. 40%
Bad 30%
weather 3
70%
No Picnic 7
 Probability of having picnic is the sum of its happening irrespective of the weather
 Probability of picnic is (60% * 80%) + (40% * 30%) which comes to 60% or,
probability of picnic is .6.
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Expected Monetary Value
Uses a Decision tree to calculate a future outcome that may or may not
happen
 Opportunities are expressed as positive values and risks as negative values.

 In Expected Monetary Value the value of each possible outcome is multiplied by its
probability of occurrence and then added together.
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EMV Exercise
I have a choice of following 2 routes:-
Route 1 –There is a 40% chance of taking this route which will result in
following:
- 80% chance that I will make a $50,000 profit
- 20% chance of making $10,000 loss
Route 2 – There is a 60% chance of taking this route which will result in following:
- 70% chance that I will make a $40,000 profit
- 30% chance of making a $30,000 loss
What is the Expected Monetary Value of my decision?
R1… (.4X.8X50000)‐(.4X.2X10000)=16000‐800=15200
R2…. (.6X.7X40000)‐(.6X.3X30000)=16800‐5400=11400
EMV = 15200+11400=26600
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EMV Exercise – Make or Buy
I have a choice of following choices:-
Buy Software – Cost 175,000/-

- 25% chance that it will be unfit. If unfit, negative impact is 90,000/-
- 75% chance that it will be fit. If fit, no impact
Make Software – Cost 150,000/-

- 55% chance that it will be unfit. If unfit, negative impact is 110,000/-
- 45% chance that it will be fit. If fit, no impact
Should I make or buy?
Buy… ‐(.25X90000) + (.75X0) ‐ 175000= ‐ 197500

Make…. ‐(.55X110000) + (.45X0) – 150000= ‐ 210500
Buy is better
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Sensitivity Analysis
Determines the outcome if a key parameter or assumption is

changed
 Used to show how the likely performance will vary when important
assumptions are changed
 Value of one variable is changed while others are kept constant to determine
which will have maximum impact on the outcome of the project
 Provides better understanding regarding which risk events will have
maximum impact on project objectives
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Monte Carlo Simulation
 Monte Carlo simulation used to show a large number of possible project outcomes.
Gives a complete picture and ‘what-if’ scenarios
 Project ‘performed’ many times using different durations for activities
 Provides a statistical distribution of the results
 Correlation between different activities and activities very crucial for the project’s
duration are highlighted
 Two important outputs are histograms and Cumulative probability charts or ‘S’
curves
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Select and identify response

Develop proactive actions to deal with risks – reduce threats, enhance opportunities
 Identify a responsible owner for the risk
 Select most appropriate response method for the risk – cost effective, timely, realistic
 Keep track and record in a Risk Register
Risk Response Strategy Effect of Response

Threats or Negative risks Avoid Remove root cause. Eliminate from project
” Transfer Third party financially responsible
” Mitigate Reduce Probability or Impact or Both
Opportunities or positive risks Exploit Remove uncertainty to use opportunity
” Share Make third party owner- better equipped
” Enhance Increase positive Impact or Probability or both
Threats & Opportunities Accept Accept the risk. Keep a contingency reserve
Unclear but threat more likely Contingent Execute if required

Response
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Select and identify response – carrying out risk management
Now is the question of incorporating different responses into the plan
Responses form the basis of management cycles PM needs to implement – response avoid may
result in change of scope – response change the likelihood may require increased control on the
execution or in the form of a disaster plan – the response transfer may possibly be translated
into a fixed price contract or an insurance policy – the response accept may require the
provision of an extra budget
Differentiate between owner of risk and team member who has to execute actions related to
planned risk response…latter is the action holder. The owner is ultimately responsible for
tracking and monitoring the risk i.e. changes in the probability and impact – he may be the
actioner himself or may delegate ….. The PM remains accountable for all residual risks or
neglect/ poor response to a risk by its owner ….. PM keeps a close watch on the risk profile
Actions
Explain how you can manage the risks and opportunities
Assess the possible risk responses
Develop alternatives
Ensure necessary people and resources are available
Implement and communicate risk plan
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Evaluate and monitor risks, opportunities and responses
Risk analysis is carried out in the start … but also throughout the project; including
execution
Actions
Monitor and manage risks and opportunities
Communicate about the risks and opportunities
Actively monitor risks and re‐assess when
An important change takes place in the project/ programme context in general or in the
organization in which, or for which the project/ programme is being carried out
At important milestones – which are logical points to again review the risks
Before important decisions that are to be taken during the project/ programme
Also check to what extent the responses actually have an impact
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Other Risk Response Strategies
A Fall Back Plan – Developed by the team, if the response strategy is found to be not
effective – Plan B if Plan A fails
Secondary Risk – the risk that arises due to the implementation of the original risk
response plan – team will review any possibility of secondary risk while finalizing risk
response strategy
Risk Trigger – is an indication that risk is imminent and risk owner will initiate response
plan (contingency) – EVM calculations show SPI <1 indicating Project Delay
Workaround – Finding a way out of a situation when an unidentified risk has already
occurred. Too many workarounds (Fire Fighting) shows lack of Risk Management
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Practice 5 – Organization and Information
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Organization and Information
In a project/ programme people work together to realize an unique product/ service /

result.
There is a need to organise a temporary organization in which various people,
departments, companies and/ or organizations know what they have to do within the
scope.
The word information is derived from Latin and means giving form to/ moulding and/ or
instructing. It should not be confused with data or knowledge.
Data becomes information when it makes sense to someone.
Actions to be taken
 Determine the information needs of the stakeholder
 Determine the roles, responsibilities and the organization structure
 Implement processes and infrastructure
 Implement and maintain the temporary organization
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Determine the information needs of the stakeholder

Actions to be taken
 Assess the documents, information and archiving needs
 Define the various (formal and informal) communication processes
 Explain the importance of good information exchange
 Determine the specific information of this project/ programme or portfolio
Information to be communicated including content, format and level at which it is to be made

Nominating the person responsible for this communication
Persons or groups who will receive the information
Method, technology and media to be used for the communication eg. Email, video
conferencing, press release etc.
Frequency of communication – monthly, daily, weekly or ‘on need basis’
Escalation process
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Define the roles, responsibilities and the organization structure
Portfolio Management
Line Management
Directing (Temp Org)
A decision making
body for the
Programme Management (Temp Org)
initiative (Sponsor)
Project Management (Temp Org)
Programme/ Project
Delivery Management (Temp Org) Manager
Corporate Management – Mgrs of permanent org who Internal and external

make available resources to Pgm/Proj suppliers (Team)
Decision Making Body – Sponsor/ Project Board
Customise Procedures :
Pgm/Proj Mgt – Project/ Programme Mgr Decision making , Hiring,
Executing Team and Suppliers – Execute project Reporting, Escalation, Meetings,
Changes, Work Order, Purchase ,
Determine Roles
Documentation
Actions to be taken
 Explain how a project/ programme or portfolio organization works
 Document the different roles 367
 Document the different responsibilities
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Implement processes and infrastructure

Actions to be taken
 Explain the goal of, and content of , the information processes
 Distribute the internal information
 Avoid redundancy in information provided
 Name the information to be provided without using IT facilities
 Explain the usefulness on the various meetings
 Explain what you will use the communication infrastructure for
Formal meeting structure Documents Document Mgt – choice of

Part of mgt infrastructure Technical documents technology depends on
Project board meetings (specialist documents) Urgency of information
Project (management) team Management documents Availability of technology
meetings Project schedules Ease of use
Team meetings Reports The context
Discussion with end users Records, registers Sensitivity and confidentiality
and logs of information
Business documents
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Implement and maintain the temporary organization
Actions to be taken
 Implement the organizational structure
 Monitor the effectiveness of the named roles
 When necessary, amend the organization
A plan needs to be implemented to Information Control

succeed. This implies it needs to be Gathering together the data
approved and implemented. Molding the data into information
Continuous flow of information Distributing the information
through the PMIS required. PM is Information at lower level is data for higher level
responsible for the implementation Controlling is therefore:
of the information system, while Ensuring that team members formulate
specialists are responsible for the information in their reports such that it contains
products/ services/ results. Failure useful information
if any is due to the system not Processing their reports into our progress
because of unwilling staff. reports in such a way so that this is suitable for
management level above us
Actively communicate
Take care of information security
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Roles in Project
Project Board/ Steering Committee/Sponsor
 Has ultimate accountability for the project
 Has hierarchic authority over resources coming under control of PM
 Board is chaired by project sponsor – executive manager who has overall decision
power in the project - Determine the priority between time, cost, quality
 Appoint the Project Manager
 Monitor the project's progress - is responsible on behalf of senior management
 Keep the Management Board informed about the project's progress and status
 Act as mediator for contract disputes or any other changes to be made to resolve issues
Project Manager
 Developing and owning the Project Management Plan
 Delivering the project on time, within budget and meeting required specifications
 Integrating, controlling & coordinating the project
 Managing stakeholder expectations & Communicating with various stakeholders, team
members, senior management through the project
 Resolving team conflicts & Developing and motivating team
 Maintaining a channel between the project team and the senior management
 Ensuring that all the project risks are fully identified, assessed, managed and regularly
re-assessed for any new risks
 Developing the network schedules for the project 370
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Roles in Project
Sub Project Manager/ Team Lead
 Where the number of participants in a project are so large that direct management by
PM is not feasible; a sub – project manager/ Team Lead may be appointed
 They have same responsibilities as the PM; only for a much smaller part of the project
 They report to the PM
Project Management Office (PMO)/ Project support

 Plays supporting role – to be independent of execution function
 Size can vary from a single project secretary to a group of experienced staff from
various disciplines
 PMO relieves the PM of a number of tasks; thus he can manage larger projects
 Combining together the project office of all projects an effective and permanent high
centre of excellence can be set up benefitting all projects of the organization
Project Controller
 If there are many projects, a project controller may be assigned – responsible for all of
the project administration
 He has the task of monitoring the finances of the projects and report this to the PM and
other management
 Makes proposals on potential to save costs and reduce risks
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Roles in Project
Project Assurance
 This is a specific role that demonstrates that attention is being paid to the agreements
made in the project management plan, in particular the work procedures, and ensure that
these are adhered to
 Ultimate responsibility for this role lies with the project board – they may carry this out
themselves, or may involve an external party or org’s quality assurance deptt
Customer Organization
 Essential that the project manager reasons from the customer’s position
 Essential that PM also identifies with the sponsor to achieve a high return from as small
an investment as possible
 If the PM comes from the supplier’s org, he has a tendency to use more capacity; and
bring the business case to danger
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Roles – Rules to be kept in mind
Never lose sight of the following issues
 Sponsor – accountable for the complete project including company benefits
 Sponsor – chairs project board if it exists
 Project Manger – carries out day to day management
 Project Manager – must think from customer perspective
 Interest of suppliers and users must be balanced
 Essential to build good relationship with key stakeholders; if not done, one will be
overwhelmed with unreasonable demands during execution stage
 Teams work autonomously within their clearly defined work packages
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Communication
 Organization of communication should be such so that it is unambiguous
 Aim is to avoid communication at cross purposes, holes appearing in the
communication and untruths circulating.
 Hierarchy – project organization should contain clear lines of authority; avoid matrix
construction within project organization as far as possible
 Linking pin – each part of the organization is represented in a higher part of the
organization; it is important that the project manager attends meetings of the project
board
Role Responsible for communication with
Project manager Project board or programme manager
Sub project manager Project manager
Team member Sub project manager or project manager
Project board company
Interested parties, unless explicitly delegated to project
manager
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Roles in a programme
Board of Directors
Sponsorship Board
Programme Director
Programme Board Pgme Assurance
Change Manager(s)
Tech Design Auth
Pgme Support
Programme Manager
Programme Team
Project Managers Line Managers
Project Project
Business as usual
Programme portfolio
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Roles in Programme
Sponsorship Board
 Installed when politically sensitive programmes are involved
 Ensures efficient cooperation from within the organization.
Programme Board
 Representation of key stakeholders, partners/ investors – responsible for leadership and
direction setting of the programme
 Chaired by Programme Director
Programme Director
 Sometimes called the programme sponsor, senior responsible owner or programme
executive
 He is a senior manager with sufficient authority to make all decisions related to the
programme investments
 Appointed by the Board of Directors
 Chairs the Programme Board; provides leadership and direction to the programme
 Ensures priority of the programme and interface with permanent organization
 Can escalate matters; provides advice and support to programme manager
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Roles in Programme
Programme Manager
 Responsible for the daily management including keeping project managers on course
 Stimulates ongoing operations to carry out change (along with the change managers)
 Responsibility includes handing over results
 He is the chairman of the programme team, from where daily management of the
programme takes place
Technical Authority
 When large technical component involved, include an expert in the team - Technical
authority
 Responsible to ensure techniques delivered by the underlying projects are synchronised
and balanced with each other and to the organization’s technical infrastructure
 Monitors technical cohesion at a high level
Programme Assurance
 On behalf of the Pgme Board, monitors effectiveness of the programme mangement
 Ensures organization can be assured of good programme management
 Is the “controller” of the programme manager
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Responsibility Assignment Matrix
Responsibility Assignment Matrix (RAM)

 RAM is used to show project Roles & Responsibilities
Who will do what work
Level of responsibility
 WBS & OBS are combined to develop the RAM. WBS shown down left hand side and
resources from OBS across the top of the matrix.
 Rows indicate the activities
 Columns identify the positions, or names
Weakness - Responsibility Matrix does NOT show when work will be done,
how much time will be taken nor how people will interact
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Responsibility Assignment Matrix (RAM)
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RACI Matrix
Person
Phase John Donald Sue Josephine Kelly
Project Mgt R R R I I
Analysis R A A C I
C I C I I
Design
A I R A I
Develop
C A C C I
Testing
Responsible Accountable Consulted Informed
RASCI – here S stands for Support to the Responsible team
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Team Structure
Rationale
 How effectively a team functions is dependent on – its structure (which is dependent on
the task that the team has to fulfill), and knowledge & experience of different team
members.
Considerations for Effective Structure (Henry Mintzberg)
 Organizing team according to knowledge, skills and function – designers in one team,
builders in another etc.
 Organizing according to time – All trades (designers, builders etc.) involved in Stage
1in one team, Stage 2 a second team and so on.
 Organizing according to Result to be delivered – All trades responsible for sub-system
A in one team and likewise for sub-system B
 Organizing according to User Groups – Each team is responsible for representing the
interest of a particular user group
 Organizing according to location – dependent on where team members are stationed
Take into account

 Relationship within the work to be carried out – determined on the basis of mutual
facilities used but also on the basis of sequence – design a structure such that cost of
coordination and communication is minimized
 The size – when a particular group functions best at a particular size
 Social coherence – put people in a team who can get along with each other 381
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Project Management Information System

 Permanent orgs make use of cost centres to
WBS compare budgets and actual spend
 Uses this to assess line managers in terms of
how they control costs
Activities  Different accounts are included in the so
called Chart of Accounts
Resource  This ledger accounts breakdown structure
Resource
Assignment are suited for the permanent organization
Allocations
Matrix (RAM)
Cost Need for similar structure for Projects/ Pgmes
OBS of permt org Allocation  Permanent Organization’s accounting
Matrix (CAM) cycle is not suited for the projects/ pgmes
Chart of  Accounting looks back while in projects we
Accounts need to look forward
 Project manager needs to design his own
PMIS
 Possible that the project/ programme may
be involved with several organization –
own, suppliers’, customers’ etc
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Project management Documents
Project Management Plans
One of the first documents to be produced is the Project Charter – consists of the following
topics
 Project Sponsor
 Objectives and result
 Constraints
 Interfaces
 Quality expectations
 Global business justification
 Reference to relevant documents
 Project manager and his authority
Depending on the size of the project – details further worked out in separate plans
 Project definition
 Scheduling
 Budget
 Quality plan
 Resource plan
 Communication plan
 Risk plan
 Procurement plan
In these plans – worked out in detail how these aspects will be organized in detail
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We may also have stage-wise plans, sub-project plans (NOTE- more documents=less clarity)
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Project Management Documents

Project Management Reports
 Progress reports
 Interim exception reports
 Memos documenting agreements
 Correspondence regarding project management process
 Periodic report on progress made – used when you have management by exception
with the sponsor – highlight report
 Between the reporting moments - Exception report sent when you anticipate a
deviation .. Project sponsor gets enough information and can decide necessary
arrangements to correct or deviate from the original plan
Project Records or Registers
 Covers minutes of meetings, logbooks and registers
 Daily log – PM keeps a diary of matters that are important but cannot be found in
other documents
 Issue Register – a list of project issues submitted during the project including change
requests
 Lessons learned log – list of experiences useful for future projects
 Quality register – registers all scheduled quality reviews, details of when they took
place, who participated and what was the outcome
 Risk register – a document in which identification, assessment, impact assessment
and response to all risks of the project are recorded
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Core Documents in a Programme
Vision Document
 Describes what we aim to achieve with this programme
The Programme Brief
 Produced during startup
 Based on this document, management make decision whether or not to start the
programme or not
 Repeats the vision, expected benefits, outline of programme organization, processes,
relationship with other initiatives, risks and other issues
The programme plan
 Sometimes this is part of the proposal
 Detailed description – phase plan
Blue print
 What the organization will look like at the end of the programme
 New roles and responsibilities
 Technology required to support this
Benefit composition
 Which translates vision into concrete measurable benefits
The business case
 Details why we should carry out the programme
 Which are the benefits versus the costs are set out
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Document Management
Rationale
 Plethora of documents may be overwhelming leading to lack of clarity
 Hence, need to organize documents
Types of document
 Specialist documents – specialised technical documents to be provided as part of the
delivery eg. manual of a computer; And are controlled by configuration management
 Management documents – relates to management results: needed to manage the project/
pgme eg. Project management plan. These are not only needed / useful for the duration of
the project; but in case of a later dispute with the customer which ends up in court; may
be used for forensic analysis
Important Aspects
 Document Control Plan
 Document Control
 Issue Documents
 Archive Documents
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Document Management
Document Control Plan
 Description of the documents
 Naming conventions
 Method of numbering versions
 Example templates and explanation
 Location of the documents
 Responsibilities
 Document control procedure
Not all documents need to go through the same regime; so a classification system required
 Management documents: daily log, risk register, issue register, pgme/ project mgt plan
 Project plans: schedule, budget, quality plans etc.
 Technical plans: safety plan, security plan, environmental plan, construction plan etc.
 Technical documentation: requirements document, design documents, user manual etc
 Contract documentation: proposal, contracts with customer and/ or suppliers, change
requests etc.
 Minutes and reports: progress report, minutes of meeting, decisions etc.
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Document Management
Document Control – ISO 9001 lists the following controls
 Approve documents for adequacy prior to issue
 Review and update as necessary and re-approved documents
 Ensure that changes and current revision status of documents are identified
 Ensure relevant versions of applicable documents are available at points of use
 Ensure documents remain legible and readily identifiable
 Ensure documents of external origin are identified and their distribution controlled. They
may be needed for planning and operation of quality management systems
 Prevent unintended use of obsolete documents: apply suitable identification on them if
they are retained for some purpose.
Issue Documents: check documents before issue for-

 Consistency – no internal or external inconsistency
 Actuality – must reflect reality of actual situation
 Completeness – contains all the information that should be present
 Accuracy – in lines with the need of the target group
Archive Documents
 During pgme/ project – saving at a place where it can be found easily
 After pgme/ project – some may be removed; others saved are archived and handed over
to permanent organization as per policy, rules and/ or legal obligation in force
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Practice 12– Stakeholders
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Definition
The stakeholders competence element includes identifying, analysing, engaging and managing the
attitudes and expectations of all relevant stakeholders. All individuals, groups or organisations
participating in, affecting, being affected by, or interested in the execution or the result of the project
can be seen as stakeholders. This may include sponsors, clients and users, suppliers/ subcontractors,
alliances and partners and other projects, programmes or portfolios. Stakeholder engagement includes
constantly revising, monitoring and acting upon their interests and influence on the project.
Stakeholder engagement may also involve building strategic alliances that create organisational
capacities and capabilities where both risks and rewards are shared.
Purpose
The purpose of this competence element is to enable the individual to manage stakeholder
interests, influence and expectations, and to engage stakeholders and effectively manage
their expectations
The competence places strong emphasis on situational awareness and calls for following
Actions
Identify and analyze interests of stakeholders
Develop and maintain the stakeholder strategy and communicate with stakeholders
Ensure that senior management is involved
Ensure that users, partners and suppliers are involved
Organize and maintain network and alliances
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Identify and analyze interests of stakeholders
A stakeholder has something at stake in the project and he wants to exert influence
Necessary to identify and analyze all interests .. Look at
The influence that can be exercised on the execution of the project
The consequences of the project for the interested party
As what is at stake for someone increases …. He wants to exert more influence
The more power someone has, the more influence and effect that person will have on the
project
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Different types of interest
Business interest – expressed in terms of money
Idealistic interest – which are connected to someone’s principles
Political interest ‐ how the results can influence someone’s position
Management interest – the necessity of following a consistent course of action
Loyalty interest – which are linked to personal relationships
Emotional interest – related to an affinity with, or aversion to – certain themes
Cultural interest – especially when operating in a context ; where parties with different value
systems need to cooperate
Their future behaviour can be deduced from their interest – which can be focused on the result
or the way in which the project is executed. Try to predict what effect all these interests have on
the execution, and develop a strategy to match these
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As stakeholders often have opposing interests; the interests especially of influential people play
an important role. If the PM and team have analyzed these well – they can anticipate them
Actions
Identify the interest groups
Identify and name the different
interests
Assess the influence of the
stakeholders
Recognize interest arising out of
project/ programme/ portfolio
context
Analyze effect of these on
project/ programme/ portfolio
Carry out actions to manage
stakeholders
Key persons
Project Sponsor - Project Manager - Project team members - Customer/Client - Performing
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organization
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Develop and maintain stakeholder strategy and communication

Action
Describe the importance of stakeholder strategy
Produce a communication plan to maintain it
Explain any changes
Look for possibilities to cooperate with other people
The way of communicating could be
Strong involvement
Consultation
Informing
Effective communication is the key to successful stakeholder management
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Develop and maintain stakeholder strategy and communication
Stakeholders provide support and make demands – the PM and team need a strategy to engage
with the stakeholders:
Develop trust
Manage expectations
Helps figure out which way the wind blows…..who are the informal leaders (who is really in
charge)
The project/ programme management plan establishes the approach – have a sign off from
project board/ sponsor … the board typically should consist of the most important
stakeholders – the plan is a means of sorting out the PM’s authority in advance ‐ involve
stakeholders in determining the approach
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Ensure that the senior management is involved

Action
Involve the sponsor
Involve senior management
Manage senior management expectations
Use senior management as ambassadors for your project/ programme/ portfolio
Senior management is the most influential group in an organization. Especially the sponsor
exerts influence on
Necessary finances
Setting priorities
The scope
The budget
Etc
Involve sponsor and senior management in decision making
This helps you borrow some of their power
If you manage senior managers from across the organization – you are likely to get support
from all departments
As ambassadors to your project/ programme – they make the right noises across as everyone
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realizes that your project/ programme has senior management support
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Ensure that users, partners and suppliers are involved
Action
Involve the users and acquire their support
Acquire the support of the suppliers
Work together to achieve the optimum result
Users are most involved with what the project/ programme is going to deliver
often the users find that they are not involved in the formation of list of requirements
sometimes the results are just forced on to the users
even if you do a perfect job delivering the results
but if the users do not ultimately accept them then the project is a failure
the maintenance staff have to keep the delivered product in working condition and thus have
a say in the acceptance
if maintenance staff is involved too late you may jeopardise the project
Suppliers (internal and external) supply to multiple projects so they prioritise; if you have their
support then they may give your project a higher priority
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Organize and maintain networks and alliances

Action
Document the agreements
Draw up a cooperation plan
Develop criteria in order to measure success
Maintain the agreements
If necessary, conclude the formal contracts
Support is the sum of all the influences stakeholders have
You acquire support by networking, by communicating with the people in the context and by
entering into alliances
Influence people to get their cooperation (politics) – bring about the best for the project
In complex projects there is a lot of political influencing and you have to become skilful in it
Enter into dialogue with different interest groups – make agreements with them – to protect
each others interests – document such agreements
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Stakeholder’s Attitude
• Positive or
Types of Stakeholders
negative about
the project Unaware
• Actively or Resistant
passively Neutral
involved in the
project Supportive
Leading
• Is affected by
project work
and/or project
outcome
• A Stakeholder
can help or
hinder the
project
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Planning Stakeholder Management
Involves:
• Identifying how the project will affect the stakeholder
• Identifying how the stakeholder could affect the project
• Developing approaches to affectively engage the stakeholder
• Managing stakeholder expectations to achieve project objectives
• Maintaining relations between external stakeholders and the project team
• The aim is to satisfy the stakeholders within the project boundaries
Stakeholder management involves:
• Encouraging engagement with stakeholders
• Often conflicting interests need to be managed
• Resolving issues that arise
• Effective Communication is the first key technique of stakeholder management
• Engagement of stakeholders with project activities and decisions is the second key
technique of stakeholder management
Skills required: • Effective & Active listening
• Strong interpersonal skills • Overcoming resistance to change
• Building trust
• Resolving conflicts 400
400
200
Stakeholder Analysis
• Make a list of all the stakeholders – Stakeholder Register

• Analyse their interests, requirements and expectations
• Understand each stakeholders key requirements
• Communicate any requirements that cannot be fulfilled
• Identify potential impact/ support the stakeholder can generate from power /interest grid;
power/ influence grid & influence/ impact grid
• Prioritize the interests

 Vital – must be achieved to complete project
 Significant – will have deep impact but project can still be completed
 Some effect on time/cost/quality and
 No effect
401
401
Stakeholder Management Analysis
Stakeholder Register
402
402
201
Stakeholders Grid
High
Power
Low
Low High
Influence
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403
Stakeholders Grid
High
Influence
Low
Low High
Impact
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202
requirements of all stakeholders …..
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405
aligning the stakeholders …..
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203
reduce angle of divergence…..
ᾳ
ᾳ
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Practice 13– Change and transformation
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408
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Change and transformation
Definition
Newly developed capabilities only deliver benefits when they are put to use, and when they are
supported by the organisations and people receiving them. Change (improvement of a current
situation, keeping the past in mind) and transformation (the emerging development of new
situations, based on a vision of the future) provide the process, tools and techniques that can be
utilised to help individuals and organisations make successful personal and organisational
transitions resulting in the adoption and realisation of change.
Purpose
The purpose of this competence element is to enable the individual to help societies,
organisations and individuals to change or transform their organisation, thereby achieving
projected benefits and goals.
Action – emphasis on adaptability Rationale
Assess the adaptability of the organization(s) Change necessary in a more complex world
Identify change requirements and options Technology, society & individual behaviour
Develop a change strategy changing
Implement the change People are better informed, more articulate
and better educated and will not slavishly
Projects deliver results – these have to be follow senior management
used by people – this calls for Organizations need to change both strategy
transformation in attitude and behaviour and structure
Project management besides delivering the
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result also must manage change
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Assess the adaptability of the organization(s)

Action
Study the change history and determine the level of adaptability
Research the potential areas of resistance
Influence the circumstances that can raise the level of adaptability
Take action when change exceeds the level of adaptability
Extent to which people in an organization are prepared to change is predominantly related to
their experience of earlier change processes
If you have experienced multiple reorganizations in the past few years; your view is different
from someone facing it for the first time
Some employees are completely sceptical of change
Constant reorganizations give the employees an impression that management does not know
what they are doing
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Identify change requirements and options
Action
Identify those people directly involved
Analyze the interests
Regularly investigate what should and could change
Adapt yourself when interests change
Even with delivery of different products/ services; change may be required in the context to
realize full benefits
Determine which people are involved
People are reluctant to change if they feel that their interests are in danger
This action is in parallel with the stakeholder analysis
We determine what has to change and communicate clearly and unambiguously
It may be needed to apply additional change
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Develop a change strategy

Action
Identify possible change strategies
Work together to validate these
Document the change strategy
Apply step by step approach when this is necessary
Learn from experience
Amend strategy when necessary
Project/ programme strategy describes the way in which we arrive at project results and
benefits
On the other hand we have to ensure that the organization changes such that the project
results are optimally utilized
Work together with various parties to ensure that change strategy is developed
Cooperation and listening to people involved is essential, so that approach created has
sufficient support
Big bang approach – change in one go; advantage – speed, sense of urgency, makes
preparedness better; disadvantage – less careful.
Speed of change is dependent on the level of adaptability and necessity to change
Sometimes step by step approach is better – implement small change; see extent of
transformation – adapt and proceed
Be ready to amend strategy if required
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Implement the change
Action
Ensure you have a coordinated collection of interventions
Implement the interventions
Organize and lead workshops and trainings
Openly bring up the subject of resistance
Make use of mass media interventions
Encourage new behaviour
Interventions
Workshops on particular aspects
Trainings in which professionals learn how they should behave n their new function
Information meetings about the progress of the change
“Serious games” in which new behaviour is practiced in game setting
Mass media manifestations, by addressing all the staff together in a video clip
Interventions have to reinforce each other – be in line with desired change – change approach

should be aligned to the message – practice what you preach (otherwise the message loses
credibility) – management should lead workshops themselves – they demonstrate ownership
through this – get to hear directly from employees – visibility of management demonstrates that
they are directly involved
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Practice 14 – Select and Balance
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Select and Balance
Definition
Select and balance focuses on the assessment, selection and performance monitoring of
components within the programme scope, and on the balancing of the programme, that is,
making sure that the programme as a whole implements the required change and creates
optimal benefits.
Purpose
The purpose of this competence element is to enable the individual to prioritise, select and re‐
assess all components within the programme scope, based on clear criteria. Maintaining the
balance, consistency and performance is crucial in order to achieve the outputs and outcomes.
This competency element is for programme and portfolio managers only ‐ as per IPMA
Ser Competence Programme Portfolio

manager manager
1 Identify the components Required
2 Analyze the components Required Required
3 Prioritize the components Required Required
4 Create an overview of all deliveries Required
5 Predict the performance of related components Required Required
6 Facilitate the decisions to be taken Required Required
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Select and Balance

Rationale
When there are a number of projects running ‐ organization has to weigh up which of these are
most important ‐ providing maximum contribution to strategy – they will get priority on
allocation of resources – the rankings may change over the duration of the project/ programme
– selecting and balance is about finding the optimum balance
Criteria used
Speed in which the results have to be visible – feasibility of required results – efficiency of the
effort in comparison to the benefits – flexibility between benefits and deployment of resources
– goal orientation of the effects – in the case of portfolio: organization must make an effort that
all parts of the organization receive sufficient attention – are we innovating sufficiently – are we
ensuring that the systems are maintained – is there a good balance between different divisions
of the organization – are projects in line with organization’s strategy – when the strategy
changes reverse can also be true
Reassess our initiatives
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Identify the components
Action
Identify all ideas, plans, proposals and active and inactive initiatives
Collect together all the current issues and document them
Produce an inventory and discuss this with the right people
Once senior management decides on strategy –number of projects, initiatives – ideas – plans –

compete for resources – hence organization must make an inventory of the things that have
been started – which are not part of routine work one can call this organization portfolio and
individual parts of it form components – the list is the basis of discussion at various
management level
By balanced it is meant the there is a good distribution between
Innovation
Maintenance
Commercial – risky and less risky
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Analyze the components

Action
Collect information on the way in which the components are related to each other
Analyze the relationship of the components
Identify the compulsory components
Compare the different components to assess whether they are worth the investment
Remove redundancy between different components
Group projects into programmes when this is required
Quantifiable criteria Other criteria
Profit growth Alignment with strategy
Cost savings Competitive advantage
Cost avoidance Customer satisfaction
Returns Opportunities and threats for the organization
Net Present Value Impact on the current company operations
Payback period Chances of a successful implementation
Costs Staff satisfaction
Effect on cash flow Availability of the required knowledge and experience
Claim over available resources Conformance with standards
In line with the choices already made
Consequences if we do not do this
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Prioritize the components
Action
Obtain agreement on the way prioritization is to take place
Support the prioritizing process
Support the allocation, financing and selection processes
Prioritize the components, based on their contribution to the total picture
Series of problems that can occur when classifying projects
Criteria can be explained in different ways
Classification leads to bureaucracy
The priority setting can be manipulated
Some work remains invisible
There are doubts about necessity
Negative impact on innovation
Customer confusion on the priority setting used
Not all projects can be compared the same way
Categories within which different projects/ programmes can be measured the same way –
linked to strategic goal such as
Financial benefit
Market share
Process improvement
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Innovation
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Create an overview of all deliverables

Action
Bring the components into line during the agreed assessment times
Collect and assess qualitative and quantitative data on the components
Monitor the portfolio to ensure it continues to meet the expectations
Identify those components, which have to be further investigated
Identify the necessary amendments to the portfolio
Portfolio management is checking at high level that different initiatives are still in line
with the organization’s strategy – the organization then delegates the execution of the
project to the sponsor and the project manager and his team – therefore a mechanism is
required to keep projects in line with the strategy – and the mechanism is portfolio
management – when we zoom to the different components of the portfolio – there would
be a broad outline of what the components deliver, what contribution they deliver, and
the times important decisions have to be made – periodically the responsible managers
can now check whether this is still in line with the currently applicable direction of the
organization – when necessary they amend the portfolio
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Predict the performance of the related components
Action
Assess and improve the identification of components
Use performance indicators to measure and add value
Use this to prioritize components
Learn from experience to improve this component
Tracking and monitoring portfolio is about
Keeping track of all projects and programmes that have been started
Continuously checking correctness of the priority model used
Take action when necessary
There is a difference between the progress cycle of a portfolio and that of projects/ programmes
Projects are based on technical phasing – based on what the team produces
Programmes are based on the implementation plateaus
Portfolio are based on management phasing – when the management wants to be informed
about actual status (quarterly; half yearly; yearly etc.)
Projects under the parapet – those projects that are unknown to the portfolio manager because
they were started by line managers from within their budget – these too need to be brought
under portfolio management – some such projects may need to be stopped (REMOVE
COMPONENTS) – added are programmes/ projects coming under the portfolio (ADD
COMPONENTS) 421
421
Facilitate the decisions to be taken

Action
Identify the ideal mix for the portfolio in question
Select the components of the portfolio
Communicate the choices made
Project / programme managers help senior managers in making decisions about the portfolio
– help in producing the business case – project managers within a programme help the
programme manager take the right decision – when necessary they similarly help the portfolio
manager – by structuring their knowledge; project/ programme managers help senior
managers take well considered decisions – once the decisions are taken they have to be
communicated to important parties involved
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211
Perspective
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Perspective 3 – Compliance, standards and regulations
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Compliance, standards and regulations
Definition
The compliance, standards and regulations competence element describes how the individual
interprets and balances the external and internal restrictions in a given area such as country,
company or industry. Compliance is the process of ensuring adequate adherence to a given set
of norms. Compliance requirements operate on a spectrum from voluntary and informal, to
mandatory and formal. Standards and regulations influence and define the way projects should
be organised and managed to be feasible and successful. Standards and regulations address
compliance with requirements that include legislation and regulations, contracts and
agreements, intellectual property and patents, health, safety, security and environmental
protection, and professional standards.
Purpose
The purpose of this competence element is to enable the individual to influence and manage
the alignment of the relevant standards and regulations within the permanent organisation; the
relevant sources of legislation and the standards and norms of both the organisation and the
wider society; and to improve the organisation’s approach to these areas.
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Compliance, standards and regulations
Actions
Comply with all relevant laws
Comply with all relevant health, security, safety, and environmental legislation
Comply with all relevant professional guidelines
Use professional standards and instruments
Improve the organizational project management competence
The objective of laws, regulations and standards is to raise the competence level of citizens –
in contact with each other, in traffic, in doing business, in protecting each other and the planet
– projects, programmes and portfolio are also concerned with legislation, codes of conduct
and professional standards – though many may find these to be a hindrance – they are not
likely to go down – the ultimate goal is to ensure that an organization manages projects,
programmes and portfolio in a professional manner – aim is to improve this competence and
benchmark it against the best
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213
Comply with all relevant laws and regulations
Action
Make an inventory of the issues involving legal aspects
Acquire knowledge on legal aspects
Make an inventory of the currently applicable legislation
Identify the risks associated with the above
Seek information from the relevant legal experts
Deal with regulatory authorities as stakeholders
Bring project/ programme procurement strategy into line with the regulations
Legal knowledge/ advice required for
Contracts
Transport
Financial transactions
Tendering
Intellectual property
Environmental law
Sanctions
International projects are confronted with different legal systems and cultures – there is a
difference between keeping to the rules and acting in the right way ‐ legislation is the minimum
you have to follow – otherwise you can be punished – however, that is not sufficient – if you
understand the spirit of the legislation – organizations have their own policy in this area –427
know
when to consult legal experts – must have adequate knowledge about the laws
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Comply with all relevant professional codes of conduct
Action
Identify the relevant professional codes of conduct
Understand the underlying ethical principles
Bring procurement practice into line with the business code of conduct
Ensure team members adhere to the codes
Laws are not enough – many organizations have developed their own code of conduct which
provide direction when dealing with personnel – these codes cover the way in which business is
conducted – one may view the codes as an extra layer of legislation on top of what already
exists – although they are less enforceable than the laws – people signing codes of conduct are
found to behave in a more honest manner
These codes may be laid down by a formal document by
A professional body
An organization
The government – rules in such cases may be legally enforceable
Codes of conduct are designed to regulate peoples behaviour – focus on ethical behaviour –
motivates professionalism – number of codes of conduct may influence a project – team
members are subject to code of conduct – violations may affect their professional honour
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Use professional standards and tools
Action
Make use of applicable professional standards
Manage risks arising out of the use of the standard
Manage the best practices applicable to the project/ programme
Customise the standards to the project/ programme
Project management is a profession that is still strongly developing – new insights being added
– agile philosophy has introduced many new roles – PMO developing and becoming stronger –
all new developments mean that we need to train and educate ourselves
Necessary to adapt new insights and standards to the need of the project / programme in
question – develop command over a method – standards, tools, templates may need to be
provided by parent organization
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Improve the organizational project management competence

Action
Identify organizational development needs
Design relevant benchmarks
Compare existing practices to practices
Develop and implement improvements
Propagate the knowledge gained in the organization
Different ways of viewing project/ programme/ portfolio management
• How an individual practices project management
• How an organization manages projects
The latter is more difficult to classify – as opposed to individual project managers; it is not
possible to call an organization to account – coach it – send it on a training course.
An organization is a collection of people who cooperate with each other – negotiate –
collaborate and deliver results – thus the people are the most important success factor – but we
also need to improve the organizations – benchmarking is a good tool for this – external
comparison – competition among organizations – but the challenge is to get data – but there are
organizations like IPMA that have excellence awards for projects delivered as well as IPMA Delta
that look at the complete organization – the IPMA Organizational Competence Baseline
indicates which issues an organization has to address for competent project/ programme and
portfolio management 430
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Legal
• This competence element describes the impact of the law and regulations on projects and
programmes.
• Project, programme and portfolio management also focus on avoiding torts (tort law
protects a person’s interest in personal security, tangible assets, financial resources, or
reputation) and claims as a result of actions such as breach of contract.
• In a project, decisions are made which may have legal implications.
• Knowledge and experience in contract law are essential for the management of some kinds
of projects.
• International projects can be subject to the requirements of more than one legal system.
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Important Laws in India
• Industries (Development and General laws applicable to all Companies:

Regulation) Act, 1951 Income Tax Act, 1961 and Rules made there
under;
• Trade Union Act, 1926
Payment of Gratuity Act, 1972;
• Competition Act, 2002 Goods and Services Tax Act, 2017and further
• The Indian ContractAct, 1872 amendments thereto;
• Arbitration and Conciliation Act, 1996 Employees State Insurance Act, 1952 and Rules
• Foreign Exchange Management Act made there under;
(FEMA), 1999 The Maternity Benefit Act, 1961 and Rules made
there under;
• Laws relating to Intellectual Property
Wealth Tax Act, 1957;
rights (IPR)
Employees Provident Fund and Miscellaneous
• Laws relating to labour welfare. Provisions Act, 1952;
• Laws relating to the environment Environment Laws;
Various Labour Legislations.
INDUSTRY SPECIFIC LAWS
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Steps for Legal Compliance
• Set legal standards and guidelines appropriate to the organization or portfolio.

