Machine Elememts

Project Management Framework: Definition of Project
A project is a
• Temporary endeavor with a specific beginning and end (i.e. has limited life)
• Creates a unique product, service or result (i.e. each project by definition is unique)
Most studies have shown that only 33% of the projects are successful (e.g. standish
group). Project management is a relatively new area of discipline and has great future
potential as work professionalization increases
• Develop a website to advertize our product

• Provide training to improve the efficiency of our sales force
• Help new customers to use our product
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P5 Overview
A specific work with a

Project
beginning and an end
Program A set of related projects
Combination of projects
Portfolio
related and unrelated both
Process Eternal activity (In theory)
A combination of projects and
Product
processes
Projects are managed while processes are controlled/Improved

Role of PMO (Project Management Office)
A PMO in general should have one of the following roles

• Provide policies, methodologies and templates to manage projects
• Provide support and guidance to others in the organization on how to manage
projects, train others in PM or PM software and assist with specific PM tools
• Provide project managers for different projects and take responsibility for the
projects
PMO is not a person but an organizational entity

Management by Objectives: Older theory of project management
The philosophy believes in three steps

• Establish unambiguous and realistic objectives
• Periodically evaluate if objectives are being met
• Implement corrective action
It is important to note that MBO works only if management supports it

Project Constraints (SIX Triple constraint)
Constraints are
• Time
• Cost
• Risk
• Scope
• Quality
• Resources
There could be other specific factors (Customer satisfaction etc)

Constraints help evaluate competing demands
Management directly or indirectly sets the priority of each constraint

PM uses this prioritization to plan the project and evaluate impact of changes
PM is responsible for analyzing the and changes requested to the project and
identifying its impact on all constraints through change control

Stakeholders
Stakeholder
• Stakeholders are people or organizations whose interests may be positively or
negatively impacted by the project
• These could be functional managers, organization itself, portfolio managers,

operations managers, buyers, sellers etc
A chemicals manufacturing company works in the vicinity of Bachupally, Hyderabad. Are

the following stakeholders or not?
• Government of Andhra Pradesh
• Municipality of Bachupally
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Management Institute),
www.nucleusIMS.com
Organizational Structure
Type of Organization Comments

Grouping by specialty (marketing,
Functional
manufacturing, accounting, HR etc)
Entire company is organized by projects
Projectized
(e.g. Dam construction, TCS, Infosys etc)
Combination of Functional and
Matrix
Projectized
In a strong matrix, power rests with the project manager while in a weak
matrix power rests with the functional manager.
In a balanced matrix, both are equally powerful and project manager works
part time.
Project manager’s role in a weak matrix could be
Expediter: Acting as a staff assistant and communications coordinator. He cannot
personally make or enforce decisions
Coordinator: Similar to expeditor, except he has some power to make decisions and
reports to higher level manager
A “tight matrix” refers to locating the entire project team in the same room “ War
location” Copyright: NucleusIMS (An ISB Management Institute), www.nucleusIMS.com
More on Org Structure (Functional, Projectized and Matrix)
Advantages Disadvantages
People place more importance to functions
Easier management of specialists
and projects suffer
Clearly defined career paths No career path in project management
Only one supervisor PM has no authority
Efficient projects Lack of professionalization in disciplines
Loyalty to projects No “Home”
Effective communication Less efficient use of resources
Visible project objective Extra project administration
Better PM control on resources More than one boss
Better support from functions More difficult resource allocation

Life cycles in PMI world
There are three different life cycles

Project management life cycle: The project management life cycle is made up of the 42
unique processes grouped by 5 process groups and describes project management
activities. These are not so much sequential in application but, integrative, iterative and
simultaneous throughout each of the project lifecycle phases as required. This is usually
common across industries.
Project life cycle: The Project lifecycle is a grouping of a number of sequential phases
which make up the project from the beginning to end. They are usually industry specific,
or can be based on company methodology. Project life cycle is also called as the
department’s procedure to run the projects
Product life cycle: The product lifecycle is also industry specific and sequential. Also there
can be many different project lifecycles within a product lifecycle. Conception of product
to withdrawal. This does not change as much with industry as project life cycle does.
An example: Product life cycle of a computer.

1) Project life cycle-1 (or project-1): Manufacturing the computers.
2) Project life cycle-2 (or project-2): Deploy 15,000 computers in a bank.
3) Project life cycle-3 (or project-3): Hardware and software upgrades to the computers.
4) Project life cycle-4 (or project-4): Replacement of the computers.
Life cycles in PMI world
Phase: Phase: Phase:

Development manufacturing Marketing

Marketing Development manufacturing

Development Marketing manufacturing

Project Management Process
I P
Initiation Planning
Business changes
C
Closing
M&C E
Monitor &
Executing
Control
Large projects have several phases and each phase has all the above five processes

Overview
Knowledge Areas (9)

Process Groups (5)
Integration Management
Initiation Scope Management
Time Management
Planning
Cost Management
Execution Quality Management
Monitoring and HR Management
Controlling Communication Management
Closing Risk Management
Procurement Management
42 Total processes across all the process groups and knowledge areas

Project Management Processes: Introduction
Project life cycle describes what is needed to complete the work while the project
management process describes what is needed to manage the project
Project management process includes (Deming cycle in parenthesis)

• Initiation (Start)
• Planning (Plan)
• Execution (Do)
• Monitoring and Control (Check and Act)
• Closing (End)

Introduction to PM activities
Monitoring and
Initiating Planning Executing Closing
Control
Select PM Decide how to plan Execute PM plan Action to control project Confirm work done to specs
Study Ent Env Factors Finalize requirements Finish product scope Measure perf baselines Complete contract closure
Identify Org process assets Scope statement Recommend corr/prev actions Measure as per plan Get formal approval
Divide into phases Identify procurement needs Implement corr/prev actions Find variances and if important Final performance reporting
Define Business case Select team members Common understanding Influence factors for change Index and archive
Document business need WBS/WBS dictionary Implement work authorization system Request changes Update lessons learned
Define project objectives Activity List Cts improvement Do integrated change control Hand off final product
Develop project charter Network Diagram Follow process Recommend corr/prev actions Release resources
Stakeholders Estimate resources Quality assurance Approve corr/prev actions
Stakeholder Management Cost and Time Quality audits Inform stakeholders
Critical Path Final Team Manage configuration
Schedule Manage People Create forecasts
Budget Progress meetings Get interim acceptance
Quality standards Team building Perform quality control
Process improvement plan Rewards and recognition Report on performance
Roles and responsibilities Use issue log Risk audits
Communications requirement Manage conflict resolution Manage Reserves
Risk analysis Send and receive Info Administer contracts
Iterations Hold meetings
Prepare procurement docs Select sellers
Finalize “how to execute plan”
Develop final PM plan and baselines
Obtain formal approval

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kickoff meeting
Roles and responsibilities
Roles and responsibilities include

• Who is going to do what work activity
• Who will provide reports
• Who will attend meetings
• Who will help with risk identification and analysis
• Who will work with quality department
• Who will document the lessons learned
Resources can be released anytime during the project but only after their work is
approved and other closure activities pertaining to their work are completed. They
should also document their lessons learned.

Quick overview of the Five process groups
• Initiation
• Planning
• Execution
• Monitoring and controlling
• Closing

Initiating Process Group
The initiating process group formally starts a new project/phase by officially

authorizing the project and project manager with the information necessary to begin
the project.
There is a formal project selection process or evolved selection criteria.
Once a project is selected, it is chartered and therefore authorized
Progressive Elaboration
PM plan is finalized in planning but items like detailed estimate, project scope and
product scope can be clarified over time during execution and Monitoring &
controlling phase
Project Manager
He is assigned early during a project and is hence involved in project initiation
Most high level planning is done during the Initiation process

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Planning process group
Planning gives one an ability to repeat the same project. Since projects are unique
this is an important part of project management.
It involves walking through the project and getting organized before it is actually done
If it cannot be planned, it cannot be done
Time spent on planning must be appropriate to the project needs
Everyone needs to be involved during planning process

Executing Process Group
The purpose of executing process is to complete work defined in the project

management plan and to meet the objectives set out in the charter
Focus on managing people, following processes and managing information flow
Meetings are most important part of executing. Number of meetings can be reduced
by better planning.
The meetings are too important to discuss status of a project. These must be used to
review risks and upcoming contingency plans.

Monitoring and controlling process group
Measuring the performance of project to PM plan and approving change requests.
Recommended corrective/preventive actions and defect repair
This group runs in parallel to Executing group (and NOT after its completion).
We choose to categorize some activities to be belonging to this group- does not mean
they happen after execution.

Closing process group
Project is not completed even if all the activities are completed. It gets completed in
the closing process group.
Completion of product scope is not completion of project. Closing involves

administrative closure, documentation of lessons learned, formal release of resources
Celebration and final performance reporting are important elements of closing a

project.