• Initiate processes for implementing appropriate standards and guidelines.
• Manage the project’s or programme’s contracts, claims and changes appropriately.
• Respond effectively to organize labour challenges.
• Respond appropriately to claims of harassment, discrimination, safety issues or non
performance. Document lessons learnt.
• Provide feedback on lessons learnt and adjust standards and guidelines if needed.
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Health, Security, Safety and Environment
• Health, Security, Safety and Environment (HSS&E) deals with the legal and statutary
requirements to ensure proper safety is maintained and health facilities are provided as
per the law at the work place.
• This element covers the activities that help ensure the organisation behaves appropriately
in the context of (HSS&E) and during the planning phase of the project, its execution,
and during the delivered product’s lifecycle and its decommissioning and disposal.
• Project organizations need to ensure the following:

– Health, security and safety of the work force
– Control and restrict usage of hazardous substances
– Protect the environment against emissions and toxic effluents
– Protect community from the actions of the organization
– A health, security, safety and environment plan needs to be developed in each
project and dovetailed in the project management plan.
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National Legislation
• The main health and safety laws are derived from British Factories Act as enumerated
below:
– The factories Act 1948 provided health, safety and welfare for factories in India
– Indian Boiler Act, 1923, regulates working in boilers
– Dock workers Act, 1966 for workers in shipyards
– Mines Act,1952 for safety of workers employed in mines
– Plantation Labour Act, 1951
– Explosives Act,1884
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Safety of Employees
• Securely guarding of all ports of dangerous machinery

• Ensure required precautions for workers on machinery
• Emergency SHUT OFF of power
• Maintenance of hoists and lifts
• Lifting machines, chains, ropes etc to be maintained in good conditions
• Provision of protective clothing and equipment
• Preventive measures for fires and explosions
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Environment
• Environment includes water, air, land and their inter-relationship with human beings,
living creatures, plants and property.
• Environmental pollutant means any solid, liquid, or gaseous substance present in such
concentration so as to cause harm to the environment.
• Handling includes the manufacture, processing, treatment, package, storage and
transportation of goods, products and services.
• Hazardous substance includes any substance likely to cause harm to humans, living
creatures and plants.
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Some guidelines to be followed
 Autonomous professional regulations

 Professional standards and norms, e.g., IPMA standards
 ISO standards (e.g, ISO 21500 guidance on project management or other standards of
ISO/TC258
 Knowledge management
 Codes of ethics
 Codes of business conduct
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Some other terms of importance
 Sustainability principles
 Benchmarking - tools and methods
 Difference between law theories
 NATURAL LAW THEORY - developed in Greece by philosophers like Heraclitus,
Socrates, Plato, and Aristotle - there are two types of law - One of them is made by
person to control the relations within a society and so it may vary from society to society
and also from time to tome within a society - The other one is that not made by person
but controls all human beings of the world; do not vary from place to place and from
time to time and even used to control or weigh the laws made by human beings. These
philosophers named the laws made by human beings as positive laws and the laws do
not made by human being as natural laws.
 MARXIST LAW THEORY - believe that private property is the basis for the coming
into existence of law and state; property was the cause for creation of classes in the
society; The theory has the assumption that people can attain a perfect equality at the
communism stage in which there would be no private property, no state and no law.
 REALIST THEORY OF LAW [Biset; 2006] - is interested in the actual working of the
law rather than its traditional definitions. It provides that law is what the judge decides in
court; it is the decision given by the judge but not the legislators that is considered as law
according to this theory. Hence, this theory believes that the lawmaker is the judge and
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not the legislative body.
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Perspective 4 – Power and interest
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Power and interest
Definition
The power and interest competence element describes how the individual recognises and
understands informal personal and group interests and the resulting politics and use of power.
This competence element defines how individuals participating in projects should recognise how
informal influences (resulting from personal and group ambitions and interests, and modified by
personal and group relations) relate with the project context. These informal influences differ
from formal interests (as for instance formalised in a business justification) that derive from the
organisation’s strategy or from standards, regulations, etc.
Purpose
The purpose of this competence element is to enable the individual to use power and interest
techniques to achieve stakeholder satisfaction and deliver the agreed outcomes within the
constraints of time and budget.
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Power and interest

Actions
Assess ambitions and interests
Assess the informal influence
Assess and use personalities and styles of working
The goal of this element is to ensure that you High

understand how to motivate people in such a
way that they make positive contribution to the
initiative. .. project/ programme – so the trick
is to ensure that the person has interest – when Power
he/she does – he/ she will try to protect this
interest – power is the influence that person
Low
can wield – thus such a person must be treated
as a stakeholder – a project/ programme
manager is constantly occupied listening to
and influencing interests – this competence is
primarily concerned with recognizing and Low High
assessing the different forms of power, which
one way or another influence the initiative Interest
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221
Assess ambitions and interests
Actions
Identify the ambitions and interests of those involved
Identify the difference between personal and organizational interests
People have personal ambitions and interest – they search for circumstances in which they
can satisfy these – these motives determines their behaviour – when people realize their
ambitions and interest through the project/ programme they feel more motivated – motivated
people make the project/ programme successful – so it is important that the PM shows
sincere interest in the people who one way or the other are involved in the project/
programme
This is different from stakeholder management – that is a separate competence where you
look more closely at the formal interests – this is about informal or ‘felt’ interests – often
individuals feel the need to fight for the interests of the organization – they may want a
particular way of working or may be obstructive – this is often because of a hidden agenda –
for each hidden agenda that the you discover – ask yourself – “what impact does this have on
the project/ programme?” – if the impact is positive – make use of it – if it is negative – try to
find a solution for it – this is ability which demands the necessary diplomatic and political
skills
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Assess the informal influence

Actions
Assess all influence and power
Assess the interdependent relationships
Power and influence are both characteristics of a relationship POSITIONAL
between two actors – it is mainly perception – power is an illusion
– the other person has power because you believe he has power –
when a senior manager (say sponsor) grants you this power – it is
called positional power – whereas the power you receive from
your team members is called personal power – this is more
important of the two – before someone grants you personal power POWER
– he asks himself whether it is worthwhile following your
leadership – reasons why someone would do it is because #1 the
way you conduct yourself #2 your expertise #3 the people you
know #4 your position etc. – PM HAS POWER AS LONG AS
PEOPLE BELIEVE SO – before senior manager grants you
positional power – he asks himself whether people will follow you
– your track record comes in to play – thus internal resources
deployed as PM has advantage over external person taking over
as he has to first establish himself - power also has to be
maintained through – by not neglecting maintaining working
PERSONAL
relationships 444
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Assess and use of personalities and working styles
Actions
Understand the diversity in behaviour and conduct, and personality
Understand the diversity of cultures and personalities
Personality is the behaviour that you let other people see – and behaviour influences others –
who then react one way or another – there is no such thing as good or bad behaviour as people
have their own particular style – even when people have the same interest they may have their
individual styles of behaviour – the choice of behaviour depends on genetics (nature) and
context (nurture)
You cannot change personality – but can change the interaction with people to make the
communication effective – develop psychological insight in order to understand - why people
do the things that they do – in addition culture plays an important role – study the culture of the
people you are interacting with – try to form an impression of how this influences and
determines their image of the world and their behaviour – people with influence are pragmatic
in choosing a particular style of behaviour – adapt as per the audience – you will notice
gaining support becomes much easier
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The basis of social power

Circumstances through which someone can have social power
Reward – based on the perception that someone can reward you
Coercive – based on the perception that someone can punish you
Legitimate – based on the perception that someone has the right to compel you
Referent – when someone feels connected with someone else
Expert – based on the perception that someone has specialist knowledge or expertise
Connection – based on the perception that you have access to powerful people
Information – based on the perception that someone has important information
How to acquire power
Power is based on perception Acquiring information
Intimidating employees
Various techniques Flattering employees
Loyalty Emphasizing unity
Discipline Self‐ promotion
Circumspection Emphasizing hierarchical position
Granting a favour
Arousing feelings of guilt
Maintaining control
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Power in an organization
Sources of power
The possession of a resource
The possession of a technical skill
The possession of knowledge that is essential for an organization
The right to make decisions
Connection with people who possess the previous four
The mere possession is not sufficient – the potential leader has the will and skill to play the
politics shrewdly
The Psychology of Project Leadership
Emotional Intelligence ‐ “emotional intelligence is the sine qua non of leadership”
….“the most productive, innovative teams were led by people who were both task and
relationship orientated”.
the 5 components of EI as follows:
1. Self‐Awareness
2. Self‐Regulation
3. Motivation
4. Empathy
5. Social Skill
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Perspective 5 – Culture and values
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Culture and values
Definition
The culture and values competence element describes the individual’s approach to influence on
the organisation’s culture and values and the wider society in which the project is situated. It
also includes the acknowledgement by the individual participating in or leading a project of the
consequences of these cultural influences for the project and how to incorporate this
knowledge in the management of the project. Culture may be defined as a set of related
behaviours within a community, and the importance that individuals within the community
attach to it. Values may be defined as a set of concepts on which the individuals in the
community base their actions. Explicit definitions of values might include codes of ethics. Many
organisations also describe corporate values explicitly in their strategy.
Purpose
The purpose of this competence element is to enable the individual to recognise and integrate
the influence of internal and external cultural aspects on the project approach, objectives,
processes, sustainability of the outcomes, and agreed outcomes.
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Culture and values
Actions
Assess the dominant culture
Align this with the organization’s formal culture and values
Assess the informal culture and values within the organization
One of the strongest factors to influence behaviour is culture – an organization and a society are
both social systems – influence and bind people together – the culture of the society and country
influence that of the organization and the team – socialization is the way we learn what we can
and what we cannot do – what is acceptable and what is not – a lot of standards remain
undisputed – that is normal behaviour ‐ when exposed to a new culture there is a need to adapt
– however not everyone is prepared to adapt – the recommended method is #1 a respectful
basic attitude #2 de‐coupling the observation from judgement
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Assess the dominant culture
Actions
Understand the cultural values and standards of the dominant culture
Understand to what extent this has an impact on the initiative
Act in accordance with this without harming your own values
Projects inherit a part of its culture from the participating organizations and team members –
this dominant culture has a strong influence on the team – culture does not change quickly –
outsiders may read signals incorrectly or totally miss them out – an idea of the history helps
understand culture – a society protects its values through unwritten rules that exist – cultural
differences therefore often manifest themselves fiercely – as the touch at the core of someone’s
identity – for one collectivity may be important and for the other it may be individuality –
culture always has to deal with underlying values and the standards are there to protect these
The key is to find what consequences the culture has and how you want to work with the team
– you may want to create a culture of openness – but your team members may not consider
that to be a value to be pursued – then attempts to enforce openness may fail – since every
dominant culture would have some positives – the aim should be to identify those to leverage
them towards achieving our aim for the project/ programme/ portfolio
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Align this with the organization’s formal culture and values

Actions
Study the mission
Study the quality policy
Respect the formal values and standards
Translate these into values and standards for the team
PM has to actively work on the culture required in all parts of the initiative – the existing
dominant culture is the starting point – not the goal – for each team there is a required culture
– as a leader you have to manage this – the bigger the initiative – the more important it
becomes – culture is a powerful mechanism for influencing behaviour – the mission statement
is a useful starting point – what values does management mention in it – there are professed
values and there are behaviours that are rewarded or punished – are codes of professional
conduct in writing? – these could be used to make your team conform to them
Quality management plan is another good source of understanding formal values and
standards – if the organization is ISO 9001 certified – it implies that the organization is #1
emphasising that customer requirements must be fulfilled #2 executing quality policy #3
assessing the actual quality delivered #4 making required people/ resources available for this –
organizations also have social responsibility – the self imposed standards set by the company
may exceed the requirement set by law – the PM and the team have to embrace these values –
the leader has a special role in influencing the culture that evolves
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Assess the informal culture and values within the organization
Actions
Understand the informal culture
Accept the consequences of this culture
Stay in line with the informal values and standards
The formal culture is important – but the informal culture just exists – can present an obstacle

to creating a healthy atmosphere in the team – the way in which people actually interact with
each other can differ from department to department – the jokes people make – the style of
clothes they wear – what the office looks like – what people think and behave – conforms to
existing standards – what people think and say about each other – after some time even the
new employees start conforming and all start resembling each other – this can generate group
blindness – or it can generate a real feeling of solidarity and commitment
The organizational history gives an understanding of this – how it overcame crisis – what types

of leaders nurtured and steered the organization to its present state – the knowledge of all this
will help the PM to decide how he should lead the team – the PM and the team too are
destined to create a new sub‐culture and compile its own history – PM should play a positive
role in this
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Sustainability and projects
Aspects of projects Principles to be applied to integrate
Short term versus long term sustainability into projects
Stakeholders versus future generations Balancing and harmonising social,
Result oriented versus cycle oriented environmental and economic
Result oriented versus life cycle oriented interests
Scope, time and money, versus triple‐bottom‐time Short‐term and long‐term
Simplifying versus increasing complexity orientations
Local and global orientations
Consuming income, not capital
Transparency and accountability
Projects are affected by sustainability Personal values and ethics
Sustainability is relevant to project management
Integrating sustainability stretches the system boundaries of project management
Project management standards fail to address sustainability
Integration of sustainability may change the project management profession
“the development, delivery and management of project organized change in policies,
processes, resources, assets or organizations, with the consideration of the principles of
sustainability, in the project, its results and its effects”
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Green project management
GPM endorses six principles and their implementation
Commitment & accountability
Ethical decision making
Integrated and transparent
Based on principles and values
Social and ecological equity
Economic prosperity
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People
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People 1 – Self-reflection and self-management
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Self-reflection and self-management
Definition
Self-reflection is the ability to acknowledge, reflect on and understand one’s own emotions,
behaviours, preferences and values and to understand their impact. Self-management is the ability
to set personal goals, to check and adjust progress, and to cope with daily work in a systematic
way. It includes managing changing conditions and dealing successfully with stressful situations.
Purpose
The purpose of this competence element is to enable the individual to control and direct his or her
behaviour by acknowledging the influence of his or her personal set of emotions, preferences and
values. This enables effective and efficient use of the individual’s resources and leads to positive
work energy and a balance between inside and outside work.
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Self-reflection and self-management
Actions
Understand how your values and experience influence the way you work
Develop self-confidence from your own strong and weak points
Bring your goals into line with your own intrinsic motivation
Take both the situation and your own opportunities into account
Take responsibility for your own learning and development path
Interpersonal skills are concerned with how we interact and cooperate with each other – how we
resolve conflicts – how we produce results – they require readiness to carry out self-reflection – I
can only cooperate when I am conscious of the effect of my behaviour on another person! – when
placed in a new team we carry out the function for which we have been hired – project manager
or team leader or PMO professional or team member – but besides this we also cooperate with
other members – in different situations – we quickly adapt to the new situation – this first
competence is about our ability to learn – every learning stage starts with reflection on our
capacity to distance yourself from your convictions – and self image you have carefully built up –
and try to protect – your behaviour is situation dependent – also the knowledge that your values
and standards are not necessarily better than someone else
Each learning stage starts with the confidence in your own capacity to further develop yourself –
after self reflection comes self management – reflection can lead to insight – from self reflection
you develop learning goals – you then start applying in practice – apply your self to this
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Understand how your values and experience influence the way you work
Actions
Reflect on your own standards and values JOHARI WINDOW
Use your standards and values to arrive at a decision
Communicate about your principles and requirements
Put your own experience into perspective
Use your experience to assess situations
Every person perceives something from his personal frame of reference viz. unique – who we are
and how we look at life – is shaped by – the solutions we found to problems – the decisions we
made in difficult circumstances – usually we are not conscious of the subjectivity that is involved
– we think we are objective – but we are not
Every person develops a set values and moral standards – some of which is self chosen – others
taken over from the group of people of which we are a part – values and standards are the
consequence of all important lessons in life – we may believe our values and standards better
than others – they believe the obverse – in order to cooperate you must have at least something in
common – therefore we have to share values and standards – this is the way organizations and
teams develop their own culture – culture is the result of a common learning process
The skills dealing with and associating with other people is dependent on how we communicate –
you can only communicate when you have self-knowledge – and that begins with a consciousness
of all those experiences that have formed who we are 460
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Develop self-confidence from your own strong and weak points
Actions
Recognize your strength, talent, boundaries and weaknesses
Use your strength, talent and passion
Find solutions to your weaknesses and boundaries
Remain in contact during times of tension
Accept setbacks without losing your self control
The best you can become is yourself‐ first step is self knowledge – accept who you are – self

acceptance – know what you are good at – your talents – look for situations where you can fully
develop yourself – feeling of competence motivates you – talent and passion work to reinforce
each other – allowing you to find inner strength and power – also recognize your weak points –
listen carefully to what others say –be open to criticism – examine how you can overcome the
weakness – be in touch with those who criticize you – seek coaching from them – use this as an
opportunity to learn – similarly disappointments or failures are inevitable – especially in a project
– instead of regressing into self pitying – use it as a learning opportunity – professionally
developing yourself means you accept whatever crosses your way – this primarily means
perseverance
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Bring your goals in line with your intrinsic motivation

Actions Ask yourself the following questions when
Show people what motivates you something goes against you
Set personal and professional goals Is it a problem or a limitation? You can
Take action to achieve those goals resolve a problem, but not a limitation
Name what holds you back in doing this Am I motivated or do I act out of habit?
Reflect and keep your attention on the goals Stop, follow your goals
Satisfy your obligations Do I want it for myself, or am I doing it for
Retain focus on your goal someone else?
Find your own way in uncertain situations Do I have the skills I need? Most skills can
be acquired
If you know what you want – you know which direction to go – goals that intrinsically motivate
you – have greater chance of success – regularly reflect on progress and your motivation – what
motivates you may change with time – we may be doing something out of force of habit –
review them – when something goes against you or is unclear – your responsibility is to find a
way out of the situation – may ask for advice – but you have to solve it yourself
You achieve your goals including personal ones through cooperation – when people do
something for you they expect something back – honour that obligation – you achieve success
with each other – not alone – uncertainties make life challenging – makes us learn and develop
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Take both the situation and your resources into account
Actions
Keep track of your time
Prioritize the requirements that are set for you Eisenhower Matrix
Say no when that is appropriate
Make optimum use of your opportunities
Adapt your use of language
Make clever use of the situation
You have to keep adapting your behaviour to the situation – the situation is ever changing – this

style is called flexibility – usually we have a preferred type of behaviour – which may not be
effective – normally when under pressure you may fall back on your older behaviour – you need
patience to change – also time management may be an issue as you may have to do more than
you have time – however also evaluate the time you spend on your smartphone … twitter,
facebook, whatsapp etc.
Prioritize the requirements people put on you – find a balance with own priorities ‐ this will be

linked with the relationship you have with the other person – you may say “no” to a colleague
more easily than your CEO – how you say something can make or break a relationship
Success is often a coincidence – but it is also a skill to take advantage of an opportunity as it
arises
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Take responsibility of your own learning and development path

Actions
View failure as a learning experience
Use feedback as an offer for personal development
Ask advice
Read your professional literature
Measure your own performance
Work on continuously improving yourself
Professional life is a succession of learning experience – you develop yourself from beginner to
expert – making mistakes are part of learning experience – gaining experience – also ask for
feedback – take action based on feedback – you may also seek advice – this can only come from
the experienced – reading professional books and journals is also similar to taking advice – the
aim is to improve yourself
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Ways to enhance Personal effectiveness
‘10 ways to enhance Personal effectiveness’ is a stepwise method to find your best self.
1. Clarity
2. Don’t hesitate to be different
3. Streamline your outer & inner image
4. Self organization skills
5. Commitment
6. Constant Evolution
7. Assertive communication skills
8. Relationship building skills
9. Spirituality
10. Take responsibility
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People 2 – Personal integrity and reliability
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Definition
The delivery of projects benefits involves making many individual commitments to get things
done. Individuals must demonstrate personal integrity and reliability because a lack of these
qualities may lead to a failure of the intended results. Personal integrity means the individual is
acting in accordance with his or her own moral and ethical values and principles. Reliability is
acting dependably, according to expectations and/or agreed behaviour.
Purpose
The purpose of this competence is to enable the individual to make consistent decisions, take
consistent actions and behave consistently in projects. Maintaining personal integrity supports an
environment built on trust that makes others feel secure and confident. It enables the individual to
support others.
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Actions
Maintain ethical standards in all decisions and actions
Facilitate the sustainability of all outcomes
Take responsibility for all your decisions and actions
Act, decide and communicate consistently
Build confidence by fulfilling your tasks
We all prefer to work with team mates who have integrity – the collective (or group’s) definition
of integrity is subjective – if you act in accordance with your personal values and standards – you
may consider that you have integrity – but is that considered integrity by the team? – only if you
are lucky – so common ground may emerge more by luck than by judgement – for a manager
integrity is important – equally important is trust – which is a two way street
The work and cooperation must have a certain amount of predictability – if we do not know
where we stand – too much stress results – the team becomes more productive when uncertainty
is controlled – by placing emphasis on personal integrity and trustworthiness the context is
created whereby the unpredictability is decreased and higher performance is the result
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Maintain ethical standards in all decisions and actions
Actions
Know and reflect on your own values
Use your values and ideals when making decisions
Communicate your principles
Ethics is about making the right choices – most people want to be good people – act for the good
of something – but the context often makes that difficult – what is good? – different people may
have different classifications – we would rebel against something if it goes against our self-belief
– so would your team if it is forced to do something that opposes their self-belief/ self-image
The project results/ deliverables are not the only thing that matters – since work is an expression
of your values – shared values are an important driving force for a teams cooperation – talk
about shared values with your team if it increases cooperation – however if it creates conflict –
refrain from talking about it
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Facilitate the sustainability of all outcomes

Actions
Talk about sustainability
Include the long term outcome in the result
By definition projects/ programmes are finite – we try to deliver within the deadline – within the
cost – we focus only on the short-term project result – as long as it is accepted by the sponsor –
the risk of this is that it may not be sustainable
When we talk about sustainability we are talking about the broadest possible definition – not only
the environment; social justice; and / or economic advantage – but all long term effects.
Sustainability looks beyond the project/ programme/ portfolio boundaries – and the obligatory or
self imposed regulations – it is about every individual involved keeping the larger picture in mind
and acting accordingly – sustainability is about delivering for the long term – this is the essence
of acting ethically
This is a break from how we looked at projects – deliver in time; within cost and of right quality –
we are now looking also at sustainability in the long run – sustainability needs to be part of the
organization’s DNA
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Take responsibility for all your decisions and actions
Actions
Take full responsibility for your choices and actions
Feel responsible for both the positive and negative effects
Keep to agreements and decisions made with other people
Address personal and professional shortcomings
Children may not understand the consequences of their actions – thus cannot be expected to take
responsibility for their action – unfortunately many adults behave like children when it comes to
taking responsibility – when someone has integrity he is willing to take responsibility for the
choices he made and the action taken – when results are positive – most are willing to claim
success – but with failure – it is another story
Taking responsibility and admitting mistakes should be standard for project personnel – it would
guarantee continuous learning – if the PM focuses on controlling in the right direction – the right
objective – rather than finding the guilty and punishments – more team members will take
responsibility and grow professionally
Honesty, confidence and trustworthiness are important for you to be able to make an agreement
that decisions will be made jointly – then you have to honour it – going back on agreement is
crippling for cooperation – keep your commitments and help others keep their commitment
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Act, decide and communicate consistently

Actions
Align words and action
Solve similar problems in the same way
Modify your behaviour to match the situation
Others can depend on you when you are somewhat predictable – predictability makes you
trustworthy – this is important when you want cooperation – don’t raise expectations if you
cannot live up to it
Also applicable for the decisions you make – people should know that they can count on you – it
is not only words – deeds speak louder than words – you have to set an example
Team members and sponsor only begin trusting you when you do what you say you are doing –
on one hand we have the emergence of a project manager who solves problems – has
predictability – team members know where they stand – sponsor knows that the project/
programme is in safe hands – consistency does not mean rigidity – there is a balance between
predictability and adaptability – different problems may need different and new avenues of
approach
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Build confidence by fulfilling your tasks
Actions
Complete your work thoroughly and carefully
Gain trust by delivering accurate and careful work
Confidence should be earned – everything you are responsible has to be high quality – you must
earn a reputation that you always work well – confidence comes predominantly from the extent to
which you satisfy the expectations of people from you, the manager – these expectations arise
through:
• How the dominant culture views managers
• How the organization’s culture thinks about this
• The experience team members have
• The extent to which your deeds match your words
Senior management has expectations from you – so do team members – suppliers – vendors –
other managers – all expect a certain fulfilment of your tasks – when you achieve the expectation
– you strengthen your image and vice-versa
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People 3 – Personal communication
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Definition
Personal communication includes the exchange of proper information, delivered accurately and
consistently to all relevant parties.
Purpose
The purpose of this competence element is to enable the individual to communicate efficiently
and effectively in a variety of situations, to different audiences and across different cultures.
As nouns the difference between information and message is that information is things
that are or can be known about a given topic; communicable knowledge of something
while message is a communication, or what is communicated; any concept or information
conveyed.
As a verb message is to send a message to; to transmit a message to, as text via a cell phone.
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Actions
Communicate clearly and structurally, test the understanding
Encourage open communication and efacilitate this
Align your communication style to the situation
Communicate effectively with virtual teams
Use humour when applicable
To achieve project results – people have to cooperate – they need to agree on “what” and “how”
of this cooperation – this can only be achieved when they communicate and understand each
other – in the ‘kick off meeting’ itself when the team meets each other for the first time – members
have to discover the optimum way to communicate – the sender is responsible for the quality of
the message – managers have to ensure the atmosphere where people can communicate openly
Communication critical in a project - Provides the critical link between People, Ideas and
Information in the project
Communication of vision to team and stakeholders
Passage of instructions
Progress Reports
Presentation of the project status
Project Manager responsible for communication in the project – spends 80% time on
communication
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Right Information – to right person – at right time – in a cost effective manner
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Communicate clearly and structurally, test the understanding
Actions
Structure the information to the needs of the situation
Use story telling where this is applicable
Use clear language
Give lectures and presentations
Coach and teach people
Lead and facilitate meetings
Emphasize your message with images, body language and intonation
Communication can be
Oral
Written
Non-verbal (body language) Communication is never one sided –message must be
clear – in cultures that are bothered about you not losing
Message Impact on the face – may not seek clarification even if not understood –
receiver : 7% words test whether the receiver understood what you said – also
+38% vocal tone +55% watch out for non-verbal reactions from the recipient –
non Verbal this competence is based on lots of practice
Effective communication requires:
 Talking
 Writing
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 Listening
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Encourage open communication and facilitate this

Actions
Work on creating an open respectful atmosphere
Listen actively by showing that you understand the other person
Let others finish what they are saying
Be open to, show interest in , new ideas
Check that people understand what you are saying
Make clear how someone can introduce a new idea
Make clear how you handle an idea
Cooperation in the team is better in an open atmosphere – you will then be aware of risks sooner
and people will share ideas more quickly – you will thus benefit from the talent available –
quieter people are generally the thinking variety – often have better solutions – the manager
must ask the quieter members for their opinion
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Align your communication style to the situation
Actions
Choose the right communication channels and style
Use the chosen style
Keep an eye on the communication
Change style and channel when necessary
Communication depends on the situation – there is no right way – therefore you have to become
skilled in using the different options available – what style is applicable? – formal or informal? –
businesslike or emotional? – the choice depends on the situation – channel chosen can inhibit the
style – emotion is difficult to express in a mail – only after you convey the message – you see
how it comes across – observe how people react – change if doing so produces better result -
communication is very pragmatic – you choose the style that works
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Communicate effectively with virtual teams

Actions
Use communication technology
Define clear communication processes and maintain them
Encourage a sense of belonging in the group
Modern communication technology allows us to communicate at any given moment from

wherever we are – this made virtual teams possible – as it is a new channel that has been added –
group consciousness and team spirit drives the communication
As technology keeps evolving the present means may become obsolete – you have to keep up with
the developments
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Use humour when applicable
Actions
Change your point of view
Ease the tension by using humour
Project teams work under pressure – limited budgets – limited time – tensions are inevitable – the
context may often demand more than can be reasonably expected – the stress may translate into
close cooperation in the team – but also to stress – humour and irony at such times – used in the
right way – can break the routine – ease the tension
Use of humour should be done with caution – know where to draw the line – understand the
dominant culture – people do not like jokes about their life principles and beliefs
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Communication requirements and technology
1. Communication Requirement Analysis

• Complexity of communication channels - A project with “N” number of
stakeholders has N(N-1)/2 possible channels of communications
• A key component is communication planning is to determine who will
communicate with whom and who will receive what information.
2. Communication Technology
• As part of the communications planning, the project manager should identify all of
the required and approved methods of communicating.
• Communication modalities can also include meetings, reports, memos, e-mails, and
so on.
• The project manager should identify which are the preferred methods of
communicating based on the conditions of the message to be communicated.
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Communication model
Communication Models :
• Encode - Translate thoughts or ideas into a language that understood by others
• Message and feedback message - The output of encoding Medium - The method used
to convey the message
• Noise - Anything that interfaces with the transmission and understanding of message
(Distance, unfamiliar technology etc)
• Decode - To translate message back into meaningful thoughts or ideas
Medium
Sender Receiver
Message Noise
Encode Decode
Feedback‐Message
Decode Encode
Noise
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Communication methods
Communication Methods :
• Interactive communication - Between two or more parties in multidirectional (Phone
calls, meetings, interviews). Most effective way.
• Push communication - Sent a specific information to specific recipients. Examples
are letters, memos, e-mails, faxes etc. This ensures that message is sent but will but
will not certify that it is actually received or understood. (Push the message to
recipient)
• Pull communication - Used for large volume of information and large audiences.
Examples are internet sites, company data bases, e-learning etc. Recipients has to
access the communication content (Pull out information) at their own discretion.
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Communication - Stakeholder
 Plan how you will communicate with them

 Project Management focuses on planning before taking action
 Communication is the most common cause of problems in a project – hence
planning for communication is critical
 Communicate with them
 Stakeholders are included in the project presentations and receive project
information including progress reports, updates, changes to project management
plan, and if required even changes in project documentation
 Manage their expectation and influence
 Managing stakeholders is an ongoing process from the beginning of the project –
early phases till the end
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Plan Communication
What to Consider Communication Management Plan
 What does the project hope to includes
achieve  Identifying requirement of
communication of various
 Who are the stakeholders stakeholders
 Stakeholders communication  Information to be communicated
requirements including content, format and level at
 Different communication media which it is to be made
 Communication barriers  Nominating the person responsible for
this communication
 Technical requirements to
 Persons or groups who will receive the
communicate information
Project manager communicates  Method, technology and media to be
with used for the communication eg. Email,
 Upper management, video conferencing, press release etc.
Sponsor client to ensure
continued support  Frequency of communication –
 Team members to solve monthly, daily, weekly or ‘on need
their conflicts, motivate, basis’
train, supervise them, co-  Escalation process
ordinate activities
 Other departments, co-
workers, users
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Communication Barriers
 Different perceptions - goals and objectives; different perceptions about each other
 Differences in attitudes - receiver and sender
 Personality clashes
 Hidden agendas
 Selective listening
 Cultural barrier
 Message not clear
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 Competition e.g. facilities, material, manpower
 Subjective interpretations
 Organizational hierarchy - receiver disregards message
 Resistance to change
 Insufficient knowledge – use of jargon
 Language problems
 Number of links – more number of links leads to distortion of message
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People 4 – Relations and engagement
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Relations and engagement
Definition
Personal relations build the foundation for the productive collaboration, personal engagement and
commitment of others. This includes one-to-one relations as well as setting up a whole network
of relations. Time and attention have to be invested in establishing durable and robust relations
with individuals. The ability to form strong relationships is primarily driven by social
competences such as empathy, trust, confidence and communication skills. Sharing visions and
goals with individuals and the team drives others to engage in tasks and to commit to the
common goals.
Purpose
The purpose of this competence element is to enable the individual to build and maintain personal
relations and to understand that the ability to engage with others is a precondition for
collaboration, commitment and, ultimately, performance.
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Relations and engagement
Actions
Develop personal and professional relationships
Build up a social network
Show your empathy
Show trust and respect
Share your vision and goals
Projects delivers pre-agreed results – it may be viewed as a network of committed people – a

social network where both professional and personal relations evolve – friendships and/ or
animosity – key to good cooperation is the ability of people to evolve – build positive relations
with each other – while “interested” parties are concerned with their own interest – “committed”
parties are all about shared common interest – obviously the latter are better from the project
perspective
Cooperation needs engagement – the PM must also focus on the social network – over and above
his usual deliverables of budget and schedule – he must constantly work on relationships through
demonstrating encouraging emotions and involvement – empathy – confidence – respect – trust
and a positive outlook of the future
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Develop personal and professional relationships

Actions
Actively look for opportunities to make contact
Meet new people
When adequate , use humour to break the ice
Be open to a dialogue
Develop a routine for one on one conversations
Inform your contacts
In projects people get together to work towards a common goal – it also brings people together in
a relationship – this besides the sponsor, PM, the team, vendors, contractors etc. also may
include local interest groups – however, good relationships, just do not happen on their own –
you have to work towards it – everyone including team members need to build good relations
with others – this requires an active attitude – look for opportunities to make new contacts –
develop existing ones – you need to network – often also negotiate – first contact may be uneasy
– break the tension – humour often works on this count – be open to a dialogue – share ideas –
don’t try to win a debate – maintain the relationship by frequently meeting/ contact – one on one
conversations help develop relationships
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Build up a social network
Actions
Make contributions to a social network
Facilitate a social network
Organize network meetings
Support people in their networking
You can carry out social networking by

Becoming a member of an existing one
Starting a new network
Open up your own network
The first is the easiest – social media is more like a bulletin board – of course they have several
advantages – professional bodies/ groups allow more intense and focused interaction and
exchange of ideas
You may start a network of likeminded people for a cause – after the first few meetings – try to
make it self-managing – this should be built around something you are passionate about – and
also other people care about it deeply
If you open up your own network to others – others too might do the same for you – but it has its
own risks of others misusing your network
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Show empathy
Actions
Listen actively
Ensure that people feel listened to
Ask for clarification
Offer your help
Take the values of someone else to heart
React in a timely manner
You show empathy when you sympathise with someone and also display this – empathy expresses
itself in different dimensions – the content – the emotion – the authenticity – the timeliness – try
to understand the other persons emotions – what is he seeking – react in a timely manner
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Show your trust and respect
Actions
Trust someone on his word
Trust the people you delegate to
Trust that people will comply with chosen values
Delegate without excessive control
Ask others for their ideas, wishes and concerns
Respect mutual differences
Embrace the value of diversity
There are two basic attitudes:

 People have to earn trust
 Start with trust and see what happens
These are opposing convictions – first one believes that people cannot be trusted – until he
convinces me otherwise – the second starts with trust – continues to trust the other, unless he is
convinced about the others untrustworthiness
In projects the latter is more effective
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Share your vision or goal

Actions
Act positively, invite people to contribute to the vision
Communicate the vision, goals and results
Debate this and allow criticism
Involve people in planning and decision making
Ask people to commit themselves
Take individual contributions seriously
Emphasize the importance of involvement
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Motivation
What is motivation?
 Motivation is an inner force
 PM needs to motivate team – for performance
 Performance = Ability X Commitment
7 Techniques for Increasing Motivation
1. Create a Positive Work Environment. ...