Integration management process Group it belongs to

Develop project Charter Initiating
Develop project management plan Planning
Direct and manage project execution Execution
Monitor and control project work Monitoring and Controlling
Perform integrated change control Monitoring and Controlling

Close project or phase Closing

The main role of a project manager is to perform integration management
Integration management is the act of putting all the pieces of the project into a single
unit
Team members must focus on completing the work packages and sponsor must
protect the project from undue influences. PM is responsible for the integration
Integration involves balancing all the processes in knowledge areas of scope, time,
cost, quality, HR, communications, risk and procurement management with each
other

Project Charter
Project Title
It is a statement of
Description
the scope, objectives
Project Manager and authority level
and participants in a
project. It provides a
Business Case
preliminary
Resources assigned
delineation of roles
Stakeholders
and responsibilities,
Stakeholder requirements known
outlines the project
objectives, identifies
Product description/deliverables
the main
stakeholders, and
Project objectives
defines the authority
Approval requirements
of the project
High level risks
manager.
Project sponsor

Example project Charter
Project Name
Project Sponsor
Project Manager
Primary Stakeholder(s)
Project Description (Statement of work)
Business Case/Statement of Need
Customers Customer Needs/Requirements
Project Definition
Project Goals
Project Scope
Project Deliverables
Project constraints/Risks
Implementation Plan/Milestones
Communcations Plan
Change Management/Issue Management
Project Team Roles and Responsibilities

Team Members Roles Responsibilities

Project Selection
Benefit Measurement (Comparative)

• Murder board
• Peer review
• Scoring
• Economic models
Constrained optimization
• Linear programming
• Integer programming
• Dynamic programming
• Multi-objective programming
Economic models
• Present Value (PV)
• Net present value (NPV)
• Internal rate of return (IRR)
• Payback period
• Benefit-cost ratio

PV (Present value) and NPV (Net present value)
PV = FV/ (1+r)n, FV stands for Future Value
If rate is 10% then 100/- next year is worth only 91/- today
NPV is the PV value of all future profits. Higher NPV is better
Exercise-1: If project A gets 100/- in year 1 and 200/- in year 2. What is its PV. Assume
the interest cost is 10%.
Exercise-2: For project B, you have to spend 20/- at the end of one year and 40/- at
the end of year 2. The revenue at the end of year 1 is 100/- and revenue at end of
year 2 is 200/-. What is the NPV? (r = 10%)
Exercise-1: r = 0.1 (10%) Exercise-2: r = 0.1 (10%)

Year1- Rev = 100 => PV = 100/(1+0.1) = 91 Year1- Benefit = 100-20 = 80
Year2-Rev= 200=> PV = 200/(1+0.1)2 = 165 => NPV = 80/(1+0.1) = 73
PV of project A = 91+165 = 256 Year2- Benefit = 200-40 = 160
=> NPV = 160/(1+0.1)2 = 132
NPV of project B = 73+132 = 205
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IRR (Internal rate of return)
The equivalent interest rate of the future cash flows. Higher IRR is better (exceptions)
Exercise-1: Project A requires you spend 100/- today but will result in a total money
of 120/- at the end of one year. What is IRR for project A?
Exercise-2: For project B, you have to spend 120/- at the end of one year and 40/- at
the end of year 2. The revenue at end of year 2 is 200/-. What is the IRR?
Exercise-1: Exercise-2:
100*(1+r) = 120 120*(1+r)+40 = 200
=> R = 0.2 = 20% ⇒1+r = 160/120 = 1.33
⇒r = 33%

Payback and Benefit cost ratio
Number of time periods it takes for profit to reach positive
Benefit cost ratio present value of total benefits with present value of total costs
BCR = Benefits/Costs
Exercise-1: Project A requires you spend 300 and will yield 100/- each year starting at
the end of year-1. What is the payback period
Exercise-2: For project B, you have to spend 100/- now and 100/- at the end of one
year. You will receive 50 at the end of one year and 200 at the end of second year.
What is BCR? r = 10%
Cost = 300. PV of benefits = (50/1.1)+(200/1.12) = 210
Benefit for n years = 100*n PV of costs = 100+(100/1.1) = 191
300 = 100*n => n = 3 BCR = 210/191 = 1.1
(BCR > 1 is good project)
Economic value added
Additional value generated after covering for the financing cost (Like interest cost etc)
Exercise-1: Project A requires you to spend 100/- today. It will generate 130/- at the
end of one year. You have an option to invest in a partner company which will give
you 20% returns. What is the economic value of undertaking project A?
Exercise-1:
Revenue generated = 130
Cash to invest = 100
FV @ 20% = 100 * 1.2 = 120
EV of project A = 130-120 = 10

Opportunity cost and Sunk cost
Opportunity cost
Opportunity given up by choosing one project over another
Sunk cost
Money already expended
Exercise-1: Project A requires you to spend 100/- today and will complete after two
years with profit of 50. Project B requires you to spend 50/- and will complete after
year one with a profit of 50. What is the opportunity cost of project A.
Exercise-2: You have a project to replace all the CRT monitors in your office with LCD
monitors. There are 100 monitors and you have already replaced 50 of them, each at
a cost of 4,000/-. A new technology based monitor (OLED) is available in the market.
This monitor costs only 2,000/- and has better quality than LCD. What should you
pursue? LCD or OLED? (For reasons of compatibility there must be only one kind of
monitors in office)
You will project B with profit of 50 Total cost of LCD = 4000*100 = 4Lakh
=> Opportunity cost of A = 50 Money to spend now = 4000*50 = 2Lakh
Money with OLED = 2000*100=2Lakh
OLED
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Depreciation
Assets lose value over time which is called depreciation

• Straight line depreciation
• Accelerated depreciation
• Double declining balance (Double the rate of depreciation)
• Sum of the years digits
Exercise-1: Project A requires you to buy an equipment with 1000/- which is useful
for 10 years. What is the straight line depreciation in first year.
Exercise-2: Project A requires you to buy an equipment with 1000/- which is useful
for 5 years. What is the sum of years depreciation for first year.
Dep = 1000/10 Digits are 5, 4, 3, 2, 1
= 100/- Sum of digits = 5+4+3+2+1 = 15
First year depreciation = (5/15)*1000
Second year depreciation = (4/15)*1000

Depreciation (Continued)
Exercise-3: You are working for Dr Reddy’s lab and have to buy a large biological
reactor for making insulin injections. The same identical reactor is for sale both in
China and Germany. The cost of reactor from China is 96 crores while from Germany
it is 100 crores. Indian government requires you do straight line depreciation with
china imported equipment but allows double declining depreciation with Germany.
Where would you buy. Assume useful life of 3 years and interest rate of 10%.
China case: Germany case:

1st year depreciation: 32 crores 1st year depreciation: 66 crores
2nd year depreciation: 32 crores 2nd year depreciation: 34 crores
3rd year depreciation: 32 crores 3rd year depreciation: 0 crores
Tax saving: Tax saving:

Tax benefit from
1st year case: 10/1.1 1st year case: 22/1.1
Germany is more than
2nd year case: 10/1.1^2 2nd year case: 11/1.1^2
cost difference and hence
3rd year case: 10/1.1^ 3rd year case: 0/1.1^
is a good option.
Total benefit = 25 crores Total benefit = 30 crores
Statement of work
Created by the
sponsor/customer and
describes the needs, product
scope and how project fits
their strategic needs

Enterprise environmental factors
Existing systems and company “culture”. A few examples
• Organizational culture & structure, Infrastructure,

• Government rules, guidelines, regulations or industry standards,
• Marketplace conditions,
• Stakeholder risk tolerances,
• Project management information systems(PMIS),
• Existing human resources factors like skills, knowledge, disciplines,
• Personnel administration like hiring, performance review guidelines, training,
• Published commercial information or databases for estimations, risk data
• Company work authorization system

Organizational process assets
Software, documents, historical information, guidelines, lessons learned etc

Management Plans
Strategy for managing the project and the processes in each knowledge area. How to
plan the project based on the needs and how to manager and control the project
Creating management plans is an integral part of PM’s job.

Project management plan
PM Plan is an integral function- integrating management plans of all knowledge areas

and includes baseline for the project
The baseline includes scope baseline, schedule baseline and cost baseline
Baselines once fixed should be difficult to change and changes must be asked for in
the monitoring & controlling process group
Deviations from baselines are mostly (almost always) due to inadequate risk
identification

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Requirements and change management plan
Requirements management plan describes how requirements will be identified,

managed and controlled
Controlling a project to the baselines and the rest of the project management plan is
so important that the PM needs to think twice in advance about where there might
be changes and what to do to limit the negative effects of changes
Changes are much more costly than if work was included from the beginning

Change control system and configuration management plan
Change control system is part of organization assets and includes standard forms,
reports, processes, procedures and software to track and control changes
Configuration management plan helps manage the version of scope, schedule and
other components of the project management plan

Configuration management system and process improvement plan
Configuration management system contains organization’s standard configuration

management tools, processes and procedures. It may include the change control
system and is part of the PMIS
As part of project planning the PM identifies existing processes to use on the system
and may also create his own. These efforts improve efficiency of work completion by
team members.

Project documents and project management plan approval
Project documents are the documents used to manage a project and are not part of
project management plan. e.g. SOW, Charter, contracts etc.
Project management plan is a formal document used to manage the execution of the
project and must receive formal approval by the management.
Before you can complete the “develop project management plan” process and
project execution starts a kickoff meeting should be held.

Monitor and control project work
It is a control function (process) done from initiation to closing of the project. This
results in change requests and updates to PM plan and project documents.
This is different from the Monitoring and controlling process group.
Monitoring and controlling project involves measuring against the project

management plan

Work authorization system
It helps PM to authorize start of work packages and is part of enterprise

environmental factors.
It makes sure work is properly sequenced and starts only when authorized.
Remember, the focus is on activity sequencing and not people sequencing.

Sequencing of people is only a consequence and not primary goal.

Corrective Action
Any action to bring expected future project performance in line with the project
management plan. It is not about rectifying something which went wrong.
This requires the existence of a performance measurement baseline to compare with.

Integrated change control
During monitoring and controlling processes, changes may be requested that affect
any part of the project. These can be accepted or rejected in the integrated change
control process. This looks at the impact of change on all knowledge areas like quality,
risk, time, cost, HR etc
To evaluate the impact of a change, it is necessary to have

• A realistic PM plan to measure against
• A complete product scope and project scope
Changes are usually controlled by the change control board which comprises of PM,
customers, experts, sponsors etc

Procedure to make a change
• Evaluate the impact

• Create options
• Get the change request approved internally
• Get customer buy-in

Scope Management
Scope management process Group it belongs to
Collect requirements Planning

Define scope Planning
Create WBS Planning
Verify Scope Monitoring and Controlling
Control Scope Monitoring and Controlling

Scope Management
• Scope management is the process of defining what work is required and making sure
all of that work and ONLY that work is done
• You must plan in advance how you will determine the scope, manage it and control it
• Scope must be clear and formally approved before work starts
• Requirements are gathered from all stakeholders and not just the person who
assigned the project
• WBS must be used as this can help find additional scope
• Gold plating is not allowed
• All scope changes must be through integrated change control

Product Scope
• It relates to the requirements of the product of the project
• Answers “What end result is wanted”
Scope management involves both product scope and project scope
Scope management plan can be formulated in stages or iterated during project

planning

Scope management process
• Determine requirements making sure all requirements support the business need of
the project
• Sort through and balance the needs of stakeholders to determine product scope and
project scope
• Create WBS to break up the scope to smaller and more manageable pieces
• Verify that the scope of work planned is actually being done
• Measure scope performance and adjust as needed

Collection of requirements
• Interviewing
• Focus groups
• Facilitated workshops
• Brainstorming
• Delphi technique
• Mind maps
• Affinity diagrams
• Questionnaires and surveys
• Observation
• Prototypes
• Group decision making –
Dictatorial, majority, plurality and consensus

Resolving competing requirements
Some issues are very complex and require management intervention. Broad guidelines
exist however prefer in this order
• Business case for starting the project

• Project charter
• Project scope statement
• Project constraints

Requirements management plan and requirements traceability
• Requirements management plan is the output of collect requirement process
• Requirements traceability matrix helps track the requirements over the life of the
project to ensure they are accomplished
Unique Requirement Source of SRS / FR # Module Test Successful Test Modification of Comments
Case(s) Verification
Number Requirement Requirement

Define Scope
This is concerned with what is and what is not included in the project and its
deliverables

Product analysis and project scope statement
• Product analysis helps analyze the objectives and description of the product stated by
the customer and turn into tangible deliverables
• Project scope statement is the output of “Define Scope Process”
• The project scope statement along with the WBS and WBS dictionary comprise the
scope baseline which is part of project management plan

WBS
WBS breaks the project into smaller and more manageable tasks
The rules to keep in mind while making WBS

• Must be done with help of the team
• First level is to be done before further levels are done
• Each level of WBS is a smaller piece of the level above
• Entire project is included in the upper levels. Some levels are deeper than others
• WBS includes only deliverables that are absolutely needed
• Deliverables not in the WBS are not part of the project
Work packages are reached when they include deliverables that

• Cab be realistically and confidently estimated
• Can be completed quickly (80 hours)
• Can be completed without interruption
• May be outsourced or contracted out
Use easy to identify numbering system

What are the benefits of WBS?
• Communicate costs
• Communicate responsibilities

WBS Dictionary
• It is the output of create WBS process

• It helps the project by putting boundaries on what is included in the work package
WBS Dictionary consists of

•A number identifier
•Related control account
•A statement of the work to be done
•Who is responsible
•Any schedule mile stones
•Interdependencies

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Verify Scope
• Involves meeting the customer or sponsor to gain formal acceptance of the

deliverables during monitoring and controlling phase
• This can be done at the end of each project phase
• Quality control and Verify scope are similar in that both involve checking for the
correctness of work. The difference is the focus on effort and who is doing the
checking.
• In QC, the QC department checks to see if the quality requirements specified for the
deliverables are met, In verify scope it is the customer who checks before accepting the
deliverables.

Control Scope
• Control scope involves measuring project and product scope performance and
managing scope baseline changes
• Need to measure scope performance against the baseline to see magnitude of any
variances. Next see if any updates to scope baselines or other parts of project
management plan are needed

Time Management
Time management process Group it belongs to

Define activities Planning
Sequence activities Planning
Estimate activity resources Planning
Estimate activity durations Planning
Develop schedule Planning
Control schedule Monitoring and controlling
• Remember that unrealistic schedule is a project manager’s fault and not that of senior
management (This assumes that the PM is the one who created the schedule)
• It is PM’s job to see if the needed end date can be met and create options to make it
happen, all BEFORE project execution even starts
• PM software can be of extreme help with scheduling, scenario analysis and

performance tracking but it cannot tell how to manage a project
Schedule Management Plan
It is not listed as a separate part of scheduling process but is created as part of

Project Management plan in the Integration management
It includes:
• The scheduling methodology and scheduling software to be used on the project
• Establishment of a schedule baseline for measuring against during the
monitoring and controlling process group
• Identification of the performance measures that will be used on the project, to
identify variances early
• Planning for how schedule variances will be managed
• Identification of schedule change control procedures

Define Activities
The process involves taking the work package in WBS and breaking down further
to reach activity level. In order to do this you need the scope baseline and the
team so that activities can be defined more accurately and make estimates better.
Other Information
• Rolling Wave Planning: Plan at higher level and then wait until project work
begins to start next level of planning
• After completion, Define activities will result in activity list and details of the
activities being completed
• Milestones are significant events within the project schedule

Sequence Activities
• Take the activities and milestones and start to sequence them into how work is
performed. This will create a network diagram

Network diagramming techniques
Uses of network diagrams

• Justify time estimate for the project
• Aid in effectively planning, organizing and controlling the project
• Show interdependencies of all activities
• Show workflow so the team will know what activities need to happen in a sequence
• Identify opportunities to compress schedule
• Show project progress

Network diagramming techniques
Precedence diagramming method (Activity on Node)- Nodes are used to represent
activities and arrows show activity dependencies
Four types of relationships
• Finish to Start: An activity must finish before the successor can start
• e.g. Foundation after excavation
F S S
• Start to Start: An activity must start before the successor can start
• e.g. Preliminary test to start production F S
• Finish to Finish: An activity must finish before the successor can finish
• e.g. Heating the oven and baking the cake F
• Start to Finish: An activity must start before the successor can finish
• e.g. Next shift supervisor must start for current supervisor to complete his work S
GERT
F
This allows loops within a network diagram
Dependencies
Mandatory Dependency: Inherent to the nature of work (Foundation after excavation)
Discretionary Dependency: Can be changed (Light bulbs after ceiling fan during interior)
Leads and Lags
Lead may be added to start an activity before the preceding activity and lag is
inserted waiting time between activities. Lead is negative lag and lag is –ve lead.
Lead Activity-A Lag
Estimate Activity Resources
Once the activities are sequenced, the type and quantity of needed resources is determined
Estimate Activity Durations
Once the previous time management processes are completed the next step is to compute
the amount of time each activity is expected to take. For this you will need activity
resource requirements, resource calendars, organizational process assets, enterprise
environmental factors. [Duration = Time to complete+1]
The time estimates gathered during estimating are also used to create the risk register
during risk management process
Padding is a bad idea as it will remove confidence with the plan

Estimation procedure
One point estimate
• Can force people to do padding
• Hides important information
Analogous Estimating
• Uses expert judgment and historical information to predict the future
• The planned dam looks similar to the Nagarjuna sagar dam which took 10 years to build.
Our dam will use similar number of resources and hence should take 10 years.
Parametric Estimating
• Calculates projected times based on historical records from previous projects and other
information.
• Last project had 2000 lines of code and took 2 months. The current project would have
about 4000 lines of code and will take about 4 months.
• Regression analysis (or scatter diagram) tells if two variables are related
Heuristics
It’s a rule of thumb.
Constructing a house in Hyderabad takes about 1 year.
Three point estimate (PERT)
Expected duration = (P+4M+O)/6
• SD = (P-O)/6
• V = SD2,
• Do not add SD. Only add Expected duration or variances (V)
3 point estimate example
A B C
P: 12 P: 9 P: 14
M: 9 M: 6 M: 6
O: 6 O: 3 O: 4
D = (12+4*9+6)/6 = 9 = (9+4*6+3)/6 = 6 = (14+4*6+4)/6 = 7

SD = (12-6)/6 = 1 = (9-3)/6 = 1 = (14-4)/6 = 1.67
V 1^2 = 1 1^2 = 1 1.67^2 = 2.77
Project Duration = 9+6+7 = 22

Project Variance = 1+1+2.77 = 4.77
Project SD = sqrt (4.77) = 2.18
Reserve analysis (Covered in cost chapter and risk chapter as well)
Project must have reserves to accommodate for risks that remain after the completion of
risk management activities.
Two types of reserves for risks- Contingency reserves and Management reserves
Contingency reserves- For risks which remain after plan risk response process
Management reserves- For unknown risks
Contingency reserves are under the control of project manager while management
reserves are under the control of top management.
Develop Schedule
Difference between time estimate and schedule is that schedule is calendar
based.

Schedule Network Analysis
Some techniques for this are

• Critical path method
• Schedule compression
• What if scenario analysis
• Resource leveling
• Critical chain method
Critical path method is the determination of the longest path in the network diagram and
critical path is the path of longest duration in the network diagram and determines the
shortest time to complete the project
Near critical path is a path close in duration to critical path. The closer it is to critical path,
the more risk project has

Float or slack
Total Float/Total Slack: Time an activity can be delayed without delaying the project end
date or an intermediary milestone
Free Float/Free Slack: Time an activity can be delayed without delaying the early start date
of its successor
Project Float: Project float is the amount of time a project can be delayed without delaying
the externally imposed project completion date required by the customer or management.
Activities on critical path have zero float.
Float = LS-ES or LF-EF
Find ES and EF in the forward pass.

Find LS and LF during the backward pass

Schedule Compression
Fast tracking- Doing critical path activities in parallel that were originally in series.
Increases risk and needs more communication. This involve a time vs. risk tradeoff.
Crashing- Making cost and schedule tradeoffs to determine how to compress the
schedule. Always involves increased cost. This involve a time vs. cost tradeoff.
Resource leveling: Produce a resource limited schedule. The schedule from this is almost
always longer than the project schedule.
Critical Chain method: It takes both activity and resource dependency directly into
account. Buffers are added to the activities at few locations and these buffers are
managed.