2. Set Goals that are Reasonable and Achievable. ...
3. Increase Motivation by Providing Incentives. ...
4. Recognize Achievements and Accomplishments. ...
5. Share Profits to Improve Performance. ...
6. Solicit Employee Input.
7. Provide Professional Enrichment
Key Motivation theories

 Maslow’s Hierarchy of Needs Theory
 Herzberg’s Two Factor Theory
 McGregor’s Theory of X and Y
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Maslow's Hierarchy of Needs Theory
 Developed by Abraham Maslow in 1943
 There are five basic human needs that must

be fulfilled to motivate people
 Behaviour of all persons including project team

members governed by their personal needs
 Needs have to be met from lowest level to highest

level
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Maslow's Hierarchy of Needs Theory
 Physiological needs - air, water, food, shelter, clothing
 Safety/security needs – Job security, Stability, Freedom from

Physical Harm
 Social needs – Love, Affectionate relationships, Friends,

Social status
 Esteem/recognition needs –Accomplishment, Respect,, Attention, Appreciation,

Self worth,
 Self Actualization – Self-fulfillment, Growth, Creativity, Learning, Developing

potential
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Herzberg’s Factor Theory

 In 1960 Frederick Herzberg identified two separate categories of
need and motivation
 ‘Hygiene factors’ and ‘Motivators’
 Both are independent and affect persons differently
 Hygiene factors necessary for persons to avoid becoming dissatisfied and

de-motivated with their job
 Motivators necessary for persons to be motivated
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Herzberg’s Factor Theory
Hygiene factors Motivators
• Company policies •Achievement

• Peer, subordinate, superior •Recognition
relationships
•Work content
• Working conditions
•Responsibility
• Salary
•Professional growth
• Personal life
• Status
• Security
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McGregor's Theory X and Y

 Theory X - average worker is lazy, needs
supervision. Authoritarian management style
 Theory Y - self-motivated workers, involved in

decision-making. Democratic management style
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People 6 – Teamwork
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Teamwork
Definition
Teamwork is about bringing people together to realise a common objective. Teams are groups of
people working together to realise specific objectives. Project teams are commonly multi-
disciplinary; specialists in different disciplines work together to realise complex outcomes.
Teamwork is about building a productive team by forming, supporting and leading the team.
Team communication and team relations are among the most important aspects of successful
teamwork.
Purpose
The purpose of this competence element is to enable the individual to select the right team
members, promote a team orientation, and effectively manage a team.
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Teamwork
Actions
Select and build up the team
Encourage cooperation and networking
Support the development of the team and its members
Delegate tasks and responsibilities
Acknowledge mistakes and learn from them
Staffing Plan
Project Teams  When
 Teams are at core of the project
 Who, How many
 Essential to have high
performing, cohesive teams that  How
share same aims & objectives for  Internal staffing
project success  Contractors
 Hiring
 Uniqueness of project and  Outsourcing
uncertainty creates a large  Consider – time, cost, lead-time, drop
dependency on the team ratio, liability, availability, legal
 Consider – part time, work from home,
virtual team, over time, resource
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Select and build up the team

Actions
Select on the basis of individual competence
Clarify the objectives and develop a common vision
Develop objectives for the team
Negotiate about common standards for the team Schedule BL
Motivate individuals and make them conscious of the team
Resource Estimate;
Time Estimate
A Team is a Group of individuals that share
common: Staff requirement by category:
Resource Histogram
Objective and identity
Values HR Plan/Staffing
Norms
Standard of behavior Staff selection Safety
Commitment Team Building
Loyalty Training
Team Organization
& have Diversity
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Team Formation Stages
Team Formation Stages – TUCKMAN MODEL
Project teams generally go through 4 development stages and a final disbanding

phase:
Constructive group behavior
 Forming – 1st stage Forming Storming Norming Performing
RESULT
 Storming – 2nd stage
accountability
 Norming – 3rd stage commitment
trust conflict handling skills

 Performing – 4th stage
 Mourning / Adjourning – Final Disband

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Forming
Team members only moderately effective as they lack a common aim, are
hesitant and unsure of each other
PM’s role - give direction, build common grounds, help members to

understand each other better
Storming
Differences and hostilities surface between team members leading to arguments,

different opinions, personality conflicts, formation of groups /sub groups
PM’s role - motivate and educate team members, clarify project goals and
manage team conflicts
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Norming
Team members start developing an identity and set of norms and values.
Better understanding and communication among team.
Issues become more important than personalities
PM’s role - resolve issues that came up, define and assigning team roles and
responsibilities
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Performing
Team becomes high performing team - members understand and appreciate

each other.
Team works effectively as a resourceful, focused, cohesive force with a united
aim. Problems tackled more confidently and innovatively
PM’s role - maintain performance by co-coordinating and controlling the work,

appraise performance, delegate work, acknowledge good work
Mourning / Adjourning
Team disbanded - some persons happy some sad
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Encourage cooperation and networking
Actions
Create the opportunity to enter into discussion
Ask for contributions to improve performance
Share success with the team
Encourage people to cooperate both internally and externally
Take action when something disrupts mutual cooperation
Use cooperation tools
For effective team PM should

 Clarify individual role and responsibilities
 Delegate to appropriate person
 Expect and resolve conflicts at the earliest
 Encourage diversity
 Build a team identity
Measures to promote collaboration
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Belbin’s Classification of Team Members

Team Role Individual Characteristics
Plant Creative‐imaginative‐unorthodox‐solve difficult problems‐does not like
criticism‐ignores established procedure
Resource Investigator Extrovert‐enthusiastic‐communicative‐explores different opportunities‐
develops contacts‐ can lose interest easily
Coordinator Mature‐confident‐good decision maker‐clarify goals‐promote decision
making‐delegates‐ prefers to organise rather than do himself
Sharper Enjoys challenge‐dynamic‐works well under pressure‐overcomes
obstacles‐personal drive‐likes to shape/channel team effort‐lose temper
Monitor ‐ evaluator Discerning‐sober‐strategic‐objective‐good analytical skills‐good at
evaluating options‐gives best choice‐ critical of others
Team worker Cooperative‐mild‐perceptive‐tactful‐reduces conflict‐ indecisive
Implementer Disciplined‐reliable‐conservative‐well organised‐turns ideas into
practical action/tasks‐completes agreed decisions
Completer/finisher Anxious‐conscientious‐painstaking‐meets details & deadlines‐delivers
on time‐ perfectionist‐annoys & depresses others
Specialist Dedicated‐single‐minded‐serious‐expert in his field‐key knowledge‐
skills‐ remains focused in own area‐not interested in the whole picture
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Margerison & McCann Team Management Profile – 8 Roles
Team Role Personality & Aptitude
Advisor / Reporter Supporter & helper – like to collect information
Creator / Innovator Is imaginative – comes out with new ideas & approaches
Explorer / Promoter Likes to explore new opportunities
Assessor / Developer Is analytical and objective – likes to use new approaches
Thruster / Organizer Establishes way to make things work – gets result
Concluder / Producer Works systematically – delivers results
Controller / Inspector Likes to control – work details,
Upholder / Maintainer Upholds and safeguards standards and values
+ Project Manager
Linker Integrate r‐ coordinator
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Support development of the team and its members

Actions
Encourage continuous learning and sharing of knowledge
Involve people in continuous learning process (on-the-job)
Provide opportunities to attend seminars and workshops (off-the-job)
Organize sharing of experience/ lessons on the project/ programme
Give team members time for personal development
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Delegate tasks and responsibilities
Actions
Delegate tasks whenever possible
Hand over associated responsibility
Be clear about your expectations and performance criteria
Provide a reporting structure at team level
Ensure feedback takes place both at team and individual level
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Acknowledge mistakes and learn from them
Actions
Try to reduce the negative effects of mistakes
Accept the fact that people make mistakes
Be lenient with respect to mistakes
Analyze and discuss mistakes made
Help the team members to learn from their mistakes
Good Team Attributes Poor Team Attributes
 Imaginative  Hiding facts

 Trust  Personal Agenda
 Respect  No clear direction
 Innovative  Lot of rework
 Clear Roles  Blame culture
 Supportive  Self centered
 Adaptive  Unresolved conflicts
 Result oriented
 Committed
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People 7 – Conflict and crisis
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Conflict and crisis
Definition
Conflict and crisis includes moderating or solving conflicts and crises by being observant of the
environment, and noticing and delivering a remedy for disagreements. Conflicts and crises may
include events and situations, character conflicts, stress levels and other potential dangers. The
individual must handle these scenarios appropriately and stimulate a learning process for future
conflicts and crises.
Purpose
The purpose of this competence element is to enable the individual to take effective action when
a crisis or clash of opposing interests/incompatible personalities occurs.
Not all conflicts are bad ‐ Conflicts are essential for betterment of the team and for
finding new and innovative solutions
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Conflict and crisis
Actions
Anticipate conflicts and crisis
Analyze and take measures
Mediate in conflicts and crises
Learn from the experience gained
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Anticipate conflicts and crisis

Actions
Identify potential stressful situation
Keep conflicting characters and interest separate
Delegate conflict sensitive subjects to the right people
Take prevention measures
Take stress reducing measures
Review stressful situation with the team
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Analyze and take measures
Actions
Assess the conflict stages
Analyze the possible causes of conflict or crisis
Analyze the possible consequences of conflicts and crisis
Have an extensive repertoire of intervention options available to use
Three stages of conflict

1. Latent – when it is dormant
2. Emerging – when people realize it
3. Escalating – when it becomes emotional
Manifest
Emotional
Rational
Latent
Unaware Aware
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Mediate in conflicts and crises

Actions
Discuss points of difference or dispute openly
Make constructive debate possible
Find an approach that works
If necessary, take disciplinary or legal steps
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Learn from experience gained
Actions
Restore or repair team’s environment
Motivate team to learn from the conflict or crisis
Use conflicts to revise the progress
Learn from conflicts and crises to improve future practices
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Conflict Resolution Techniques
Managing team conflicts
Five main methods to resolve conflicts:
 Withdrawal
 Smoothing
 Compromising
 Forcing
 Confrontation
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Withdrawal / Avoiding
• Retreating or withdrawing from an actual or potential

disagreement/conflict
• No action is taken by the disagreeing parties. Does not solve the

problem
• PM can use this method for conflicts over trivial issues, to lessen
tension or when resolving the conflict could increase immediate
problem
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Smoothing
• Emphasize areas of agreement and play down areas of disagreement -

give less importance to or avoid areas of conflict
• Keeps the atmosphere friendly and less stressful in team but does not
solve problem
• PM can use this method to encourage a team member and help him/her
to grow by learning from own experience
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Compromising
• This method uses a “give and take attitude”
• Both parties need to make some trade offs so neither party can win
• Gives some satisfaction to each concerned party – but not ideal solution
• PM can use to resolve a conflict in team temporarily to avoid delays in

work, or in making concessions when negotiating for contracts
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Forcing
• Uses authority to exert one’s viewpoint at the potential expense of

another
• PM uses his power and authority to force a solution
• Should be used as a last resort as ill feelings are likely to return as a
problem
• PM can use forcing to make quick decisions in crucial or urgent
situations or when he wants a specific solution to be used
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Confrontation / Problem Solving
• The issue kept as focus. Affected parties try to resolve their

disagreements by directly facing the conflict
• Most direct and objective approach that pinpoints the problem
• It provides a final solution to the conflict
• PM can use confrontation method when team is mature
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Managing conflicts
What to use for resolving conflicts?
 1st - Confrontation
 2nd - Compromise
 3rd - Smoothing
 Last - Forcing and Withdrawal
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People 5 – Leadership
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Leadership
Definition
Leadership means providing direction and guidance to individuals and groups. It involves the
ability to choose and apply appropriate styles of management in different situations. Besides
displaying leadership with his or her team, the individual needs to be seen as a leader in
representing the project to senior management and other interested parties.
Purpose
The purpose of this competence element is to enable the individual to lead, provide direction and
motivate others, in order to enhance individual and team performance.
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Leadership
Actions
Act proactively, help and advise
Be responsible, show involvement
Give directions, coach and improve the work
Use right level of power and influence to achieve the goals
Take decisions, enforce them and dare to change them
Projects need leadership to stitch and bind a team together from a diverse group of individuals –
but the competence of leadership is not only confined to the project manager – he also has to
inspire the followers to show leadership – team members too have to take initiative and ensure a
proactive culture prevails – after all the project/ programme is to do with bringing about a
change to the status quo which will benefit the stakeholders – including team members
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Act proactively, help and advise

Actions
Plan to take action
Make every effort to achieve a desired result
Offer your help and advice when (un)wanted
Think and act in a way that is forward looking
Find a balance between opportunities and threat
Types of Leadership
• Transformational Leadership
• Bureaucratic Leadership
• Charismatic Leadership
• Servant Leadership
• Transactional Leadership
Style of Leadership
• Autocratic
• Democratic
• Laissez faire
• Directive
• Supportive 534
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Be responsible and show involvement
Actions
Carry responsibility for your attitude, behaviour and words
Talk positively about project/ programme
Make people enthusiastic about the project/ programme
Develop measurement criteria and performance indicators
Search continuously for improvement
Constantly focus on, and guide people towards, the learning process
Leadership is the ability to:

 Establish direction — the vision of the future
and strategies to achieve the vision
 Align people — communicate the vision
effectively
 Motivate and inspire — help people to
overcome obstacles and achieve their aim
 Set goals and objectives — identify the right people
to implement them
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Give direction, coach and improve the work

Actions
Provide directions to teams and individuals
Coach people to make them more skilled
Use your vision as the leading principle
Bring personal goals into line with the project/ programme
Show the way to achieve these
Principles of Leadership
 Know yourself and seek self-improvement
 Be technically proficient
 Seek responsibility and take responsibility for your actions
 Make sound and timely decisions
 Set the example - Be a good role model for your team members
 Know your people and look out for their well-being
 Keep your team members informed
 Develop a sense of responsibility in your team members
 Ensure that tasks are understood, supervised, & accomplished
Leaders must make sense and give sense

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Use the right level of power and influence to achieve goals
Actions
Use different ways of exerting power
Demonstrate your exertion of power in a timely manner
Ensure people view you as a leader
Leadership in Project Management

 Motivate a diverse group of team members
 See around corners and identify issues that need to be dealt
 Anticipate and resolve people orientated issues
 Keep executive leaders properly informed
 Identify and manage project and business risks.
Process of Leadership
• Challenge the process
• Inspire a shared vision
• Enable others to act
• Encourage the heart
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Take decisions, enforce them and dare to change them

Actions
Accept uncertainty
Invite discussion on decision to be taken
Influence the decisions that parties involved have to take
Communicate clearly and transparently about the decisions
Review a decision when facts change
Reflect to improve the decision making
The project manager must possess the following characteristics:

 Leader
 Committed Project Manager Must
 Goal oriented  Deal effectively with managers and supporting personnel
 Communicator  Integrate individual demands, requirements and limitations
 Supportive to team for better project performance
 Decision maker  Ensure team members understand and follow project goals
 Integrator and aims
 Budget conscious  Have SMART objectives
 Sees overall picture - Specific, - Measurable, - Achievable,
 Independent thinker
- Realistic, - Time-framed
 Creative
 Flexible
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PM – Approaches of Leadership
Hersey and Blanchard Situational Leadership

Team stage and Leadership Style Focus of PM Supportive Behaviour
Team maturity
level
Encouraging Coaching
Forming – low High Structuring/ Task focus – what /Supporting
competence, low direction, directing to do, how to do
commitment low support Delegating Structuring/
Directing
Storming – High Coaching/ Listen – advise,
medium direction, selling coach
competence, high support Directive Behaviour
limited skills
Norming – good High Encouragin Low task focus –
competence, support, low g/ high support
mixed direction supporting
commitment
Performing – Low Delegating Low supervision –
high competence, direction, low guidance
high commitment low support
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People 8 – Resourcefulness
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Resourcefulness
Definition
Resourcefulness is the ability to apply various techniques and ways of thinking to defining,
analysing, prioritising, finding alternatives for and dealing with or solving challenges and
problems. It often requires thinking and acting in original and imaginative ways and stimulating
the creativity of individuals and the collective creativity of the team. Resourcefulness is useful
when risks, opportunities, problems and difficult situations arise.
Purpose
The purpose of this competence element is to enable the individual to effectively handle
uncertainty, problems, changes, limitations and stressful situations by systematically and
continuously searching for new, better and more effective approaches and/or solutions.
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Resourcefulness
Actions
Stimulate and support an open creative work place
Conceptualize when defining situations and strategies
Use analytical techniques to analyze data
Encourage the use of creativity techniques
Encourage a holistic approach to decision making
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Stimulate and support an open creative work place
Actions
Encourage people to provide a contribution with the knowledge that they have
Encourage creativity and support this
Use imagination to remove obstacles
Consult other people and accept something from them
Use viewpoints of everybody involved
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Conceptualize when defining situations and strategies

Actions
Where possible encourage conceptual thinking
Recognize that problems have multiple causes
Recognize that solutions have multiple effects
Think in term of systems
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Use analytical techniques to analyze data
Actions
Apply different analytical techniques
Analyze problems in order to find causes and solutions
Analyze complex data into meaningful information
Report clearly on the findings
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Encourage the use of creativity techniques

Actions
Use applicable creativity techniques
Use divergence techniques
Use convergence techniques
Encourage the viewpoints of various disciplines
Identify the interdependencies
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Encourage a holistic approach to decision making
Actions
Think holistically and explain the total picture
Consider a situation from different viewpoints
Link a project to its context
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Problem Solving Techniques
 Brainstorming  Lateral Thinking

 Swim Lane Diagram  Thinking Hats
 System Diagram  SWOT Analysis
 Simplex  Root Cause Analysis
 Appreciative Inquiry  Affinity Diagram
 Soft System Methodology  Cause & Effective Diagram
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Problem Resolution Methods
Lateral Thinking
 Edward De Bono – a Maltese Physician coined the term
 Sometimes traditional step by step methodology does not give any results
 It is about reasoning the not immediately obvious ideas
 Promotes shifting from the obvious and routine and using new or unexpected ideas
 According to De Bono we may need to solve problems not by removing cause but by
designing a way forward; even if the cause remains in place
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Thinking Hats – Propagated by Edward De Bono… Encourages parallel thinking – uses 6

metaphorical hats
 White – Covers facts, figures, information needs and gaps
 Red – for intuition, feelings and emotions
 Black – Caution and judgment – very valuable
 Yellow – logic: why something will work; what benefits it will give
 Green – for creativity, alternative proposals, provocations and changes
 Blue – overview or process control hat. Does not look at the subject itself, but at the
“thinking” about the problem
635 Method of creative thinking
550
550
275
SWOT Analysis
 Provides a framework for analyzing Strengths, Weaknesses, Opportunity and Threats
 Internal factors – Strengths and Weakness
 External factors – Opportunity and Threat
Root Cause Analysis
 5 whys popularized by Toyota in 1970s
 Cause and effect analysis
 Brainstorming
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551
Creative thinking technique - Abstraction

ALeonardo
different DawayVinci
to look at our
called thisproblem
thinking strategy
issaper
to tiltvedere
the diagram so that
or “knowing how it is to see.”
standing vertical on one dot. Now you
realize that you can think of the
The figure below is a square defined
illustration as a diamond with a point.
by four dots. A square is a rectangle
Then moving the two other dots to
with four equal sides and four 90‐
make the remainder of the points,
degree angles. Your challenge is to
you’ve got a square twice as large as
move 2 dots and create a
the
square twiceone.
original Reframing the square
as big as the one
as a diamond put it into a different
defined by the dots as they are
framework for context and the problem
presently arranged.
is more easily solved.
552
552
276
Coping methods
Hundreds of coping methods have been identified. Classification of these methods into a
broader architecture has not been agreed upon. Common distinctions are often made
between various contrasting methods, for example: problem‐focused versus emotion‐
focused; engagement versus disengagement; cognitive versus behavioral. Weiten for
instance, identifies four types of coping methods:
Appraisal‐Focused (adaptive cognitive): directed towards challenging personal assumptions.
Problem‐Focused (adaptive behavioral): reducing or eliminating stressors.
Emotion‐Focused: changing personal emotional reactions.
Occupation‐Focused: directed towards lasting occupation(s), which generates positive
feedback
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553
People 9 – Negotiation
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554
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Negotiation
Definition
Negotiation is the process between two or more parties that aims to balance different interests,
needs and expectations in order to reach a common agreement and commitment while
maintaining a positive working relationship. Negotiation includes both formal and informal
processes such as buying, hiring or selling or regarding requirements, budget and resources in
projects.
Purpose
The purpose of this competence element is to enable the individual to reach satisfactory
agreements with others by using negotiation techniques.
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555
Negotiation
Actions
Understand interests of all parties in the negotiation
Develop sufficient options to satisfy all needs
Design an acceptable strategy to achieve your objective
Reach an agreement, which is in line with your objectives
Exploit commercial opportunities
 It is a process of bargaining in which two parties, each of whom have something that
the other wants, try to reach an agreement on mutual accepted terms.
 Negotiation can only take place when both the parties are willing to meet and discuss
an issue. That is to say, they both want to reach an agreed decision by discussion, not
force or authority.
a. Arm yourself with relevant data / industry practices

b. Always negotiate on basis of strengths and not on weaknesses
c. Be open to other’s perspectives
d. Convince or get convinced
e. Willingness to demonstrate fairness
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Understand interests of all parties in the negotiation
Actions
Know and reflect on your own interests, needs and limitations
Collect and document information on the parties involved
Analyze and document your own priorities
Analyze and document the priorities of the other parties
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Develop sufficient options to satisfy all needs

Actions
Identify concessions, options and alternate solutions
Identify the best alternative
Make the right offer at a favourable moment
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558
279
Design an acceptable strategy to achieve your objective
Actions
Identify the different strategies that can lead to success
Identify alternative strategies in case the negotiation is different to what you expected
Understand why you choose a particular strategy
Choose negotiation tactics which support the strategy
Name the players and document their mandate
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Reach an agreement, which is in line with your objectives

Actions
Always bring your tactics into line with the situation
Negotiate about a lasting agreement
Show both your patience and perseverance in order to reach an agreement
Use the best alternative, if you cannot come to an agreement
Document the result of the agreement
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560
280
Exploit all commercial agreements
Actions
Look for ways to deliver more quickly, better and/ or cheaper
Always keep looking for smarter alternatives
When considering an alternative, always weigh up the effect it could have on the relationship
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Stages of Negotiation
• Protocol. In this stage, the participants get acquainted and set some ground rules for the
negotiation meeting. It is often more useful to create a collaborative atmosphere and let
the meeting evolve, rather than trying to rush things.
• Probing. During this stage, the parties actually start communicating with each other.
Verbal communication plays a significant role, so participants need to feel comfortable
and speak fluidly. But non-verbal components such as eye contact, gestures, vocal tones,
postures, etc., also become meaningful.
– Through language, gestures and body language, the parties start to feel each other
out. They try to identify weaknesses and areas of shared interest.
– During this stage, negotiators try to verify the adequacy of their strategies or fall
back on contingency plans developed during their pre-negotiation planning.
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281
• Rough bargaining. This involves knowing your points and issues and going after
them with confidence and assertiveness, which is very important for successful
negotiations.
• Closure. The issues of cost, schedule and performance are settled during this stage.
The agreements reached on individual bases are summarized and, if no objections
are raised, last stage follows—agreement.
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• Agreement. Reaching an agreement is the final goal of negotiation.

– During this stage, discussions take place about where and when the work should
start, when to meet again, how the progress will be monitored, and other side
issues.
– This is a good time to review key phrases to be included in the contract because
different words have different meanings for different people.
• Both sides must feel like "winners"—even though one side may actually have gained
more.
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Negotiation Strategy
• Trusting collaboration. Negotiators should consider this strategy when both
relationships and substantive outcomes are important.
– The negotiator seeks a win-win outcome in terms of both substantive goals and
positive relationships. Trusting collaboration is most effective when both
parties are open, interdependent, and support each other.
– It increases mutual trust and leads to effective problem solving and a win-win
settlement . Project managers should use this strategy when negotiating
important issues with the client, project team members, and functional
managers.
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• Open subordination. This corresponds to an accommodating style of conflict

management in which negotiators are more concerned about positive relationships
than about substantive outcomes.
– Open subordination can dampen hostility, increase support and cooperation, and
foster more interdependent relationships.
– Project managers should use this strategy with support staff.
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• Firm competition. This is used when substantive outcomes are important and
relationships are not.
– Similar to the forcing style, this is used when a negotiator has little trust in the
other party or the relationship is not good from the beginning.
– The negotiator exerts status or position power to gain substantive outcomes for
himself or herself.
– In competitive strategy, negotiators seek a win-lose outcome and are willing to
risk their relationships.
– This is not a very effective strategy in project management and should be used
cautiously.
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• Active avoidance. People consider this strategy when neither the substantive
outcomes nor the relationship are important to them or to their organizations.
– Refusing to negotiate is the most direct and active form of avoidance.
– This strategy does not lead to successful negotiations in a project
environment and therefore should be used only as a last resort.
In negotiation theory, the best alternative to a negotiated agreement or BATNA is the most
advantageous alternative course of action a party can take if negotiations fail and an agreement
cannot be reached. This could include diverse situations, such as suspension of negotiations,
transition to another negotiating partner, appeal to the court's ruling, the execution of strikes, and
the formation of other forms of alliances. BATNA is the key focus and the driving force behind a
successful negotiator. A party should generally not accept a worse resolution than its BATNA.
Care should be taken, however, to ensure that deals are accurately valued, taking into account all
considerations, such as relationship value, time value of money and the likelihood that the other
party will live up to their side of the bargain. These other considerations are often difficult to
value, since they are frequently based on uncertain or qualitative considerations, rather than
easily measurable and quantifiable factors.
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People 10 – Result orientation
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Result orientation
Definition
Results orientation is the critical focus maintained by the individual on the outcomes of the
project. The individual prioritises the means and resources to overcome problems, challenges and
obstacles in order to obtain the optimum outcome for all the parties involved. The results are
continuously placed at the forefront of the discussion and the team drives toward these outcomes.
One critical aspect of results orientation is productivity, which is measured as a combination of
effectiveness and efficiency. The individual needs to plan and deploy resources efficiently to
realise the agreed results and be effective.
Purpose
The purpose of this competence element is to enable the individual to focus on the agreed
outcomes and drive towards making the project a success.
Process of Result orientation
 Restating the previous steps for as many
 Define results unambiguously times as is necessary
 Arrange results into interest groups  Communicating project performances and
 Clearly manage expectations results
 Determine and communicate the critical  Striving for a continuous result improvement
path  Compare project performance and results
 Make the project plan definitive, against the plan
communicate it and get it approved  Apply lesson learned
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570
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Result orientation
Actions
Assess all decisions based on their influence on success
Balance the available resources in order to optimize the outcome
Create a healthy, safe and productive working conditions
Sell the project/ programme, the processes and the results
Deliver the result and accomplish acceptance
Results orientation is a term used to describe "Knowing what results are important and focusing
resources to achieve them."
Focus Teams attention on Key Objectives and obtain Optimum Outcomes from parties involved
PM paid to deliver project results
PM is responsible to deliver project results acceptable to stakeholders….Project results
subdivided into
Project Results
Customer Results
People Results
Other Party Results
He should ensure project results satisfy interested parties
He should pay attention to all ethical, legal & environmental issues that can affect the project
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Assess all decisions based on their influence on success

Actions
Make the objectives and agreed result leading
Derive your personal goals from these
Derive the way of working from these
Base every decision on contribution to project success
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572
286
Balance the available resources in order to optimize the outcome
Actions
Prioritize the required resources
Explain the importance of these
Refuse that which does not lead to the result
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573
Create a healthy, safe and productive working conditions

Actions
Shield the team from influences from the surroundings
Ensure there are healthy and safe working conditions
Give the team members well-defined work instructions
Ensure the necessary resources are available
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Sell the project/ programme, the processes and the results
Actions
Defend and sell the project/ programme/ portfolio in all possible ways
Look for opportunities to promote the project/ programme
Encourage others to promote the project/ programme
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Deliver the result and accomplish acceptance

Actions
Differentiate between efficiency, effectiveness and productivity
Maintain the required efficiency, effectiveness and productivity levels
Demonstrate the skill of getting things done
Aim for demonstrable improvements
Think in terms of solutions instead of problems
Recognize shortcomings and make these the subject of discussions
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Assertiveness
“Assertiveness means standing up for your personal rights - expressing thoughts,

feelings and beliefs in direct, honest and appropriate ways.”
Assertive Behaviour includes
Listening to the views of others and responding appropriately, whether in
agreement with those views or not.
Accepting responsibilities and being able to delegate to others.
Regularly expressing appreciation of others for what they have done or are doing.
Being able to admit to mistakes and apologize.
Maintaining self-control.
Behaving as an equal to others.
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An individual's assertive rights should always include:

 The right to express feelings, opinions, values and beliefs.
 The right to change one's mind.
 The right to make decisions.
 The right to say "I don't know" and/or "I don't understand".
 The right to say "no" without feeling bad or guilty.
 The right to be non-assertive.
 The right to personal freedom, to be one's self.
 The right to privacy, to be alone and independent.
PM’s Assertiveness
• Persuasiveness – ability to achieve consensus to common goals
• Discuss decisions affecting project – obtain team consensus
• Assertive behavior requires acting politely, reasonably and objectively
• Be neither passive nor aggressive, but balanced
• Assertiveness ensures effective communications with stakeholders
• PM can avoid being led, manipulated or taking decisions that are not in the
interest of the project 578
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Efficiency
Efficiency relates to ‘doing things in the most economical way (good input to output
ratio)
 Eliminates unnecessary costs associated with the project

 Matching the highest quality work to the best price
 Requires PM to have confidence in team members
 Delegate tasks
 Manage meetings well
 Strive for continuous improvement
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Thank You
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Measures for promoting collaboration in the Project Team
1. Create a clear and compelling cause.
2. Communicate expectations.
3. Establish team goals.
4. Leverage team‐member strengths.
5. Foster cohesion between team members.
6. Encourage innovation.
7. Keep promises and honor requests.
8. Encourage people to socialize outside of work.
9. Recognize, reward and celebrate collaborative behaviour.
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International Standards for Project Management
ISO 21500:2012, Guidance on Project Management, is an international standard developed

by the International Organization for Standardization, or ISO starting in 2007 and released in
2012. It was intended to provide generic guidance, explain core principles and what
constitutes good practice in project management.[ The ISO technical committee dealing with
project management, ISO/PC 236 was held by the American National Standards
Institute (ANSI) which had approved four standards that used PMI materials. one of which
was ANSI/PMI 99‐001‐2008, A Guide to the Project Management Body of Knowledge ‐ 4th
Edition (PMI BoK® Guide ‐ 4th Edition) (revision and re‐designation of ANSI/PMI 99‐001‐
2004): 11/20/2008.
ISO plans for this standard (21500) to be the first in a family of project management
standards. ISO also designed this standard to align with other, related standards such as ISO
10005:2005 Quality management systems − Guidelines for quality plans, ISO 10006:2003
Quality management systems − Guidelines for quality management in projects, ISO
10007:2003 Quality management systems − Guidelines for configura on management, ISO
31000:2009 Risk management – Principles and guidelines.
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The Eisenhower Matrix
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292
Johari Window
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585
Ha! Ha!
586
293
Ha! Ha! Ha!
587
Ha! Ha! Ha! Ha
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294
!!!?????!!!!!?????
589
!!!!!!!!
?????????
!!!!!!!!!
590
295
??????????!!!!!
??????????!!!!!!!!!
591
PM – Process Mapping
Project Management Process Group
Knowledge Areas Initiating process group Planning process group Executing process group Monitoring and Controlling Closing process group
process group
Project Integration Develop Project Charter Develop Project Management Direct and Manage Project Monitor and Control Project Close Project or Phase
Management Plan Work Work
Perform Integrated Change
Control
Project Scope Plan Scope Management Validate Scope
Management Collect Requirement Control Scope
Define Scope
Create WBS
Project Time Plan Schedule Management Control Schedule
Management Define Activities
Sequence Activities
Estimate Activities Resources
Estimate Activities Duration
Develop Schedule
Project Cost Plan Cost Management Control Costs
Management Estimate Costs
Determine Budget
Project Quality Plan Quality Management Perform Quality Assurance Control Quality
Management
Project Human Resource Plan Human Resource Acquire Project Team
Management Management Develop Project Team
Manage Project Team
Project Communication Plan Communications Manage Communications Control Communications

Management Management
Project Risk Plan Risk Management Control Risks

Management Identify Risks
Perform Qualitative Risk Analysis
Perform Quantitative Risk
Analysis
Plan Risk Responses
Source: A Guide to the Project Management Body

Project Procurement of Knowledge, Fourth
Plan procurement Management Edition
Conduct Procurements Control Procurements Close Procurements
Management
(PMBOK® Guide) ©2008
Project Stakeholder Project ManagementPlan Stakeholder Management
Identify Stakeholders Institute, Inc. All RightsManage Stakeholder
Reserved. Control Stakeholder
Management Engagement Engagement
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593
594
297
595
596
298
597
598
299
599
600
300
Agile Approach – Agile Manifesto
Individuals and interactions

Process & tools
Working Product
Comprehensive documentation
Customer collaboration
Contract negotiation
Responding to change
Following a plan
Agile values items on the left more than the items on the right (our learning from SW Projects)
Agile Values and Pillars
1. Transparency
2. Inspect
3. Adapt
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601
Agile Macro Practices
Discover Scope
Prioritised Product Backlog

Iteration review: Product demonstration to customer and feedback at the end of every
review
Lean: Low value scope can be dropped
Team Self management
Daily stand up meeting

Information Radiators: Task Board, Burn down Cart
Team workspace: Caves & Commons
Adaptive Planning
Tentative release plan

Accurate JIT iteration plan
Update release plan at the end of each iteration, as necessary
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602
301
Agile Macro Practices
Anarchy ?
Requirement Volatility / Complexity
Agile is better – Iterative Agile is best – Iterative
High
customer feedback shapes
requirements
customer feedbacks shape
requirements + prototyping
mitigates technical risk
?
Simple Zone – Agile is better –

Agile/Traditional - Little prototyping mitigates
Low benefit from Agile technical risk
Technology Complexity / Experience
Low High Anarchy
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• Knowledge: facts, information, and skills

acquired through experience or education; the
theoretical or practical understanding of a subject
• Skill: the ability to do something well; expertise
• Methods: a carefully thought out way of working
in order to reach the result that that contributes
towards the goal
• Techniques: a way in which a certain activity or
piece of work is carried out
• Tools: are resources that help with this
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My project is to build a wall of 10,000 bricks @ Rs. 1/brick in 10 days …. 1,000 bricks a day
=> BAC = Rs. 10,000; Original duration 10 days
Review at end of day 1 => we achieved 900 bricks @ Rs. 1.1
PV = Rs. 1000
EV = Rs. 900
AC = Rs. 990
SV = EV – PV => 900 – 1000 = ‐ Rs. 100

CV = EV – AC => 900 – 990 = ‐ Rs. 90
SPI = EV/PV => 900/1000 = 0.9
CPI = EV/AC => 900/990 = 0.91
EAC = BAC/ CPI => 10000/.91 = Rs. 11,000
New Time = Original duration/ SPI => 10/0.9 = 11.11 days
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Quiz 1
1. The project’s success criteria should be:

a. Clear before beginning the project
b. Measurable
c. Changed as the project progresses
d. a and b
2. As the project manager the tools and techniques that you will use to manage the project:
a. Will always be identical in all projects
b. Will vary depending on the project
c. Will depend entirely on the size of the project
d. Will depend entirely on the cost of the project
3. The tools and techniques used in managing projects:
a. Are same for all projects
b. Are not the same for all projects
c. Depend entirely on the size of the project
d. Depend entirely on the cost of the project
4. Environmental constraints should be considered:

a. For manufacturing projects
b. For construction projects
c. For all projects
d. Only for social and political projects
5. Health and safety standards for the project should be initially identified in the:
a. The Business case
b. Project strategy
c. Project Success Criteria
d. Project Management Plan
6. What is a project context?

a. The product of the project
b. The tools and techniques to be used in the project
c. The internal and external factors that influence the project
d. Health, safety and environment plans
7. Projects often fail due to:

a. Lack of proper planning
b. Unforeseen environmental changes
c. Inadequate project monitoring and control
d. All of the above
8. The most relevant measures used to confirm project acceptability is?

a. The quality criteria
b. The project completion time
c. Key Performance Indicators
d. The expenditure incurred in the project
9. The programme manager is responsible to manage:

a. Interdependencies between different projects
b. Interdependencies within the same project
c. All high cost projects
d. A large number of unrelated projects
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10. For proper integration within a project it is important that:
a Relationships between sub-projects and the project should be clear
b. Team members must meet daily
c. The project manager should meet the sponsor daily
d. B and C
11. Success criteria:

a. Are qualitative measures
b. Are Qualitative and quantitative measures
c. Is the baseline of the project
d. Is decided by the Project Manager
12. Arranging finance for the project forms a part of the:

a. Contract
b. Business case
c. Project Management Plan
d. Project strategy
13. Success Factors can be defined as the:

a. Elements of the project work that can be controlled by the Project Manager
b. Elements of the project context that can be controlled by the Project Manager
c. Factors that improve chances of project’s success
d. All of the above
14. An organisational structure that is best suited for doing repetitive jobs is:
a. Projectised
b. Matrix
c. Functional / Line
d. A and c
15. Some advantages of a Matrix organization are:

a. The project manager and functional manager can share responsibility for
assigning priorities
b. It allows most economical and efficient use of resources
c. Allows team members to be more dedicated as their career prospects
are maintained
d. All of the above
16. Some disadvantages of a Matrix organization are:

a. Team members have to keep both the functional and the project managers happy
b. Can have disagreement between functional and project manager regarding
project priorities
c. Top management has to be more involved to lay down guidelines etc
d. All of the above
17. A project manager will be given least level of direct project authority in a ........... organization:
a. Balanced matrix structure
b. Weak matrix structure
c. Projectised structure
d. Strong matrix structure
18. Which is likely to be the LEAST flexible of the following project quality processes?
a. Quality of the management process
b. Quality control of deliverables
c. Quality assurance
d. Good attitudes
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19. The three basic types of Organizational structures are:
a. Functional, Project and Matrix
b. Functional, Weak Matrix and Neo-Matrix
c. Functional, Matrix and Strong Matrix
d. Weak Matrix, Matrix and Strong Matrix
20. The Project Office is best described as:

a. The co-location venue for project personnel
b. The project managers office
c. The centre for planning and project support functions
d. The meeting venue for contractors/sub-contractors
21. What is not a method of investment appraisal?

a. Payback
b. Discounted cash flow
c. Earned value analysis
d. Internal rate of return
22. A key aspect of undertaking an investment appraisal is to:

a. Find the critical path
b. Minimize the project expenses
c. Choose the right contract
d. Evaluate the proposed project
23. Your company has got an investment appraisal done for a proposed project. The minimum investment
option possible for them will be:
a. The ‘do-nothing’ option
b. The project cost must be at least 1,00,000/-
c. To ensure more than one consultant was used to study all the options
d. To include all cost and schedule data
24. A post project appraisal will be conducted after:
a. Scheduling the network
b. Implementation of the project
c. The business case has been finalized
d. The feasibility stage
25. Concept of relating future cash flows over the project’s life to a common base value is known as:
a. IRR
b. Feasibility
c. Net Present Value
d. Discounted cash flow
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Quiz 2
1 Dependencies and precedence relationships are shown using:

a. Milestone charts
b. WBS
c. Responsibility matrix
d. Network diagrams
2 The project team members commonly use milestones to show:

a. The resources used to-date
b. The project’s deliverables
c. The completion date of key deliverables
d. The start and end date dates of deliverables
3 Critical path analysis can best be defined as a tool used to …… the project’s ……
a. Calculate, floats
b. Manage, schedule
c. Manage, critical activities
d. Manage, non-critical activities
4 A Free Float is the:

a. Difference between an activities late start and early start
b. Amount of time an activity can be delayed without affecting the earliest start of succeeding
activities
c. Amount of time an activity can be delayed without affecting latest start of succeeding activities
d. All of the above
5 Which of the following would you use to display the detailed project schedule?
a. Bar chart
b. PDM network
c. Milestone chart
d. Gantt chart
6 The project management plan will be developed by the:

a. Project Manager
b. Project Manager with the team members
c. Project Manager and the Sponsor
d. All of the above
7. The total float of an activity is equal to its:

a. Early Finish date plus Early Start date
b. Early Finish date minus Early Start date
c. Late Start date minus Early Start date
d. Late Start date plus it’s Late Finish date
8. Project closeout will take place after the:

a. Project plan is finalized
b. The Business Case has been drafted
c. Implementation stage
d. The work required is accurately estimated
9. A key advantage of using a three point estimate is that it:

a. Requires minimum knowledge
b. Reduces the risk by improving the estimate
c. Involves more people
d. Is more flexible
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10. A network can be described as:
a. A schematic representation of project activities
b. A sequence of events
c. The critical path for the project
d. Is generally drawn from right to left
11. Reducing the project duration will normally result in:

a. Increased costs
b. Need for more manpower
c. Decreased costs
d. A and b
12. PESTLE stands for:

a. Political, Essential, Societal, Technical, Legal, Energy
b. Political, Economic, Social, Technical, Legal, Environment
c. Policy, Economics, Society, Teachers, Legal, Environment
d. none of above
13. The critical path is the:

a. Shortest path in the network
b. Longest path in the network
c. Path in which only some activities contain floats
d. Path which has the maximum float
14. Dummy activities in an activity-on-arrow network are used to:

a. Show those tasks which are superfluous
b. Show alternative paths
c. Show a dependency relationship
d. Show the milestones
15. Project success and failure criteria are first determined:

a. At project closure
b. When the Business case is defined
c. During implementation of the project
d. When making the risk management plan
16. Out of the following, which is the first planning issue to be addressed?
a. The size of the team required for each phase of the project
b. The integration method to be used for each deliverable
c. The Work Breakdown Structure
d. The deliverable product test plans

17. The aim of Crashing is to:
a. Take action to decrease the project duration for least cost
b. Shorten the project schedule without reducing the project scope
c. Compress the project schedule by overlapping activities that would normally be done in
sequence
d. A and B

18. The term ‘float’ can best be described as:
a. The amount of time an activity can be delayed
b. The amount of time an activity can be delayed without delaying successor activities
c. The amount of time an activity can be delayed from it’s early start without delaying the
project end date
d. The amount of time a activity can be delayed from it’s late start without delaying the project
end date
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19. Which of the following best describes a project stakeholder?
a. The contractor, sponsor and project manager
b. Anyone who is a part of the project, has interest in it, or is impacted by it
c. The customer
d. The project team
20. Operations are most suited for:

a. Improving manufacturing processes
b. Introducing changes
c. The maintenance department
d. A and c
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Quiz 3
1. Cost variance is:
a. EV-PV
b. EV-AC
c. AC-EV
d. PV-AC
2. Schedule variance is:

a. BCWS-BCWP
b. BCWP-BCWS
c. ACWP-BCWS
d. BCWP-ACWP
3. Earned value is the same as the:

a. Actual cost of work performed
b. Budgeted cost of work performed
c. Budgeted cost of work scheduled
d. Budget at completion
4. Earned Value is used to:

a. Evaluate the feasibility of the project
b. Measure the performance of the project
c. Measure the project’s Payback period
d. Calculate the project’s profit
5. What is not true of the Cost Performance Index:

a. Cost efficiency ratio of earned value to actual costs
b. Is developed using the EV and the PV
c Measures the cost of the work performed
d. Is used to predict the likely project cost
6. If cost efficiency is expected to continue then EAC can be calculated as:

a. BAC / CPI
b. EV / AC
c. PV / EV
d. AC / PV

7. A project being reviewed shows the following:
PV=950; EV=1050; AC=1250. This shows the:
a. Project is behind schedule and under budget
b. Project is ahead of schedule and over budget
c. Project is behind schedule and under budget
d. Project is on schedule and over budget
8. All of the following statement are true of networks except:

a. Are the most powerful tool to control the project’s progress
b. Help to meet a fixed project end date
c. Enable optimization of resource usage across the project
d. Highlights activities with floats that must be completed by their early finish date
9. You want to know details of how the project will be executed. To know this you should
check the:
a. Risk management plan
b. Project Management Plan
c. The network schedule
d. WBS
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10. Which statement best describes the overall aim of project management?
a. Ensure the project is completed on schedule irrespective of cost
b. Ensure the project cost is maintained irrespective of schedule
c. Achieving the success factors described in the Project Charter
d. Provide better quality than was specified
11. A resource histogram shows the:

a. Hiring of manpower to perform changes in the project
b. Leveling of resources used in project
c. The number of resources to be used in a project month/week wise
d. None of the above
12. A project management methodology is:

a. A structured and documented process to manage a project
b. Life cycle approach in managing projects
c. A special PM software
d. Use of MS Project to manage the project’s progress
13. Project integration mainly involves:

a. Efficient use of network schedules
b. Effective coordination and control
c. Making the responsibility matrix
d. Meetings of all the stakeholders
14. The network is drawn from?