Mile stone charts/Bar charts(Gantt Charts)

When to use which chart
Network diagram and not Gantt: To show interdependencies between activities
Milestone and not Gantt: To report to senior management
When to use Gantt/Bar and not Network diagram: To track progress and to report to team

Cost Management
Cost management process Group it belongs to
Estimate Costs Planning
Determine budget Planning
Control Costs Monitoring and Controlling

Cost Management
For many projects activities are used to create cost estimates. On some large projects it
may be more practical to estimate and control at a different level called control account
which is at a higher level than work package in WBS
Control accounts are placed at selected management points of the Work Breakdown
Structure (WBS) to monitor cost and schedule performance of significant elements of
work. Control accounts are a management control point for cost summarization, scope
description, and variance analysis & reporting, responsibility assignment, and corrective
action planning. Each Control account contains one or more work packages and planning
packages, but each work package / planning package may be associated with only one
control account. Control accounts are also referred to as cost accounts
Cost management plan is created during project management plan creation and includes
• Specifications on how estimates should be stated
• Level of accuracy needed for estimates
• Reporting formats to be used
• Rules for measuring cost performance
• Whether costs will include both direct and indirect costs
• Control thresholds
Lifecycle costing includes looking at the total cost during the entire life of the product
Value analysis and Estimate costs
• Involves finding a less costly way to do the same work. This means team is looking to
decrease project cost with same scope
The estimate costs process is where the estimates for each activity are made
• Must be based on WBS
• Must be done by person doing the work
• PM must not accept constraints from management but must analyze needs of the
project and come up with own estimate and reconcile any differences
• PM must meet agreed upon estimates
• Estimates can be decreased by eliminating or reducing risks
Types of costs
Variable costs: Cost of soaps in hotel given to guests
Fixed costs: Cost of having an attendant at the hotel
Direct costs: Cost of wood to build a table in factory

Indirect costs: Rent paid for using the factory

Inputs to cost estimating
• Scope baseline
• Project schedule
• HR plan
• Risk register
• Policies on estimating, templates, processes, procedures, lessons learned etc
• Company culture etc
• PM costs
How is estimating Done
• One point estimate

• analogous estimate
• Parametric estimate
• 3 point estimate
• Bottom up estimate

More on estimation
What helps in estimate creation

• PM software
• Resource cost rates
• Risk reserve analysis
• Cost of quality
Estimates made during early project phase are less accurate than the ones which
are made later
Range of estimates
ROM (Rough order of magnitude): - 50% to 100%
Budget estimate: -10 to 25%
Definite estimate: +/- 10%

Determine budget
Total cost of project needs to be computed so that the organization can set aside this
money and is called budget.
Cost aggregation
Activity costs are rolled into work package costs and work package costs are rolled into
control account costs and control account costs into project costs
Progress reporting
Sometimes It is not practical to report the project progress continuously based on the
progress of activity level.
At a work package level use one of following

50/50 rule
20/80 rule
0/100 rule

Progress reporting (Assume all activities on critical path are of same time duration)
50/50 Rule
Activities completed: 1+1+0.5+0.5+0 = 3, Project completed: (3/5)*100 = 60%
20/80 Rule
Activities completed: 1+1+0.2+0.2+0 = 2.4, Project completed: (2.4/5)*100 = 48%
0/100 Rule
Activities completed: 1+1+0+0+0

Copyright: NucleusIMS = 2,
(An ISB Project completed:
Management (2/5)*100 = 40%
Institute), www.nucleusIMS.com
Earned value analysis
PV – planned value
EV – Earned value
AC – Actual cost
BAC – Budget at completion (Initial Budget)
EAC – Estimate at completion (Revised Budget)
ETC – Estimate to complete
VAC – Variance at completion (Difference between Initial budget and revised budget)
Cost variance (CV) = EV-AC

Schedule variance = EV-PV
CPI = EV/AC
SPI = EV/PV
EAC = AC + (BAC-EV)
ETC = EAC-AC
VAC = BAC-EAC

TCPI (To complete cost performance Index)
It is the ratio of work remaining to budget remaining for the project. TCPI is the calculated
projection of cost performance that a project must achieve on the remainder of the
project work to reach a specified end result.
If TCPI is one (1.0), then the remaining project work must be executed at the same
cost performance level as the completed project work. If TCPI is less than one
(<1.0), then the remaining project work can be executed at a lower cost
performance level than the project completed work. If TCPI is greater than one (>
1.0), then the remaining project work must be executed at a better cost
performance level than the project completed work till date.
BAC = $115,000
CPI = EV/AC = $55,000/$75,000 = 0.733
EV = $55,000
AC = $75,000.
New budget approved is $125,000. Calculate TCPI
TCPI = (BAC - EV) ÷ (EAC - AC) = (115,000-55,000)/(125,000-75,000) = 1.2
TCPI allows you to calculate the amount of cost performance improvement that must be
made on the remaining workNucleusIMS
Copyright: to reach(AnaISB
set goal. Institute), www.nucleusIMS.com
Management
Quality management
Lack of attention results in more rework and defects and costs time and money
Process Group
Plan quality Planning process group
Perform quality assurance Executing process group
Perform quality control Monitoring and controlling
What is quality?
Degree to which project fulfills requirements
Implies you need to have all the stated and unstated requirements and project
scope statement
Quality management
Includes creating and following policies and procedures to ensure that a project
meets the defined needs it was intended to meet from the customer’s perspective
Quality Theorists
• Juran: Developed the 80/20 principle (80% of problems contributed by 20% causes)
• Edward Deming: TQM and Deming cycle (Do small increments before making large changes)
• Philip Crosby: Prevention over inspection (Better to prevent errors than inspect later)
Marginal analysis
• Benefits or revenues to improving quality are equal to cost of achieving this
quality. This tells when to stop trying to improve quality.
Kaizen or continuous improvement

• Making small and incremental improvements in quality over a long period of
time

Plan quality vs Perform QA vs Perform QC
Plan quality Perform QA Perform QC

Done during planning Done during execution Done throughout project
Find existing standards Use measurements from QC Measure quality
Create additional project Perform continuous Identify quality improvements

specific standards improvement
Determine work to be done to Determine if project activities Validate deliverables
meet standards comply with project and
project policies
Determine how to measure to Find good practices Complete checklists
meet standards
Balance needs of quality with Share good practices in org Update lessons learned
time, cost, risk etc
Create Quality mgmt plan as Submit change requests
part of PM plan
About what needs to be done About how it is to be done About the final result being
what was actually planned

Control charts
Used to monitor things like project performance figures such as cost and schedule
variance. It is also useful for monitoring the quality of technical process parameters.
Some examples: How long does it take to answer a customers query in a BPO. How long
does it take for us to fix a bug reported by a customer. etc
Upper and lower control limits, Specification Limits, Mean (average)

Out of control
• A data point falls out of upper or lower control limit
• There are non-random data points like rule of 7
Rule of 7
• 7 data points grouped on one side of mean (even though within control limits)

Sigma limits
+/- 1 Sigma is 68.26%

+/- 2 Sigma is 95.46%
+/- 3 Sigma is 99.73%
+/- 4 Sigma is 99.99985%
A pharmaceutical company follow 3-sigma policy. They produce one lakh tablets a
month. How many defective tablets would you find?
Defective = (100-99.73)*100,000/100 = 270 tablets a month

Tools of quality
• Fish bone (Cause and effect or Ishikawa Diagram)

• Flow chart
• histogram
• Pareto chart- prioritize potential causes of the problem
• Run chart-To see pattern of deviation
• Scatter diagram
• Control chart

Tools of quality
30 100 Customer Requirements
90
25 80
20 70
60 Create Design Document
15 50
40
10 30
5 20
Get customer Approval
10
0 0
Implement
Hand off

HR Functions
Process Group
Develop HR plan Planning process group
Acquire project team Executing process group
Develop project team Executing process group
Mange project team Executing process group
• Improving the team member’s competencies is the responsibility of project manager

• HR management is primarily done in executing process group
• The project manager’s HR activities are formal and require documentation
• Projects are planned by the team and coordinated by the project manager
• Team building activities are formally planned in advance and are a required part of
project management
• The project manager must trace team member performance
• HR can be divided into administrative and behavioral management topics

Roles and Responsibilities of
1. Sponsor
2. Team
3. Stakeholders
4. Functional Manager
5. Project Manager

www.nucleusIMS.com
Role of sponsor
• Is a stakeholder
• Provides funding
• Gives PM authority outlined in the charter
• Helps organize work into appropriate projects
• Sets priorities between projects
• Provides the project team with time to plan

• May review WBS
• Supplies list of risks
• Provides expert judgment
•Approves the final project management plan

Role of Team
• Identify and involve stakeholders

• Identify requirements
• Identify constraints and assumptions
• Create WBS
• Decompose work packages
• Identify dependencies between activities
• Provide cost and time estimates
• Participate in risk management process
• Enforce ground rules
• Attend project team meetings
• conduct process improvement

Role of stakeholders
• May be involved in creation of project charter and project scope statement

• Project management plan development
• Verifying scope verification
• Identifying constraints
• Identifying requirements
• Risk management

Role of Functional manager
• Assign specific individuals to team and negotiate with project manager regarding
resource
• Let project manager know of other projects that may impact the project
• provide subject matter expertise
• Approve the final schedule during schedule development
• Recommend changes to project
• Improve staff utilization

Role of project manager
• Responsible for managing the project to meet project objectives

• May help with making charter
• Coordinator of interactions between project and key stakeholders
• Leads and directs the project planning efforts
• Understands and enforces professional and social responsibility
• Determines and delivers required levels of quality
• Is accountable for project success or failure

Develop HR Plan: Inputs, Tools
• Enterprise environmental factors

• organizational process assets
• organizational charts and position descriptions
• Responsibility assignment matrix: RACI chart
• Organizational breakdown structure
• Resource breakdown structure
• Position descriptions

RACI Chart for a Project Meeting
Project Project Procurement Business Technical Applications

WBS Code Description
Sponsor Manager Manager Analyst Specialist Development
P01.02.01 Security Governance C A I I C R

P01.02.03 Functional Requirements A I I I R C
P01.02.06 Business Acceptance Criteria A C C R I I
P01.02.08 Procurement Analysis C A R C I I
RACI chart is independent of member names

Develop HR Plan
Organization (al) Breakdown Structure (OBS) is

an intermediate level of the Work Breakdown
Structure (WBS) in which organizational
relationships are identified and used as the
framework for assigning work responsibilities.
It is the org chart for the project
RBS is a standardized list of personnel

resources related by function and arranged in
a hierarchical structure.

HR Plan
HR Plan includes
• Roles and responsibilities
• Project organizational charts
• Staffing management plan
Rewards and recognitions is a part of staffing management plan
To create a rewards and recognition system ask how will you motivate and reward not just
the team but every individual member

Resource histogram
Shows the number of resources used per time period and where there is a spike in the
need for resources

Acquire project team
This occurs during execution process
Halo effect
Refers to the tendency to promote someone due to their technical competence

Team building
Stages of team formation (Tuckman Model)

• Forming
Question-1: You have a 24 Crores project, spanning 12 months. A new team is formed
• Storming and from historical estimates, you could estimate storming phase to last for a month.
• Norming What is the financial loss? (Team members typically work at 25% efficiency during
• Performing storming phase)
• Adjourning
Examples of team building activities

• Taking classes together
• Milestone parties
• Holiday and birthday celebrations
• Outside of work trips
• Creating WBS
• Project planning with everyone involved
• Community games/sports
Collocation (War room)

Arrange all team members in same place so that communication enhances and impact of
conflict decreases Copyright: NucleusIMS (An ISB Management Institute), www.nucleusIMS.com
Powers of project manager
• Formal
• Reward
• penalty
• Expert- comes from being a technical or PM expert
• Referent- comes from other person liking you
Expert and reward are the best forms of power

Penalty is the worst

Management and leadership styles
• There is no one right way or wrong way to manage

• Better to use multiple styles of management during the project
• Directing- Telling what needs to be done

• Facilitating – Helping others figure out what needs to be done
• Coaching
• Supporting
• Autocratic- Manager retains power and decision making authority
• consultative
• Consultative-autocratic
• Consensus
• Delegating
• Bureaucratic- emphasize procedures and historical ways
• Charismatic-create a powerful self image to draw people to you
• Democratic/participative
• Laissez-faire – Hands off style, provides little or no direction and gives freedom
• Analytical- Leadership driven by data, facts and numbers
• Influencing

Conflict management
• Conflict is inevitable because

• Nature of the projects addressing needs across multiple stakeholders
• Limited power of project manager
• Necessity to obtain resources form functional managers
• Conflict presents opportunity for improvement
Top reasons for conflict

• Schedules
• Project priorities
• Resources
• Technical opinions
• Administrative procedures
• Cost
• Personality
Conflict is best resolved by those in the conflict

Conflict Management
• Confronting- Find out the root cause and address it
• Compromising-Get to middle path agreement. Compromise sends a message of

tolerance, understanding, and sympathy for both parties leaving integrity and dignity
intact.
• Withdrawal-Give up. Anyway you will not listen to me, I will do what you tell me
• Smoothing-Smoothing can be described as the process of playing down differences that

exist between individuals or groups while emphasizing common interests.
• Collaborating-I will listen to you now, but next time you will have to listen to me
• Forcing-I am the PM, you have to listen to what I tell you

Other theories
Expectancy theory – employees who believe their efforts will lead to effective
performance and who expect to be rewarded for their accomplishments remain
productive as rewards meet their expectations

Motivation Theory
Mc Gregor’s theory
X Type- People need to be watched everytime.
Y Type- People are willing to work without supervision
Maslow Theory

Motivation Theory
Herzberg’s theory
Hygiene factors – working conditions, salary, personal life, relationships at work, security
status.
Motivating factors- Responsibility, Self-actualization, professional growth, recognition
Poor hygiene factors may destroy motivation but improving them in mist circumstances
will not improve motivation

Communications Management
Communications management Group it belongs to

process
Identify Stakeholders Initiating
Plan Communications Planning
Distribute Information Executing
Manage Stakeholder expectations Executing
Report Performance Monitoring and Controlling
• Communications can be informal & formal, written and verbal but it is always
proactive and thorough in a PMP world.
• An effective manager spends about 90% of his time in communications and

roughly about 50% of that time is spend in communicating with the project team.
• Great project managers create status reports, communications management

plan, ask stakeholders what they need communicated to them and frequently
revisit communications at team meetings to limit communications problems.
Communications Management: Working with stakeholders
• Identify all stakeholders

• Determine all their requirements
• Determine their expectations
• Determine their interests
• Determine their level of influence
• Plan how to communicate with them
• Communicate with them
• Manage their expectations and influence all throughout the project

Communications Management: Stakeholder related tools
Classification tools such as power/interest grids and salience models can be used
to group stakeholders by qualifications like authority level, impact or influence or
requirements

Communications Management: Stakeholder Register
All the information about stakeholders is compiled in the stakeholder register, an

output of the identify stakeholder process. The other major output of
stakeholders is a strategy to manage them. See below an illustration of
stakeholder register.

Communications Management: Managing stakeholders
Stakeholder description Some options on what to do
High interest, low influence, expert on high Invite the stakeholder to participate in risk
risk areas management process
Low interest, source of most requirements, Make sure requirements are clear and send
not easy to work with reports
High interest, high influence, not supporter Understand why he is not a supporter and
of project plan on dealing with him on those reasons
Involve stakeholder in team meetings,
High interest, high influence, a supporter of
report to this person and include the
project
information stakeholder requested
Moderate interest, high influence, a project Invite the stakeholder to officially join the
supporter and working with you project team
Moderate interest, high influence because he Plan to meet with the stakeholder
identified many risks and supporter of the periodically to see if he has identified any
project more risks
Moderate interest, nervous about completing Plan to find and forward relevant literature to
his/her activities assigned stakeholder and arrange for a training

Communications Management: Ways of communicating
Customer, sponsor, Functional

Managers and team members
Other project managers The project Other projects
Other stakeholders
• Active Listening – Receiver takes steps to ensure sender is understood.

• Effective Listening- Requires listener’s full thought and attention.
• Feedback – Speaker must monitor verbal and non verbal cues to see whether the
listener fully comprehends the message.
• Non Verbal – Takes place through body language like posture, facial
expression, hand motion etc
• Para lingual – It is vocal but not verbal like pitch, volume etc
• Communications blockers – Anything that disrupts the communications channels
like weak signal, Noisy surroundings, Hostility, Language, Culture etc

Communications Management: Methods of communicating
Method Examples When Used

To convey information
Informal Written E-mail, memos etc
about the project
Used for critical and
Contracts, legal documents
Formal Written important documents like
etc
project management plan
For quick information
Informal Verbal Meetings, discussions etc
dissemination
Used for PR events,
Formal Verbal Presentations, lectures etc company announcements,
sales etc

Communications models are framed around three parts

• Sender
• Message
• Receiver
Message is encoded by sender and decoded by receiver. Receiver’s education,

experience, language, culture etc affect the way receiver decodes the message
and called as noise factors.
The different means of communications are called communications technology

Communications Management: Categories of communicating
Category Characteristics Examples

Interactive Two way information flow Open house discussions
Push Information sent in one way Marketing e-mails, SMS etc

Pull Information taken by one side Website content, videos etc

Communications Channels
Communications channels are communicated by the formula

N*(N-1)/2,
Where N = Number of people

Managing stakeholder expectations
Active management of stakeholder expectations makes them feel their concerns and
needs are at least considered even if they are not agreed to.
Types of reports
Type of report Purpose

Status report Where the project stands now regarding performance
measurement baseline
Progress report What has been accomplished
Trend report Plot project results over time
Forecasting report Predict future performance
Variance report Compares actual results to baselines
Earned value report PV, EV, AC etc
Lessons learned Reports on performance can be used as lessons
documentation learned for future projects

Trend Reports

Communications Management
Communications management Group it belongs to

process
Identify Stakeholders Initiating
Plan Communications Planning
Distribute Information Executing
Manage Stakeholder expectations Executing
Report Performance Monitoring and Controlling
• Communications can be informal & formal, written and verbal but it is always
proactive and thorough in a PMP world.
• An effective manager spends about 90% of his time in communications and

roughly about 50% of that time is spent in communicating with the project team.
• Project managers need to create status reports, communications management

plan but best project managers ask stakeholders what they need communicated to
them and frequently revisit communications at team meetings to limit
communications problems in a pro-active
Copyright: NucleusIMS way. Institute), www.nucleusIMS.com
(An ISB Management
• Identify all stakeholders

• Determine all their requirements
• Determine their expectations
• Determine their interests
• Determine their level of influence
• Plan how to communicate with them
• Communicate with them
• Manage their expectations and influence all throughout the project

Communications Management: Stakeholder related tools
Classification tools such as power/interest grids and salience models can be used
to group stakeholders by qualifications like authority level, impact or influence or
requirements

Communications Management: Stakeholder Register
All the information about stakeholders is compiled in the stakeholder register, an

output of the identify stakeholder process. The other major output of stakeholders is a
strategy to manage them. See below an illustration of stakeholder register (Where
multiple team members make the register).
Stakeholder Name Project Sponsor