a. Right to left
b. Left to right
c. Top to bottom
d. Can follow any direction
15. Milestones:
a. Have zero duration
b. Are significant events in the project
c. Consume time and money
d. a and b
16. Bar/Gantt charts are primarily used to show:

a. Show the critical path
b. A network of activities
c. Overview of tasks against a calendar
d. The lead and lag constraints

17. Extra time that is kept in the network schedule to mitigate risks is referred to by all of the
following terms except:
a. Buffer
b. Reserve
c. Contingency
d. Window
18. Project Management advocates managing the project by:

a. Defining what is to be accomplished in terms of time, cost, quality and technical parameters
b. Developing a plan to achieve project objectives
c. Using various tools and techniques to monitor the progress
d. All of above

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19. Work on developing the project management plan should begin:
a. When the Business case is being drafted
b. After financing has been obtained
c. Once the project charter has been issued
d. Once the full project team is formed

20. Your project is running behind schedule. To compress the project’s duration and get back
on schedule you would:
a. Crash the critical path activities
b. Fast track critical path activities
c. Add more resources
d. All of the above
21. Resource planning is done in the project to:

a. Level the resources
b. Evaluate the type and amount of resources needed through the project
c. Hire the best resources
d. To draw the resource histogram
22. The acronym PERT stands for:

a. Project Evaluation Review Technique
b. Personnel Evaluation Review technique
c. Programme Evaluation Review Technique
23. Which statement about standard deviation is Not true?

a. Is a statistical tool that is used to show dispersion of data from the mean
b. Measures the variability in the data
c. Closer the data examples are to the mean the smaller is the standard deviation
d. Closer the data examples are to the mean the larger is the standard deviation
24. My project is running ahead of schedule. In Earned Value reporting this will be reflected as:
a. Project’s BAC = CPI
b. Project’s SPI < 1
c. Project’s SPI > 1
25. At project completion, the project’s Earned Value will always be same as the:
a. EAC
b. BAC
c. Actual Cost
d. Estimate to complete
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Quiz 4
1. When will you implement the risk mitigation strategy in the project?
a. After the risk identification process
b. After performing quantitative risk analysis
c. After risk response planning
d. After qualitative risk assessment
2. A risk can be defined as:

a. The product of the probability of an event times it’s impact
b. The product of the probability of an event less it’s impact
c. Mitigation of uncertainties
d. What-if analysis
3. Your management wants the project team to maintain a Risk Register. The Risk Register is:
a. A log kept of all potential risks using a standard format
b. A group of project risks that can be managed in a coordinated way
c. The framework by which project management can be used to manage risks
d. The required response to a risk
4. Risk Management covers the processes of:

a. Identification, assessment, response allocation and management of risks
b. Identification, assessment, and management of all project risks
c. Allocation, assessment, and management of all project risks
d. Identification, assessment and management of key risks
5. The Assumption analysis tool:

a. Is used to identify risks
b. Undertakes a stability analysis
c. Checks the sensitivity of the assumption
d. All of the above
6. In projects risks can be caused by:

a. Environmental factors
b. Unforeseen government regulations
c. Internal factors
d. All of above
7. Who should be made responsible for implementing the agreed risk responses?
a. The person best placed to manage the risk effectively
b. The person who identified the risk
c. The project manager
d. The sponsor
8. If a risk occurs in the project it will:
a. Increase the cost of the project

b. Increase both the cost and schedule of the project
c. Increase the project’s schedule
d. Impact the project’s objectives
9. A Secondary risk is:

a. An unimportant risk
b. A new risk created when responding to a risk
c. A risk with two options
d. A risk response strategy
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10. Probability can be described as:
a. The likelihood and effect of a risk occurring in the project
b. The chances that a similar risk will occur more than once
c. The likelihood of a risk occurring
d. Likelihood that the project will be completed on time, within budget
11. If the probability that A will occur is 70% and that B will occur is 50% then what is the
probability of both A and B occurring?
a. 55%
b. 40%
c. 35%
d. 45%
12. When a risk is transferred it affects:

a. Its likelihood of occurrence
b. Its impact as well as likelihood of occurrence
c. Its impact
d. Has no affect
13. Brainstorming for risks should focus on:

a. Listing out the right and wrong options
b. Listing out all the unlikely options
c. Listing out the most likely options
d. Listing out all possible options
14. Sensitivity analysis helps to:

a. Determine the risks that have maximum potential impact on the project
b. Calculate the average outcome of a future scenario
c. Calculate the critical path
d. Conduct interviews
15. When developing the network schedule once you have completed the forward pass and the
backward pass all of the following can be determined except?
a. Floats
b. Schedule delays
c. Critical path
d. Free floats
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Quiz 5
1. The cost of quality can be defined as:
a. The expense of non-conformance to specifications/requirements
b. The responsibility of the concerned workers
c. Fixed by the quality circle
d. All of the above
2. Quality Assurance:
a. Assures there will be zero defects in the project
b. Uses various charts to depict acceptance level for defects
c. Monitors the project results to ensure quality is being met
d. Provides feedback regarding whether work being done is according to the quality
management plan
3. Quality refers to:

a. Providing the best technical performance
b. The degree to which the set of inherent characteristics fulfils the project requirements
c. Ensuring that the required safety is fully met
d. Providing the customers with more than they asked for

4. A Pareto diagram:
a. Is a form of ‘s’ curve
b. Is a histogram based on magnitude
c. Is a histogram based on the frequency of occurrence
5. The cost of quality is generally categorized as:

a. Cost of failure and prevention
b. Cost of appraisal, failure and prevention
c. Cost of appraisal, internal failure and external failure
d. Cost of prevention
6. Which is likely to be the LEAST flexible of the following project quality processes?
b. Quality control of deliverables
d. Good attitudes
7. Pareto analysis is same as the?

a. 80/20 rule
b. 20/80 rule
c. 50/50 rule
d. 40/60 rule
8. Sampling, Cause and Effect analysis and Pareto analysis are tools used for:
a. Cost estimation
b. Investment appraisal
c. Quality management
d. Contract negotiation
9. In Resource Scheduling:
a. The number of resources available is fixed
b. The pre-determined level of resources cannot be exceeded
c. Project duration may or may not exceed
d. All of the above
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10. The Project Management Plan is owned by the:
a. Sponsor
b. Customer
c. Project manager
d. A and c
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Quiz 6
1. Programme management can be described as:
a. Implementation of organisation’s business strategy through projects
b. Managing a portfolio of interrelated projects having common objective
c. Resource allocation amongst a portfolio of projects
d. All of the above
2. A change log is:

a. A record of all authorised project changes
b. A record of all proposed changes, rejected or authorised
c. A record of the impact of changes
d. A record of rejected changes with reason for rejection
3. Monitoring of project costs by category is based on the company’s:

a. Chart of accounts
b. Code of accounts
c. Cash flow
4. A contract that considers aspects like target cost, share ratio, minimum fee and maximum fee
is:
a. FPIF
b. CPIF
c. Firm fixed price
d. Time & Material
5. Changes should be monitored against:

a. Their impact on the project’s schedule
b. The project’s requirements
c. Their impact on resources
d. Project’s scope
6. Current standing of the project is provided by a:

a. Progress report
b. Performance report
c. Status report
d. Schedule report
7. What of the following do you think will be least useful in a Post Project Review?
a. List of contractors used
b. Project management plan
c. Schedule and cost variances
d. Resource estimates
8. The Project Support Office:

a. Is normally responsible for recruiting all project personnel
b. Makes the network schedule
c. Supports the project by providing standard templates
d. Assess the competence of the team members
9. What is NOT true of a project phase?

a. Phasing allows for most efficient use of resources
b. Can be split into stages
c. Nomenclature of each phase is the same in every project
d. Acts as an evaluation and approval point

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10. Which of the following would you not use for making an estimate?
a. Metrics
b. Post project reviews
c. Expert opinion
d. GERT
11. Equipment ordered but not yet paid for can best be described as a:
a. Sunk cost
b. Committed cost
c. Variable cost
d. Indirect cost

12. An estimate that gives a first look of likely costs is a ________ estimate:
a. Definitive
b. Rough Order of Magnitude
c. Analogous
d. Top down

13. Document management refers to:
a. Changes in design
b. Reporting structure
c. Requests for information
d. Information management
14. A procurement strategy would include all except the:

a. Potential sources of supply
b. Final value of the contract
c. Type of contract to be used
d. Methods of supplier selection
15. A Document Distribution Schedule:

a. Lists all documents required for the project and who is responsible for producing them
b. Shows who will receive what document and at what frequency
c. Is a part of the Project Management Plan
d. All of above
16. Configuration management should keep a record of?

a. Whether a change can occur in the project
b. All the drawings and documents issued in the project
c. The changes requested and approved
d. The members of the change control board
17. What is true of project closeout?

a. It is the implementation phase
b. Uses the Business case as basis for project evaluation
c. It does not involve the project manager
d. Check should be done to see all work is completed
18. Which type of contract is most rigid?

a. Unit Price
b. Fixed price
c. Cost Plus
d. a and b
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19. What items should be considered when selecting a supplier?
a. Dependability
b. Product quality
c. Location
d. All of above
20. Communication barriers between sender and receiver can be due to:
a. Incomplete information
b. Differences in culture
c. Differing motivation levels
d. All of above
21. Leadership involves:

a. Ability to identify what has to be done
b. Setting of goals and objectives
c. Motivation
d. All the above
22. A communication plan:

a. Is not necessary
b. Is developed during project execution
c. Should be developed during the project planning
d. Is made by the sponsor
23. Project communication covers media such as:

a. Verbal
b. Written
c. Body language
d. All of above
24. When delegating it is important to:

a. Provide supervision and feedback
b. Delegate authority and accountability
c. Delegate to the senior most team member
d. Be working within a Matrix structure
25. Administring of contracts is a part of:

a. Conflict management
b. Quality management
c. Procurement management
d. Financial management
26. On large projects, detailed documentation:

a. Should be avoided to the extent possible since it adds to bureaucracy and project costs
b. Has costs that typically lie in the 10%-15% range
c. Is needed to keep track of what is happening
d. A and B
27. Project close-out can best be described as:

a. Completing all the work of the project
b. Termination of the project
c. Documenting of the project details
d. Verifying that the project met it’s objectives
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28. In conflicts, who will decide the importance between cost, schedule and quality?
a. Project manager
b. Sponsor
c. Both the project manager and sponsor
d. None of above
29. A project manager must be a good:

a. Motivator
b. Communicator
c. Integrator
d. All of the above
30. Who would normally chair a post project review?

a. The project manager
b. The project Sponsor
c. Project team members
d. A competent person outside the project team
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Quiz 7
1. During the Storming stage of the team’s development the project manager should provide
high direction and high support. This style of leadership is known as:
a. Democratic
b. Coaching
c. Encouraging
d. Delegating
2. Engagement helps people to believe in and ………………to the project.

a. Be accepted
b. Get selected
c. Buy-in
d. Motivate others
3. Hygiene factors are necessary to:

a. Motivate people
b. Provide satisfaction
c. Prevent dissatisfaction
d. Build group dynamics
4. Which of the following is not a Motivator factor in Herzberg’s Two Factor theory?
a. Responsibility
b. Recognition
c. Achievements
d. Salary
5. Self-Control or Self-Management is a systematic and disciplined approach to:

a. Cope with daily work
b. Deal with stressful situations
c. Cope with changing requirements
d. All of above
6. The Project Manager is responsible for all of the folowing except:

a. Keeping his own self-control
b. Taking appropriate action with individuals losing self control
c. Maintaining an awareness of the stress levels in the team
d. Arrange funding for the project
7. Health, Security, Safety & Environment aspects deals with:

a. Control of the use and storage of dangerous substances
b. Control of the emissions of noxious substances in atmosphere
c. Protecting people from accidents at work place
d. All of the above
8. One adequate behavioural pattern for self-control is to:

a. Ignore conflict
b. Neglect conflict
c. Avoid stressful situations
d. Control emotions
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9. Relationships in the team cannot be built on:
a. Mutual respect
b. Secrecy
c. Trust
d. Reliability
10. To be able to gain from the experience and knowledge of others, the Project Manager
should have:
a. Relaxation
b. Creativity
c. Ethics
d. Openness
11. Openness involves all of the following behaviours except?

a. Being flexible and keeping the interests of the project in mind
b. Maintaining formal and informal communication with stakeholders
c. Benefitting from experience of team members
d. Being pessimistic and change averse
12. Being creative does not involve:

a. Holistic thinking
b. Rejecting intuitions
c. Emotional intelligence
d. Being imaginative
13. Which of the following could be related to Creativity:

a. Brainstorming session
b. Championing of ideas
c. Motivation
d. All of the above
14. Which is NOT an adequate behavioural pattern for being Creative:

a. Being optimistic that new ideas will lead to feasible solutions
b. Only accepting what can be modeled, neglecting intuition and feelings. Sticking to reasoning.
c. Performing active scope and change management
d. Using intuition for problem solving and maintenance of relationships
15. What behavioural pattern is not desirable for Results Orientation:

a. Having an entrepreneurial style of work
b. Missing the big picture
c. Managing the needs of different stakeholders
d. Delivering results
16. Name the method which measures current performance against that of the best performers
to determine how we can improve our performance levels:
a. Design of Experiments
b. Pareto analysis
c. Benchmarking
d. Cost-Benefit analysis
17. Contingency reserves are incorporated as additional time into the overall project schedule as
recognition of schedule risk, which can be:
a. A percentage of the estimated activity duration
b. A fixed number of work periods
c. Developed by quantitative schedule risk analysis
d. All of the above
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18. At the start of a project:
a. Influence of stakeholders is high and cost of changes are low
b. Influence of stakeholders is low and cost of changes are high
c. Influence of stakeholders and cost of changes are both low
d. Influence of stakeholders and cost of changes both are high
19. Resource leveling is a technique applied to a schedule model which can be used to address;
a. Schedule activities that need to be performed to meet specified dates
b. The situation where shared or critical required resources are only available at certain times or
in limited quantities
c. To keep selected resource usage at constant level during specific periods of project work
d. All of the above situations
20. Consultation results in:

a. Mutually accepted decisions
b. Differences of opinion
c. Power play
21. In projects, ethical behaviour is important for:

a. Senior management
b. Project manager
c. Team members
d. All of the above
22. Which of the following is regarded as adequate ethical behaviour?

a. Being unethical due to ignorance
b. Ambiguity in setting ethical standards
c. Highlighting team members work in the event of project success
d. Not conforming to professional conduct
23. A Key success factor in a project is:

a. Compromising applicable laws and regulations
b. Formulating differential ethical practice for people of different cultures
c. Suppression of ethical conflicts
d. Having a common ethical code as an integral part of project management.
24. Which of the following will help the project manager to decide to what extent an activity could affect
health and safety:
I. The nature of the work
II. Type and duration of activity
III. Clarity of health and safety procedures among workers and supervisors
a. I&II
b. II&III
c. I&III
d. All of the above
25. Aspects NOT covered under Occupational safety and health is:
a. Safety committee
b. On-site emergency plans
c. Earned Value analysis
d. Risk assessment
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26. The HAZOP study (Hazard and operability studies) are carried out in advance on any plant:
a. To examine the process to discover how deviation from the intention of design can occur
b. To decide whether such deviations can give rise to hazardous conditions
c. To simulate the imagination in a systematic way and is useful in identifying potential hazards
in advance allows the user to take corrective measures.
d. All of the above
27. What is not true of quality audits:

a. Are proposed by the quality circle
b. Are an important tool used in Quality assurance
c. Should be planned into the process
d. Are often performed by a third party
28. Techniques and tools used by PM to ensure safe working practices are:
a. Risk assessment of potential dangers
b. Safety training
c. Use of safe working methods
d. All of the above
29. What is not an adequate behaviour for managing conflicts?

a. Differentiating between work and personal relationships
b. Being unaware of emerging conflicts
c. Being open in accepting feedback
d. Accepting uncertainty as a challenge
30. The project manager should be aware of the legal requirements as:
a. It has personal implications
b. It is a statutory requirement
c. It eliminates the need for a legal department
d. In a project many decisions are made which have legal implications
31. Financial management involves:

a. Making necessary funds available to the project on time
b. Project manager must provide information of when funds needed
c. Sponsor must arrange the funds
d. All of the above
32. What is not true of ISO 14001:

a. It is a mandatory international standard
b. Establishes the requirements for environmental management
c. Depends on system not personality
d. Provides internal and external assurance of meeting environmental requirements
33. The business and legal context is linked to a project through the business case at a:
a. Strategic level
b. Operational level
c. Tactical level
d. All of the above
34. Personnel management covers aspects of:

a. Recruitment
b. Performance assessment
c. Training
d. A, B and C
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35. The staffing management plan will show all of the following except:
a. The skill level of resources
b. Location where resource required
c. Time frame to begin recruiting different resources
d. When a resource will be fired
36. What is the role of the project manager in financial management?

a. To check the use of funds in the project
b. To keep management informed about finance requirements
c. Check the payments made
d. All of the above
37. Resource Management does not consists of:

a. Resource planning
b. Estimating task durations
c. Optimizing use of resources
d. Continuous monitoring and control of resources
38. Which of the following falls in resource management?

a. Projects and programmes of different types
b. Management of quality
c. People, material and the infrastructure for project work
d. Problem resolution
39. Personnel development is the responsibility of all except the:

a. Project Manager
b. Line manager
c. Client
d. HR Manager
40. Which of the following are part of the Contract Management Process:
a. Putting bids out to tender
b. Managing contract changes
c. Documenting the lessons learnt and applying to future projects
d. All of the above
41. Main burden of ensuring conformance to the terms of the overall contract lies with:
a. The owner
b. The manager
c. Main Contractor
d. Sub contractor (if any)
42. Consultation can be described as:

a. Hiring a consulting firm for project work
b. Exchange of opinions about project issues
c. Ensuring that we have no differences
d. A and B
43. Project control is based on:

a. Project objectives
b. Project cost
c. Project milestones
d. Project objectives, plans and contracts
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44. Project control measures:
a. Earned value
b. Project performance
c. Project cost
d. Actual project progress and performance, compares it against the base line and takes any
necessary remedial action
45. When the project manager and his team are very experienced, it may be sufficient to:
a. Submit detailed project progress reports
b. Submit no reports
c. Report by exception
d. To submit monthly status reports
46. Portfolio management is mainly concerned with:

a. The organization structure
b. Coordinating organization’s project’s and programmes to optimize throughput
c. Starting maximum project’s as early as possible
d. All of the above
47. Which communication barrier will be significant for a multination organization operating across the
globe on various projects?
a. Too many details
b. Too technical message
c. Dogmatic attitude of sender
d. Cultural barrier
48. A document that is used in a project to show the type and frequency of communication requirements
of the different project stakeholders is called a:
a. Communication Plan
b. Timing Chart
c. Communication chart
d. Communication Matrix
49. The life-cycle of a product or service will be managed by?

a. Product or service management
b. Project manager
c. Facility manager
d. Seller
50. To judge the effectiveness of the communication a project manager should:

a. Spend less time on communication
b. Have ability to identify what is to be done
c. Take feedback and encourage two way communication
d. Set clear objectives
51 A key skill required by a Programme Manager is:

a. The ability to manage complex projects successfully
b. The ability to use MS Project
c The ability to facilitate the implementation of business strategy through
projects within the organization
d. The ability to monitor the performance of the project mangers
52 Which of the following best describes the overall aim of project management?
a. To achieve the success criteria of the stakeholders
b. Adhere precisely to the original specifications
c. Ensure the original budget is met
d. To successfully avoid risks
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53 Which of the following is best suited as part of functional management?
a. Building a road
b. Manufacturing a car gear assembly
c. Buying a home
d. Developing a new design for a battery
54 Which one of the following is best suited as part of project management?

a. Maintaining operational procedures
b. Introducing new procedures
c. Minor changes to procedures
d. Following the new rules
55 The pricing method most likely to lead to a tight contract from the seller’s viewpoint is:
a. Cost plus %
b. Cost plus
c. Lump sum, fixed price
d. Target price
56 Which of the following is an estimating method?

a. Discounted cash flow
b. Internal Rate of Return
c. Comparative
d. Earned value measurement
57 What is the main advantage of running projects as part of a Programme?

a. It allows dependencies and interfaces between projects that are part of the
programme to be integrated into the business objectives
b. It enables the business to save time and costs by avoiding many project
managers
and by appointing a single programme manager
c. It allows one master programme for all the projects for execution
d. It saves in allocating priorities to projects as they are the same
58 A budget can be described as a:

a. Summation of actual cost outflows
b. List of major work
c. Sunk costs
d. Schedule of anticipated costs
59 What type of project(s) needs to take consideration of environmental constraints?

a. Construction projects only
b. Construction and petrochemical projects only
c. All but IT projects
d. All projects
60 What is meant by the term Programme Management?

a. A group of unrelated projects that are all controlled by one manager
b. A complex project that needs special tools and techniques
c. A project that uses a series of software tools
d. Many project’s having a common business purpose
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Multiple Correct Answers (Each correct Answer carries 1 Marks)
1. In the list given below select the four statements that are correct about Contents of
Project Charter
A. Details of the Board of Directors of the of the organization
B. Business need – why the project is needed
C. Justification of the project and results of feasibility study
D. Detailed budget figures
E. Customer’s requirements & expectations
F. Likely Stakeholder influences
G. Detailed outline of risks
H. Detailed analysis of stakeholders
I. List of Reports to be prepared by project team
J. Details of personnel required for the project

2. Of the statements given below select the three correct statements about Stakeholder
Management
A. Encouraging engagement with stakeholders
B. Ignore conflicting interests
C. Avoid issues that arise
D. Effective Communication is the first key technique of stakeholder management
E. Engagement of stakeholders with project activities and decisions is the second key
F. The negotiator exerts status or position power to gain substantive outcomes for himself
or herself.
G. During this stage, discussions take place about where and when the work should start,
when to meet again, how the progress will be monitored, and other side issues.
H. This is a good time to review key phrases to be included in the contract because different
words have different meanings for different people.
I. Ignore stakeholders who are negative about the project
J. Team members should not be involved in any stakeholder interactions

3. Of the statements given below select the four correct statements about organizational
structure with Matrix Structure
A. Each project represents a potential profit centre & the PM has the responsibility and
accountability for the success of the project. Every PM in the organization reports directly
to the head of the functional department
B. The authority for the project is shared by both the departmental head and the project
manager. While the PM is responsible and accountable for the project he depends on the
functional manager to support him and provide him resources
C. The PM’s role is more of a project coordinator and he is given minimum authority over
the project
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D. A matrix organization is a combination of functional and projectized organizational
structure. It attempts to merge the advantages of both and create an organizational
structure suited for companies
E. In this both horizontal and vertical channels of responsibility exist – functional
responsibility is vertical while PM’s responsibility cuts across many departments
F. The PM is responsible for keeping technical excellence in the projects. The project head
ensures technical base is maintained and required information can be exchanged
between projects
G. The Functional Manager is responsible for keeping technical excellence in the projects.
The Functional Head ensures technical base is maintained and required information can
be exchanged between projects
H. All departments are subsumed in the project and lose their identity
I. This kind of structure is best suited when an organization does occasional projects

4. What all should be included in the Business Case? Select the three right statements.
A. The network schedule of the project
B. The key performance indicators and the success criteria of the project
C. A detailed procurement strategy, penalties and liquidation damages if any
D. The hardware tools that will be used in the project
E. The investment appraisal data and business need for undertaking the project
F. The WBS for the project is included in the Business Case to ensure scope of the project is
fully understood
G. Only those stakeholders financing the project
H. The financial and nonfinancial advantages and the “do‐nothing “ option
I. Business case provides the cost variance expected in the project
J. Business case provides the schedule variance expected in the project
K. Business case include the mechanism of resolving conflicts amongst the contractors

5. The following statements describe a project. Select the four incorrect statements.
A. It manages change.
B. Quality / Performance are determined at close of project
C. It has identifiable beginning and end point, that is, a project is an entity by itself.
D. All projects are identical
E. It is usually a repetitive task without a definite goal or objective.
F. It is a team work. The co‐ordination and communication within the team and with
environment is essential for accomplishing the project objectives.
G. It may require separate organization for its management and conduct.
H. It is a permanent activity as they have well defined goals and objectives
I. Predefined goals & objectives – financial/ social /economic
J. Budgets & schedules – prefixed budget and timeframe

329

6. The following statements describe a programme. Select the three incorrect statements.
A. Projects are always part of a programme
B. The Programme Manager must personally appoint all contractors for the projects
C. A portfolio of projects related to a common objectives e.g. business aim
D. An organizations business strategy required to be implemented through projects
E. Programmes aim at creating more benefit for the organization
F. Aim is to achieve overall benefits for the business not just for a project
G. There is no interdependency between the projects of a programme
H. Resource allocation amongst a portfolio of projects

7. The following statements describe project lifecycle. Select the four correct statements.
A. Project Life Cycle is a sequence of phases from project start to project end ‐ a start, a
middle and an end
B. Length of each phase is fixed
C. Each phase associated with major processes and deliverables
D. Each phase is associated with a finish date, irrespective of any deliverables being
achieved
E. Length of each phase will vary with project
F. Terminology used to describe each phase not fixed
G. Start or Concept phase, Intermediate phases & a Closeout phase are always the names of
phases in a project
H. Breaking up the project into phases increases the risk of the project

8. The following statements describe project management plan (PMP). Select the three
incorrect statements.
A. PMP is prepared by the sponsor of the project
B. PMP guides the project's execution
C. Documents assumptions made in planning the project
D. Documents planning decisions & alternatives selected
E. PMP has no role in facilitating communication amongst different stakeholders
F. Defines key management reviews content, extent and timing
G. Provides baseline for progress measurement and control
H. Provides guidelines to team / management on development phases and estimates
related to cost, schedule, resources etc.
I. Provides reference regarding quality expectations of the projects output i.e. the product
of the project
J. PMP is key document of the project ‐ used to control the project ‐ Forms the baseline of
project
K. Is owned by the Project Manager ‐ Developed by Project Manager with project team
L. PMP need not be shown or discussed with Sponsor / client

330

9. The following statements describe role of project manager (PM). Select the four incorrect
statements.
A. Developing the Project Charter
B. Delivering the project on time, within budget and meeting required specifications
C. Integrating, controlling & coordinating the project
D. Not managing stakeholder expectations
E. Developing and motivating team
F. Ignoring team conflicts
G. Maintaining a channel between the project team and the senior management
H. Communicating with various stakeholders, team members, senior management through
the project
I. Creating and recruiting people for the PMO of the organization
J. Ensuring that all the project risks are fully identified, assessed, managed and regularly re‐
assessed for any new risks
K. Developing the network schedules for the project

10. The following statements describe what should be included in the Project Scope Statement.
Select the three incorrect statements.

A. Product Scope Description‐Characteristics of the Product, Services or Result that the
Project is undertaken to produce
B. Scope acceptance criteria
C. Project Objectives ‐ Measurable success criteria e.g. Cost, schedule , quality or business
objectives
D. Project Deliverables‐ Product, Services or Results of the project including ancillary results
(Reports and Documentation)
E. Project Requirement‐Conditions or capabilities that must be satisfied by the Deliverables
as specified in the contract, specification or Stakeholder analyses.
F. Project Constraints‐ Pre‐defined budget , imposed schedule end date
G. Project assumptions
H. Project Boundaries (What is not included in the scope)
I. Initial Project Organization
J. Detailed Risk Analysis
K. Schedule Milestone
L. Final Cost estimate

331

Answer Key to Quiz 1 to 7
Ques Quiz 1 Quiz 2 Quiz 3 Quiz 4 Quiz 5 Quiz 6 Quiz 7 Ques Quiz 7
1 d d b c a d b 31 d
2 b c b a d b c 32 a
3 a b b a b a c 33 c
4 c b b a c b d 34 d
5 a b b d b b d 35 d
6 c b a d b c d 36 d
7 d c b a a a d 37 b
8 c c d d c c d 38 c
9 a b b b d c b 39 c
10 a a c c c d d 40 d
11 b d c c b d 41 c
12 b b a c b b 42 b
13 c b b d d d 43 d
14 c c b a b b 44 d
15 d b d b d b 45 c
16 d c c b c 46 b
17 b d d d d 47 d
18 b c d b a 48 d
19 a b c d d 49 a
20 c d d d a 50 c
21 c b d d 51 c
22 d c c c 52 a
23 a d d d 53 b
24 b c b d 54 b
25 d b c c 55 c
26 c d 56 c
27 a a 57 a
28 b d 58 d
29 d b 59 d
30 d d 60 d

Multiple Correct Answers
Question Answer
1 BCEF
2 ADE
3 BDEG
4 BEH
5 BDEH
6 ABG
7 ACEF
8 AEL
9 ADFI
10 BJL
332

Numerical Mock Test Questions
Question 1
Resources
Duration Type of
Activity Dependencies Number of
in weeks Dependency
people/week
A 5 - 3
B 1 A FS 4
C 3 A FS 2
D 7 A FS 2
E 4 B FS 3
F 3 C FS 3
G 6 E FS 2
H 1 E FS 1
J 2 G,H FS 3
K 4 F FS 2
L 5 D FS 1
M 4 J, K, L FS 3
1a. Fully analyse the network using the above table. Identify the activities on the critical path and
state the amount of free float and total float associated with each activity.
1b. What will be the effect on the critical path and the earliest finish date of the project if the
duration of activity L is increased to 7 weeks from 5 weeks. (No network required)
1c. If the duration of activity L is increased to 6 weeks, how will it affect the critical path and the
earliest project finish date.
Question 2
2a Produce a Resource Histogram for the above network based on 1a.
2b. You have been told that a maximum of 7 people will be available for the project work on any
day and all the activity durations are fixed. Level the resources accordingly.
333

Question 3
The bar chart shown below represents a simple project’s schedule.
Task Duration
Name -
1
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
A 3 days
B 4 days
C 5 days
D 4 days
E 6 days
F 4 days
G 3 days
H 3 days
J 4 days
K 5 days
3a. Develop a network based on the above Bar Chart and calculate the Total floats and the Free
floats.
3b. Draw a resource histogram for the above project. Assume that three skilled people are needed
per day on a full-time basis to complete each task and that the cost of each resource is Rs. 200
per day. Skilled labour is the only project consumable (no materials or services are required).
Question 4
A project has a planned duration of 12 months and an estimated total resource usage of 250
man-weeks as follows:
Note: all figures are cumulative
Month 1 2 3 4 5 6 7 8 9 10 11 12
Planned
Resource 5 25 45 80 110 140 165 185 205 225 235 250
Usage
Actual
Resource 8 30 52 93 125
Usage
Overall %
Complete of 3 8 15 30 40
the project
4a. Assuming that the current trend at the end of the review point of 5 months will continue, what
is the estimated final resource total?
4b. Assuming that the current trend at the end of the review period of 5 months will continue,
what is the estimated final duration?
334

Question 5
A project has a budget of ₤150,000 and a planned duration of 24 months. The following table shows
progress information for each of the first four months.
Figures shown are cumulative:
Month 1 2 3 4
Planned (₤)
10,000 20,000 30,000 45,000
Actual Spend (₤)
6000 14,000 25,000 38,000
Earned Value (₤) 32,000
5000 12,000 21,000
5a. Calculate the cost variance, schedule variance, cost performance

index and schedule performance index at the end of the third month.
5b. Calculate the expected cost at completion based on the latest progress information.
5c. What will the cost at completion of the project be if:

(i) Efficiency does not change until the end of the project.
(ii) Efficiency increases to 100% after month 4 until the end of the project.
(iii) Efficiency reduces to 50% after month 4 until the end of the project.
5d. Estimate the completion time of the project based on the latest progress information.
5e. Estimate the likely completion time of the project if:

(i) Efficiency does not change until the end of the project.
(ii) Efficiency increases to 100% after month 4 until the end of the project.
(iii) Efficiency reduces to 50% after month 4 until the end of the project.
335

Question 6
6.1 The following table shows costs & returns associated with a particular project option. Calculate
the Net Present Value for this project option using the discount factors shown in the table below.
Year Cash Flow Discount Factor (8%)

0 Rs. 1, 40,000 1.000
1 Rs 100,000 net return .926
2 Rs 100,000 net return .857
3 Rs 100,000 net return .794
4 Rs 100,000 net return .735
5 Rs 100,000 net return .681
6.1.a Should you proceed with this project?
6.1.b Will a reduction in the discount rate affect your decision to proceed with this project option?
6.2 Your project has a Fixed Price Incentive Fee contract with the following contractual
terms:
• Target Cost is Rs. 50 lacs;
• Target Fee is Rs. 5 lacs;
• Target Price is Rs. 55 lacs;
• Share Ratio is 80/20 in favour of the buyer for cost savings and overruns
• Ceiling Price of Rs. 58 lacs.
At the end of the project it is found that the Actual Cost of the project is Rs. 55 lacs.
What is the Final payment to be made for this contract?
6.3 You have signed a Cost Plus Incentive fee contract with the following terms:
• Target cost is Rs.1,20,000;
• Target Fee is Rs.20,000;
• Target Price is 1,40,000;
• Maximum Fee is Rs. 25,000
• Share ratio is 80/20 has been finalized for Buyer/Contractor
6.3.a. How much fee is to be paid to the contractor if the Actual cost is Rs.1,10,000?
6.3.b. What is the Final Price for the contract?
336

Question 7
7.1 The probability and impact grid shown below depicts the relative positions of different risks
to the project following a risk assessment. Risk numbers are entered in grid.
List the top 6 risks in the order of their priority.
Very High (.9) 7 3 4 6
High (.75) 12
Probability
Medium (.5) 8 9
Low (.35) 2 1
Very low (.2) 11 5 10
Very low Low Med High Very High
.10 .25 .4 .6 .9
Impact
7.2 Draw a Pareto chart using the following input data.
Causes Number of errors

Reason 1 20
Reason 2 15
Reason 3 10
Reason 4 5
Reason 5 60
Reason 6 40
Question 8
A 80 week project has been divided into 20 equal monitoring periods at the end of 4 weeks
each. There are 5 major milestones A, B, C, D and E. These 5 milestones were planned to be
completed in the weeks 15, 28, 40, 64 and 72 respectively.
 Milestone A slipped by 1 week at each of the first 5 monitoring periods.
 Milestone B slipped by 4 weeks in the first monitoring period only.
 Milestone C slipped by 2 weeks each in the 7th and the 8th monitoring periods.
 Milestones D and E each slip by 1 week from the 12th to 16th (both inclusive) monitoring
periods.
Draw the Milestone Slip Chart assuming that you are in the 80th week.

337

Numerical Mock Test Answers
Question 1
1a.
Critical path is A B E G J M
Activity Total Float Free

Float
A 0 0
B 0 0
C 3 0
D 1 0
E 0 0
F 3 0
G 0 0
H 5 5
J 0 0
K 3 3
L 1 1
M 0 0
1b. The critical path changes and becomes A D L M.

Project end date becomes 23 weeks.
1c. We now have 2 critical paths A D L M and A B E G J M.