Stakeholder Position 20+ Years in the organization
Stakeholder Project Role Business Project Sponsor
Rate on a scale of 1-5 (1 is low and 5 is high)
Influence Influence
Project Success Influence 3
Project Failure Influence 2
Importance Importance
Command Level 2
Legitimacy within the organization 4
Ability to get attention 5
Attitude Attitide
Project Will 5
Expectation for Failure 2
Expectation for success 5
Communications Management: Managing stakeholders
Stakeholder description Some options on what to do
High interest, low influence, expert on high Invite the stakeholder to participate in risk
risk areas management process
Low interest, source of most requirements, Make sure requirements are clear and send
not easy to work with reports
High interest, high influence, not supporter Understand why he is not a supporter and
of project plan on dealing with him on those reasons
Involve stakeholder in team meetings,
High interest, high influence, a supporter of
report to this person and include the
project
information stakeholder requested
Moderate interest, high influence, a project Invite the stakeholder to officially join the
supporter and working with you project team
Moderate interest, high influence because he Plan to meet with the stakeholder
identified many risks and supporter of the periodically to see if he has identified any
project more risks
Moderate interest, nervous about completing Plan to find and forward relevant literature to
his/her activities assigned stakeholder and arrange for a training

Communications Management: Ways of communicating
Customer, sponsor, Functional

Managers and team members
Other project managers The project Other projects
Other stakeholders
• Active Listening – Receiver takes steps to ensure sender is understood by

checking with speaker if what he/she understood is right.
• Effective Listening- Listen to words of speaker and the meaning of the words.
• Feedback – Speaker must monitor verbal and non verbal cues to see whether the
listener fully comprehends the message.
• Non Verbal – Takes place through body language like posture, facial expression,
hand motion etc
• Para lingual – It is vocal but not verbal like pitch, volume etc
• Communications blockers – Anything that disrupts the communications channels
like weak signal, Noisy surroundings, Hostility, Language, Culture etc
Communications Management: Methods of communicating
Method Examples When Used

To convey information
Informal Written E-mail, memos etc
about the project
Used for critical and
Contracts, legal documents
Formal Written important documents like
etc
project management plan
For quick information
Informal Verbal Meetings, discussions etc
dissemination
Used for PR events,
Formal Verbal Presentations, lectures etc company announcements,
sales etc

Communications Management: Models
Communications models are framed around three aspects

• Sender
• Message
• Receiver
Message is encoded by sender and decoded by receiver. Receiver’s education,

experience, language, culture etc affect the way receiver decodes the message
and called as noise factors.
The different means of communications are called communications technology

Communications Management: Categories of communicating
Category Characteristics Examples

Interactive Two way information flow Open house discussions
Push Information sent in one way Marketing e-mails, SMS etc

Pull Information taken by one side Website content, videos etc

Communications Channels
Communications channels are communicated by the formula

N*(N-1)/2,
Where N = Number of people

Managing stakeholder expectations
Active management of stakeholder expectations makes them feel their concerns and
needs are at least considered even if they are not agreed to.
Types of reports
Type of report Purpose

Status report Where the project stands now regarding performance
measurement baseline
Progress report What has been accomplished
Trend report Plot project results over time
Forecasting report Predict future performance
Variance report Compares actual results to baselines
Earned value report PV, EV, AC etc
Lessons learned Reports on performance can be used as lessons
documentation learned for future projects

Progress Report: What has been accomplished till date

Status Report: What the project stands now

Trend Report: Project results over time

Variance Report: Compare actual results (cost, time etc) to baselines

Earned Value Report: EV, PV etc

Risk Management
Risk management process Group it belongs to

Risk Plan Management Planning
Identify Risks Planning
Qualitative Risk Analysis Planning
Quantitative Risk Analysis Planning
Plan Risk Responses Planning

Monitor and Control Risks Monitoring and Controlling
The term risk is specific to the following two aspects

1. It is related to an uncertain event
2. It may affect the project both in a good way or bad way
Although risk processes are done in a sequence they are done often during the
course of project, starting in initiation all the way to the end of the project

Risk Management
Through risk management, the project changes from being in control of the
project manager to the project manager being in control of the project.
Process of risk management will help prevent many problems on projects and
make others less likely. This reduction in uncertainty means saving in terms of cost
and time
Uncertainty is the lack of knowledge about an event that reduces confidence in

conclusions drawn from the data
Risk Factors- Looking at risk, one must determine

• The probability it will occur
• Range of possible outcomes
• Expected timing in project life cycle
• Anticipated frequency of risk events from the source
Risk aversion- Someone who does not want to take risks

Casino-1: A casino offers 50/- to every entrant who walks in.
Casino-2: A coin is flipped, if its heads 100/- is given and if tails nothing
Choosing Casino-1, indicates risk aversion,
Copyright: NucleusIMS Casino-2Institute),
(An ISB Management choicewww.nucleusIMS.com
indicates risk seeking behavior
Plan Risk Management
Plan risk management answers the question of how much time to be spent on risk
management based on the needs of the project. Who will be involved and how
you will go about performing risk management
Outputs: Risk Management plan

• Methodology
• Roles and responsibilities
• Budgeting
• Timing
• Risk categories
• Definitions of probability and Impact
• Stakeholder tolerances
• Reporting formats
• Tracking

Various ways of risk categorization
Risks can be categorized as
• External- Regulatory, Government, Market changes etc
• Internal-Time, cost, poor planning etc
• Technical-Changes in technology (Landline Vs Mobile)
• Unforeseeable- Usually less than 10%
Risks generated by
• Customer
• Lack of PM Effort
• Lack of knowledge of project management
• Suppliers
• Resistance to change
• Cultural differences
Source of risks (Counterpart and similar to the above classification)

• Schedule- Hardware arrived early
• Cost-extra cost
• Quality-low quality, incoming QA
• Scope-Unclear scope
• Resources-Churn
• Customer satisfaction-Unhappy customer
Risk classification
Risks can be classified as

• Business risk-can be positive or negative
• Pure risk-always a loss (Fire, theft etc)
It is better that everyone is involved with risk identification
Ways of getting information

• Brainstorming
• Delphi
• Interviewing
• Root cause analysis
• SWOT
• Checklist analysis
• Assumption analysis
• Diagramming techniques (Quality management)

Identify risks
Risk register is the place where most risk information is kept

Qualitative risk analysis
This involves creating a short list of the previously identified risks and is a subjective
technique. To perform this you need
• Probability of each risk occurring, using a standard scale
• Impact of each risk occurring using a standard scale
• It is CRITICAL to give a standard risk rating matrix along with this information. This is
considered a separate and distinct activity

Miscellaneous risk related terms
Risk categorization: What will we find if we regroup the risks by categories or work
packages?
Risk Urgency assessment: Qualitative risk analysis also includes listing of risks which need
to be quickly addressed
Outputs of perform qualitative risk analysis

• Risk register updates
• Risk ranking for the period compared to other projects
• List of prioritized risks and their probability and impact ratings
• Risks grouped by categories
• List of risks requiring additional analysis and response
• Watch list
• Trends

Quantitative risk analysis
Involves numerical analysis of the probability and impact. The purpose is to

• Determine which risk events warrant a response
• Determine overall project risk
• Determine the quantified probability of meeting project objectives
• Determine cost and schedule
• Identify risks requiring most attention
• Create realistic cost, schedule or scope targets
Note that quantitative risk analysis is a more objective evaluation but also requires more
time and cost to evaluate
Risk assessment = Quantitative risk analysis
Expected monetary value (EVM) = P x I

Exercise
Go from one city to another. What airline to
take and expected monetary value of decision On time 90%
Fare 900
Airline A
Late 4,000
On time 70%
Airline B
Fare 300
Late 4,000
Airline A: (10%*4000)+(90%*0)+900 = 1300

Airline B: (30%*4000)+(70%*0)+300 = 1500

Quantitative risk analysis: Output
Risk register updates

• Prioritized list of quantified risks
• Amount of contingency time and cost reserves needed
• Possible realistic and achievable completion dates and project costs with confidence levels
• Quantified probability of meeting project objectives
• Trends in quantitative risk analysis

Notes of Monte carlo simulation
• Done with a computer

• Evaluates overall risk of the project
• Provides probability of completing a project on a specific day with specific cost
• Probability of any activity being on a critical path
• Takes into account path convergence
• Translates uncertainties into impacts to total project
• Can be used to assess cost and schedule impacts
• Results in probability distribution

Plan risk responses
Responses include doing all or one of the following
• Do something to eliminate threats before they happen
• Do something to make sure the opportunities happen
• Decrease the probability and/or impact of threats or increase the probability and/or
impact of opportunities
For remaining (residual) threats that cannot be eliminated

•Do something if the risk happens [contingency plans]
• Do something if contingency plans are not effective [fallback plans]
Outputs
• Project management plan updates
• Project document updates
Residual risks-Risks after risk planning
Contingency plans- action if +ve or –ve risks happen
Risk response owners
Secondary risks – Risks created by risk response
Risk triggers – events triggering contingency plans
Contracts
Fallback plans-plan if contingency plan does not work
Reserves Copyright: NucleusIMS (An ISB Management Institute), www.nucleusIMS.com
Risk response terms
Decrease/Increase the Risk Register Do something to make sure

Probability or impact of risks they happen or they do not
Updated risk
Residual Risks
Register/Watch List
Risk Happens Risk did not Happen
Do not have a
Have a Plan Work around
Plan
Not in risk register
Secondary Risks
Contingency Plan
[New risks]
Fall back plan if

Contingency plan fails Copyright: NucleusIMS (An ISB Management Institute), www.nucleusIMS.com
Risk response strategies
Risk (Negative) Response Strategy
Eliminate threat by eliminating cause (Use a different
Avoid technology). e.g. Instead of flying plan due to fear or brake
failure, use a train service. These are usually dramatic.
Reduce the probability of impact of a threat by making it a
smaller risk and removing it from the top list (e.g. Build in
Mitigate
redundancy etc). e.g. To reduce chance of brake failure in a
flight, incorporate triple brake system.
Make another party responsible for risk by purchasing
Transfer insurance, bonds, warranties etc. e.g. Life insurance or fire loss
insurance etc.
Risk (Positive) Response Strategy