Project end date remains same - 22 weeks.
338

Question 2
2a
339

Question 2
2b.
340

Question3
3a.
Floats: D - 2 days; E - 2 days; F - 4 days; H - 1 day
Free Floats: F – 4 days; E – 2 days; H – 1 day
Task Duration
Name -
1
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
A 3 days
B 4 days
C 5 days
D 4 days
E 6 days
F 4 days
G 3 days
H 3 days
J 4 days
K 5 days
Total Res. 6 6 6 6 9 9 9 9 6 6 3 3 3 3 3 6 6 6 3 3 3 3 3 3
341

Question 4
A project has a planned duration of 12 months and an estimated total resource usage of 250 man-weeks.
NOTE: The question has mentioned that all the figures are cumulative. This means that the % complete
showing the project’s progress should also be taken as a cumulative figure showing the percent complete of
the total project.
The Earned Value should be = BAC x % complete
Month 1 2 3 4 5 6 7 8 9 10 11 12
Planned
Resource 5 25 45 80 110 140 165 185 205 225 235 250
Usage
Actual
Resource 8 30 52 93 125
Usage
% Complete
3 8 15 30 40
of project
100
EV
SPI .909
CPI .8
4a. Assuming that the current trend at the end of the review point of 5 months will continue, what is the
estimated final resource total?
EAC = BAC/CPI
= 250 / (EV/AC) (At month 5 EV = 40% of 250; AC = 125)
= 250 / (100/125)
= 250 / .80
= 312.5
= 313 resources
4b. Assuming that the current trend at the end of the review period of 5 months will continue, what is the
estimated final duration?
Final duration = total project duration / SPI

= 12 / (100/110)
= 12 / .909
= 13.2 months
342

Question 5
A project has a budget of ₤150,000 and a planned duration of 24 months. The following table shows
progress information for each of the first four months.
Figures are cumulative:
Month 1 2 3 4
Planned (₤)
10,000 20,000 30,000 45,000
Actual Spend (₤)
6000 14,000 25,000 38,000
Earned Value (₤) 32,000
5000 12,000 21,000
5a. Calculate the cost variance, schedule variance, cost performance

index and schedule performance index at the end of the third month.
SV = -9000 CV= -4000 CPI = .84 SPI = .70
5b. Based on the latest progress information, what would you estimate
the cost at completion to be?
EAC = 150,000 / CPI = 150,000/.842 = ₤ 178,147

(CPI = 32000 / 38000 = .842)
5c. What is the effect of the following assumptions on your answer to part 5b:
(iv) Efficiency does not change until the end of the project.
There is no effect of this on 5b. Budget at completion remains as ₤ 178,147
(v) Efficiency increases to 100% after month 4 until the end of the project.
EAC = AC + Balance work (BAC – EV)

= 38,000 + (150,000 – 32,000)
= ₤ 156,000
(vi) Efficiency reduces to 50% after month 4 until the end of the project.
EAC = AC + Balance Work / CPI (.5)

= 38000 + 118000 / .5
= 38000 + 236000
= ₤ 274,000
5d. Based on the latest progress information, what would you estimate the completion
time of the project will be.
New completion time = 24 / SPI

= 24 / .71 (32000 / 45000)
= 33.8 months
343

5e. What is the effect of the following assumptions on your answer to part 5d:
(iv) Efficiency does not change until the end of the project.
There is no effect of this assumption. Project completion time will remain

as 33.8 months
(v) Efficiency increases to 100% after month 4 until the end of the project.
New completion time = current month + Backlog work + remaining months

= 4 months + 26 days + 20 months
= 24 months 26 days
Backlog work at end of 4th month is 13000 (45000 – 32000)
PV for 4th month was 15000. 2000 was done in 4th month. Assuming a linear execution of work and a
30 day work period we see that work worth 500 will be done each day. 2000 shows 4 days of work.
Hence a backlog of 26 days to complete the backlog work.
(vi) Efficiency reduces to 50% after month 4 until the end of the project.
New Duration = current month + (Backlog work + remaining months / SPI)

= 4 months + 26 days / .5 + 20 months / .5
= 4 months + 52 days + 40 months
= 45 months 22 days
Question 6
6. 1 The following table shows costs & returns associated with a particular project option. Calculate the Net
Present Value for this project option using the discount factors shown in the table below.
Year Cash Flow Discount Factor (8%) PV=CFxDF

0 Rs 1,40,000 1.000 -140000
1 Rs 1,00,000 net return .926 92600
2 Rs 1,00,000 net return .857 85700
3 Rs 1,00,000 net return .794 79400
4 Rs 1,00,000 net return .735 73500
5 Rs 1,00,000 net return .681 68100
6.1a. Yes, we should proceed with the project. NPV = 399300 – 140000 = Rs. 2,59,300
6.1 b. A reduction in the discount rate means that the NPV for the project will increase so the project’s
profit and viability will increase even more. My decision to go ahead will be reinforced.
344

Q 6.2 Your project has a Fixed Price Incentive Fee contract with the following contractual terms:
Target Cost of Rs. 50 lacs (L); Target Fee of Rs. 5 L; Target Price of Rs. 55 L; Share Ratio of
80/20 in favour of buyer and a Ceiling Price of Rs. 58 L. At the end of the project it was found that
the Actual Cost of the project was Rs. 55 L. What is the Final payment to be made for this
contract?
Target Cost = Rs. 50 lacs (L)

Target Fee / Profit = Rs. 5 L
Target Price = Rs. 55 L
Share Ratio = 80/20 in favour of Buyer for cost overruns and under-runs
Ceiling Price = Rs. 58 L
Actual Cost = Rs. 55 L
Contractor’s final fee = Target Fee + Incentives based on share ratio

= (50 L - 55 L) x 20% = 1 L (Target cost compared with Actual cost)
=5L-1L
= 4 Lacs (Contractor Fee is reduced by his share ratio of 20% due to cost overrun of 5 L)
Final Price of contract = Actual Cost + final contractor's fee

= Rs. 55 L + 4 L
= Rs. 59 Lacs less the amount above Ceiling Price
= Rs. 58 lacs
The Final Price of above contract = 58 Lacs
Note: Though the Final Price comes to Rs. 59 lacs after adjusting the contractor's fee for cost overruns of
5 lacs, the Buyer will only have to pay Rs.58 lacs to the contractor as the contractor is responsible to meet
all additional costs above the Ceiling Price of Rs 58 lacs. For calculating contractor incentives, the
difference between the Actual Cost and the Target Cost is shared as per the pre-decided share ratios for
cost savings and cost overruns. If there are cost overruns the Target Fee is accordingly reduced based on
share ratio.
6.3 In a CPIF contract the Target cost is 1,20,000, Target Fee is 20,000, Target Price is 1,40,000 and
the Maximum Target fee is 25,000 and the share ratio is 80/20.
6.3 a. How much fee would the contractor get if the Actual cost is 1,10,000.
6.3 b. What is the Final Price?
Incentive for cost savings: = 10,000 x 20% = 2,000
a. Total Fee of contractor: = Incentive earned + Target fee of 20,000/-

= 2,000 + 20,000
= 22,000 (this ok as Maximum fee is 25,000)
b. Final Price: = 1,10,000 + 22,000 (Actual cost + Target Fee adjusted for Incentives)
= 1,32,000
345

Question 7
7.1 The probability and impact grid shown below depicts the relative positions of different risks to the
project following a risk assessment. The risk id’s are entered in the grid.
List the top 3 risks in the order of their priority and the three least important risks from minimum.
Very High (.9) 7 .09 3 .23 4 .54 6 .81
High (.75) 12 .68

Probability
Medium (.5) 8 .20 9 .45
Low (.35) 2 .09 1 .21
Very low (.2) 11 .02 5 .05 10 .18
.10 .25 .4 .6 .9
Impact
Q 7 The 6 highest risks in order of priority are: 6, 12, 4, 9, 3, 1
Q7 Draw a Pareto chart using the following input data.
Causes Number of errors Percent of total Cumulative %

Reason 5 60 40.0 40.0
Reason 6 40 26.7 66.7
Reason 1 20 13.3 80.0
Reason 2 15 10.0 90.0
Reason 3 10 6.7 96.7
Reason 4 5 3.3 100
Grand Total (Reason 150 100% 100%
1-Reason 6 max-min)
346

Q8 A 80 week project has been divided into 20 equal monitoring periods at the end of 4 weeks each. There
are 5 major milestones A, B, C, D and E. These 5 milestones were planned to be completed in the weeks
15, 28, 40, 64 and 72 respectively.
Milestone A slipped by 1 week at each of the first 5 monitoring periods.

Milestone B slipped by 4 weeks in the first monitoring period only.
Milestone C slipped by 2 weeks each in the 7th and the 8th monitoring periods.
Milestones D and E slip by 1 week each from the 12th to 16th (both inclusive) monitoring periods.
Draw the Milestone Slip Chart for this project assuming that you are in the 80th week.

347

MOCK TEST PAPER 1
Section 1 (115 Q&A)
Q1 What is a key role of the Project Sponsor?

A To assist with day-to-day project management
B To define the required technical strategy
C To approve all change requests
D To link the aims of the project to the business
Q2 When a Business Case is developed, differences between stakeholders are

resolved by:
A The Project Manager
B The Project Sponsor
C The Project Executive
D The Programme Manager
Q3 A 360-degree feedback is done to assess team members competence and

performance. It:
A Requires daily reporting
B Atleast4 persons assess individuals PM performance and competence
C Is a waste of time
D Is biased
Q4 The project schedule is used to manage and control:

A The project’s scope
B The project risks
C The project’s time
D The business case
Q5 Project start-up phase is initially characterized by all except:

A Uncertainty and sketchy information
B Clear objectives
C Unrealistic time frames
D Optimism and enthusiasm
Q6 Project Success and Failure Criteria is decided:

A When the business case is fully defined
B When the deliverables are demonstrated
C During the design development phase
D When the contracts are determined
Q7 An investment appraisal gives you:

A The cost of product operational features
B The timing of major purchase deals
C A structured approach to investment decision making process
D A process to make a sound project management plan
Q8 The most important aspect of an investment appraisal is to:

A Establish the cheapest option
B Develop the cost for the product or service
C Evaluate the Business Case
D Define a financial fallback plan
348

Q9 The provision of Project finance is the responsibility of:
A The Client/Sponsor
B The Project Support Office
C The Programme Manager
D The Project Manager
Q 10 What is the purpose of an investment appraisal?

A To monitor cash flow during the project
B To control investments made during the project
C To identify the actual cost of the project
D To identify the preferred business option
Q 11 The start-up of a project accounts for approximately:

A 20% of the project’s success
B 10% of the project’s success
C 15% of the project’s success
D 30% of the project’s success
Q12 An important purpose of breaking a project into phases is to:

A Provide break points where the continuing viability of the project can be reviewed
B Enable the Project Manager to assign different parts of the Work Breakdown Structure
to different teams
C Enable the Project Manager to select personnel with the skills required to complete
each phase
D Enable different elements of the project to be contracted out or completed in-house a
appropriate
Q 13 Which of the following is true about breakdown structures:

A The lowest level of the Work Breakdown Structure should comprise tasks with a
maximum value of Rs25,000
B A Cost Breakdown Structure is a Work Breakdown Structure with costs attached
C Product Breakdown Structures and Work Breakdown Structures are not used together
D A work package is the lowest level of the WBS
Q 14 Which of the following is a scheduling tool?

A Precedence Network
B Responsibility Matrix
C Product Breakdown Structure
D Monte Carlo programme
Q15 Which of the following helps to define the project deliverables?

A Product Breakdown Structure
B Gantt Chart
C Critical Path Analysis
D Certified Project Manager
Q 16 Which of the following issues must be addressed by the Project

Management Plan (PMP)?
A Details of the project’s acceptance criteria
B CV's of all the team members
C Details of previous similar projects
D Reviews of past projects
349

Q 17 Which of the following is a key result of a Work Breakdown Structure?
A Defines project phases
B Defines the scope of the project
C Communicates business needs
D Ensures product cohesion
Q 18 Arrow diagramming method is same as?

A Activity on Arrow
B Precedence diagramming method
C A network technique
D Activity on Node
Q 19 What does a Work Breakdown Structure provide?

A A breakdown of the team needed for the project
B A foundation for determining the cost of the project
C A breakdown of the required organisation structure
D A foundation for the management of the project
Q 20 “Reach for the impossible and achieve the unlikely”, best sums up:
A Openness
B Assertiveness
C Creativity
D Self-control
Q 21 A new project is being evaluated and you are required to make an estimate of the
likely costs. As you are new in your job your boss tells you to use historical
information from similar projects done in the past by your organization. This means
you will be making an:
A Bid estimate
B Initial estimate
C Analogous estimate
D Parametric estimate
Q 22 During the start-up phase it is important to first:

A Create a shared vision among team members
B Define roles and responsibilities
C Develop the detailed project plans
D Document the lessons learnt
Q23 When the project manager provides low support and high direction to a team
member he is following a ……………………. type of leadership
A Coaching
B Structuring
C Supporting
D Bureaucratic
Q 24 What is meant by Parametric Estimating?

A A top down estimate based on the project life cycle
B A bottom up estimate based on the Work Breakdown Structure
C An estimate based on statistical models
D An estimate made using comparative costing information
350

Q 25 Discounted Cash Flow is:
A The actual costs of the project
B Adjustment of future revenues to represent current value
C Used to evaluate project’s having varying duration
D B and C
Q26 Out of the following, which is the first planning issue to be addressed?
A The size of the team required for each phase of the project
B The integration method to be used for each deliverable
C The Work Breakdown Structure
D The deliverable product test plans
Q 27 Who can identify risksin a project?

A The project manager
B The customer
C Any stakeholder
D The risk manager
Q 28 Which quality system element contributes most to the design process?

A Owner's requirements
B Supervision and Control
C Implementation method
D Inspection
Q 29 Which of the following is related to a numerical estimate of riskprobability?

A Critical path analysis
B Monte Carlo analysis
C Net present value analysis
D Configuration Audit
Q 30 Risk assessment is initially quantified:

A In terms of the number of risks that are likely to occur through the project’s life cycle
B By estimating the impact of the risk on the project’s time, cost and performance
C In terms of numbers of risks owned by the sponsor, PM, contractor etc
D Through the total cost to the project
Q31 Assertiveness is the ability to state one’s views:

A Aloofly
B Authoritatively
C Aggressively
D Agreeably
Q 32 Which of the following issues must be addressed by the Project

Management Plan (PMP)?
A Recording the test results
B Developing aRisk Register for the project
C A review of the Project Strategy
D A forecast of overall success
Q 33 A Project Management Plan:

A Is owned by the project sponsor
B Excludes procurement
C Includes the 'what', 'how', 'when', ‘how much’ and 'who' of the project
D Is developed by the sponsor
351

Q 34 During which phase(s) of the project will planning occur?
A Only during Project Conception
B All phases of the project at the appropriate level
C All phases of the project at the appropriate level but more detailed in the initial
planning phase
D All phases after Project Feasibility is approved
Q 35 The prime function of a Responsibility Matrix is to define:

A Where the stakeholders are involved in the project
B When the stakeholders are involved in the project
C Why the stakeholders are involved in the project
D What the stakeholders responsibilities will be in the project
Q 36 Team building is most difficult in a ----------------- structure?

A Line
B Functional
C Matrix
D Project
Q 37 Select the organisation structure where a line management should support project
management?
A Functional
B Line
C Matrix
D Project
Q 38 For more effective team building, the project manager should:

A Let new team members find their own level within the team
B Provide focus by cutting links with departments during the project
C Ensure new team members are properly inducted
D Try to ensure that all team members have a similar personality
Q 39 Which of the following statements about delegation is always true?

A Authority should be delegated along with accountability
B A good manager is one that delegates everything
C In order to delegate the project manager must have line authority
D Delegated tasks must be constantly supervised
Q 40 Which statement is not true about estimates?

A Definite estimates are most accurate as they use work packages
B The project initially uses an Order of Magnitude estimate
C A Bid estimate is always most accurate as it uses work packages
D A Preliminary estimate is used for bidding purposes
Q 41 Which of the following is required as part of Procurement?

A Benefits tracking and management
B Development and maintenance of contract documentation
C Material purchase only
D Milestone planning and material purchase
352

Q 42 Which quality process must be strictly adhered to?
A Quality of the management process
B Quality control
C Quality assurance
D Good attitudes
Q 43 When is it necessary to use risk assessment?

A When a project cost exceeds 10% of the annual budget
B During the concept and feasibility phases of the project
C When the project manager is new
D During all phases of any project
Q 44 When using Brainstorming to identify risks you must:

A Filter out ridiculous suggestions
B Limit the meeting to technical specialists
C Establish solutions along with the problems identified
D Establish a list of all possible risks
Q 45 A Programme Manager can be responsible for:

A Interaction between team member in a project
B Writing the lessons learned report
C The interdependencies between a number of projects
D Creating the Project Management Plan
Q 46 Which of the following is the most beneficial last action in a negotiation?

A Make sure all parties exchange personal details (telephone-fax numbers etc)
B Arrange the next meeting
C Ensure good relationship between all parties
D Recording conclusions of the negotiation
Q 47 Given the following stages of a negotiating strategy, select the missing stage from
the option below : Planning, Introductions, Opening _____ and Finalising
A Recording areas of disagreement
B Confronting points of dispute
C Defining adverse effects to the project
D Presenting concessions for consideration
Q 48 How should a PM attempt to foster team co-operation to avoid conflicts?

A They must adopt a firm approach with all team members, having selected their
preferred solution
B They must focus on the objectives of all key individuals in each sub-project team
C They must promote the idea that individuals can have differing, but equally valid
solutions
D They must ensure that all team members are aware of the Sponsor’s priorities
Q 49 Which of the following best describes using Forcing as an aspect of

conflict management?
A A settlement of a problem where each side presses for its viewpoint
B To attempt to directly resolve a problem through delegation
C Use of their authority through knowledge or position to promote a solution
D Withdrawal by one party
353

Q 50 Which of the following is the best technique for team building?
A Having clear goals
B Scientific selection through individual assessment
C Motivation
D Communicating proper strategy and plans,organisation and control system
Q 51 A crisis in the project shows:

A A clash of different interests among team members
B The project is facing extreme difficulty
C A conflict between the project manager and a team member
D Lack of funds to proceed
Q 52 Which of the following is a barrier to delegation?

A Lack of confidence in subordinates
B Inadequate project management control systems
C The organizational structure
D Unfamiliar projects
Q 53 What are the Project Manager's responsibilities in ensuring effective

communications?
A Project manager should develop informal communications to build a strong team
B Project manager should develop formal communications that avoid misunderstanding
C Project manager should use both formal and informal communication networks
D Project manager should appoint a communications officer to ensure that the
development and delivery is professionally handled
Q 54 Which of the following is a strategy that you can use for mitigating risk?
A Smoothing
B Reduction
C Assessment
D Identification
Q 55 As the project manager you think the best way to lead the team is by letting each
team member decide how to do the project work as this will release their potential.
What is your leadership style?
A Democratic
B Coaching
C Participative
D Laissez-faire
Q 56 Who is responsible for implementing the risk management process on a project

A The sponsor
B The customer
C The project manager
D The person who identifies each risk
Q 57 Which statement below defines a Project Management Methodology?

A A summary of the project background, purpose and benefits
B A documented process for managing a project
C A statement of the Sponsor's business objectives
D A software package used to record progress during a project
354

Q 58 Which of the following actions should be adopted to resolve conflict situations?
A Joint problem solving
B Immediately seek a compromise approach
C Establish who has the major authority
D Close observation, awaiting a natural solution
Q 59 The PM can control the ------------------- to improve chances of project success:

A Success criteria
B Success factors
C Project finances
D None of the above
Q 60 An individual would demonstrate competence in team leadership by:

A Assuming that specialists would follow their lead
B Ensuring that credit is given where earned
C Demonstrating the success of the project to stakeholders
D Often praising the sponsor/client
Q 61 The person in charge of the project’s designs:

A Will only communicate through the project manager
B Communicates through text, numerical and graphical media
C Needs to ensure accurate records are maintained
D Will delegate all but his/her own design responsibilities
Q 62 Which of the following is an aim of delegating work?

A Enabling you to concentrate on the things you enjoy
B Making sure everyone is fully aware of all project issues
C Clearing your work list faster
D Developing your team
Q 63 A team is best motivated by:

A Being provided with satisfactory housing and club facilities
B Being successful
C Through having lot of specialists with them
D The direct involvement of the client
Q 64 Which one is a significant barrier to effective communications?

A Formal meetings
B Use of body language
C Use of informal communication channels
D Attitudes, emotions and prejudice
Q 65 The project’s Procurement Strategyshould include:

A The costmanagement plan
B A supplier acquisition plan
C The Product Breakdown Structure
D Investment appraisal data
Q 66 At the Opening stage of negotiations, one should:

A State the concessions you want to give
B Come to your offer straight away
C Plan for the next round of negotiations
D State one's objectives
355

Q 67 One of the key responsibilities of the programme manager is to:
A Co-ordinate with CEOs
B Ensure completion of a project within time and budget
C Manage priorities and interfaces between projects
D Undertake configuration management
Q 68 Which of the following is true about conflict management?

A A project manager should encourage conflicts as it increases productivity
B High performing teams do not have conflicts
C Levels of conflict are constant throughout the project lifecycle
D Levels of conflict will vary throughthe project lifecycle
Q 69 Which is the least desirable characteristics of good leadership?

A Arguing
B Informing
C Integrating
D Listening
Q 70 Which of the following statements about project leadership is true?

A Leadership style could vary in line with the development of the project team
B It is important for the PM to concentrate on the technical aspects of the project
C Good leaders will deal with all the issues in the project themselves
D Leadership can only be achieved through line authority
Q 71 How does delegation of work impact the project manager's accountabilityfor it?
A The project manager passes all accountability to the team member
B The project manager passes all accountability to the line manager
C The project manager retains accountability for the work
D The project manager passes on the accountability to senior management
Q 72 One outcome that a negative risk will impact upon is:

A In appointing new project manager
B Change in scope
C Loss of sponsor support
D Financial loss
Q 73 If your project has 8 team members it will have ______ communication channels:
A 64
B 32
C 28
D 8
Q 74 Which of the following describes the delegation given to a project manager

assigned to a large and complex project?
A The responsibility, authority and accountability for the project
B The responsibility through line management for the project
C The responsibility and authority with a line manager for the project
D The responsibility through the client-sponsor for the project
Q 75 The role of Configuration Management system is to:

A Control the physical and functional characteristics of a product or service
B Ensure that technical products fit together
C Notify the Client of all available versions of the products
D Identify the changes under investigation
356

Q 76 Estimated final hours of an activity can be approximatelycalculated by:
A Dividing the actual hours by the % complete
B Dividing the earned value hours by the % complete
C Dividing the budget hours by the % complete
D Multiplying the budget hours by the % complete
Q 77 If an unaccountable over run in time is expected the Project Manager

should, first:
A Assign added resources to the activities with least float
B Have the network adjusted to allow optimum parallel activities and review
dependencies
C Negotiate with the Sponsor an extended project duration
D Assess the Work Breakdown Structure to see if there are additional tasks not
previously identified
Q 78 Which of the following statements about cost control is true?

A Cost control is the job of the finance department
B A change control system is essential for cost control
C Accounting systems and cost control systems are the same thing
D The PM should build contingency into task estimates to deal with overruns
Q 79 Which is a characteristic of an effective Project Control System?

A Ensure every issue isescalated to the Project Manager
B Include a trigger mechanisms for escalating problems
C Provide extensive, detailed information on all aspects of the project
D Protect the project team from control issues so they can concentrate on their work
Q 80 Ineffective team building is most likely to result in:

A Poor morale
B Wrong network
C Poor product design
D Minimum quality control
Q 81 A project should be terminated or reconsidered if:

A It has exceeded its original budget by more than 25%
B Scope changes invalidate the Baseline Plan
C New risks are identified more than expected
D The objectives in the Project Charter can no longer be met
Q 82 Configuration Management is required:

A Throughout the life cycle of a project
B Only at the start of the project
C Once the project definition is completed
D As soon as the first change is required
Q 83 Estimates are most likely to be exceeded if there are:

A Uncontrolled changes
B Changes in project personnel
C No quality assurance functions
D Cash flow problems
357

Q 84 To improve Efficiency the project manager should NOT:
A Delegate tasks
B Monitor and control the resources
C Do all the work himself/herself
D Strive for continuous improvement
Q 85 Earned Value hours can be calculated by:

A Dividing the actual hours by the budget hours
B Dividing the actual hours by the % complete
C Multiplying the budget hours by % complete
D Adding actual hours to the budget hours
Q 86 What is the best way to ensure effective change control?

A Bar charts
B Formal procedures
C Quality assurance
D Earned value analysis
Q 87 Bar charts or Gantt charts are primarily used to:

A Show interdependencies between tasks
B Give an overview of project tasks against a calendar
C Show a network of activities
D Provide guidelines to manage resources
Q 88 The prime role of a project management information system is to:

A Provide any information at any point of time to the sponsor
B Make decisions only for procurement purposes
C Support decision making processes
D Frequently report on all detailed aspects of the project to CEO
Q 89 When would change control be applied to a project?

A To all deliverables or sequences of work in any project
B When the project has physical deliverables
C To all project deliverables where the change may increase costs
D When the value of the project could significantly affect the sponsor's business
Q 90 Which of the following is an effective cost control tool?

A Quality Assurance
B Investment Appraisal
C Earned Value
D Separate cost centres
Q 91 Monitoring and control of major timed events can best be overviewed using:
A A precedence network
B A milestone slip chart
C Histograms
D EVMS
Q 92 Which of the following should be highlighted in a Risk Register?

A The time when the risk will occur
B The person who owns the risk
C The method that was used to evaluate the risk
D The person who identified the risk
358

Q 93 A change during the course of project implementation is likely to result in:
A Organisation policy changes
B Time and/or cost and/or performance changes
C In the current use of software
D Change in standard conditions of a contract
Q 94 The main purpose of change Control is to:

A Not allow people to make change requests
B Assess the impact of proposed changes on the project
C Improve the functionality of the design/service
D Maximise profits
Q 95 To control deliverables, it is necessary to:

A Assign and delegate one person to expedite the delivery
B Inform the contractor to expedite the delivery
C Have all the team members involved in expediting the contract
D Ensure that the contract was signed by all the parties
Q 96 The most important benefit of using Earned Value in monitoring a project is:
A It allows the project manager to compare the work performed against the budget
allocated for that work
B It allows the project manager to efficiently and effectively manage the project's time
and cost against performance
C It allows the project manager to efficiently and effectively allocate human resources
during the execution phase of a project
D It allows the project manager to efficiently and effectively manage all project resource
allocations
Q 97 Which of the following requirements must be met to ensure Integration

within a project?
A There must be a clear sequential relationship within and between the sub-networks
B There must be regular meetings between the project manager and the sponsor
C There must be clearly defined boundaries separating the sub-networks
D There must be well defined project benefits
Q 98 What is the overall purpose of Project Integration?

A The co-ordination of the project and its business environment
B The co-ordination of the technical components of the project
C The co-ordination of the Work Breakdown Structure within the Product
Breakdown Structure
D The co-ordination of the project team with other project teams
Q 99 Project closure normally takes place following the:

A Feasibility phase
B Concept phase
C Implementation phase
D Design phase
Q 100 A Post Project Appraisal need only be conducted for:

A Failed projects
B Technically complex projects
C High Value projects
D All projects
359

Q 101 A post project review uses the project management plan as:
A A record of what should have happened
B The master document for evaluation
C A short summary of the project benefits
D The document to understand what went wrong in the project
Q 102 At project closure the Project Manager:

A Conducts a Post Project Review
B Checks that all outstanding project business has been completed
C Checks all deliverables met their quality criteria
D Checks that all benefits have been realized
Q 103 In his profile assessment of team roles for team members Belbin has identified
………….. types of characteristics:
A Eight
B Nine
C Eleven
D Ten
Q 104 Which member(s) of a project management team most require 'Integration

Skills'?
A The Project Manager
B The Project Support Office
C The Technical Development Team
D The Project Sponsor
Q 105 What do we understand by Project Close-out?

A Formal termination of a project at any point during its life
B The completion of all work on the project
C Final validation of the original Business Case
D Final disposal or archiving of all project documentation
Q 106 All of the following statements are correct about Order of Magnitude estimates
except:
A Is a conceptual type of estimate
B Used in early phases of the project so is least accurate
C Is generally developed using work packages
D Is more accurate if developed using prorates of past projects
Q 107 How would you use baselines in the project?

A To measure and control the project work
B To guide the installation and operating procedures
C As the technical specification of deliverables
D For off-specification details and follow-up actions
Q 108 Which of the following is a valid objective for conducting a post project review?
A Career planning for the project team
B Lessons learned to improve the planning for future projects
C To guide operations people to improve productivity
D Plan how to complete the balance objectives of the project
360

Q 109 Formal project closure is necessary:
A On medium to large projects only
B As part of the deliverables
C Only if a project has been terminated early
D On all projects
Q 110 A Project appraisal at the end of the project is normally carried out by:
A The project manager
B The operations manager
C A suitable person who is outside the project team
D The sponsor
Q 111 Which of the following is a suitable method you can use to manage conflicts?
A Bypassing the source of conflict
B Exploring the differences
C Impact Analysis
D Decision trees
Q 112 Which of the following is the best form of contracting if cost minimisation is the
prime objective?
A Cost-plus contract
B Maximum price contract
C Target price contract
D Competitively tendered contract
Q 113 What is meant by the critical path through a network?

A It has the shortest time duration
B The path with the longest time duration
C It has the greatest amount of float
D It has the minimum amount of float
Q 114 ‘Management by walkabout’best describes:

A Maintain visibility and keep in contact with team members
B Walkout from meetings when there is a disagreement
C Always be accessible to team members
D To keep a grapevine communication for getting reports
Q 115 To avoid hazardous accidents the Occupier should:

A Hire extra guards
B Take an accident prevention insurance policy of minimum Rs.1 lac
C Maintain a ‘Safe zone’ from other establishments
D Ensure employees are always alert for any danger
361

Section 2
Q 116 The following questions are related to organization structures with

Matrix structure. Select the right statements. (4 right answers)
Option A Each project represents a potential profit centre and the project manager has
the responsibility and the accountability for the success of the project. Every
PM in the organization reports directly to Head of the functional department
Option B The functional manager is responsible for the project as he controls the
resources. The project manager is accountable for the project but is given no
responsibility to enable him to get the job done.
Option C The functional manager is responsible for keeping technical excellence in the
projects. Functional heads ensure that a technical base is maintained and
information can be exchanged between projects.
Option D The Matrix organizational structure is not very suited to managing projects as it
has the disadvantages of both the traditional functional organization and the
projectised organizations giving rise to wastage of resources.
Option E In this both horizontal and vertical channel of responsibility exist - Functional
responsibility is vertical as in traditional organizations while project manager's
responsibility cuts across many departments.
Option F The project manager is responsible for keeping technical excellence in the
projects. The project head ensures that a technical base is maintained and
that required information can be exchanged between projects.
Option G Matrix organization is an interim organization structure and it does not provide
any significant advantages for a company to execute projects.
Option H A matrix organization is a combination of the traditional pure functional

organization structure and a projectised organizational structure. It attempts to
merge the advantages of both to create an organizational structure that is
suited for companies.
Option I The project manager's role is more of a project coordinator and he is given
minimum authority over the project.
Option J There are both horizontal and vertical channels of responsibility - the project
coordinator has vertical responsibility down the department. The functional
manager's responsibility cuts across the different departments so as to better
implement the project
Option K The authority for the project is shared by both the departmental head and the
project manager. While the project manager is responsible and accountable
for the project, he depends on the functional manager to support him and
provide the resources.
362

Section 2
Q 117 What are the main advantages of a Matrix organization? (4 right)
Option A The project manager has complete control over the project since he is
given total line authority over the project. He does not have to involve line
managers as he or she reports to the senior management team
responsible for the project.
Option B Project personnel are more dedicated and motivated as they have 2
bosses and if one boss does not like them, they can report to the other
one.
Option C In a matrix organizational structure the project manager has the main
responsibility for the project while the functional manager provides
technical excellence. This allows him/her to have work closely with the
functional manager and to develop a good rapport.
Option D Each project is a separate profit centre, which means that there is greater
direct control over the budget.
Option E Routine operations and projects are balanced and both are integrated into
the company's business.
Option F Resources are shared between projects so there is more efficient and
flexible usage of resources as well as expensive equipment. This means
lower project costs and better control.
Option G Technical specialists and highly skilled workers are available full time on
the project, as they do not have to be shared with other projects in the
organization.
Option H Project resources being dedicated do not have to be shared with other
projects being undertaken so there is more flexibility in scheduling project
work.
Option I It provides an opportunity for upper management to keep themselves

occupied by resolving the conflict between line and project managers
Option J Matrix organizations allow attention to both the line operations as well as
projects being undertaken.
Option K Response and reaction time to changes is fastest in matrix organizations.
Option L Technical expertise is much better. It is possible to develop a strong and

wide base of specialists who are available to all the projects. Therefore,
project manager reports to functional head.
363

Section 2
Q 118 Select three wrong statements from the following. (3 answers)
Option A Internal Rate of Return is the discount rate at which the project’s NPV will
be zero.
Option B The project’s Sponsor should be involved in developing the Project

Management Plan details to ensure that the project requirements have
been covered by the team members.
Option C The Project Manager must ensure all environmental safeguards and the
health and safety requirements are included in the project management
plan
Option D The Project Charter is important as it formally authorizes the project to go

ahead and forms the link between the project and the on-going work of
the organization.
Option E Risks are assessed and prioritized based on the likelihood of occurrence
of an uncertain event and it’s impact on the project.
Option F Quality Assurance is carried out to provide confidence that all the defects
have been rejected.
Option G In Herzberg’s Factor Theory, the Hygiene factors which are similar to
Maslow’s lower level needs are necessary to be met as they prevent team
members from becoming dissatisfied with their job.
Option H A stakeholder analysis should be carried out by the project manager to

analyze the contributions, expectations and importance of the different
stakeholders of the project
Option I The higher the NPV the more risky the potential project.
Option J Quality control uses different tools and techniques to monitor the project
results and find the causes creating the defects.
Option K A key disadvantage of a Matrix organization structure is that there are two
bosses.
364

Section 2
Q 119 What is the role of the Business Case in a project? A business case
is needed because: (3 right)
Option A The business case is an important document in a project as it discusses

the "why" of the project. It details both, the reasons for undertaking the
project as well as the project's requirements.
Option B The business case is an important document which discusses the 'how",
"how much", "when" and "where" of the project.
Option C The project management plan forms the basis for writing the business
case of the project.
Option D The impact and potential conflicts, if any, of the current project being
undertaken on the company's business and it's other projects is outlined.
Option E The business case looks into the importance of the project in the
company's business strategy and how the project is aligned to this
business strategy.
Option F A key use of the business case is that it forms the baseline for the project.
Option G Project management plan forms the basis for the business case.
Option H Business case gives the detailed level of planning by drawing a network
Option I It outlines the details of the project and all possible assumptions and
constraints.
Option J Business case is drawn after the approval of the feasibility study for a
project.
Option K Business case is for the project manager to convince his or her team for
the project.
365

Section 2
Q 120 What all should be included in the Business Case? (3 right)

Option A The network schedule for the project.
Option B The key performance indicators and the success criteria of the project.
Option C A detailed procurement strategy, penalties and liquidation damages if any.
Option D The hardware tools that will be used in the project.
Option E The investment appraisal data and the business need for undertaking the
project.
Option F The work breakdown structure for the project is included in the business
case to ensure the scope of the project is fully understood.
Option G Only those project stakeholders financing the project.
Option H The financial and non-financial advantages and the "do-nothing" option.
Option I The business case provides the cost variance expected in the project.
Option J The business case provides the schedule variance expected in the
project.
Option K Business case include the mechanism of resolving conflicts amongst the
contractors
366

Section 2
Q 121 Give an outline of the steps in Risk Response Planning stage in Risk
Management process. (4 right)
Option A Risk planning is done to identify suitable actions to be taken to deal with
the potential risk.
Option B Risk planning process only covers all the preventive actions that can be
taken to prevent the risk from occurring.
Option C Risk planning involves conducting a quantitative assessment of all

identified risks to determine their probability of occurring and it's impact if
the risk should occur.
Option D Before planning for the risk a qualitative assessment for all risks should be
done and a P-I table formed to prioritize the risks in order of importance.
Option E Risk planning is the third stage in risk management process.
Option F Risk planning covers both preventive actions to prevent the risk from
occurring as well as a suitable response in case the risk does occur.
Option G At times when responding to a risk it can give rise to a new or "secondary"
risk. We should not consider when choosing a risk response.
Option H Avoidance, acceptance and transfer are the three most common
responses used to deal with a risk.
Option I Avoidance, acceptance, transfer and mitigation are the four most common
responses used to deal with a risk.
Option J Once a suitable response to the risk has been identified the next step in
risk planning is to implement the response to the risk.
Option K If a risk occurs then the sponsor is responsible for implementing the risk
response.
Option L Should a risk occur then the person most affected by the risk is
responsible for implementing the risk response.
367

Section 2
Q 122 What is a Work Breakdown Structure? (4 right)
Option A The Work Breakdown structure (WBS) is a task oriented family tree, which
provides a graphical representation of all the tasks that are required to
be done for the project.
Option B The Work Breakdown structure (WBS) is a product oriented family tree,
which provides a graphical representation of all the products that are
required in the project.
Option C The main work of the project should be included in the WBS.
Option D In the WBS each level of work is reviewed and broken down into sub-
tasks, which are further broken down into sub-tasks.
Option E In order to make the WBS, the lowest level tasks required to be done in
the project must always be first listed and then added upwards to
generate a picture of the total work that needs to be done in the project.
Option F It should reflect the total scope of the project, as work not included in the
WBS is not considered to be a part of the project.
Option G From the user’s point of view, the WBS is the same as the Organizational
Breakdown Structure.
Option H The work package, which is a group of activities, is at the highest level of
the WBS.
Option I The WBS is a key tool that is used to draw the network of the project.
Option J The work package, which is a group of activities, is at the lowest level of
the WBS.
Option K Each level of detail in the WBS can be directly linked to a number of
previous levels in the tree structure.
Option L The WBS is generally drawn by the sponsor in consultation with the client
for whom the project is being undertaken.
368

Section 2
Q 123 Give three reasons why the WBS is an important tool. (3 right)
Option A Using the WBS, an accurate top down cost allocation can be done for
every activity, which is then used to make a cost breakdown structure for
the project.
Option B Using the lowest level of the WBS an accurate bottom-up cost allocation
can be done for every activity, which is then used to make a cost
breakdown structure.
Option C The WBS forms the project management plan against which the project
manager monitors the total project.
Option D As the tasks are fully identified in the WBS it is also used as the
organizational chart for the project.
Option E The WBS is an excellent tool that is used to do a qualitative analysis of

the potential risks in the detailed tasks.
Option F It forms the basis for the budget, schedule and resources data that is
required to be used for determining the earned value.
Option G Risk identification and risk management can be done more effectively as it
is easier to identify risks related to all activities once they have been listed
out in the WBS.
Option H A well formed WBS works as a Responsibility Assignment Matrix.
369

Section 2
Q 124 Describe the advantages and disadvantages of four different team

roles described by Belbin and explain how using these roles can
help in forming a more effective team. (3 right)
Option A Plant - This is a creative, imaginative and an unorthodox person who is

good to have in the team. An advantage of a Plant type is that he/she can
creatively solve difficult problems that come up in the project. A
disadvantage is that Plants dislike any criticism.
Option B Shaper - is a person who is mature, confident, and a good decision-maker

or chairperson. Such a type of person is good to have in the team as they
can clarify project goals and help to promote decision-making as well as
delegating authority to others.
Option C Team worker - is a cooperative, mild, perceptive and tactful person.