Add work or change the project to make sure the opportunity
Exploit occurs. e.g. Washing machines sold as Lassi machines in
Punjab hotels so make more machines.
Increase the likelihood and positive impacts of the risk event.
Enhance
e.g. Develop customized machines and sell in other places.
Allocate ownership of the opportunity to a third party that is
Share best able to achieve the opportunity. e.g. Oil field bidding of
drilling companies with refinery companies.
Important points to remember in Risk from Exam point of view
• Document non critical risks in a watch list and revisit them periodically
• You can choose a combination of risk response strategies
• During the execution of project you frequently watch out the list of risks to see if any
has increased in importance
• The most important item to discuss in team meetings is risk

Actions involved in monitoring and controlling risks
• Look for occurrence of risk triggers

• Monitor residual risks
• Identify new risks and then analyze and plan for them
• Evaluate the effectiveness of the risk management plan
• Develop new risk responses
• Collect and communicate risk status
• Communicate with stakeholders about risks
• Determine if assumptions are still valid
• Ensure proper risk management procedures are followed
• Update risk management and response plans
• create a database of risk data that may be used through the organization

Work involved in monitoring and controlling risks
Workarounds: Recommendations for corrective action on a project may include

workarounds. Whereas contingency responses are developed in advance, workarounds
are unplanned responses to deal with unanticipated risk events
Risk reassessments: Team needs to periodically review risk management plan and risk
register and adjust them as required
Risk Audits: Have a team verify that all risk related procedures like identification, planning
and responses are being done
Reserve analysis: Checking to see how much reserve remains and how much might be
needed
Outputs of monitor and control risks

• Change requests
• Project management plan updates
• Project document updates
• Organizational process assets updates
Procurement management
Procurement is a formal process for organization to obtain goods and services
Process Group
Plan procurements Planning
Conduct procurements Executing
Administer procurements Monitoring and controlling
Close procurements Closing
Common procurement documents
• Request for proposal (RFP)- Detailed proposal on how work will be finished
• Invitation for Bid (IFB)- Request total price to do the complete work
• Request for quotation (RFQ) – Price quote per item, hour or other unit of
measure
Seller selection
Organizations use different means to select sellers and these methods are dictated
by law or internal policies. If there are competing submissions the buyer might ask
for presentations from the sellers to help select a seller.
Procurement management notes
Procurement process does not end when the contract is entered into. Once the
contract is signed, the procurement must be administered and this involves
making sure all the requirements of the contract, even ones that seem
unimportant are met.
Seller can be sometimes internal to an organization but for PMP Exam, assume
seller is an external party.
Procurement related notes

• Contracts require formality
• All products and project management requirements for the procurement work should be
specifically stated in the contract
• If it is not in contract, it can only be done if a formal change to contract is issued
• If it is in contract, then both parties must agree for it formally change
• Changes must be submitted and approved in writing
• Contracts are legally binding and seller has no choice but to perform as agreed in contract
• Contracts must help diminish project risk
• Most governments back all contracts that fall within their jurisdictions

Role of project manager for procurement
There is a procurement manager for managing contracts, then what is the role of
a project manager?
• First it is the project manager’s project and he is ultimately responsible for it.
• Secondly project manager is the best person to understand the risks in the
project and hence can help in choosing the best contract.

Types of contracting
A procurement organization can be organized in many ways.
In a centralized contracting environment there is one procurement department

and a procurement manager manages procurements on many projects.
In a decentralized environment, a procurement manager is assigned to one

project full-time and reports directly to the project manager.

Types of contracting – Pros and cons
Type of
organization
There is higher levels of expertise Attention of a procurement manager
due to functionalized nature divided across multiple projects
Department will provide with Difficult for the project manage to
continuous training, support etc get help when needed
Centralized
Standardized practices help with Project manager not in control of the
efficiency and understanding process
Individuals have a clear career path
There is no “home department” for
Project manager has easier access
the procurement manager after the
to contracting expertise
project
Difficult to maintain high level of
Procurement manager is more
De-centralized loyal to the project
contracting expertise within
company
There may be very little
standardization, high duplication and
inefficiencies in the process
Inputs to procurement process
Enterprise environmental factors

Organizational process assets
Procurement manager assigned
Scope baseline
Risk register
Any procurement already in place on the project
Identification of resources not available within organization
Project schedule
Initial cost estimates for work to be procured
Cost baseline for the project

Activities of a plan procurement process
Performing make or buy analysis

Creating a procurement management plan
Creating a procurement statement of work
Selecting a contract type
Creating the procurement documents
Determining the source selection criteria
Make or buy analysis

One of the main reasons to buy is to decrease risk to project’s constraints. It is better
to make if
• You have an idle plant or workforce
• You want to retain control
• The work involves proprietary information or procedures

Procurement statement of work
The procurement statement of work must be as clear complete and concise as

possible and must describe all the work and activities the seller is required to
complete
Types of procurement statements of work
• Performance: This type conveys what the final product should be able to
accomplish, rather than how it should be built or what its design characteristics
should be (e.g. I want a racing car that can reach 100miles/hour in 2 seconds).
• Functional: Conveys the end purpose or result, rather than specific procedure
(e.g. The car must be able to hold two cup holders and a small refrigerator).
• Design: Conveys what precisely needs to be done, e.g. Building construction
The choice of type procurement statement of work depends on the nature of

work and the type of industry
Performance and functional are typically used for IT, IS, High-tech, R&D and
innovation projects. Design is normally used in construction and equipment
purchasing.
Types of contract
There are three broad categories of contracts and these are

• Fixed price (FP)
• Time and materials (T&M)
• Cost reimbursable (CR)
The contract type to select will be based on following considerations

• What is being purchased (Goods or services)
• The completeness of the scope of work
• Level of effort and expertise the buyer can devote to managing seller
• Whether buyer wants to offer the seller incentives
• The marketplace or economy
• Industry standards of the type of contract used

Types of contract
Fixed Price Incentive Fee

• Profits can be adjusted based on the seller specified performance criteria such as
getting the work done faster, cheaper or better. This can be positive or negative
incentive.
• Contract is 100,000/- but for every month completed earlier there is a 5000/- bonus
Fixed Price Award Fee
• Buyer pays fixed price plus an award based on performance. Similar to FPIF except that
the award is determined ahead and apportioned based on performance. The award is
always positive.
• Contract is 100,000/- but for every month exceeds planned level by 25%, there is a
5000/- bonus
Fixed Price Economic Price adjustment
• If there are concerns about future economic conditions for contracts that cover several
periods then the buyer might choose a fixed price contract with economic price
adjustment
• Contract price is 100,000 but it may increase by half the annual inflation rate

Types of contract
Purchase Order (PO)

• Simplest type of fixed contract and is a unilateral agreement. They become contracts if
the seller supplies against this agreement
Time and materials

• The buyer pays on a per hour or per item basis and is frequently used for service efforts
in which the level of effort cannot be defined at the time the contract is awarded
• Contract is 100/- per hour plus expenses or materials at cost

Types of contract
Cost Reimbursable
• When exact scope of work is uncertain and therefore costs cannot be estimated
accurately enough to effectively use a fixed price contract. This allows the buyer to pay
seller allowable incurred costs to the extent prescribed in contract.
Cost contract
• Seller receives no fee (e.g. NGO organization)
• Contract = cost
Cost plus fee or cost plus percentage of costs

• Buyer to pay all costs plus a percentage or a fee.
• This will prevent sellers from being motivated to control costs.
• Contract = cost + 10% fee
Cost plus fixed fee

• Buyer to pay all costs plus a fixed fee
• Better at motivating the seller to control costs to some degree
• Contract = cost + 25,000/-

Types of contract
Cost plus incentive fee

• Pay actual costs plus a fee based on degree to which objectives are achieved
Cost plus award fee

• Buyer pays all costs and a base fee plus an award amount based on performance
• Similar to CPIF contract except the incentive is a potential award rather than potential
award or penalty
Contract Type Priorities (Least-highest) Buyer perspective

CPFF Cost, Time, Performance
CPAF Cost, Time, Performance
CPIF Time, Performance, Cost
T&M Performance, Time, Cost
FPIF Time, Performance, Cost
FP Performance, Time, Cost

Comparison of different contracts
Contract Type Advantages Disadvantages
If the seller under-prices the work, they
Less work for buyer to manage
may try to make profits on change orders
Seller has incentive to control Seller may not complete the work if they
costs begin to lose money
Fixed Companies have experience Requires more to write procurement
with this type of contract statement of work
Can be more expensive than CR if
Buyer knows total price before
procurement statement of work is
work begins
incomplete and more work is added
Quick to create Profit to seller for every hour billed
Time and Contract duration is brief Seller has no incentive to control costs
Materials Good when you are hiring
Appropriate for only small projects
bodies to augment staff
Allows for simpler statement or
Requires auditing seller’s invoices
work
Cost Less work to define the scope CR requires more work for the buyer to
Reimbursable than for FP manage
Seller has only moderate incentive to
Generally lower cost than FP
control costs
Contract terms
Contract terms to remember
• Price
• Profit
• Cost
• Target Price – The price to use for performance measurement
• Sharing ratio – Describes how cost overruns or cost savings will be shared with
buyer (e.g. 80/100). The first number is what buyer keeps and second number is
what seller keeps
• Ceiling Price – Highest price seller will pay
• Point of total assumption – Only for fixed price incentive fee contracts.
Represents the amount after which seller bears all the loss of a cost overrun.