He/she tries to reduce conflict in the team and maintain team harmony but
is indecisive during a crisis.
Option D Team worker - is a mature, cooperative, extrovert, person. Team workers

are good to have as they excel in finishing tasks and are technically very
competent but a disadvantage is they often get into arguments.
Option E Implementer - This is a creative, imaginative and an unorthodox person

who is good to have in the team as he/she can creatively solve difficult
problems that come up in the project. A disadvantage is that Implementers
dislike any criticism against them.
Option F Completer/Finisher - is very creative, a natural leader and painstaking and

meets full details and deadlines, delivers on time and searches out
omissions. However he/she can be a perfectionist, which often annoys
and depresses others.
Option G Specialist - is a highly technical, dedicated, single-minded and serious

person who is an expert in his/her own field and has specialized, key
knowledge and skills. A specialist remains focused on his/her key area
and is not very interested about the whole project.
370

Section 2
Q 125 Given below are the 4 stages of team formation. Select the right
answers from the descriptions given below. (4 right)
Option A Storming - This is the third stage of team formation. Team's motivation is
high at being selected and the team members have begun to work well
together. However, there is still a large amount of conflicts regarding how
to do the work slowing down the progress.
Option B Storming - This is the second stage in team formation. As the project work
begins and progresses various differences start to surface. Differences
often arise over the project's overall aim and the best way to achieve
project objectives.
Option C Forming - This is the first stage of team formation. The team is formed and
all members are initially high with anticipation and commitment. Team's
motivation is high at being selected. However team members are not very
effective at this stage.
Option D Forming - This is the second stage of team formation. And the relations
between the team members begin to improve and normalize. Team
members start reaching agreements over issues and begin to find areas
of commonality.
Option F Performing - This is the third stage in team building. By now the team has
improved its performance and achieved a common focus and aim in its
work. However as work progresses the number of problems and conflicts
increases between the team members.
Option G Performing - This is the fourth stage of team formation. By now team
members have learnt to understand and appreciate each other. The team
can work together effectively as a resourceful, cohesive force with a
common, united aim.
Option H Norming - This is the fourth and final stage in the team's formation.
Teamwork is excellent, as all the team members have learnt to
understand and appreciate each other. The team becomes an effective,
resourceful, cohesive force with a common, united aim.
Option I Norming - Things begin to normalize a little as team members start

reaching agreements over issues and begin to find areas of commonality.
The project manager helps by resolving issues that came up. The team
begins to develop an identity and a set of norms.
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Mock Test Paper 1 Answers
Section - 1
Q. No. Answer Q. No. Answer Q. No. Answer
1 D 53 C 105 B
2 B 54 B 106 C
3 B 55 D 107 A
4 C 56 C 108 B
5 B 57 B 109 D
6 A 58 A 110 C
7 C 59 B 111 B
8 C 60 B 112 D
9 A 61 C 113 B
10 D 62 D 114 A
11 D 63 B 115 C
12 A 64 D
13 D 65 B Section - 2
14 A 66 D 116 C,E,H,K
15 A 67 C 117 C,E,F,J
16 A 68 D 118 B,F,I
17 B 69 A 119 A,D,E
18 A 70 A 120 B,E,H
19 D 71 C 121 A,D,F,I
20 C 72 D 122 A,D,F,J
21 C 73 C 123 B,F,G
22 A 74 A 124 A,C,G
23 B 75 A 125 B,C,G,I
24 C 76 A
25 D 77 B
26 C 78 B
27 C 79 B
28 A 80 A
29 B 81 D
30 B 82 A
31 B 83 A
32 B 84 C
33 C 85 C
34 C 86 B
35 D 87 B
36 C 88 C
37 C 89 A
38 C 90 C
39 A 91 B
40 C 92 B
41 B 93 B
42 B 94 B
43 D 95 A
44 D 96 B
45 C 97 A
46 D 98 A
47 D 99 C
48 C 100 D
49 C 101 B
50 C 102 B
51 B 103 B
52 A 104 A
372

SAMPLE - SHORT QUESTION AND ANSWERS
1 What are some characteristics commonly found in project’s at the earliest stage
when it is first proposed?
 Unrealistic expectations
 Unrealistic time frames
 Optimism
 Sketchy information
 Unclear objectives
2 What are some aspects you would consider when developing the projects WBS?
 The top level should be the name of the project, the lowest level is the work
package
 How to develop Level 2 of the WBS - can be chosen as desired and be a mix of:
 Product to be produced (object oriented) i.e. tangible deliverables
e.g. Software, Hardware, Power house, Power lines etc.
 Functions required in project (performance oriented) e.g. Marketing,

Finance, Engineering etc.
 Project phasee.g. concept, design, test etc.
 Location where task to be performed – India team, USA team etc.
 The WBS can be developed using a top-down, bottom-up or mixed approach

 Each level of the WBS should be decomposed to a greater level of detail and have
a parent-child relationship with upper level
 The work package is the level where the project manager wants to control the
project
3 Your company is not much interested in using project management to manage

any project it undertakes as it is mainly involved in routine work. List three
advantages it would have by using project management.
 A structured and documented process to manage the project

 Better planning
 Cost efficiency
 Schedule management
 Formal change management
4 Describe how project management success differs from project success.
 Project management success refers to successfully delivering the project within

time, within cost and to the required quality and other stakeholder expectations.
 Project success refers to the project delivering the business benefits it was
undertaken to deliver.
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5 The core team members of a power plant up-gradation project are conducting a
brainstorming session to identify risks. How does brainstorming method differ
from Delphi method?
 In brainstorming a face-to-face discussion is held among all the participants to

identify the potential risks. During the session the participation is not equal -
some participants identify more risks while some less.
 In Delphi technique the subject matter experts taking part do not know who the
other participants are so the risk identification is totally independent.
6 Quality is an aspect that must be met in all projects. How would you use quality
planning, quality assurance and quality control.
 Quality planning is done to understand the quality requirements for the project
and make a detailed plan of how to deliver the quality.
 Quality assurance provides feedback that the defined processes are being fully
followed through audits and reviews.
 Quality control actually monitors and evaluates the results to check that the
required standard and performance criteria is being met.
7 Write a short note on Project Organization.
 Projects main work of organization and structure geared for projects

 All staff report to PM
 PM has complete authority and independence
 Project work given maximum importance
 Advantages
o PM has complete functional authority over project
o Good communication channels
o Fast reaction time
o Needs less top management involvement
o All resources available to PM as and when needed
 Disadvantages
o Duplication of effort, resources, facilities
o Technical base less strong as no line department looking out to maintain skills
o Slower career growth
o Technical skill and knowledge remains in same group
o People retained unnecessarily after project as they may not have another
project

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8 Write a short note on Matrix Organization Organization.
 Staff assigned to project report to both Functional and Project Manager

 PM assigned full time to project
 PM and Functional Managers share decision making and authority
 Advantages
o PM has good control and authority
o Strong technical base available to projects
o Better utilization of resources
o PM can commit company’s resources
o Good for doing both projects & operations
o Project staff have a ‘home’ so their career path secure after project completed
 Disadvantages
o Dual reporting system – two bosses PM and Functional manager
o Needs more top management involvement initially
o Structure more difficult to implement
o Multidimensional work & information flow
o Conflicting / changing priorities between PM and Functional manager

9 Write a short note on Risk potential estimation.
 Assess the probability and impact

o Dimensions defined in risk analysis
o The event or condition
o The origin or cause
o The probability that the event will occur
o The possible consequences
o Signals from which we derive a change in the probability
o The period within which the risk or the opportunity will manifest itself
(proximity)
 Qualitative Risk Analysis
o A qualitative risk assessment is carried out to prioritize risks
o A risk’s Probability (P) of occurrence and Impact (I) is combined and
assessed
o Should always be done for all projects
 Quantitative Risk Analysis
o Risk probability assessed using specific values
o Numerically analyses effect of identified risks on project objectives
o More rigorous
o Optional analysis

10 What are the techniques to check the quality of Project results?
 Explain the manner in which you assess the quality

 Name those elements which are necessary for the assessment
 Make clear how quality objectives will be communicated
 Carry out and analyze quality audits
 Carry out corrective action to restore quality

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11 What measures will help you to promote collaboration within the Project?
 Create a clear and compelling cause.

 Communicate expectations.
 Establish team goals.
 Leverage team-member strengths.
 Foster cohesion between team members.
 Encourage innovation.
 Keep promises and honor requests.
 Encourage people to socialize outside of work.
 Recognize, reward and celebrate collaborative behaviour.

12 What is the stakeholder analysis development process?
 Make a list of all the stakeholders – Stakeholder Register

 Analyse their interests, requirements and expectations
 Understand each stakeholders key requirements
 Communicate any requirements that cannot be fulfilled
 Identify potential impact/ support the stakeholder can generate from power
/interest grid; power/ influence grid & influence/ impact grid
 Prioritize the interests
Vital – must be achieved to complete project
Significant – will have deep impact but project can still be completed
Some effect on time/cost/quality and
No effect

13 Briefly describe Programme Management.
Programme management covers:
 A set of projects related to a common objectives e.g. business aim
 An organizations business strategy is often implemented through projects
 Programmes create more benefit for the organization
 Aim is to achieve overall benefits for the business not just for a project
 An interdependency exists between the projects of a programme
 Resource allocation/ reallocation amongst projects
14 Briefly describe what a Project Management Plan is required to contain?

Project management plan provides an overall idea of :
 The project life cycle
 The customised project management processes
 The execution of work
 The procedures for changes & configuration management
 The way in which project performance is made transparent
 The manner of stakeholder management
 The most important decision points in the project
15 What principles should be included to create sustainable projects?

Principles to be applied to integrate sustainability into projects
 Balancing and harmonising social, environmental and economic interests
 Short-term and long-term orientations
 Local and global orientations
 Consuming income, not capital
 Transparency and accountability
 Personal values and ethics
376

ASSIGNMENTS
NPV
Q. 1 Two projects – project A and project B are being appraised for investment. The cash
flows for each project are as follows:
Project A in (Rs.) Investment is 40,000
• Cash in or Revenue for 5 years is:
20,000; 40,000; 80,000; 90,000 and 120,000 respectively.
• Expenses or cash out for 5 years is:
Project B in (Rs.) Investment is 80,000
• Cash in or Revenue for first five years is:
40,000; 60,000; 100,000; 120,000 and 140,000.
• Expenses or cash out for first five years is:
34,000; 40,000; 70,000; 80,000 and 120,000.
Discount factors for the project appraisal are:
Year Factor
0 1.0
1 .90
2 .80
3 .70
4 .60
5 .50

Determine which project should you opt for?

377

Q. 2 A project is planned in which the capital cost to be incurred is Rs. 100,000, the
interest rate expected is 10% per annum and the anticipated annual return or
revenue expected is Rs. 15000 each year for a period of 8 years.
2.1 Calculate what the Net Present Value (NPV) will be for this project.
2.2 Will this project be viable or not?

Q 3 The following table shows the initial investment, cash flows and Discount Factor associated
with a particular project option.

Calculate the Payback period and the Net Present Value for this project.

Year Cash Flow (Rs.) Discount Factor
(8%)
0 ‐ 1,40,000 1.000
1 40,000 .926
2 60,000 .857
3 80,000 .794
4 1,00,000 .735
5 1,00,000 .681

IRR
Q1 A project has an Initial investment of Rs. 149,500 and net cash flows of 39,995, 40,000,
40,000, 40,000 and 25,000 over 5 years.
What is the IRR of the project?
Year Discount Rate with Discount Factors
8% 10% 15% 16%
1 .926 .909 .870 .862
2 .857 .826 .756 .743
3 .794 .751 .658 .641
4 .735 .683 .572 552
5 .681 .621 .497 .478
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Network
Q. 1 Shown below are activities with their durations, precedent activities and resources per day.

Activity Duration (Days) Precedent Resources/day
Activity/Activities

A 4 ‐ 4
B 2 A 3
C 3 A 2

D 8 C 5
E 3 B 2
F 5 E 3

G 5 C 3
H 1 D, F, G 1
Q. 1.1 Draw the Network
Q. 1.2 Determine the Critical Path
Q. 1.3 Determine the project duration
Q. 1.4 List out all activities with total float and give their values
Q. 1.5 List out all activities with free float and give their values
Q.2 Draw the Network using PDM
Duration
Activities in weeks Dependencies Resources/week
A 4 ‐ 3
B 6 A 2
C 4 A 1
D 8 A 5
E 9 B&D 4
F 12 E 9
G 14 C&D 3
H 3 G 5
J 7 F&H 3

Q. 2.1 Find out the Critical Path
Q. 2.2 List out the Floats
Q. 2.3 List out the Free Floats
Q. 2.4 Draw a Bar chart
379

Q 3
Activity Duration Precedent activities Resources

(days) (finish‐start) per Day

A 2 ‐ 2
B 4 ‐ 3
C 8 A, B 5
D 9 C with 5 days lead 5
E 5 C 4
F 3 D, E 6
G 3 D 3
H 1 F, G 2

Q. 3.1 Draw the Network using PDM and determine the Critical Path.
Q. 3.2 List out the Floats and Free floats.

Q 4


A 2 ‐ 2

B 4 ‐ 3
C 8 A, B 5
D 9 C with 5 days lag 5

E 5 C 4
F 3 D, E 6
G 3 D 3
H 1 F, G 2


380

Q 5

Task Duration
Name
‐ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
1
A 3 days
B 4 days
C 5 days
D 4 days
E 6 days
F 4 days
G 3 days
H 3 days
J 4 days
K 5 days
5.1 Develop a network based on the above Bar Chart and calculate the Total floats and the Free
floats.
381

Standard deviation
Q 1 There are three activities A, B and C in a network having the values:
Optimistic Pessimis

Activity Most Likely (ML)
(O) tic (P)

A 10 20 30
B 15 20 30
C 12 20 29

Q1.1 Find the Pert duration and standard deviation for A, B and C
Q1.2 Find the standard deviation for the path A, B and C
Q1.3 What is the time range for the completing the activities and the project at 68% confidence
level.

Q 2. There are three activities A, B and C in a network of a project, having the durations in days:

Activity Optimistic (O) Most Likely (ML) Pessimistic (P)
A 14 20 32
B 14 20 26
C 28 40 46

The time range for the completing the activities and the project at 95% confidence level is.

Crashing
Activity Predecessor Normal Crashed Normal Crashed Crash?

time time in cost cost Yes/No
required in weeks
weeks
A None 4 2 10,000 14,000
B A 6 5 30,000 42,500
C A 2 1 8,000 9,500
D B 2 1 12,000 18,000
E B,C 7 5 40,000 52,000
F D,E 8 3 20,000 29,000
Q1) If you have to crash the project by 2 weeks, which activity will you choose ?
Q2) What will be the cost for crashing the project by 2 Weeks?
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EV
Q. 1 A project has 4 activities – A, B, C and D. At review point (originally planned completion
point) this was the position.
Activity Budgeted % Complete Actual

Man‐hours of activity Man‐hours
A 320 90 300
B 400 50 280
C 200 60 100
D 600 75 450
‐‐‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐‐‐‐‐
1520 1130

1.1 What is the earned value for each activity and the project at review point?
1.2 What is the overall % complete of the project?
1.3 What is the current CPI?
1.4 What are the man‐hours the project is likely to take to be completed based on the current
cost efficiency.
Q 2 A project has a budget of Rs.2,00,000. and is planned to be completed in 12 months. The
following table shows the cumulative values for each at the end of 4 months.
Month Planned Cost EV Actual Cost

1 14000 4000 5000
2 28000 12000 18000
3 44000 20000 30000
4 60000 28000 42000

EV2.1 Calculate the cost variance and the schedule variance at the end of 4 months.

EV2.2 At the end of the 4th month what would you estimate the cost at completion to be?

EV2.3 Estimate the likely time of completion of project if efficiency remains the same.

EV2.4 Estimate the likely time of completion of project if efficiency becomes 100% from month
5.

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1 14000 4000 5000
2 28000 12000 18000
3 44000 20000 30000
4 60000 28000 42000

5.

Q3
Following are details of a project that is planned to be completed in 12 months at a total cost of
Rs.10000. The project is being reviewed at the end of month 4. (all figures are cumulative)
Month PV in Rs AC in Rs EV

1 1000 1000 500
2 2000 2500 1500
3 3000 4000 2010
4 4000 5500 3000

1 Calculate the schedule variance at month 4.
2 Calculate the cost variance at month 4.
3 What is the cost efficiency of the project?
4 What is the status of the project?
5 Forecast the time when project can be expected to be completed based on the
6 current performance.
7 Forecast the expected cost of the project based on current performance.
8 Forecast expected project cost if efficiency becomes 50% from 5th month.
9 Forecast expected cost of project if the efficiency improves to 100% from the 5th month.
10 Forecast the time when the project can be expected to be completed assuming 100%
11 efficiency from month 5 onwards.

384

Contracts
1. We are signing a FPIF Contract with the following terms
• Target Cost 1000000
• Target Fee 100000
• Target Price 1100000
• Share Ratio 80:20 Buyer:Seller
• Price Ceiling 1250000 (Max Payout)
Calculate Contractor Fee & Final Price if
3. We are signing a CPIF Contract with the following terms
• Minimum Fee 30000
385


386

Risk

4 The probability and impact grid shown below depicts the relative positions of different risks
to the project following a risk assessment. The risk identification letters are entered in the grid.

Select the top 5 risks in the order of their priority.

Very High (.9) A B C D

High (.75) E
Probability

Medium (.5) F G

Low (.35) H I

Very low (.2) J K L


.10 .25 .4 .6 .9

Impact

387

EMV 1
The Company has the choice to outsource the cafeteria or run it by itself (Time frame one year)
Outsourcing will cost Rs. 30,000/‐ for the bid process
In a good year the contractor will share Rs. 250000/‐ with the Company
In a bad year the contractor will share Rs. 150000/‐ with the Company
Running it by the Company will cost Rs. 200,000/‐ for expenses
In a good year the cafeteria will make a profit of Rs. 450000/‐ for the Company
In a bad year the cafeteria will make a profit of Rs. 350000/‐ for the Company
The probability that next year will be a good year is 80%
Should the cafeteria be outsourced?
EMV 2
The Company has the choice to use technology 1 or 2
Technology 1 – there is 60% chance of adopting it
There is a 70% chance profit will be Rs. 200000/‐ for the Company
There is a 30% chance loss will be Rs. 50000/‐ for the Company
What is the EMV for the company?

388

ADDITIONAL HANDOUT
Value chain
A value chain is a set of activities that a firm operating in a specific industry performs in order to
deliver a valuable product or servicefor the market. The concept comes through business
management and was first described by Michael Porter in his 1985 best-seller, Competitive
Advantage: Creating and Sustaining Superior Performance.
The idea of the value chain is based on the process view of organizations, the idea of seeing a
manufacturing (or service) organization as a system, made up of subsystems each with inputs,
transformation processes and outputs. Inputs, transformation processes, and outputs involve the
acquisition and consumption of resources – money, labour, materials, equipment, buildings, land,
administration and management. How value chain activities are carried out determines costs and
affects profits.
— IfM, Cambridge
In Porter's value chains, Inbound Logistics, Operations, Outbound Logistics, Marketing and Sales,
and Service are categorized as primary activities. Secondary activities include Procurement, Human
Resource management, Technological Development and Infrastructure
According to the OECD Secretary-General (Gurría 2012) the emergence of global value
chains (GVCs) in the late 1990s provided a catalyst for accelerated change in the landscape of
international investment and trade, with major, far-reaching consequences on governments as well as
enterprises.
Firm-level
Michael Porter's value chain
The appropriate level for constructing a value chain is the business

unit, not division or corporate level. Products pass through a chain of activities in order, and at each
389

activity the product gains some value. The chain of activities gives the products more added value
than the sum of added values of all activities.
The activity of a diamond cutter can illustrate the difference between cost and the value chain. The
cutting activity may have a low cost, but the activity adds much of the value to the end product, since
a rough diamond is significantly less valuable than a cut diamond. Typically, the described value
chain and the documentation of processes, assessment and auditing of adherence to the process
routines are at the core of the quality certification of the business, e.g. ISO 9001.
A firm's value chain forms a part of a larger stream of activities, which Porter calls a value system. A
value system, or an industry value chain, includes the suppliers that provide the inputs necessary to
the firm along with their value chains. After the firm creates products, these products pass through the
value chains of distributors (which also have their own value chains), all the way to the customers. All
parts of these chains are included in the value system. To achieve and sustain a competitive
advantage, and to support that advantage with information technologies, a firm must understand
every component of this value system.
Primary activities]
All five primary activities are essential in adding value and creating a competitive advantage and they
are:
• Inbound logistics: arranging the inbound movement of materials, parts, and/or finished inventory
from suppliers to manufacturing or assembly plants, warehouses, or retail stores
• Operations: concerned with managing the process that converts inputs (in the forms of raw
materials, labor, and energy) into outputs (in the form of goods and/or services).
• Outbound logistics: is the process related to the storage and movement of the final product and
the related information flows from the end of the production line to the end user
• Marketing and sales: selling a product or service and processes for creating, communicating,
delivering, and exchanging offerings that have value for customers, clients, partners, and society
at large.
• Service: includes all the activities required to keep the product/service working effectively for the
buyer after it is sold and delivered.
Companies can harness a competitive advantage at any one of the five activities in the value chain.
For example, by creating outbound logistics that are highly efficient or by reducing a company's
shipping costs, it allows to either realize more profits or pass the savings to the consumer by way of
lower prices.
Support activities]
Using support activities helps make primary activities more effective. Increasing any of the four
support activities helps at least one primary activity to work more efficiently.
• Infrastructure: consists of activities such as accounting, legal, finance, control, public

relations, quality assurance and general (strategic) management.
• Technological development: pertains to the equipment, hardware, software, procedures and
technical knowledge brought to bear in the firm's transformation of inputs into outputs.
• Human resources management: consists of all activities involved in recruiting, hiring, training,
developing, compensating and (if necessary) dismissing or laying off personnel.
• Procurement: the acquisition of goods, services or works from an outside external source. In this
field company also makes decisions of purchases.
Physical, virtual and combined value chain
Competitive advantage cannot be understood by looking at a firm as a whole. It stems from the many discrete activities
a firm performs in designing, producing, marketing, delivering and supporting its product. Each of these activities can
contribute to a firm's relative cost position and create a basis for differentiation.
Michael Porter[7]
390

The value chain categorizes the generic value-adding activities of an organization. The activities
considered under this product/service enhancement process can be broadly categorized under two
major activity-sets.
1. Physical/traditional value chain: a physical-world activity performed in order to enhance a

product or a service. Such activities evolved over time by the experience people gained from
their business conduct. As the will to earn higher profit drives any business, professionals
(trained/untrained) practice these to achieve their goal.
2. Virtual value chain: The advent of computer-based business-aided systems in the modern
world has led to a completely new horizon of market space in modern business-jargon – the
cyber-market space. Like any other field of computer application, here also we have tried to
implement our physical world's practices to improve this digital world. All activities of
persistent physical world's physical value-chain enhancement process, which we implement
in the cyber-market, are in general terms referred to as a virtual value chain.
In practice, no progressive organisation can afford to remain stuck to any one of these value chains.
In order to cover both market spaces (physical world and cyber world), organisations need to deploy
their very best practices in both of these spaces to churn out the most informative data,] which can
further be used to improve the ongoing products/services or to develop some new product/service.
Hence organisations today try to employ the combined value chain.
Combined Value Chain = Physical Value shown in sample below.
Inbound Logistics Production Process Out-Bound Logistics Marketing Sales Activities
GATHER
ORGANIZE
SELECT
SYNTHESIZE
DISTRIBUTE
This value-chain matrix suggests that there are a number of opportunities for improvement in any
business process.

391

Balanced scorecard
The balanced scorecard is a strategy performance management tool – a semi-standard
structured report, that can be used by managers to keep track of the execution of activities by the staff
within their control and to monitor the consequences arising from these actions.
The phrase 'balanced scorecard' primarily refers to a performance management report used by a
management team, and typically this team is focused on managing the implementation of a strategy
or operational activities – in a recent survey 62% of respondents reported using Balanced Scorecard
for strategy implementation management, 48% for operational management. Balanced Scorecard is
also used by individuals to track personal performance, but this is less common – only 17% of
respondents in the survey using Balanced Scorecard in this way, however it is clear from the same
survey that a larger proportion (about 30%) use corporate Balanced Scorecard elements to inform
personal goal setting and incentive calculations.
The critical characteristics that define a balanced scorecard are:
• its focus on the strategic agenda of the organization concerned

• the selection of a small number of data items to monitor
• a mix of financial and non-financial data items.
Use
Balanced scorecard is an example of a closed-loop controller or cybernetic control applied to the
management of the implementation of a strategy. Closed-loop or cybernetic control is where actual
performance is measured. The measured value is compared to a reference value and based on the
difference between the two corrective interventions are made as required. Such control requires three
things to be effective:
• a choice of data to measure,

• the setting of a reference value for the data,
• the ability to make a corrective intervention.
Within the strategy management context, all three of these characteristic closed-loop control elements
need to be derived from the organisation's strategy and also need to reflect the ability of the observer
to monitor performance and subsequently intervene – both of which may be constrained. Balanced
Scorecard was initially proposed as a general purpose performance management
system. Subsequently, it was promoted specifically as an approach to strategic performance
management. Balanced scorecard has more recently become a key component of structured
approaches corporate strategic management.
Two of the ideas that underpin modern balanced scorecard designs concern making it easier to select
which data to observe, and ensuring that the choice of data is consistent with the ability of the
observer to intervene.
Characteristics
The characteristic feature of the balanced scorecard and its derivatives is the presentation of a
mixture of financial and non-financial measures each compared to a 'target' value within a single
concise report. The report is not meant to be a replacement for traditional financial or operational
reports but a succinct summary that captures the information most relevant to those reading it. It is
the method by which this 'most relevant' information is determined (i.e., the design processes used to
select the content) that most differentiates the various versions of the tool in circulation. The balanced
scorecard indirectly also provides a useful insight into an organisation's strategy – by requiring
general strategic statements (e.g. mission, vision) to be precipitated into more specific/tangible forms.
The first versions of Kaplan and Norton's interpretation of the balanced scorecard asserted that
relevance should derive from the corporate strategy, and proposed design methods that focused on
choosing measures and targets associated with the main activities required to implement the strategy.
392

Modern balanced scorecards have evolved since the initial ideas proposed in the late 1980s and early
1990s, and the modern performance management tools including Balanced Scorecard are
significantly improved – being more flexible (to suit a wider range of organisational types) and more
effective (as design methods have evolved to make them easier to design, and use).
Variants]
Variants that feature adaptations of the structure of balanced scorecard to suit better a particular
viewpoint or agenda are numerous. Examples of the focus of such adaptations include the triple
bottom line, decision support, public sector management, and health care management. The
performance management elements of the UN's Results Based Management system have strong
design and structural similarities to those used in the 3rd Generation Balanced Scorecard design
approach.
Balanced scorecard is also linked to quality management tools and activities. Although there are clear
areas of cross-over and association, the two sets of tools are complementary rather than duplicative.
Balanced scorecard is also used to support the payments of incentives to individuals, even though it
was not designed for this purpose and is not particularly suited to it.
Design]
Design of a balanced scorecard is about the identification of a small number of financial and non-
financial measures and attaching targets to them, so that when they are reviewed it is possible to
determine whether current performance 'meets expectations'. By alerting managers to areas where
performance deviates from expectations, they can be encouraged to focus their attention on these
areas, and hopefully as a result trigger improved performance within the part of the organization they
lead.
The original thinking behind a balanced scorecard was for it to be focused on information relating to
the implementation of a strategy, and over time there has been a blurring of the boundaries between
conventional strategic planning and control activities and those required to design a balanced
scorecard. This is illustrated well by the four steps required to design a balanced scorecard included
in Kaplan & Norton's writing on the subject in the late 1990s:
1. Translating the vision into operational goals;

2. Communicating the vision and link it to individual performance;
3. Business planning; index setting
4. Feedback and learning, and adjusting the strategy accordingly.
These steps go far beyond the simple task of identifying a small number of financial and non-financial
measures, but illustrate the requirement for whatever design process is used to fit within broader
thinking about how the resulting balanced scorecard will integrate with the wider business
management process.
Although it helps focus managers' attention on strategic issues and the management of the
implementation of strategy, it is important to remember that the balanced scorecard itself has no role
in the formation of strategy. In fact, balanced scorecards can co-exist with strategic planning systems
and other tools.
First generation
The first generation of balanced scorecard designs used a "four perspective" approach to identify
what measures to use to track the implementation of strategy. `The original four "perspectives"
proposed were:
• Financial: encourages the identification of a few relevant high-level financial measures. In

particular, designers were encouraged to choose measures that helped inform the answer to the
question "How do we look to shareholders?" Examples: cash flow, sales growth, operating
income, return on equity.
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• Customer: encourages the identification of measures that answer the question "What is
important to our customers and stakeholders?" Examples: percent of sales from new products, on
time delivery, share of important customers’ purchases, ranking by important customers.
• Internal business processes: encourages the identification of measures that answer the
question "What must we excel at?"Examples: cycle time, unit cost, yield, new product
introductions.
• Learning and growth: encourages the identification of measures that answer the question "How
can we continue to improve, create value and innovate?". Examples: time to develop new
generation of products, life cycle to product maturity, time to market versus competition.
The idea was that managers used these perspective headings to prompt the selection of a small
number of measures that informed on that aspect of the organisation's strategic performance. The
perspective headings show that Kaplan and Norton were thinking about the needs of non-divisional
commercial organisations in their initial design. These categories were not so relevant to public sector
or non-profit organisations, or units within complex organizations (which might have high degrees of
internal specialization),
Different but equivalent headings would yield alternative sets of measures, and this represents the
major design challenge faced with this type of balanced scorecard design: justifying the choice of
measures made. "Of all the measures you could have chosen, why did you choose these?" These
issues contribute to dis-satisfaction with early Balanced Scorecard designs, since if users are not
confident that the measures within the Balanced Scorecard are well chosen, they will have less
confidence in the information it provides.
Although less common, these early-style balanced scorecards are still designed and used today.
In short, first generation balanced scorecards are hard to design in a way that builds confidence that
they are well designed. Because of this, many are abandoned soon after completion.
Second generation
In the mid-1990s, an improved design method emerged. In the new method, measures are selected
based on a set of "strategic objectives" plotted on a "strategic linkage model" or "strategy map". With
this modified approach, the strategic objectives are distributed across the four measurement
perspectives, so as to "connect the dots" to form a visual presentation of strategy and measures.
In this modified version of balanced scorecard design, managers select a few strategic objectives
within each of the perspectives, and then define the cause-effect chain among these objectives by
drawing links between them to create a "strategic linkage model". A balanced scorecard of strategic
performance measures is then derived directly by selecting one or two measures for each strategic
objective. This type of approach provides greater contextual justification for the measures chosen,
and is generally easier for managers to work through. This style of balanced scorecard has been
commonly used since 1996 or so: it is significantly different in approach to the methods originally
proposed, and so can be thought of as representing the "2nd generation" of design approach adopted
for the balanced scorecard since its introduction.
Third generation
In the late 1990s, the design approach had evolved yet again. One problem with the "second
generation" design approach described above was that the plotting of causal links amongst twenty or
so medium-term strategic goals was still a relatively abstract activity. In practice it ignored the fact that
opportunities to intervene, to influence strategic goals are, and need to be, anchored in current and
real management activity. Secondly, the need to "roll forward" and test the impact of these goals
necessitated the creation of an additional design instrument: the Vision or Destination Statement. This
device was a statement of what "strategic success", or the "strategic end-state", looked like. It was
quickly realized that if a Destination Statement was created at the beginning of the design process,
then it was easier to select strategic activity and outcome objectives to respond to it. Measures and
targets could then be selected to track the achievement of these objectives. Design methods that
incorporate a Destination Statement or equivalent (e.g. the results-based management method
proposed by the UN in 2002) represent a tangibly different design approach to those that went before,
and have been proposed as representing a "third generation" design method for balanced scorecards.
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Design methods for balanced scorecards continue to evolve and adapt to reflect the deficiencies in
the currently used methods, and the particular needs of communities of interest (e.g. NGO's and
government departments have found the third generation methods embedded in results-based
management more useful than first or second generation design methods).
This generation refined the second generation of balanced scorecards to give more relevance and
functionality to strategic objectives. The major difference is the incorporation of Destination
Statements. Other key components are strategic objectives, strategic linkage model and perspectives,
measures and initiatives.
Popularity]
In 1997, Kurtzman found that 64 percent of the companies questioned were measuring performance
from a number of perspectives in a similar way to the balanced scorecard. Balanced scorecards have
been implemented by government agencies, military units, business units and corporations as a
whole, non-profit organizations, and schools.
Balanced scorecard has been widely adopted, and consistently has been found to be the most
popular performance management framework in a widely respected annual survey.

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Benchmarking
Benchmarking is the practice of comparing business processes and performance metrics to industry
bests and best practices from other companies. Dimensions typically measured are quality, time and
cost.
Benchmarking is used to measure performance using a specific indicator (cost per unit of measure,
productivity per unit of measure, cycle time of x per unit of measure or defects per unit of measure)
resulting in a metric of performance that is then compared to others.[1]
Also referred to as "best practice benchmarking" or "process benchmarking", this process is used in
management in which organizations evaluate various aspects of their processes in relation to best-
practice companies' processes, usually within a peer group defined for the purposes of comparison.
This then allows organizations to develop plans on how to make improvements or adapt specific best
practices, usually with the aim of increasing some aspect of performance. Benchmarking may be a
one-off event, but is often treated as a continuous process in which organizations continually seek to
improve their practices.
In project management benchmarking can also support the selection, planning and delivery of
projects.
In the process of best practice benchmarking, management identifies the best firms in their industry,
or in another industry where similar processes exist, and compares the results and processes of
those studied (the "targets") to one's own results and processes. In this way, they learn how well the
targets perform and, more importantly, the business processes that explain why these firms are
successful. According to National Council on Measurement in Education, benchmark
assessments [4] are short assessments used by teachers at various times throughout the school year
to monitor student progress in some area of the school curriculum. These also are known as interim
assessments.
In 1994, one of the first technical journals named Benchmarking: An International Journal was
published.
History[edit]
The term benchmark, originates from the history of guns and ammunition, in regards to the same aim
as for the business term; comparison and improved performance. The introduction of gunpowder
arms replaced the bow and arrow from the archer, the soldier who used the bow. The archer now had
to adapt to the new situation, and learn to handle the gun. The new weapon left only a mark on the
target, where the arrow used to be visible, and with the bow gone, the soldiers title changed
to marksman, the man who put the mark. The gun was improved already in the early beginning, with
rifling of the barrel, and the rifle was born. With the industrialization of the weapon-industry in the mid-
1800's, The mass production of ammunition as a cartridge replaced the manual loading of black-
powder and bullet into the gun. Now, with standardized production of both the high-precision rifle, as
well as the cartridge, the marksman was now the uncertain variable, and with different qualities and
specifications on both rifle as well as ammunition, there was a need for a method of finding the best
combination. The rifled weapon was fixed in a bench, making it possible to fire several identical shots
at a target to measure the spread.
In 2008, a comprehensive survey on benchmarking was commissioned by The Global Benchmarking
Network, a network of benchmarking centres representing 22 countries.
1. Mission and Vision Statements and Customer (Client) Surveys are the most used (by 77% of
organizations) of 20 improvement tools, followed by SWOT analysis (strengths, weaknesses,
opportunities, and threats) (72%), and Informal Benchmarking (68%). Performance
Benchmarking was used by 49% and Best Practice Benchmarking by 39%.
2. The tools that are likely to increase in popularity the most over the next three years are
Performance Benchmarking, Informal Benchmarking, SWOT, and Best Practice
Benchmarking. Over 60% of organizations that are not currently using these tools indicated
they are likely to use them in the next three years. benchmarking mainly depends on SWOT
analysis and will also be using in future for almost 4-5 years.
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Procedure
There is no single benchmarking process that has been universally adopted. The wide appeal and
acceptance of benchmarking has led to the emergence of benchmarking methodologies. One seminal
book is Boxwell's Benchmarking for Competitive Advantage (1994).[6] The first book on benchmarking,
written and published by Kaiser Associates is a practical guide and offers a seven-step approach.
Robert Camp (who wrote one of the earliest books on benchmarking in 1989) developed a 12-stage
approach to benchmarking.
The 12 stage methodology consists of:
1. Select subject
2. Define the process
3. Identify potential partners
4. Identify data sources
5. Collect data and select all partners
6. Determine the gap
7. Establish process differences
8. Target future performance
9. Communicate
10. Adjust goal
11. Implement
12. Review and recalibrate
The following is an example of a typical benchmarking methodology:
• Identify problem areas: Because benchmarking can be applied to any business process or
function, a range of research techniques may be required. They include informal conversations
with customers, employees, or suppliers; exploratory research techniques such as focus groups;
or in-depth marketing research, quantitative research, surveys, questionnaires, re-engineering
analysis, process mapping, quality control variance reports, financial ratio analysis, or simply
reviewing cycle times or other performance indicators. Before embarking on comparison with
other organizations it is essential to know the organization's function and processes; base lining
performance provides a point against which improvement effort can be measured.
• Identify other industries that have similar processes: For instance, if one were interested in
improving hand-offs in addiction treatment one would identify other fields that also have hand-off
challenges. These could include air traffic control, cell phone switching between towers, transfer
of patients from surgery to recovery rooms.
• Identify organizations that are leaders in these areas: Look for the very best in any industry and in
any country. Consult customers, suppliers, financial analysts, trade associations, and magazines
to determine which companies are worthy of study.
• Survey companies for measures and practices: Companies target specific business processes
using detailed surveys of measures and practices used to identify business process alternatives
and leading companies. Surveys are typically masked to protect confidential data by neutral
associations and consultants.
• Visit the "best practice" companies to identify leading edge practices: Companies typically agree
to mutually exchange information beneficial to all parties in a benchmarking group and share the
results within the group.
• Implement new and improved business practices: Take the leading edge practices and develop
implementation plans which include identification of specific opportunities, funding the project and
selling the ideas to the organization for the purpose of gaining demonstrated value from the
process.
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Costs
The three main types of costs in benchmarking are:
• Visit Costs - This includes hotel rooms, travel costs, meals, a token gift, and lost labor time.
• Time Costs - Members of the benchmarking team will be investing time in researching problems,
finding exceptional companies to study, visits, and implementation. This will take them away from
their regular tasks for part of each day so additional staff might be required.
• Benchmarking Database Costs - Organizations that institutionalize benchmarking into their daily
procedures find it is useful to create and maintain a database of best practices and the
companies associated with each best practice now.
The cost of benchmarking can substantially be reduced through utilizing the many internet resources
that have sprung up over the last few years. These aim to capture benchmarks and best practices
from organizations, business sectors and countries to make the benchmarking process much quicker
and cheaper.[9]
Technical/product benchmarking
The technique initially used to compare existing corporate strategies with a view to achieving the best
possible performance in new situations (see above), has recently been extended to the comparison of
technical products. This process is usually referred to as "technical benchmarking" or "product
benchmarking". Its use is well-developed within the automotive industry ("automotive benchmarking"),
where it is vital to design products that match precise user expectations, at minimal cost, by applying
the best technologies available worldwide. Data is obtained by fully disassembling existing cars and
their systems. Such analyses were initially carried out in-house by car makers and their suppliers.
However, as these analyses are expensive, they are increasingly being outsourced to companies who
specialize in this area. Outsourcing has enabled a drastic decrease in costs for each company (by
cost sharing) and the development of efficient tools (standards, software).
Types
Benchmarking can be internal (comparing performance between different groups or teams within an
organization) or external (comparing performance with companies in a specific industry or across
industries). Within these broader categories, there are three specific types of benchmarking: 1)
Process benchmarking, 2) Performance benchmarking and 3) Strategic benchmarking. These can be
further detailed as follows:
• Process benchmarking - the initiating firm focuses its observation and investigation of business
processes with a goal of identifying and observing the best practices from one or more
benchmark firms. Activity analysis will be required where the objective is to benchmark cost and
efficiency; increasingly applied to back-office processes where outsourcing may be a
consideration. Benchmarking is appropriate in nearly every case where process redesign or
improvement is to be undertaking so long as the cost of the study does not exceed the expected
benefit.
• Financial benchmarking - performing a financial analysis and comparing the results in an effort to
assess your overall competitiveness and productivity.
• Benchmarking from an investor perspective- extending the benchmarking universe to also
compare to peer companies that can be considered alternative investment opportunities from the
perspective of an investor.
• Benchmarking in the public sector - functions as a tool for improvement and innovation in public
administration, where state organizations invest efforts and resources to achieve quality,
efficiency and effectiveness of the services they provide.
• Performance benchmarking - allows the initiator firm to assess their competitive position by
comparing products and services with those of target firms.
• Product benchmarking - the process of designing new products or upgrades to current ones. This
process can sometimes involve reverse engineering which is taking apart competitors products to
find strengths and weaknesses.
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• Strategic benchmarking - involves observing how others compete. This type is usually not
industry specific, meaning it is best to look at other industries.
• Functional benchmarking - a company will focus its benchmarking on a single function to improve
the operation of that particular function. Complex functions such as Human Resources, Finance
and Accounting and Information and Communication Technology are unlikely to be directly
comparable in cost and efficiency terms and may need to be disaggregated into processes to
make valid comparison.
• Best-in-class benchmarking - involves studying the leading competitor or the company that best
carries out a specific function.
• Operational benchmarking embraces everything from staffing and productivity to office flow and
analysis of procedures performed.]
• Energy benchmarking - process of collecting, analysing and relating energy performance data of
comparable activities with the purpose of evaluating and comparing performance between or
within entities. Entities can include processes, buildings or companies. Benchmarking may be
internal between entities within a single organization, or - subject to confidentiality restrictions -
external between competing entities.
Tools
Benchmarking software can be used to organize large and complex amounts of information. Software
packages can extend the concept of benchmarking and competitive analysis by allowing individuals to
handle such large and complex amounts or strategies. Such tools support different types of
benchmarking (see above) and can reduce the above costs significantly.
The emerging technology of benchmarking engines automates the stage of going from data to
noteworthy comparative insights, sometimes even expressing the insights in English sentences.
Metric benchmarking
Another approach to making comparisons involves using more aggregative cost or production
information to identify strong and weak performing units. The two most common forms of quantitative
analysis used in metric benchmarking are data envelope analysis (DEA) and regression analysis.
DEA estimates the cost level an efficient firm should be able to achieve in a particular market. In
infrastructure regulation, DEA сan be used to reward companies/operators whose costs are near the
efficient frontier with additional profits. Regression analysis estimates what the average firm should be
able to achieve. With regression analysis, firms that performed better than average can be rewarded
while firms that performed worse than average can be penalized. Such benchmarking studies are
used to create yardstick comparisons, allowing outsiders to evaluate the performance of operators in
an industry. Advanced statistical techniques, including stochastic frontier analysis, have been used to
identify high and weak performers in industries, including applications to schools, hospitals, water
utilities, and electric utilities.
One of the biggest challenges for metric benchmarking is the variety of metric definitions used among
companies or divisions. Definitions may change over time within the same organization due to
changes in leadership and priorities. The most useful comparisons can be made when metrics
definitions are common between compared units and do not change so improvements can be
changed.
Social media and benchmarking]

Social media is beginning to penetrate more and more into existing business processes. In this sense,
benchmarking is no exception. Because of their inherent characteristics, it can even be argued that
social media will have a significant impact on benchmarking. Here are some of the benefits
associated with this.
• Joint benchmarking is, in fact, a social activity, and social media provide many new and effective
ways for social interaction.
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• Social media opens the way to new additional sources of information and data collection
channels.
• Benchmarking is becoming increasingly business-oriented, and social media is supporting this

type of continuous engagement, different from working on individual projects.
6‐3‐5 Brainwriting
6‐3‐5 Brainwriting (or 635 Method, Method 635) is a group‐structured brainstorming technique aimed at
aiding innovation processes by stimulating creativity developed by Bernd Rohrbach who originally
published it in a German sales magazine, the Absatzwirtschaft, in 1968.
In brief, it consists of 6 participants supervised by a moderator who are required to write down 3 ideas on
a specific worksheet within 5 minutes, this is also the etymology of the methodology's name. The
outcome after 6 rounds, during which participants swap their worksheets passing them on to the team
member sitting at their right, is 108 ideas generated in 30 minutes. The technique is applied in various
sectors but mainly in business, marketing, design, writing as well as everyday real life situations.
Introduction
6‐3‐5 Brainwriting is a particular form of brainstorming through the medium of graphics; in particular, it is
classified under the intuitive and progressive methodologies as it involves driving inspiration from other
members in a cyclical way. The grounding of such technique is the belief that the success of an idea
generation process is determined by the degree of contribution and integration to each other's
suggestions, and specifically it is meant to overcome the possible creativity barriers brought up by issues
such as interpersonal conflicts, different cultural backgrounds and reasons of intellectual properties.
Procedure
The optimum application of the technique would require 6 participants, as too many would make the
session unmanageable, however sessions may be carried out also in teams of 4, 5 or 7 and the number of
ideas generated would respectively be 48, 75 and 147.
It is fundamental to assure that all participants share a deep background knowledge on the topic of the
brainwriting session since even a single not well informed individual can significantly affect the quality of
the output. In addition to this, it is recommended that through a preliminary discussion, the group
focuses on identifying the problem to be solved or the aim to be pursued. This can either occur through
as independent initiative of the group or guided by the supervisor.
Once the topic of the session is narrowed down to a problem statement, this is announced and written on
top of the Idea Form. This is a worksheet that has to be handed out to each participant and consists of a
grid where the heading of the columns are Idea 1, Idea 2 and Idea 3 and the rows identify the name of
who has contributed to that particular suggestion.
At this point, the session is ready to start and participants are given 5 minutes to complete the first row
and write down the first ideas working in silence. These may be expressed in any graphical form: written,
drawn, through a symbol or however the author prefers.
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The supervisor signals the end of time, and the sheet is passed on to the next participant on the right.
Now the process is repeated and each participant is free to get inspired from the idea he reads on the
sheet written by his neighbour and contribute to them by integrating or completing them, or decide to
ignore them and start a new one from scratch.
The process goes on until the worksheet is completely filled in but if the supervisor deems it necessary,
the time for each round may be extended to a maximum of 10 minutes.
The conclusion of the brainstorming session is a preliminary screening of the ideas that have been
gathered where exact duplicates are deleted, and a team evaluation perhaps using the Nominal Group
Technique or Prioritization matrix to select 1 to 3 ideas the group can focus on.
Pros
One of the main advantages of using 6‐3‐5 brainwriting is that it is a very straightforward method and
therefore is easy and quick to learn. In addition to this, no particular training for the supervisor is
required.
Secondly, it valorises the possible different backgrounds of participants since it encourages sharing and
exchanging knowledge. Differently than traditional brainstorming, it assures an active participation from
all members and at the same time avoids issues of domination over introverts that are also likely to feel
more free about expressing their own ideas instead of risking to have their potential inhibited by those
who shout louder.
All ideas are recorded on the worksheet, this means that nobody has to be in charge of taking notes
throughout the session and this adds a motivational factor since it is possible to keep track of the author
of a particular idea.
Overall this leads to a gain of efficiency that might imply an economic benefit since by hiring 6 members
108 possible content ideas are generated.[8]
Cons
Expressing ideas in a written form may lead to issues in clarity due to participants having trouble
summarising their ideas or reading their colleagues' handwriting or graphical representations.
Stress due to time constraints might cause quality of ideas to decrease, and this might require some
people time to become familiar with the methodology.
There is a risk of clash of similar ideas since there is no immediate group discussion which constitutes a
loss of possible innovation.
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Measures for promoting collaboration in the Project Team
1. Create a clear and compelling cause.
2. Communicate expectations.
3. Establish team goals.
4. Leverage team‐member strengths.
5. Foster cohesion between team members.
6. Encourage innovation.
7. Keep promises and honor requests.
8. Encourage people to socialize outside of work.
9. Recognize, reward and celebrate collaborative behaviour.
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637

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International Standards for Project Management
ISO 21500:2012, Guidance on Project Management, is an international standard developed

by the International Organization for Standardization, or ISO starting in 2007 and released in
2012. It was intended to provide generic guidance, explain core principles and what
constitutes good practice in project management.[ The ISO technical committee dealing with
project management, ISO/PC 236 was held by the American National Standards
Institute (ANSI) which had approved four standards that used PMI materials. one of which
was ANSI/PMI 99‐001‐2008, A Guide to the Project Management Body of Knowledge ‐ 4th
Edition (PMI BoK® Guide ‐ 4th Edition) (revision and re‐designation of ANSI/PMI 99‐001‐
2004): 11/20/2008.
ISO plans for this standard (21500) to be the first in a family of project management
standards. ISO also designed this standard to align with other, related standards such as ISO
10005:2005 Quality management systems − Guidelines for quality plans, ISO 10006:2003
Quality management systems − Guidelines for quality management in projects, ISO
10007:2003 Quality management systems − Guidelines for configura on management, ISO
31000:2009 Risk management – Principles and guidelines.
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403

404

405

406

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ADDITIONAL PRACTICE QUIZ
Practice Quiz 1
1 A project is characterized by:
a. Repetitive ongoing work
b. A unique and temporary endeavour
c. Having a definite beginning and end
d. b and c
2 Line management is best suited for:
a. Managing changes in the company
b. Routine operation such as manufacturing
c. Managing managers
d. Introducing a new product
3 Operations are related with all the following except:
a. Repetitive work
b. Maintaining the plant
c. Regular manufacturing in a car company
d. Introduce a new product range
4 What is not common between projects and operations?
a. Performed by people
b. Have limited resources
c. Sustains existing business
d. Be properly planned
5 The programme manager will normally do all except:
a. Focus on long term goals
b. Focused on company strategies
c. Focused on the project work
d. Prioritize use of resources across projects
6 A Programme Manager is responsible for:
a. Interaction between team members in a project
b. Writing the lessons learned report for the project
c. Establishing the interdependencies among a number of projects
d. Developing the Project Management Plan
7 Which of the following is not a project characteristic?
a. A temporary endeavour
b. Limited availability of resources
c. Fixed end date
d. Managing repetitive work

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8 Operations are related to:
a. Improving manufacturing processes
b. Introducing a new change
c. The maintenance of existing facilities
d. a and c
9 A sequence of phases through which the project progresses is known as:
a. The Project Life Cycle
b. Project Gates
c. Milestone charts
d. Critical path of the project network
10 What is NOT true of project phasing?
a. It allows for most efficient use of resources
b. It Splits projects into stages
c. The duration of each phase is fixed for all projects
d. An end of phase review acts as an evaluation and approval point
11 Project phasing is done to:
a. Overlap project work to save time
b. For better access of project by team members
c. Break down project into more manageable blocks
d. Break down the project finances
12 Each project phase will have:
a. Some specific deliverables
b. Key activities requiring specific type of resources
c. Related sequences and types of activities
d. All of the above
13 The term Programme, in the context of project management refers to:
a. A large number of projects being executed simultaneously
b. A large number of people involved in projects
c. A group of projects related to a common objective
d. Projects implemented across many locations
14 The tools and techniques used in managing projects:
a. Are same for all projects
b. Are not the same for all projects

15 Fill in the blanks by appropriate match:
Project………; Operations……….; Project Management……..; Programme………
a. Routine work, temporary, common objective, structured process
b. Temporary, routine work, structured process, common objectives
c. Common objective, structured process, common objectives, temporary
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d. Temporary, common objective, structured processes, routine work
16 All of the following are true about the Responsibility Matrix except:
a. Shows when the tasks will be performed
b. Is made using the WBS and the OBS
c. Rows generally indicate the activities
d. Shows the responsibilities or functions
17 An organisational structure that is best suited for doing repetitive jobs is:
a. Projectised
b. Matrix
c. Functional / Line
d. a and c
18 In which type of organizational structure will the project manager be given least level of
direct authority?
a. Weak matrix
b. Functional
c. Projectised
d. Strong matrix
19 Some advantages of managing projects in a Matrix organization are:
a. The project manager and functional manager can share
responsibility for assigning priorities
b. It allows most economical and efficient use of resources
c. Allows team members to be more dedicated as their career
prospects are maintained
d. All of the above
20 Some disadvantages of a Matrix organization are:
a. Team members have to keep both functional and project managers happy
b. Can have disagreement between Line & Project manager regarding project
priorities
c. Top management has to be more involved to lay down guidelines etc
d. All of the above
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Practice Quiz 2

1 Developing the Business Case is the normally the responsibility of the project’s:
a. Sponsor
b. CEO
c. Project manager
d. Project manager & the project team
2 The Need for a new project can arise to meet:
a. New opportunities
b. Need for survival
c. Threats
d. All of the above
3 Once the project is completed the ____________ will be used as the baseline to check
whether the expected business benefits are being achieved or not:
a. Business case
b. Need statement
c. Investment appraisal
d. Profit
4 The primary role of the Project Charter is to:
a. Authorize to the project manager to use resources for project work
b. Analyse all the investment options
c. Develop the project’s need statement
d. All of the above
5 Success Factors can be defined as the:

a. Elements of the project work that can be controlled by the Project Manager
b. Elements of the project context that can be controlled by the Project Manager
c. Factors that improve chances of project’s success
d. All of the above
6 Which statement best fits a stakeholder definition?
a. The contractor, sponsor and project manager
b. Anyone who is a part of the project, has interest in it, or is impacted by it
c. The customer
d. The project team
7 The project’s requirements will be driven by the:
a. Bankers
b. Customer
c. CEO
d. Sponsor

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8 Stakeholders can exert a ___________ or ____________ influence on project.
a. Good, bad
b. Negative, positive
c. Strong, hard
9 A project need undergoes the following sequential stages:
a. Need articulation, need emergence, need recognition
b. Need emergence, need recognition, need articulation
c. Need emergence, need assessment, need recognition
d. Need recognition, need assessment, need articulation
10 A stakeholder analysis should be carried out to do all except:
a. Identify the different needs of the stakeholders
b. Understand which needs must be met
c. Find requirements that can be avoided
d. Analyze stakeholder interests and their impact
11 The Business Case addresses all of the following except:
a. Business justification for taking up the project
b. The network schedule
c. Key performance indicators
d. Project’s success criteria
12 All of the following statements are true about the project charter except:
a. The project charter is approved by the top management
b. It is the responsibility of the Sponsor to issue the project charter
c. The charter is always issued by the organization performing the
project work
d. It formally authorizes the project
13 Success criteria:
a. Are only the qualitative measures used to measure project success
b. Are Qualitative and quantitative measures used to measure project success
c. Form the baseline of the project
d. Are set by the Project Manager

14 The Business Case would not consider:
a. Social and environmental impacts of the project
b. The key deliverables
c. Details of investment appraisal
d. Detailed analysis of risks facing the project

15 The most relevant measures used to confirm project acceptability is?
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Practice Quiz 3

1 The top level of the WBS is:
a. A work package
b. an activity
c. The project
d. The product
2 A scope change involves:
a. Changes in the technical specification
b. Changes in the team personnel
c. Modification to the agreed upon scope as defined in the WBS
d. a and c
3 A work package should have all of the following characteristics except:
a. More than one parent
b. A single owner
c. Start date and end date
d. Some deliverable
4 Uncontrolled changes in the scope is known as:
a. Change management
b. Scope baseline
c. Scope creep
d. Cost creep
5 When planning the project, which of the following should be done first?
a. Finalizing the size of the team required for each phase of the project
b. Scheduling of the network activities
c. Developing the Work Breakdown Structure
d. Detailing out the attributes that will be used for inspection
6 The WBS:
a. Breaks down the project in a structured manner
b. Is a task oriented detailed break down or family tree for a project
c. Should include the total scope of the project
d. All of the above
7 Decomposition of project deliverables involves:
a. Identifying the elements of each deliverable
b. Breaking down the major elements into lower levels
c. Verifying the decomposition is correct
d. All of above

413

8 The scope statement should include all except the:
a. Project deliverables
b. Work Breakdown Structure
c. Details of the work to be done
d. Acceptance criteria
9 A WBS is used to do all except:
a. Define the project’s schedule
b. To identify the project’s stakeholders
c. To organize and define the total scope of the project
d. To define every part of the project
10 A WBS dictionary contains:
a. Work package descriptions
b. Staff requirements
c. Schedule dates
d. All of the above
414

Practice Quiz 4
1 The most commonly used logical relationship is:
a. Start ‐ start
b. Finish ‐ finish
c. Finish ‐ start
d. Lead
2 A network is:
a. A schematic representation of sequential activities in project
b. A sequence of events in the project
c. The critical path for the project
d. Is normally drawn from right to left
3 The critical path is the path where activities have:
a. Zero float
b. Maximum float
c. Early Start dates earlier than Late Start dates
d. Lead activities
4 Arrow diagramming method is same as?
a. Activity on Arrow
b. Precedence diagramming
c. A network analysis technique
d. Activity on Node
5 The acronym PERT stands for:
a. Project Evaluation Review Technique
b. Personnel Evaluation Review technique
c. Programme Evaluation Review Technique
6 The total float of an activity is equal to its:
a. Early Finish date plus Early Start
b. Early Finish date minus Early Start
c. Late Start date minus Early Start
d. Late Start date plus it Late Finish
a. Milestone charts
b. WBS
d. Network diagrams

8 What would you not use to display the project schedule?
a. Bar chart
b. Histogram
c. Milestone chart
d. Gantt chart
415

9 The critical path is the:
a. Shortest path in the network
b. Longest path in the network
c. Path in which some activities contain floats
d. Path which has the maximum float
10 A Free Float is the:
a. Difference between an activities late start and early start
b. Amount of time an activity can be delayed without affecting Early Start of
any succeeding activity
c. Amount of time an activity can be delayed without affecting Late Start of
succeeding activities
d. All of the above
11 Which of the following is a scheduling tool?
a. PDM
b. Responsibility matrix
c. Product breakdown structure
d. Business plan
12 In the PDM network technique activities are represented by the:
a. Node
b. Length of the arrow
c. Dotted arrows
d. Events
13 Dummy activities in an activity‐on‐arrow network are used to:
a. Show those tasks which are superfluous
b. Show alternative paths
c. Show a dependency relationship
d. Show the milestones
14 Gantt charts are primarily used to:
a. Show interdependencies between tasks
b. Give an overview of a project tasks against a time scale
c. Show a network of activities
d. Provide guidelines to manage resources

15 In the ‐‐‐‐‐‐‐‐‐‐‐‐ network technique activities are represented by the arrows:
a. ADM
b. PDM
c. PERT
d. Critical path

416

Practice Quiz 5
1 Schedule variance is:
a. BCWS‐BCWP
b. BCWP‐BCWS
c. ACWP‐BCWS
d. BCWP‐ACWP
2 The most detailed estimate is made using the:
b. Business case
c. Parametric estimation
d. Project schedule
3 In a new website to be developed you expect to need about 100 screens. From past
experience you know that the cost of developing a website with one screen is Rs 20000 so
you estimate that the website with 100 screens will cost Rs 20,00,000. To arrive at this figure
you used a ..................
a. Parametric estimate
b. Analogous estimate
c. Bottom‐up estimate
d. Rough Order of Magnitude estimate
4 At the project review meeting your team member tells you the project’s EV is Rs 100000,
PV is Rs 95000 and the AC is Rs 110000.
What would best describe the health of your project?
a. Behind schedule and over budget
b. Ahead of schedule and over budget
c. Ahead of schedule and under budget
d. Behind schedule and under budget
5 All the following are true of standard deviation except:
a. It is a statistical tool that is used to show dispersion of data from the mean
b. It measures the variability in the data
c. Closer the data examples are to the mean the smaller is the standard deviation
d. Closer the data examples are to the mean the larger is the standard
deviation
6 Earned value is the same as the:
a. Actual cost of work performed
b. Budgeted cost of work performed
c. Budgeted cost of work scheduled
d. Budget at completion

417

7 At project completion, the project’s Earned Value will be same as the:
a. Budget at Completion
b. Percent complete
c. Actual Cost
8 Cost variance is:
a. EV‐PV
b. EV‐AC
c. AC‐EV
d. PV‐AC
9 An estimate that gives very preliminary indication of likely costs is:
a. Definitive estimates
b. Rough Order of Magnitude
c. Parametric estimate
d. Budget estimates
10 The project’s schedule and budget together form:
a. The projects detailed budget over the current year
b. The time phased budget or the cost baseline
c. The Earned Value
d. The life cycle cost of the project
11 Earned Value is used to:
d. Calculate the project’s future revenues

12 In Earned Value, Budget At Completion (BAC) stands for:
a. The total planned cost for the project
b. The project cost based on project performance
c. The total actual cost for the project

13 A project is running ahead of schedule. In Earned Value reporting this will be reflected as:

14 Which of the following are used in Estimating:
a. Metrics
b. Lessons learned
c. Expert opinion
d. all the above
418

15 A Preliminary Estimate is:
a. The most accurate estimate of the costs to be incurred in the project
b. The approved costs of the project
c. An estimate prepared during the early phase of the project
d. Done for establishing a project budget
16 A detailed description of the work to be accomplished is presented in a:
a. Contract
b. Request for a bid
c. Statement of work
d. None of above
17 In order to compress the project’s duration:
a. Critical activities are crashed
b. Critical activities are fast tracked
c. More resources are added to critical activities
d. All of the above
18 Which statement is not true of the critical path?
a. The critical path is the longest path in the network
b. Shows a negative float when project is ahead of schedule
c. The critical path can vary during the project execution
d. A project can have more than one critical path
19 Details of what the project will do and how it will be managed will be found in the:
a. Quality management plan
b. Project management plan
c. The network schedule
d. Project Charter
20 Crashing the project duration will result in:
a. Increased costs
b. Need for more manpower
c. Decreased costs
d. a and b

419

Practice Quiz 6

1 Quality planning involves:
a. Identifying the most relevant quality standards that should be followed
b. Determining the actions required to comply with the relevant quality
standard
c. Monitoring of project results and ensuring that a deliverable meets
required quality criteria
d. a and b
2. A philosophy involving the whole organization in continuous improvement is:
a. Kan Baan
b. Benefit/cost ratio
c. TQM
d. Zero defects
3 Quality applies to:
a. Providing the best technical performance.
b. All aspects of project management
c. Ensuring that required safety is fully met
d. Providing the customers with more than they asked for
4 Prevention over Inspection means:
a. Prevention costs exceeds inspection costs
c. Less expensive to use correct processes so work is done correctly
d. Prevention is performed after the quality inspection
5 The Quality Assurance process:
a. Monitors specific results to ensure that they comply with relevant
standards
b. Provides confidence that the work is being performed as per the plan
c. Records actions required to achieve the necessary standard
d. Record all the quality metrics using a checklist
6. The Project Management Plan is used by the project manager and the project team for all
of following except:
a. Executing & controlling the project
b. Providing a baseline for measuring the project’s progress
c. Showing the project’s feasibility
d. To facilitate project communication

7. Sampling, Cause and Effect analysis, Control Chart are all used for:
a. Cost estimation
c. Quality management
d. Contract negotiation
420

8. Name a Quality tool that lists out the defects in the order of the frequency of occurrence:
a. Crawford slip
b. Pareto chart
c. Histogram
d. Cause‐and‐effect analysis
9 A control chart is used to:
a. Check if process readings are within a specified range
b. Detect the reasons for deviations
c. Prevent a problem to occur
d. A and C
10 A Pareto diagram:
a. Is an S curve based on the cumulative frequency of occurrence
b. Is a histogram depicting the magnitude of frequencies
c. Is a histogram based on the order of frequency of occurrence
d. Shows that 80 percent of the causes produce 20 percent of the problems

11 Quality Control refers to process of:
a. Demonstrating that work is being done according to quality plan
b. Monitoring of project results to ensure specified quality is being achieved
c. Preparing, checking and recording actions required to achieve required quality
d. None of above
12 A good measure of quality is:
a. The expense incurred on non‐conformance to specifications/requirements
b. fixed by the concerned workers
c. Fixed by the quality circle
d. All of the above
13 UCL, LCL, Specification limits are all part of:
a. Control charts
b. Run Charts
c. Fishbone Charts
d. Earned value Charts
14 Which statement is not true of a PESTLE analysis:
a. It is the responsibility of the project’s Sponsor
b. It is necessary only for high value projects
c. It is undertaken during the project’s feasibility for business case
d. It identifies and summarizes external influences
15 Pareto analysis is related to the?
a. 80/20 rule
b. 20/80 rule
c. 50/50 rule
d. 40/60 rule
421

Practice Quiz 7
1 Quality requirements to be met in a contract will depend on:
a. Customer requirements
b. Better then customer’s requirements
c. Best technology
d. SWOT analysis
2 Project success and failure criteria are first determined:
a. At project closure
b. When the Business case is defined
c. During implementation of the project
d. When making the risk management plan
3 The Project Management Plan is owned by the:
a. Sponsor
b. Customer
c. Project manager
d. b and c
4 Risk assessment should be done:
a. For all high value projects
b. For all projects throughout the project cycle
c. For all projects at project initiation and close out
d. For projects having contracts
5 Developing the Project Management Plan is the responsibility of:
a. Project Manager
b. Project Manager, Sponsor and project team
c. Sponsor
d. Team members
6 The minimum investment option considered in an investment appraisal is:
a. The do‐nothing option
b. The project cost must be at least 50,000/‐
c. Formation of an expert team to study all the options
d. To include all cost and schedule data
7 If the probability that an event A will occur is 60% and that the event B will occur is 50%
then what is the probability of both A and B occurring when they are independent events?
a. 55%
b. 40%
c. 30%
d. 36%

422

8 When a risk is transferred it affects:
a. Its likelihood of occurrence
b. Its impact as well as likelihood of occurrence
c. Its impact
d. Has no affect
9. Monte Carlo simulation is used for:
a. Critical path analysis
b. Risk analysis
c. Responding to a risk
d. Risk identification
10 The purpose of undertaking an investment appraisal is to:
a. Find the critical path
b. Minimize the project expenses
c. Choose the right contract
d. Evaluate all feasible options
11 Risk probability can be described as:
a. The likelihood and effect of a risk occurring in the project
b. The chances that a similar risk will occur more than once
c. The likelihood of a risk occurring
12 Monitoring of project costs by category is based on the organization’s:
b. Code of accounts
c. Cash flow statement
13 Who should be made responsible for implementing agreed risk responses?
a. Whoever is best placed to manage the risk effectively
b. The person who identified the risk
c. The project manager
d. The sponsor

14 Assumption analysis:
a. Undertakes a stability analysis
b. Is done to identify risks
c. Undertakes a sensitivity analysis
d. All of the above
15 Risk mitigation is carried out after:
a. Risk identification process
b. Quantitative risk analysis
c. Risk response planning
d. Qualitative risk assessment
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Practice Quiz 8
1 The concept of relating future cash flows over the project’s life to a common base value is
known as:
a. IRR
b. ROI

2 An investment appraisal method that checks when cumulative cash flow becomes equal to
the initial investment is known as:
a. IRR
c. Payback period
d. Financial closure

3 Which is likely to be the LEAST flexible of the following quality processes?
b. Quality control
d. Good attitude of team members

4 The project manager believes in keeping tight control over the team working and dictating
what should be done by the team members. This style of management is ……………. and
more suitable for ……………. projects:
a. Bureaucratic, government
b. Directive, low level
c. Autocratic, low risk
d. Laissez Faire, R&D

5 The cost of quality is made up of:
c. Cost of assessment, appraisal, failure and prevention

6 In case of a conflict, who will decide the importance between the project’s cost, schedule
and quality?
a. Project manager
b. Sponsor
d. None of above

424

7 A Document Distribution Schedule:
a. Lists all documents required for project and who is responsible for producing
them
b. Shows who will receive what document and at what frequency
c. Is included in the Project Management Plan
d. All of above
8 Financial gain is the primary motivation for which theory/tool?
a. Theory X management
b. Theory Y management
c. Kaizen
d. Quality circles

9 The lowest level need in Maslow’s Hierarchy of Needs is:
a. Security
b. Social needs
c. Physiological needs
d. Security needs

10 Which of the following is a method used for investment appraisal?
a. Net Present Value
b. Unit rates
c. Negotiation
d. Parametric estimating

11 Self Actualization is:
a. A Herzberg’s Motivation Factor
b. A Management philosophy
c. Maslow’s second level need
d. Maslow’s highest level need

12 The project Sponsor’s role involves all of the following except:
a. Resolve disputes in project changes
b. Justify the benefits for taking up the project
c. Manage the contractors
d. Monitor progress of the project

13 Herzberg’s Two Factor theory looks at the two aspects of …………… and …
a. Motivators, de‐motivators
b. Motivators, hygiene factors
c. Salary, recognition
d. Hygiene factors, social needs

425

14 Providing required quality in the project can be defined as:
a Conformance to requirements
b Gold plating
c Achieving Six sigma
d Having Zero defects

15 Internal Rate of Return for a project will be achieved when the:
a. Project’s IRR is higher than the cost of borrowing capital
b. The profitability is positive
c. Project’s cash flow equals the investment made
d. Discount rate applied makes the NPV zero

16 In order to motivate the project team members, the project manager can:
a. Provide more challenging work
b. Give recognition for good work done
c. Properly delegate work
d. All of the above

17 To manage the project team it is not necessary for the project manager to be a:
a. Problem solver
b. Communicator
c. Technical expert
d. Passionate
18 Benchmarking is used to:
a. Evaluate project’s quality against other projects
b. Learn from other projects
c. Improve the project’s performance
d. All of the above

19 A milestone slip chart is used to:
a. Show how milestones performed
b. Show progress and control the key timed events in project
c. Show the length of projects in a programme
d. A and B

20 In Resource limited scheduling all are true except:
a. The maximum number of resources available to the project is fixed
b. When scheduling activities a pre‐determined level of resources cannot be exceeded
c. Project duration may or may not exceed
d. The activities with zero float are scheduled last

426

21 Configuration management is concerned with:
a. Hiring manpower to perform changes in the project
b. Scheduling when the changes will be required in the project
c. Ensuring the deliverables are according to latest project’s
requirements
d. B and c

22 Configuration management should keep a record of?
a. When a change can occur in the project’s requirements
b. All changes in drawings and documents issued in the project
c. The changes requested

23 For effective team building, the team members should avoid:
a Common identity
b Shared vision
c Self orientation
d Delegation

24 Which of the following are the three most common cost estimating techniques?
a. Top‐down, parametric and bottom‐up
b. Analogous, top down and bottom‐up
c. Parametric, bottom‐up and detailed
d. Monte Carlo, bottom‐up and parametric

25 The project’s cost baseline is:
a. Another name for cost estimates
b. Given by upper management
c. Time phased budget of project that is used to measure project's cost performance
d. Provided in the contract to the customers

26 The Scope statement is not helpful in:
a. Improving communication among stakeholders
b. Earned value calculations
c. Establishing better understanding among team members
d. Detailed planning of the project's scope

27 Health and safety standards are initiated in the:
b. Business strategy

427

28 Document management refers to:
a. Changes in design
b. Reporting structure
c. Requests for information
d. Information management

29 When a conflict arises in the project team between two team members the project
manager’s preferred approach should be:
a. Let the persons involved be responsible to resolve their conflict
b. Try to resolve the conflict as soon as possible
c. Try to resolve it when he has some spare time
d. Avoid getting involved
30 Which of the following conflict resolution method results in a long lasting solution?
a. Forcing
b. Confrontation
c. Withdrawal
d. Smoothing

428

Practice Quiz 9

1 What is true of project closeout?
a. It is the done in the implementation phase
b. Uses the Business case to ensure that all benefits got materialized
d. Check is done to see all work is completed
2 The project is progressing on schedule when the client asks for a change that is likely to
upset the schedule. As the project manager what should you do first?
a. Tell the client the change cannot be implemented and the time is too short
b. Agree to the change and start the working on it with the team.
c. Inform the sponsor of the change request
d. Analyze the impact of the change and follow the change management process

3 At contract closeout, a product verification is done to:
a. Verify the product's design
b. To document the seller's work
c. Verify the work completed for making seller payments
d. Ensure that the seller's work is complete and satisfactorily meets all the contract
requirement

4 Scope changes should be monitored against:
a. Their impact on the project’s schedule
b. Project goals set out in the project charter
c. Their impact on resources
d. The communication plan
5 All the risk in a contract is:
a. Buyers
b. Sellers
c. Could be buyer or seller
d. Not possible to know this
6 For proper integration within a project:
a. Relationships between sub‐projects in the project should be clear
b. Team members must meet daily
c. The sponsor should be actively involved
d. All of above
7 Project integration involves:
a. Efficient use of network schedules
b. Effective coordination and control
c. Making the responsibility matrix
d. Meetings of all the stakeholders regularly
8 A change log is:
a. A record of all authorized project changes
b. A record of all proposed changes, rejected or authorized
c. A record of the people who are creating issues in the project
429

9 When will risk be highest in the project?
a. Depends on the project
b. At the end of the project
c. At the beginning of the project
d. Throughout the project

10 What would best describe the overall aim of project management?
c. Achieve the success factors described in the Business Case

11 Poor scope definition can result in all except:
a. Low team morale
b. Rework
c. Increase in project costs
d. Decrease in project costs

12 Projects often fail due to:
d. All of the above

13 Project ABC has a total budget of Rs 9 Crore and was planned to be completed in 8
months. While reviewing the progress at the end of 3 months, the following data was
presented: PV = Rs 3 Crore; EV = Rs 2.5 Crore and AC = Rs 3 Crore What is the EAC if the
efficiency will change to 100% from now onwards?
a. Rs 9 Crore
b. Rs 8.5 Crore
c. Rs 9.5 Crore
d. Rs 10.8 Crore

14 The Cost baseline can:
a. Change during the project life cycle
b. Be affected by a scope change
c. Be affected by changes in the schedule
d. All of the above
15 When making the project schedule, the project manager decides to add extra time to the
project’s overall duration to mitigate possible risks. This means PM is not keeping a:
a. Buffer
b. Reserve
c. Contingency
d. Window

430

16 Resource planning is done in the project to:
a. Level the resources
b. Evaluate the type and amount of resources needed
c. Hire resources
d. To draw the resource histogram

17 Lessons learned documentation is important as they:
a. Help to pinpoint fraudulent activities
b. Help to conduct a project audit
c. Are most useful in future projects to be performed by the organization
d. All of the above
18 A Risk Score can be defined as:

a. The sum total of the probability times the impact of all the identified risks
b. The total number of identified risks in the project
c. Probability of successful completion of the project
d. The product of the probability of a risk event times it’s impact

19 Sensitivity analysis is used for:
a. Motivating team members
b. Qualitative risk assessment
c. Calculating the critical path
d. Prioritizing the most significant risks, by quantitative analysis

20 Arranging finance for the project forms a part of the:
a. Contract
b. Business case
c. Project Management Plan
d. Project strategy

21 What is not true of a Fixed Price contract:
a. Is the most commonly used contract
b. Requires a lot of monitoring by the buyer
c. Should have clear work specifications
d. Contractor faces more risk than buyer

22 You want to outsource some of the work packages, but are not very sure of the exact
nature of the work involved. The most suitable contract in this case is a:
a. Fixed plus incentive fee contract
b. Cost reimbursable contract
c. Time & Material contract
d. Any type is equally suitable

23 What item should be considered when selecting a supplier?
a. Dependability
b. Product quality
c. Location
d. All of above
431

24 A procurement strategy would not include:
a. Potential sources of supply
b. Final value of the contract
c. Terms and type of contract
d. Methods of supplier selection

25 In projects, contract management is concerned with:
a. The buyer
b. The buyer and the seller
c. The contract manager
d. The seller

26 Contract Closeout involves all of the following except:
a. Relocating the team members
b. Formal acceptance of the work by the buyer
c. Updating the contract file
d. Product verification

27 Contract closure should be done:
a. If there is enough time
b. If a contract is terminated before completion
c. At the end of the contract
d. b and c

28 The amount of monitoring of contractor's work by the PM will vary based on:
a. The value of the contract
b. The type of contract being used
c. The reputation of the contractor
d. The nature of the work being done

29 Managing issues in projects is important because:
a. It helps to pinpoint the unresolved issues
b. It helps to understand some of the root causes of poor project performance
c. It helps to build team cohesion
d. All of the above

30 Contingency reserves are planned
a. Against known unknowns
b. Against unknown unknowns
c. Not as a part of budget
d. Against future scope changes

432

Answer Key to Quiz 1 to 9
Question Quiz 1 Quiz 2 Quiz 3 Quiz 4 Quiz 5 Quiz 6 Quiz 7 Quiz 8 Quiz 9
1 d a c c b d a d d
2 b d d a d c b c d
3 d a a a a b c b d
4 c a c a b c b c c
5 c d c c d b a b c
6 c b d c b c a b a
7 d b d d a c c d b
8 d b d b b b c a b
9 a b b b b d b c c
10 c c d b b c d a c
11 c b a b b c d d
12 d c a a d a c d
13 c b c c a a b c
14 a d b d b d a d
15 b c a c a c d d
16 a c d b
17 c d c d
18 a b d d
19 d b d d
20 d d d b
21 d b
22 b b
23 c d
24 a b
25 c b
26 d a
27 a d
28 d b
29 b d
30 b a

433

PRACTICE TEST

1 Mark Questions

1 The term Programme, in the context of project management refers to:
a. A large number of projects being executed simultaneously
b. A large number of people involved in projects
c. A group of projects related to a common objective
d. Projects implemented across many locations

2 The number of phases in a Project Life Cycle:
a. Is same for all projects
b. Is not the same for all projects

3 During testing, multiple defects were identified in a product. The project manager
overseeing this products development can best use which tool to help prioritize the
problems?

A. Pareto diagram
B. Control chart
C. Variance analysis
D. Order of magnitude estimate

4 You are the manager of an aircraft design project. A significant portion of this aircraft will
be designed by a subcontracting firm. How can this affect your communications
management plan?

A. More formal verbal communication will be required.
B. Performance reports will be more detailed.
C. More formal communication will be required.
D. Official communication channels will significantly increase.