Exercise
Cost plus incentive fee calculation
Cost is estimated at 210,000 and the fee at 25,000. The project is over and the
buyer has agreed that the costs were in fact 200,000. Because the sellers costs
came in lower than estimated costs the seller shares the savings – 80% to buyer
and 20% to seller. Compute final price and fee
Target cost 210,000

Target Fee 25,000
Target price 235,000
Sharing ratio 80/20
Actual cost 200,000
Final fee 210,000-200,000 = 10,000
10,000 x 20% = 2,000
25,000 + 2,000 = 27,000 fee
Final price Final price 200,000+27,000
=227,000
Source selection criteria
• Number of years in business or financial stability

• Understanding of need
• Price of life cycle cost
• Technical ability
• Quality of past performance
• Ability to complete work on time
• Project management ability

Type of agreement
Teaming agreement
• Sellers joining hands to win the contract. e.g. oil field bidding, government
contracts etc.

Some Procurement Terms
• Bonds – Payments that must be purchased. e.g. payment bond will protect the
buyer from claims of nonpayment by the seller
• Force majeure – Situation by the act of god like natural calamities
• Liquidated damages – Estimated damages for specific defaults estimated in
advance
• Material breach – Breach so large that it may not be possible to complete the
work under contract
• Retainage – Money withheld from payment and paid back when work is
completed
• Time is of the essence – Means delivery dates are strictly binding and not
sticking to time will be a material breach
Material breach and Time is of essence helps buyer to get higher compensation in
times of dispute, but also increase the cost of contract

Noncompetitive procurement process
• Single source: Directly deal with preferred seller without procurement process.
You may have worked with them before.
• Sole source: There is only one source, e.g. patented product
Conducting procurements
Advertizing
Qualified seller’s list
Bidder conferences
Seller proposal
Weighting system
Independent estimates
Screening system

More on procurement
Objectives of a negotiation
• Obtain a fair and reasonable price
• Develop good relationship with seller
Negotiation tactics
Attacks: Why is your company so inefficient?

Personal insults: You are not fit to be a manager and cannot even make these decisions?
Deadline
Lying
Limited authority
Missing man- only my boss can make decisions and he is not here
Fair and reasonable
Delay- let’s revisit this next time
Extreme demands- contract says a computer. We will give you 20 year old computer
Withdrawal
Fait accompli-it’s a done deal. This is not a negotiating point
Items to negotiate include scope, schedule and price

More on procurement
Claims administration
A claim is the assertion that the buyer did something that has hurt the seller and
the seller is asking for compensation
Termination
A contract can be terminated before it is completed. Contract usually has
provisions for termination
Closure
A contract can be closed either by
• Completing the work in contract
• Terminating the contract

Professional and Social
Responsibility

Categories in the code of ethics and professional conduct
Professional and social responsibility is broken down into the following categories in the
code of ethics and professional conduct:
• Responsibility
• Respect
• Fairness
• Honesty
It is unethical to manage a project if you are not trained in project management

It is unethical to provide a project schedule that you do not believe to be accurate
It is unethical to waste company resources because you have not properly planned project
It is unethical to manage a project without charter or WBS

Responsibility
Make decisions based on the best interest of the company rather than your best
interest
• If you discover project is suffering because you have not created a project management
plan. If you tell management about it you may lose your job. What will you do?
Only accept assignments you are qualified to complete

Protect proprietary information
Report unethical behavior and violations

Respect
Maintain an attitude of mutual cooperation

Respect cultural differences
Engage in good faith negotiations
Be direct in dealing with conflict
Do not use your power or position to influence others for your own benefit

Fairness
Act impartially without bribery

Continuously look for conflicts of interest and disclose them
Do not discriminate against others
Do not use your position for personal or business gain

Honesty
Try to understand the truth

Be truthful in all communications and create an environment where others tell the
truth

General comments
If the exam presents an easy way out be careful
PMI expects the professionals to stay engaged and further the profession. Any time PM
has an opportunity to share lessons learned, mentoring, teaching there is a good chance
it is the right answer
You may encounter situation that poses a situation where the project would benefit but
society would suffer. The project manager should avoid all such situations. If the
situation is not untenable then the project manager should disclose the situation and as
a last resort resign the project.

Important Note
Do not study the chapters and prepare in isolation. You must be able to put it all
together. The process diagram of all the processes put together is a great tool. Also Full
length exams help you in this direction.
Activities for Today

1) Fill and submit the application. There is no need to pay ANY money today. First
application will be approved (3 days) and then you can pay.
2) Exam fee (Non member) ~ 550 $
3) Exam fee (member) ~ 410$, Membership fee ~ 110$, total = 520$

Formulae to remember
Title Formula +/- 1 Sigma is 68.26%
PERT (Expected duration) (P+4M+O)/6 +/- 2 Sigma is 95.46%
+/- 3 Sigma is 99.73%
Standard deviation of an activity (P-O)/6
+/- 4 Sigma is 99.99985%
Variance of an activity SD^2
Range of an activity duration EAD +/- SD
Total Float LS-ES, LF-EF
Cost Variance (CV) EV-AC
Range of estimates
Schedule Variance (SV) EV-PV ROM
Cost performance Index (CPI) EV/AC (Rough order of magnitude): -50% to
Schedule performance Index (SPI) EV/PV 100%
Budget estimate: -10 to 25%
Estimate at completion (EAC) BAC/CPI
Definite estimate: +/- 10%
Estimate at completion (EAC) AC+ETC
Estimate at completion (EAC) AC+(BAC-EV)
Estimate at completion (EAC) AC+(BAC-EV)/CPI
Estimate to complete EAC-AC
Variance at completion (VAC) BAC-EAC
Present Value FV/(1+r)^n
NPV [R-C]/(1+r)^n
Communication Channels N(N-1)/2
Expected monetary value EMV = P x I
[(Ceiling price-Target price)/Buyers share ratio] + Target
Point of total assumption
Cost
Points to remember
• Make sure you are thinking about large projects when studying and taking the final
exam
• Practice picking an answer from two or three right answers
• Decide in advance what notes you will write down when you are given scratch paper in
the exam
• Plan you strategy for the exam. When will you take the breaks and for how long
• Expect to see questions you cannot answer or even understand. This happens to
everyone and there is no reason to get annoyed or doubt your abilities during the exam
• Visit the exam site once before the exam to make yourself familiar with the location and
facilities available
• Do not over study. It is not worth trying to get comfortable all the material available.
• Start with Andy Crowe- Then to PMBOK4 - Finish all the (10+1 PMBOK) online exams

Exam Tips
• Make sure you are comfortable during the exam. Wear a sweater which you can remove if needed.
• Bring a snack (Multi grain bars). Keep them in the locker in case you feel hungry.
• You will get scratch pad (5 pages) and pencil during the exam. You will have 15 minute tutorial to
practice. Use this time to jot down in the scratch pad anything you want to write down.
• If you want a new scratchpad you will have to surrender the previous one.
• You will answer one question at a time and can review the questions anytime. You can move back and
forth with the exam questions.
• The exam is NOT adaptive
• Use deep breathing to relax, if you are feeling nervous in the exam
• Smile during the exam- This will make you feel calm
• Use all the exam time. Do not leave early unless you have reviewed all the answers at-least twice
• Control your frustration and focus on the exam. You might dislike or disagree with some questions or
answers. You may be surprised at the number of questions you mark for review. This is very normal.
• Answer the questions from PMI’s perspective of large groups and not from your experience of small
project teams

Exam Tips
• READ ALL THE FOUR CHOICES AND THEN DECIDE THE ANSWER
• eliminate answers which are improbable, so you should in general have 2 answers to choose from
• There can be more than one right answer, but only one BEST answer
• Watch out for statements which are true but do not answer the question
• Options that represent broad and sweeping generalizations tend to be incorrect. So watch out for
“Never”, “Always”, “Must”, “completely” etc
• In the fill-up-blanks the correct answer may not be grammatically correct
• Do not get stuck. If you find a question difficult, review it later and move ahead.
• People feel that PMP content is more in regards to “White collar professions”- probably it is partially
true.
• Pace yourself- You should answer roughly about 55 questions in one hour (200 questions in 4 hours)

Continued Support
• You are requested to ask for any support or help till your examination time
• If you need any text book, we can arrange it for personal, non commercial use
• You will get support for career change or job change, long after today. Please do not
hesitate to contact if and when you need any help from the Institute.
• For immediate help, you can welcome to come over on Saturdays or Sundays and take
paper based or online exams.
• Please intimate Pradeep at-least one day in advance if you need paper based test.

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Project Management Framework: Definition of Project

• Develop a website to advertize our product

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A specific work with a

Projects are managed while processes are controlled/Improved

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A PMO in general should have one of the following roles

PMO is not a person but an organizational entity

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The philosophy believes in three steps

It is important to note that MBO works only if management supports it

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There could be other specific factors (Customer satisfaction etc)

Management directly or indirectly sets the priority of each constraint

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• These could be functional managers, organization itself, portfolio managers,

A chemicals manufacturing company works in the vicinity of Bachupally, Hyderabad. Are

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Type of Organization Comments

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There are three different life cycles

An example: Product life cycle of a computer.

Phase: Phase: Phase:

Phase: Phase: Phase:

Phase: Phase: Phase:

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Knowledge Areas (9)

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Project management process includes (Deming cycle in parenthesis)

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Obtain formal approval

Roles and responsibilities include

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The initiating process group formally starts a new project/phase by officially

There is a formal project selection process or evolved selection criteria.

Once a project is selected, it is chartered and therefore authorized

Most high level planning is done during the Initiation process

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If it cannot be planned, it cannot be done

Time spent on planning must be appropriate to the project needs

Everyone needs to be involved during planning process

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The purpose of executing process is to complete work defined in the project

Focus on managing people, following processes and managing information flow

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Measuring the performance of project to PM plan and approving change requests.

Recommended corrective/preventive actions and defect repair

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Completion of product scope is not completion of project. Closing involves

Celebration and final performance reporting are important elements of closing a

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Integration management process Group it belongs to

Perform integrated change control Monitoring and Controlling

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The main role of a project manager is to perform integration management

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Business Case/Statement of Need

Customers Customer Needs/Requirements

Change Management/Issue Management

Project Team Roles and Responsibilities