5 What officially creates the project?

A. The project initiation document.
B. The kickoff meeting.
C. The project charter.
D. The statement of work.

6 Stakeholders can exert a ___________ or ____________ influence on project.
a. Good, bad
b. Negative, positive
c. Strong, hard

434

7 The Business Case would not consider:
a. Social and environmental impacts of the project
b. The key deliverables
c. Details of investment appraisal
d. Detailed analysis of risks facing the project

8 The project’s requirements will be driven by the:
a. Bankers
b. Customer
c. CEO
d. Sponsor

9 The Need for a new project can arise to meet:
a. New opportunities
b. Need for survival
c. Threats
d. All of the above

10 Once the project is completed the ____________ will be used to check whether the
expected business benefits are being achieved or not:
a. Business case
b. Need statement
c. Investment appraisal
d. Profit

11 All of the following statements are true about the project charter except:
a. The project charter is approved by the top management
b. It is the responsibility of the Sponsor to issue the project charter
c. The charter is always issued by the organization performing the
project work
d. It formally authorizes the project

12 Success criteria:
a. Are only the qualitative measures used to measure project success
b. Are qualitative and quantitative measures used to measure
project success
c. Form the baseline of the project
d. Are set by the Project Manager

13 The most relevant measures used to confirm project acceptability is?

435

14 Which of the following is a method used for investment appraisal?
a. Net Present Value
b. Unit rates
c. Negotiation
d. Parametric estimating

15 The concept of relating future cash flows over the project’s life to a common base value is
known as:
a. IRR
b. ROI

16 Internal Rate of Return for a project will be achieved when the:
a. Project’s IRR is higher than the cost of borrowing capital
b. The profitability is positive
c. Project’s cash flow equals the investment made
d. Discount rate applied makes the NPV zero

17 An investment appraisal method that checks when cumulative cash flow becomes equal to
the initial investment is known as:
a. IRR
c. Payback period
d. Financial closure

18 The Project Management Plan is owned by the:
a. Sponsor
b. Customer
c. Project manager
d. b and c

19 Which statement is not true of a PESTLE analysis:
a. It is the responsibility of the project’s Sponsor
b. It is necessary only for high value projects
c. It is undertaken during the project’s feasibility for business case
d. It identifies and summarizes external influences

20 Which of the following is not true of the Time Value of Money theory?
a. Future value of money is equal to present value
b. There is a difference in the value of money between today and tomorrow
c. The value of money decreases with time
d. Present Value is the current worth of a sum of money expected in future

436

21 The WBS:
a. Breaks down the project in a structured manner
b. Is a task oriented detailed breakdown or family tree for a project
c. Should include the total scope of the project
d. All of the above

22 Uncontrolled changes in the scope is known as:
a. Change management
b. Scope baseline
c. Scope creep
d. Cost creep

23 Decomposition of project deliverables involves:
a. Identifying the elements of each deliverable
b. Breaking down the major elements into lower levels
c. Verifying the decomposition is correct
d. All of above

24 Which document will show to the project team that the project has been officially
sanctioned :
a. Project management plan
c. Need analysis
d. Project charter

25 A milestone can best be described as:
a. The completion of a group of activities
b. The longest path in the network
c. The earliest time for completing a work package

26 The total float of an activity is equal to its:
a. Early Finish date plus Early Start
b. Early Finish date minus Early Start
c. Late Start date minus Early Start
d. Late Start date plus it Late Finish

a. Milestone charts
b. WBS
d. Network diagrams

437

28 The critical path is the path where activities have:
a. Zero float
b. Maximum float
c. Early Start dates earlier than Late Start dates
d. Lead activities

29 Gantt charts are primarily used to:
a. Show interdependencies between tasks
b. Give an overview of a project tasks against a time scale
c. Show a network of activities
d. Provide guidelines to manage resources

30 In your project you are using weighted average duration estimates for activity durations.
This means you are using:
a. Critical Chain
b. PERT
c. Leads and lags
d. Late start and late finish floats

31 You need to rearrange the resources in your project so that the cumulative resource usage
in the project does not exceed 25 resources /week. What do you need to do?
a. Decrease the float time
b. Reschedule the network
c. Use concurrent engineering
d. Level the resources

32 It is difficult to manage the schedule using bar charts because:
a. They are cumbersome to tabulate
b. They do not show activity dependencies
c. The do not identify the activity start and end dates
d. They are a reporting tool
33 All of the following are true about a mandatory dependency except:
a. Is also known as hard logic
b. Is inherent in the nature of the work
c. Is dependent on another project
d. Work has to be performed in a specific sequence

34 When making the project schedule, the project manager decides to add extra time to the
project’s overall duration to mitigate possible risks. This means PM is not keeping a:
a. Buffer
b. Reserve
c. Contingency
d. Window

438

35 Which statement is not true of the critical path?
a. The critical path is the longest path in the network
b.Shows a negative float when project is ahead of schedule
c. The critical path can vary during the project execution
d. A project can have more than one critical path
36 The most detailed and accurate cost estimate is made using the:
a. Parametric estimate
b. Analogous estimate
c. Bottom‐up estimate
d. Rough Order of Magnitude estimate

37 What is NOT used in Cost Estimating:
a. Unit Rates
b. Lessons learned
c. Expert opinion
d. Project Budget

38 If Cost variance is negative then Cost Performance Index will be :
a. Less than 1
b. Greater than 1
c. Equal to 1
d. Less than Zero

39 Earned Value is used to:
d. Calculate the project’s future revenues

40 A project is running ahead of schedule. In Earned Value reporting this will be reflected
as:

41 At project completion, the project’s Earned Value will be same as the:
a. Budget at Completion
b. Percent complete
c. Actual Cost

439

42 A project is scheduled to be completed in 18 months. At project review it is found that the
CPI is 1.2. This shows the project will be completed in:
a. 15 months
b. 21 months
c. 18 months
d. Not possible to determine

43 The Cost baseline can:
a. Change during the project life cycle
b. Be affected by a scope change
c. Be affected by changes in the schedule
d. All of the above

44 Contingency reserves are planned
a. Against known unknowns
b. Against unknown unknowns
c. Not as a part of budget
d. Against future scope changes

45 During EVM review, a project is found to have the following data:
BCWP=BCWS=ACWP This means that the project’s:

a. Cost performance is as per plan
b. Schedule performance as per plan
c. Both cost and schedule performances are as per plan
d. Insufficient data to draw any conclusion

46 A control chart is used to:
a. Check if process readings are within a specified range
b. Detect the reasons for deviations
c. Prevent a problem to occur
d. A and C

47 A Pareto diagram:
a. Is an S curve based on the cumulative frequency of occurrence
b. Is a histogram depicting the magnitude of frequencies
c. Is a histogram based on the order of frequency of occurrence
d. Shows that 80 percent of the causes produce 20 percent of the problems

48 An indication of excellent quality is:
a. Zero conformance cost incurred
b. Zero quality training cost incurred
c. Lot of field engineers recruited for warranty support
d. Zero non‐conformance cost incurred

440

49 What best describes the Rule of seven?
a Seven consecutive data points are outside the control limits
b. Seven consecutive date points are outside the specification limits
c. Seven consecutive data points on same side of mean should be
investigated
d. Seven consecutive data points within control limits but on same side of the
mean should be investigated

50 Quality requirements to be met in a contract will depend on:
a. Customer requirements
b. Better then customer’s requirements
c. Best technology
d. SWOT analysis

51 The cost of quality is made up of:
c. Cost of assessment, appraisal, failure and prevention

52 Providing required quality in the project can be defined as:
a Conformance to requirements
b Gold plating
c Achieving Six sigma
d Having Zero defects

53 ‘Continuous improvements in small steps’ by implementing the PDCA cycles was
proposed by:
a. Deming
b. Ishikawa
c. Crosby
d. Juran

54 For effective team building, the team members should avoid:
a Common identity
b Shared vision
c Self orientation
d Delegation
55 To manage the project team it is not necessary for the project manager to be a:
a. Problem solver
b. Communicator
c. Technical expert
d. Passionate
56 Which of the following conflict resolution method results in a long lasting solution?
a. Forcing
b. Confrontation
c. Withdrawal
d. Smoothing
441

57 In case of a conflict, who will decide the importance between the project’s cost, schedule
and quality?
a. Project manager
b. Sponsor
d. None of above

58 A Project Manager is most likely to have the strongest influence in an organization that
is:
A. Balanced Matrix
B. Functional
C. Projectized
D. Strong Matrix

59 In a weak matrix organization, functional managers are usually responsible for:
A. Monitoring personnel performance
B. Approval for changes to the project schedule
C. Monitoring their project team member's deliverables
D. Changes that impact their team member's participation

60 As a Project Manager on replacing 2 miles of sewer pipe part of your job is to determine
If there are changes to the scope of the project, the schedule, the budget and the
technical requirements. These responsibilities are part of which process:
A. Executing
B. Controlling
C. Planning
D. Closing

61 You are one of four full‐time project managers in an organization. You all share an
administrative person. There are generally 8‐10 projects per year that involve about 25%
of the organization's employees, however, these employees do not report to you. Your
organization can best be classified as:
A. Functional
B. Strong matrix
C. Projectized
D. Balanced matrix

62 You have been promoted to Manager, Continuous Process Improvement. Your new
position:
A. Is a project because the work will be performed by people
B. Is not a project because Continuous Process Improvement will continue
indefinitely
C. Is a project because it is constrained by limited resources
D. Is a project because improvements must be planned, executed, and
controlled

442

63 Self Actualization is:
a. A Herzberg’s Motivation Factor
b. A Management philosophy
c. Maslow’s second level need
d. Maslow’s highest level need

64 Which one of the following communication methods has more message impact on the
receiver:
a. Verbal
b. Written
c. Non‐verbal
d. Diagram

65 You are the Project Manager having a team of 28 people, besides yourself, distributed in 3
geographic locations. Number of communication channels possible in your project are:

a. 406
b. 378
c. 392
d. 350

66 Contract Closeout involves all of the following except:
a. Relocating the team members
b. Formal acceptance of the work by the buyer
c. Updating the contract file
d. Product verification

67 All the risk in a contract can be attributed to:
a. Buyers
b. Sellers
c. buyer or seller
d. Not possible to know this

68 What is not true of a Fixed Price contract:
a. Is the most commonly used contract
b. Buyer requires to monitor cost incurred by seller
c. Should have clear work specifications
d. Contractor faces more risk than buyer

69 A change log is:
a. A record of all authorized project changes
b. A record of all proposed changes, rejected or authorized
c. A record of the people who are creating issues in the project

443

70 What is true of project closeout?
a. It is the done in the implementation phase
b. Uses the Business case to ensure that all benefits got materialized
d. Check is done to see all work is completed

71 What would best describe the overall aim of project management?
c. Achieve the success factors described in the Business Case

72 Projects often fail due to:
d. All of the above
73 Health and safety standards are initiated in the:
b. Business strategy

74 Configuration management should keep a record of?
a. When a change can occur in the project’s requirements
b. All changes in drawings and documents issued in the project
c. The changes requested

75 Rough Order Magnitude cost estimates are meaningful during the _______ phase of the
project:

a. Conceptual
b. Planning
c. Control
d. Execution

76 Your project work requires that you must wait for 3 days before you can begin the
successor activity. What is this relationship called?

A Lead
B External dependency
C Lag
D Discretionary dependency

444

77 If you are a project team member how could you make use of floats?

A Use the floats to crash the project
B Utilize the floats to optimize use of resources
C Fast track the activities that have floats
D All of the above

78 When can a non‐critical activity become a critical activity?

A Not possible
B If the activity is not completed by it’s Late Finish date
C When the project progress shows the activity has a negative float
D B and C

79 Project trade‐offs vary between:

A Risk, cost and schedule
B Direct cost, indirect cost and resource availability
C Cost, quality and schedule
D Quality, procurement and time

80 At the beginning of a project you are asked for an order of magnitude budget.
What type of budget estimate are you likely to use?
A. Analogous
B. Parametric modeling
C. Bottom‐up
D. Detailed

81 You have inherited a project that is in trouble. The team members are spread out in 5
states, the schedule is behind by 20%, the former project manager alienated the team and
there is no communication plan. The first issue you must work on is building a cohesive
team to get the project back on track. Which of the following is NOT a technique that you
would use in team development:
A. Flying everyone in for a team meeting
B. Provide training for those areas that are suffering the most
C. Establish a reward system that will pay out based on getting the critical path back
within the established time frame
D. Use performance reports to get feedback on individual performance

82 The primary communication skills you will use in working with members of your project
team will be:
A. Problem solving
B. Negotiating
C. Team building
D. Public relations

445

83 A Bar chart is best used to:

A Show the activity dependencies
B Show the completion date of key events
C Review the project’s progress at a summary level
D Assign responsibility to team members

84 A start to start logical relationship is used to show:
A The predecessor activity can start once it’s successor has started
B The successor activity can start once it’s predecessor has started
C The successor activity can finish once it’s predecessor has started
D A lead in the successor activity

85 When developing the WBS at which level will you place the work package?
A The highest level of the WBS
B The middle level of the WBS
C The lowest level of the WBS
D Will depend on the industry

86 You are required to examine the consequences of a scope change. To do this you should
view its impact on the project’s:
A Schedule
B Cost
C Quality
D All of the above

87 When you are contemplating how to recover a delay in the project schedule, the last thing
you should consider is to _______:

A Look at the critical path carefully
B Apply more resources
C Fast track the project
D Adjust the project end date to adjust the time delay

88 Normally, increased complexities in a project will _______ uncertainties:
A Have nothing to do with it
B Reduce
C Increase
D Cannot say anything about it

89 Lessons learned is an important part of project management. These are documented by the
project team in order to:

A Assess each team members competence
B Know who to blame for errors
C Use them to improve future projects
D Review the project’s cost and schedule

446

90 One should have an attitude of ____________ in order to be successful in negotiating
across global cultures:
A Forcing your position
B Distrust
C Mutual trust and cooperation
D Showing your company is the best

91 The primary communication skills you will use in working with your project sponsor
will be:
A. Problem solving
B. Negotiating
C. Team building
D. Public relations

92 Your project plan requires personnel to wear a Radiation Monitor counter at all times
while they are within the protected area surrounding a nuclear reactor. This requirement
arises from your concern for:
A. Quality assurance reporting requirements
B. Personnel safety needs
C. Stakeholder reporting requirements
D. Personnel physiological needs

93 Which of the following is not a consideration in selecting project staff members?
A. Type of organization
B. Personal characteristics
C. Previous experience
D. Personal interests

94 If the project manager does not allow the team members to provide extra items as an add‐
on to please the customer during the execution phase, is she/he following the principles of
good scope management to complete the required work?

A May be yes or no
B No
C Yes
D It depends

95 Configuration management is closely related to:
A Change control
B Project control
C Time control
D Scope control

447

96 Your sponsor has asked you to prepare a report showing the start and end dates of critical
path activities. To do this you would use:
A Gantt charts
B PDM network
C Milestone charts
D Pert networks

97 Which of the following is NOT the responsibility of the project manager?
A Monitoring project progress
B Project Integration
C Budgeting project costs
D Developing the Project charter

98 As a project is being closed out, a common source of conflict arises in:
A Determining the best use of the time of design personnel
B Different interpretations between buyer and contractor as to whether the terms and
conditions have been met
C Determining whether the cost‐plus‐actual fee (CPAF) or cost‐plus‐incentive fee (CPIF)
contract structure is most appropriate
D Identifying the primary causes of monthly variances on the project

99 Your project is an important one for the company and it was a feather in your cap to be
selected as the project manager. Unfortunately, the project is not progressing as well as
planned and it will be reviewed in the next board meeting. Which of the following is not a
common format for performance reporting and should not be used by you for management
reporting?
A Bar charts
B S‐curves
C Histograms
D Precedence diagrams

100 Written change orders are recommended:
A For all size of projects
B For large projects only
C For multilocation projects only
D For those projects where CEO is personally interested

101 Project termination responsibilities include all of the following except:
A. Archive appropriate project documentation
B. Provide project personnel with favorable performance appraisals to ensure their future
cooperation
C. Ensure the fulfillment of product support requirements
D. Oversee the closing of project accounting

448

102 Your original plan was to construct a building with six stories, with each story costing
$150,000. This was to be completed in four months; however, the project has not gone as
planned. Two months into the project, earned value is $400,000. What is the budgeted cost
at completion?
A. 450,000
B. 600,000
C. 800,000
D. 900,000

103 The Project Management Plan establishes the:
A Why, what, how, and when of the project
B What, how, how much and when of the project
C Why, what, how, how much and when of the project
D Why, what, how and how much of the project

104 A project phase is:
A An endeavor of considerable scope encompassing a number of projects
B A sub project
C A sub part of a programme
D Marked by completion of key deliverables

105 The Business case should include:
A Criteria to judge whether the project is a success or failure
B Why the project is required
C The success criteria
D All of the above

106 Fill in the blanks from the following:
Project… ……; Programme… ……; Project Management……..; Operations… …….
A. Routine
B. Temporary
C. Common objective
D. Structured processes
a. B,C,D,A
b. A,B,C,D
c. D,B, C,A
d. B,D,C,A

449

107 Refer to the table below. What is the critical path?

Task Dependency Duration
Start None 0
A Start 3
B A 2
C B 2
D Start 4
E D 1
F Start 5
G F 7
H B,E 3
I C,G,H 4
Finish I 0

A. Start‐A‐B‐C‐I‐Finish
B. Start‐A‐B‐H‐I‐Finish
C. Start‐D‐E‐H‐I‐Finish
D. Start‐F‐G‐I‐Finish

108 Two projects have exactly the same pay back period but project A has a smaller IRR
than project B. You should choose

A project A.
B project B
C there is no difference
D there is not enough information available

109 If a task has been estimated at O = 4 days, P = 9 days, and M = 7days, what is the
standard deviation?
A. 5/6 of a day
B. 6.83 days
C. 1/3 of a day
D. ½ of a day

110 If the optimistic estimate for an activity is 15 days and the pessimistic estimate is 25
days, what is the realistic estimate?
A. 19 days
B. 20 days
C. 21 days
D. Unknown

450

111 A Work Breakdown Structure:
A Is a key tool used in project management
B Forms the basis for making the networks and bar chart
C Each level has a parent‐child relationship
D All of the above

112 You are evaluating four projects. Project A has an NPV of 12,000, Project B has an NPV of
Zero, Project C has an NPV of 15,000 and Project D has a NPV of 9,000 You should select:
A Project A
B Project B
C Project C
D Project D

113 The project is likely to be delayed if:
A There are too many changes
B If proper planning is carried out in the beginning
C Quality assurance is neglected
D A and C

114 “I cannot test the software until I code the software”. This expression describes which of
the following dependencies?
A Discretionary
B Soft
C Mandatory or hard
D Regulated

115 The IRR of a project shows:
A Helps to measure the project’s breakeven point
B The project’s expected profit
C The Payback period in NPV terms
D B and C

Multiple Correct Answers (Each correct Answer carries 1 Marks)
116. In the list given below select the four statements that are correct about Contents of
Project Charter
K. Details of the Board of Directors of the of the organization
L. Business need – why the project is needed
M. Justification of the project and results of feasibility study
N. Detailed budget figures
O. Customer’s requirements & expectations
P. Likely Stakeholder influences
Q. Detailed outline of risks
R. Detailed analysis of stakeholders
S. List of Reports to be prepared by project team
T. Details of personnel required for the project

451

117. Of the statements given below select the three correct statements about Stakeholder
Management
K. Encouraging engagement with stakeholders
L. Ignore conflicting interests
M. Avoid issues that arise
N. Effective Communication is the first key technique of stakeholder management
O. Engagement of stakeholders with project activities and decisions is the second key
P. The negotiator exerts status or position power to gain substantive outcomes for himself
or herself.
Q. During this stage, discussions take place about where and when the work should start,
when to meet again, how the progress will be monitored, and other side issues.
R. This is a good time to review key phrases to be included in the contract because different
words have different meanings for different people.
S. Ignore stakeholders who are negative about the project
T. Team members should not be involved in any stakeholder interactions

118. Of the statements given below select the four correct statements about organizational
structure with Matrix Structure
J. Each project represents a potential profit centre & the PM has the responsibility and
accountability for the success of the project. Every PM in the organization reports directly
to the head of the functional department
K. The authority for the project is shared by both the departmental head and the project
manager. While the PM is responsible and accountable for the project he depends on the
functional manager to support him and provide him resources
L. The PM’s role is more of a project coordinator and he is given minimum authority over
the project
M. A matrix organization is a combination of functional and projectized organizational
structure. It attempts to merge the advantages of both and create an organizational
structure suited for companies
N. In this both horizontal and vertical channels of responsibility exist – functional
responsibility is vertical while PM’s responsibility cuts across many departments
O. The PM is responsible for keeping technical excellence in the projects. The project head
ensures technical base is maintained and required information can be exchanged
between projects
P. The Functional Manager is responsible for keeping technical excellence in the projects.
The Functional Head ensures technical base is maintained and required information can
be exchanged between projects
Q. All departments are subsumed in the project and lose their identity
R. This kind of structure is best suited when an organization does occasional projects

452

119. What all should be included in the Business Case? Select the three right statements.
L. The network schedule of the project
M. The key performance indicators and the success criteria of the project
N. A detailed procurement strategy, penalties and liquidation damages if any
O. The hardware tools that will be used in the project
P. The investment appraisal data and business need for undertaking the project
Q. The WBS for the project is included in the Business Case to ensure scope of the project is
fully understood
R. Only those stakeholders financing the project
S. The financial and nonfinancial advantages and the “do‐nothing “ option
T. Business case provides the cost variance expected in the project
U. Business case provides the schedule variance expected in the project
V. Business case include the mechanism of resolving conflicts amongst the contractors
120. The following statements describe a project. Select the four incorrect statements.
K. It manages change.
L. Quality / Performance are determined at close of project
M. It has identifiable beginning and end point, that is, a project is an entity by itself.
N. All projects are identical
O. It is usually a repetitive task without a definite goal or objective.
P. It is a team work. The co‐ordination and communication within the team and with
environment is essential for accomplishing the project objectives.
Q. It may require separate organization for its management and conduct.
R. It is a permanent activity as they have well defined goals and objectives
S. Predefined goals & objectives – financial/ social /economic
T. Budgets & schedules – prefixed budget and timeframe

121. The following statements describe a programme. Select the three incorrect statements.
I. Projects are always part of a programme
J. The Programme Manager must personally appoint all contractors for the projects
K. A portfolio of projects related to a common objectives e.g. business aim
L. An organizations business strategy required to be implemented through projects
M. Programmes aim at creating more benefit for the organization
N. Aim is to achieve overall benefits for the business not just for a project
O. There is no interdependency between the projects of a programme
P. Resource allocation amongst a portfolio of projects

453

122. The following statements describe project lifecycle. Select the four correct statements.
I. Project Life Cycle is a sequence of phases from project start to project end ‐ a start, a
middle and an end
J. Length of each phase is fixed
K. Each phase associated with major processes and deliverables
L. Each phase is associated with a finish date, irrespective of any deliverables being
achieved
M. Length of each phase will vary with project
N. Terminology used to describe each phase not fixed
O. Start or Concept phase, Intermediate phases & a Closeout phase are always the names of
phases in a project
P. Breaking up the project into phases increases the risk of the project

123. The following statements describe project management plan (PMP). Select the three
incorrect statements.
M. PMP is prepared by the sponsor of the project
N. PMP guides the project's execution
O. Documents assumptions made in planning the project
P. Documents planning decisions & alternatives selected
Q. PMP has no role in facilitating communication amongst different stakeholders
R. Defines key management reviews content, extent and timing
S. Provides baseline for progress measurement and control
T. Provides guidelines to team / management on development phases and estimates
related to cost, schedule, resources etc.
U. Provides reference regarding quality expectations of the projects output i.e. the product
of the project
V. PMP is key document of the project ‐ used to control the project ‐ Forms the baseline of
project
W. Is owned by the Project Manager ‐ Developed by Project Manager with project team
X. PMP need not be shown or discussed with Sponsor / client

454

124. The following statements describe role of project manager (PM). Select the four incorrect
statements.
L. Developing the Project Charter
M. Delivering the project on time, within budget and meeting required specifications
N. Integrating, controlling & coordinating the project
O. Not managing stakeholder expectations
P. Developing and motivating team
Q. Ignoring team conflicts
R. Maintaining a channel between the project team and the senior management
S. Communicating with various stakeholders, team members, senior management through
the project
T. Creating and recruiting people for the PMO of the organization
U. Ensuring that all the project risks are fully identified, assessed, managed and regularly re‐
assessed for any new risks
V. Developing the network schedules for the project

125. The following statements describe what should be included in the Project Scope
Statement. Select the three incorrect statements.
M. Product Scope Description‐Characteristics of the Product, Services or Result that the
Project is undertaken to produce
N. Scope acceptance criteria
O. Project Objectives ‐ Measurable success criteria e.g. Cost, schedule , quality or business
objectives
P. Project Deliverables‐ Product, Services or Results of the project including ancillary results
(Reports and Documentation)
Q. Project Requirement‐Conditions or capabilities that must be satisfied by the Deliverables
as specified in the contract, specification or Stakeholder analyses.
R. Project Constraints‐ Pre‐defined budget , imposed schedule end date
S. Project assumptions
T. Project Boundaries (What is not included in the scope)
U. Initial Project Organization
V. Detailed Risk Analysis
W. Schedule Milestone
X. Final Cost estimate

455

Answer Key to Practice Test
Question Answer Question Answer Question Answer Question Answer
1 c 41 A 81 A 116 BCEF
2 b 42 D 82 C 117 ADE
3 a 43 D 83 C 118 BDEG
4 c 44 A 84 B 119 BEH
5 c 45 C 85 C 120 BDEH
6 B 46 D 86 D 121 ABG
7 D 47 C 87 D 122 ACEF
8 B 48 D 88 C 123 AEL
9 D 49 D 89 C 124 ADFI
10 A 50 A 90 C 125 BJL
11 C 51 B 91 B
12 B 52 A 92 B
13 C 53 A 93 A
14 A 54 C 94 C
15 D 55 A 95 A
16 D 56 B 96 A
17 C 57 B 97 D
18 C 58 C 98 B
19 B 59 D 99 D
20 A 60 B 100 A
21 D 61 D 101 B
22 C 62 B 102 D
23 D 63 D 103 C
24 D 64 C 104 D
25 A 65 A 105 D
26 C 66 A 106 A
27 D 67 C 107 D
28 A 68 B 108 B
29 B 69 B 109 A
30 B 70 D 110 D
31 D 71 C 111 D
32 B 72 D 112 C
33 C 73 A 113 D
34 D 74 B 114 C
35 B 75 A 115 A
36 C 76 C
37 D 77 B
38 A 78 D
39 B 79 C
40 C 80 A

456

ANSWERS TO ASSIGNMENTS
NPV
Q. 1 Two projects – project A and project B are being appraised for investment. The cash
flows for each project are as follows:
Project A in (Rs.) Investment is 40,000
• Cash in or Revenue for 5 years is:
• Expenses or cash out for 5 years is:
Project B in (Rs.) Investment is 80,000
• Cash in or Revenue for first five years is:
40,000; 60,000; 100,000; 120,000 and 140,000.
• Expenses or cash out for first five years is:
34,000; 40,000; 70,000; 80,000 and 120,000.
Discount factors for the project appraisal are:
Year Factor
6 1.0
7 .90
8 .80
9 .70
10 .60
11 .50

Determine which project should you opt for?
A B
Year Factor Inflow Outflow Cash flow PV Inflow Outflow Cashflow PV
0 1 0 40000 ‐40000 ‐40000 0 80000 ‐80000 ‐80000
1 0.9 20000 14000 6000 5400 40000 34000 6000 5400
2 0.8 40000 30000 10000 8000 60000 40000 20000 16000
3 0.7 80000 60000 20000 14000 100000 70000 30000 21000
4 0.6 90000 70000 20000 12000 120000 80000 40000 24000
5 0.5 120000 100000 20000 10000 140000 120000 20000 10000
9400 ‐3600
457

Q. 2 A project is planned in which the capital cost to be incurred is Rs. 100,000, the
interest rate expected is 10% per annum and the anticipated annual return or
revenue expected is Rs. 15000 each year for a period of 8 years.
2.3 Calculate what the Net Present Value (NPV) will be for this project.
2.4 Will this project be viable or not?

Year Factor Cashflow PV

0 1 ‐100000 ‐100000
1 0.909090909 15000 13636.364
2 0.826446281 15000 12396.694
3 0.751314801 15000 11269.722
4 0.683013455 15000 10245.202
5 0.620921323 15000 9313.8198
6 0.56447393 15000 8467.109
7 0.513158118 15000 7697.3718
8 0.46650738 15000 6997.6107
‐19976.107

458

Q 3 The following table shows the initial investment, cash flows and Discount Factor associated
with a particular project option.

Calculate the Payback period and the Net Present Value for this project.

Year Cash Flow (Rs.) Discount Factor
(8%)
0 ‐ 1,40,000 1.000
1 40,000 .926
2 60,000 .857
3 80,000 .794
4 1,00,000 .735
5 1,00,000 .681

Year Cash Flow (Rs.) Cum Cash flow Discount Factor PV
(8%)
0 ‐ 1,40,000 ‐140000 1.000 ‐140000
1 40,000 ‐100000 .926 37040
2 60,000 ‐40000 .857 51420
3 80,000 40000 .794 63520
4 1,00,000 .735 73500
5 1,00,000 .681 68100

2.5 years and Rs.1,53,580

459

IRR
Q1 A project has an Initial investment of Rs. 149,500 and net cash flows of 39,995, 40,000,
40,000, 40,000 and 25,000 over 5 years.
What is the IRR of the project?
Year Discount Rate with Discount Factors
8% 10% 15% 16%
1 .926 .909 .870 .862
2 .857 .826 .756 .743
3 .794 .751 .658 .641
4 .735 .683 .572 552
5 .681 .621 .497 .478
Ans.
Year Cash Flow Discount Factor @ Present Value

8%
0 (149,500) 1.0 (149,500)
1 39,995 .926 37,035
2 40,000 .857 34,280
3 40,000 .794 31,760
4 40,000 .735 29,400
5 25,000 .681 17,025
Net Present Value 0
IRR for the project is 8%
460

Network
Q. 1 Shown below are activities with their durations, precedent activities and resources per day.
Activity Duration (Days) Precedent Resources/day
Activity/Activities

A 4 ‐ 4
B 2 A 3
C 3 A 2

D 8 C 5
E 3 B 2
F 5 E 3

G 5 C 3
H 1 D, F, G 1
Q. 1.2 Determine the Critical Path
Q. 1.3 Determine the project duration
461

Free Float 1
4 2 6 6 3 9 9 5 14
B E F
5 1 7 7 1 10 10 1 15

Free Float 3

0 4 4 7 5 12 15 1 16
A G H
0 0 4 10 3 15 15 0 16
4 3 7 7 8 15
C D
4 0 7 7 0 15
Q. 1.2 Determine the Critical Path ‐ ACDH
Q. 1.3 Determine the project duration – 16 days
Activity Float/Total Float/Path Float Free Float
A 0 0
B 1 0
C 0 0
D 0 0
E 1 0
F 1 1
G 3 3
H 0 0

462

463

Q.2 Draw the Network using PDM
Duration
Activities in weeks Dependencies Resources/week
A 4 ‐ 3
B 6 A 2
C 4 A 1
D 8 A 5
E 9 B&D 4
F 12 E 9
G 14 C&D 3
H 3 G 5
J 7 F&H 3

Q. 2.1 Find out the Critical Path
Q. 2.4 Draw a Bar chart

464

Free Float 2
4 6 10 12 9 21 21 12 33
B E F
6 2 12 12 0 21 21 0 33

0 4 4 33 7 40
4 8 12
A J
D
0 0 4 33 0 40
4 0 12
Free Float 4 Free Float 4
4 4 8 12 14 26 26 3 29
C G H
12 8 16 16 4 30 30 4 33
Q. 2.1 Find out the Critical Path ‐ ADEFJ
Q. 2.4 Draw a Bar chart (Later)
A 0 0
B 2 2
C 8 4
D 0 0
E 0 0
F 0 0
G 4 0
H 4 4
J 0 0

465

Q 3


A 2 ‐ 2
B 4 ‐ 3
C 8 A, B 5
D 9 C with 5 days lead 5
E 5 C 4
F 3 D, E 6
G 3 D 3
H 1 F, G 2


466

Free Float 1
16 3 19
7 9 16
G

Free Float 2 D 20 1 21
17 1 20
8 1 17 H
0 2 2
17 3 20 20 0 21
A
F
2 2 4
4 8 12 12 5 17
17 0 20
C E

4 0 12 12 0 17

0 4 4
B
0 0 4
Q. 3.1 Draw the Network using PDM and determine the Critical Path. BCEFH

A 2 2
B 0 0
C 0 0
D 1 0
E 0 0
F 0 0
G 1 1
H 0 0

467

Q 4


A 2 ‐ 2

B 4 ‐ 3
C 8 A, B 5
D 9 C with 5 days lag 5

E 5 C 4
F 3 D, E 6
G 3 D 3
H 1 F, G 2

468

26 3 29
17 9 26
G

Free Float 2 D 29 1 30
26 0 29
17 0 26 H
0 2 2
26 3 29 29 0 30
A
Free Float 9 F
2 2 4
4 8 12 12 5 17
26 0 29
C E

4 0 12 21 9 26

0 4 4
B
0 0 4
Q. 3.1 Draw the Network using PDM and determine the Critical Path. BCDFH and BCDGH

A 2 2
B 0 0
C 0 0
D 0 0
E 9 9
F 0 0
G 0 0
H 0 0

469

Q 5

Task Duration
Name
‐ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
1
A 3 days
B 4 days
C 5 days
D 4 days
E 6 days
F 4 days
G 3 days
H 3 days
J 4 days
K 5 days
5.1 Develop a network based on the above Bar Chart and calculate the Total floats and the Free
floats.
470

471

Standard deviation

Q 1 There are three activities A, B and C in a network having the values:
Optimistic Pessimis PERT SD (P‐ Variance

Activity Most Likely (ML)
(O) tic (P) (P+O+4ML)/6 O)/6 SD^2
A 10 20 30 20 3.33 11.09
B 15 20 30 20.83 2.5 6.25
C 12 20 29 20.16 2.83 8.01
60.99 say 61 25.35
square root = 5.03
say 5
At 68% confidence level – 61+/‐ 5 or between 56 to 66 days
Q1.1 Find the Pert duration and standard deviation for A, B and C
Q1.2 Find the standard deviation for the path A, B and C
Q1.3 What is the time range for the completing the activities and the project at 68% confidence
level.

Q 2. There are three activities A, B and C in a network of a project, having the durations in days:

Activity Optimistic (O) Most Likely (ML) Pessimistic (P)
A 14 20 32 21 3 9
B 14 20 26 20 2 4
C 28 40 46 39 3 9
80 22
The time range for the completing the activities and the project at 95% confidence level is.
SD=4.7 at 95% assurance it is PERT+/=2SD => 80+/‐2x4.7

70.6 days to 89.4 days

472

Crashing

required in weeks
weeks
A None 4 2 10,000 14,000
B A 6 5 30,000 42,500
C A 2 1 8,000 9,500
D B 2 1 12,000 18,000
E B,C 7 5 40,000 52,000
F D,E 8 3 20,000 29,000
Q1) If you have to crash the project by 2 weeks, which activity will you choose ?
Q2) What will be the cost for crashing the project by 2 Weeks?

1 The activities of a small project are given below with the activity duration and activity
interrelationships.

You have to crash the project by 2 weeks, which activity/ies will you choose

required in weeks
weeks
A None 4 2 10,000 14,000 2000pw
B A 6 5 30,000 42,500 12500pw
C A 2 1 8,000 9,500
D B 2 1 12,000 18,000
E B,C 7 5 40,000 52,000 6000pw
F D,E 8 3 20,000 29,000 1800pw

Activity F by two weeks
Additional Cost Rs. 3600
473

EV
Q. 1 A project has 4 activities – A, B, C and D. At review point (originally planned completion
point) this was the position.
Activity Budgeted % Complete Actual
Man‐hours of activity Man‐hours
A 320 90 300
B 400 50 280
C 200 60 100
D 600 75 450
‐‐‐‐‐‐‐‐‐‐‐‐ ‐‐‐‐‐‐‐‐
1520 1130

1.1 What is the earned value for each activity and the project at review point?
1.2 What is the overall % complete of the project?
1.3 What is the current CPI?
1.4 What are the man‐hours the project is likely to take to be completed based on the current
cost efficiency.
Activity Budgeted % EV Actual SPI CPI

MH - PV Complete MH - AC
A 320 90 288 300 EV/PV EV/AC
B 400 50 200 280 1058/1520 1058/1130
C 200 60 120 100 =.696 = .936
D 600 75 450 450 69.6% of EAC=BAC/CPI
1520 1058 1130 project is 1520/.936
BACorPV EV AC complete =1624

474

1 14000 4000 5000
2 28000 12000 18000
3 44000 20000 30000
4 60000 28000 42000



5.

475

1 14000 4000 5000
2 28000 12000 18000
3 44000 20000 30000
4 60000 28000 42000
SV=EV‐PV …. 28000‐60000=‐32000

CV=EV‐AC …..28000‐42000=‐14000


CPI=EV/AC ……28000/42000 =2/3
EAC=BAC/CPI ….. 200000/2/3=300000
NEW TIME = OT/SPI SPI=EV/PV … 28000/60000 = .47
NT=12/.47=25.7 MONTHS

5.

NEW TIME = CURRENT MONTH + {BACKLOG+REMAINING MONTHS}/SPI assumed

= 4+{BL+8}/1 = 4+{2+8}/1=14MONTHS

476

Q3

Following are details of a project that is planned to be completed in 12 months at a total cost of
Rs.10000. The project is being reviewed at the end of month 4.
Month PV in Rs AC in Rs EV
1 1000 1000 500
2 2000 2500 1500
3 3000 4000 2010
4 4000 5500 3000

SV=EV‐PV……3000‐4000=‐1000
1 Calculate the schedule variance at month 4.
2 Calculate the cost variance at month 4. CV=EV‐AC……3000‐5500=‐2500

4 What is the cost efficiency of the project? CPI=EV/AC……3000/5500=.545

SPI=EV/PV……3000/4000=.75 OVER BUDGET &
12 What is the status of the project?
BEHIND SCHEDULE

13 Forecast the time when project can be expected to be completed based on the current
performance. NEW TIME=ORIGINAL TIME/SPI……12/.75=16 MONTHS

14 Forecast the expected cost of the project based on current performance.
EAC=BAC/CPI……10000/.545=18349
15 Forecast expected project cost if efficiency becomes 50% from 5th month.
EAC=AC+(BAC‐EV)/CPIassumed……5500+(10000‐3000)/.5=19500
16 Forecast expected cost of project if the efficiency improves to 100% from the 5th month.
EAC=AC+(BAC‐EV)/CPIassumed……5500+(10000‐3000)/1 =12500
9 Forecast the time when the project can be expected to be completed assuming 100%
efficiency from month 5 onwards.
NEW TIME=CM+(BL+RM)/SPIassumed……4+(1+8)/1=13 MONTHS

477

Contracts
Contractor Fee = Target Fee + Share (Target Cost
• Target Fee 100000 – Actual Cost)
• Target Price 1100000 = 100000+.20(1000000‐900000)
• Share Ratio 80:20 Buyer:Seller =100000+20000 = 120000
• Price Ceiling 1250000 (Max Payout) Final Price = Contractor Fee + Actual Cost
Calculate Contractor Fee & Final Price if = 120000+900000 = 1020000
• Target Cost 250000 Contractor Fee = Target Fee + Share (Target Cost
– Actual Cost)
= 25000+.25(250000‐290000)
=25000+(‐10000) = 15000 but Price Ceiling =
• Share Ratio 75:25 Buyer:Seller 295000 => Contractor Fee = 5000
Final Price = Contractor Fee + Actual Cost
= 5000+290000 = 295000
Contractor Fee = Target Fee + Share (Target Cost
3. – Actual Cost)
We are signing a CPIF Contract with the following terms
= 35000+.20(310000‐300000)
=35000+(2000) = 37000
= 37000+300000 = 337000
• Share Ratio 80:20 Buyer:Seller = 35000+.20(310000‐350000)
• Minimum Fee 30000 =35000+(‐8000) = 27000 But Minimum Fee is
30000 => Contractor Fee = 30000
• Option 1 Actual Cost = 300000 = 30000+350000 = 380000
478

• Target Cost 500000 Contrator Fee = Target Fee + 20% (Target Cost – Actual Cost)
• Target Fee 50000  50000 + 20% (500000 – 450000) = 60000
• Target Price 550000 Final Price = Actual Cost + Contractor Fee
 4500000 + 60000 = 510000
Contrator Fee = Target Fee + 25% (Target Cost – Actual Cost)
 15000 + 25% (150000 – 175000) = 15000 – 6250 = 8750
Final Price = Actual Cost + Contractor Fee
 175000 + 8750 = 183750
Option 1
Contrator Fee = Target Fee + 20% (Target Cost – Actual Cost)
 25000 + 20% (250000 – 225000) = 25000+5000 = 30000
• Share Ratio 80:20 Buyer:Seller  225000 + 30000 = 255000
Option 2
• Option 1 Actual Cost = 225000 Contrator Fee = Target Fee + 20% (Target Cost – Actual Cost)
• Option 2 Actual Cost = 285000  25000 + 20% (250000 – 285000) = 25000‐7000 = 18000
 But Minimum Fee is 20000 so Fee paid is 20000

 285000 + 20000 = 305000
479

Risk

4 The probability and impact grid shown below depicts the relative positions of different risks
to the project following a risk assessment. The risk identification letters are entered in the grid.

Select the top 5 risks in the order of their priority.

Very High (.9) A B C D

High (.75) E
Probability

Medium (.5) F G

Low (.35) H I

Very low (.2) J K L


.10 .25 .4 .6 .9

Impact

D, E, C, G, B

480

EMV 1
The Company has the choice to outsource the cafeteria or run it by itself (Time frame one year)
Outsourcing will cost Rs. 30,000/‐ for the bid process
In a good year the contractor will share Rs. 250000/‐ with the Company
In a bad year the contractor will share Rs. 150000/‐ with the Company
Running it by the Company will cost Rs. 200,000/‐ for expenses
In a good year the cafeteria will make a profit of Rs. 450000/‐ for the Company
In a bad year the cafeteria will make a profit of Rs. 350000/‐ for the Company
The probability that next year will be a good year is 80%
Should the cafeteria be outsourced?

481

EMV 2
The Company has the choice to use technology 1 or 2
What is the EMV for the company?
482

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Workshop

1115-1130 Tea Break

1130-1315 Governance, Structure and Process

1315-1400 Lunch Break

1515-1530 Tea Break

1530-1745 Creation of project

0930-1115 Revision, Home Work Discussion

1115-1130 Tea Break

1400-1515 Time Management

1515-1530 Tea Break

0930-1115 Revision, Home Work Discussion

1115-1130 Tea Break

1130-1315 Quality Management

1400-1515 Procurement & Partnerships

1515-1530 Tea Break

1530-1745 Risk & Opportunity

0930-1115 Revision, Home Work Discussion

1115-1130 Tea Break

1130-1315 Compliance, standards and regulations

1400-1515 Self - reflection and Self – management

1530-1745 Relations and engagements

International Project Management Association (IPMA) is a professional body founded in

• For the project personnel: To obtain

IPMA 4 Level Certification (4LC)

Be prepared for the EXPECTATIONS OF AN INTERNATIONAL CERTIFICATION

Home work and Preparation for the test

Level C – Paper 1(2 hrs) 100 Marks

Paper 2 (2 hrs) 125 Marks – Only Mathematical Questions

PASS MARKS = 60% INDIVIDUALLY IN EACH PAPER – NO

IPMA Level D Examination

Paper 2: (Duration ‐ 2 hours) This paper also has 2 Parts – Part A and Part B (Max Marks 150)

What is project management?

• It is the management of projects.

Since organizations can be viewed as systems,

Mary Parker Follett (1868–1933), defined

• An activity that changes status-quo

•Projects manage change

What do you think has

Routine, repetitive, PROJECT

maintaining status quo

•Programmes – Achieve Strategic Goal -

of projects that are related to a common objective

•Portfolio – A set of projects and /or programmes,

Investment < Returns

Investment < Returns

Investment < Returns

Investment < Returns

Governance, structure and process

One or more One or more Several Organizational

Apply project management principles and guidelines

Project Management Office Project Office

Temporary Ongoing/ Permanent

Orientation is for Present

Project Management Operations Management

Create new products/services Maintain existing products/services

Aim is to achieve the objectives of the Objective of operation is to sustain the

Guidelines for Programmes

Programme Management Office Programme Office

Pgm databank (including lessons