Pmbok 5th Edition

Author - Pankaj Sharma
Connoisseur Solutions
Process Framework
Pankaj Sharma, 9810996356
Definition of Project
Definition as per PMBOK Guide
A project is a temporary endeavor undertaken to
create a unique product or service.
Project Definition
A temporary endeavor means that every project has a definite

beginning and end.
Unique means that the product or service or result is different from

other product or service or result.
Progressively elaborated - proceeding in steps
Examples of Project
Building a Software
A Major Enhancement to the software
Filming a Motion Picture
Building a new office
Designing a new product or service
Creating an advertisement campaign
Creating a new process with a business unit
Moving from one building to another
Designing a space vehicle
Project vs Operation
PROJECTS
OPERATIONS
Temporary
Ongoing
Unique
Repetitive
Closes after attaining the objectives
Objective is to sustain business
Prototyping the new car model
Assembly line production
Project Constraints
Risk
Scope
Budget
Scope
Cost
Quality
Resources
Quality
Schedule
PM Triangle
Schedule
Source: A Guide to the Project Management Body of Knowledge, Fourth Edition (PMBOK Guide) 2008 Project
Management Institute, Inc. All Rights Reserved.
Why Projects Fail ?
Lack of clearly defined purpose

Inexperienced project Managers
Poor estimation of duration and cost
Cultural and ethical misalignment
Poor requirements and scope management
Lack of coordination of resources and activities
Poor communication
Inadequate planning of scope, schedule, resources, cost, risk and
quality
Lack of progress and quality control
What Is Project Management ?

Project management is the application of knowledge, skills, tools
and techniques to project activities to meet the project requirements
- PMBOK Guide 4th edition (Glossary)
Project Management Benefits
Project Management Process Groups
Process Groups
Project management processes have been bundled into 5 groups and these
groups are called project management process groups
Initiating
Planning
Executing
Monitoring and controlling
Closing
These process groups are common to most of the projects across various
domains construction, technology, IT, life sciences etc.
Process groups are different than the Phases
Process groups may overlap / repeat based on the activities in the project
Initiating Process Group
Processes within this group launches the project or a project phase

Key activities associated with Initiation includes:
Identifying business needs
Creating a feasibility study
Creating a Product description
Creating Detailed Business Case
Creating a Project Charter
Selecting a Project Manager
Planning Process Group
It involves creation of Project Management Plan that acts as a

roadmap for project execution
Key activities would include:
Collect Requirements
Define Scope
Create Work Breakdown Structure
Define and Sequence Activities
Estimate Activity Resource Requirement and Duration
Creating Schedule
Estimate Cost and Determine Budget
Planning Human Resource, Quality, Communications
Identify, Analyze and Prepare Risk Response Plan
Planning Procurement
Executing Process Group
Executing process group consists of processes to complete the work in

each of the phases
Helps the PM coordinate and direct project resources to meet the
objectives of the project plan
Direct and manage project execution
Acquire project team
Perform quality assurance
Manage Stakeholders Expectation
Distributing project information
Develop and Manage project team
Conduct Procurement
Monitoring and Controlling Process Group
Controlling processes are the activities that

ensure that the project goes according to plan
the actions to implement when project is not going as per the plan
Variances from the project baselines are identified and necessary
corrective measures are undertaken
Ensuring Quality Control
Providing scope verification
Implementing change control
Configuration management
Controlling key parameters like cost, schedule and scope
Monitor and Control Risks
Closing Process Group
This process group includes all processes to close all activities in a

project or project phase
Closing activities to be performed even for the aborted / terminated
projects
Auditing procurement documents
Scope verification
Closing vendor contracts
Closing administrative duties
Submitting final reports
Archiving project records
Celebrating!!!
Process Group Interaction

Executing
Processes
Level
Planning
Processes
Of
Activity
Phase
Start
Initiating
Processes
Controlling Processes
Time
Closing
Processes
Phase
Finish
Project Life Cycle
Projects are divided into phases
The project will have at least a beginning, intermediate and ending phase
Number of phases depends on complexity and size of the project
Reviews are conducted at the end of each phase to measure performance
Phase end reviews allows to decide if the project should continue
The collection of phases is called project life cycle
The project life cycle defines the beginning and end of a project
Characteristics of Project Phase

The completion of one or more deliverables marks the project phase
Deliverables are reviewed and formally accepted by customer at
phase end
Phase end reviews are also called phase exits, stage gates or kill
points
Rolling wave planning summarizes the future phases at high level
Characteristic of Project Life Cycle
Source : PMI PMBOK Fifth Edition
Project Management Knowledge Areas
There are 10 Knowledge Areas covered in PMBOK Guide 5th edition

These 10 Knowledge Areas are:
Project Integration management
Project Scope Management
Project Time Management
Project Cost Management
Project Quality Management
Project Human Resource Management
Project Communications Management
Project Risk Management
Project Procurement Management
Project Stakeholder Management
Project Stakeholders
Individuals and organizations involved in the project

Those who will be directly or indirectly impacted
Stakeholders should be identified throughout the project
They may have a positive or negative influence on the outcome
Stakeholder influence goes down as the project progresses
Project Stakeholders
Key stakeholders include: Project Manager

Customer / User
Performing organization
Project team members
Project management team
Sponsor
Influencers
PMO
Project Manager Skill Set
Communication Skills
Organizational and Planning skills
Budgeting Skills
Conflict Management Skills
Negotiation and Influencing Skills
Leadership Skills
Team Building and Motivating skills
Project, Program & Portfolio Management
Programs
Collection of related projects

Controls are implemented and managed in a coordinated way
Collective benefits are realized
Each project has a project manager
Portfolios
Collection of programs and projects

Projects meet a specific business goal or objective
Includes weighing the value of each project against the portfolios
strategic objective
Project Management Office (PMO)
Project Management Office [PMO]
Centralized units to oversee project and programs within the organization

Establishes and maintains the standards of project management
methodologies
Support managers in planning, estimating, risk management and provide
trainings
Organization Type - PM Influence
Pankaj
Sharma,Fifth
9810996356
Source: A Guide to the Project Management Body
of Knowledge,
Edition.
Organization Type Functional Organization
Source: A Guide to the Project Management Body of Knowledge, Fifth Edition.
Organization Type Weak Matrix
Organization Type Balanced Matrix
Organization Type Strong Matrix
Organization Type Projectized
Organization Type Composite
Organization Types Advantages & Disadvantages
Process Framework
PM Knowledge Area Process Mapping
Source: A Guide to the Project Management Body of Knowledge, Fifth Edition
Project Integration Management

Processes and activities needed to identify, define, combine, unify,
and coordinate the various processes and project management
activities within the Project Management Process Groups
Develop Project Charterthe process of developing a document that formally

authorizes a project or a phase and documenting initial requirements that satisfy the
stakeholders needs and expectations.
Develop Project Management Planthe process of documenting the actions

necessary to define, prepare, integrate, and coordinate all subsidiary plans.
Direct and Manage Project Workthe process of performing the work defined in the
project management plan to achieve the projects objectives.
Monitor and Control Project Workthe process of tracking, reviewing, and

regulating the progress to meet the performance objectives defined in the project
management plan.
Perform Integrated Change Controlthe process of reviewing all change requests,

approving changes, and managing changes to the deliverables, organizational process
assets, project documents, and the project management plan.
Close Project or Phasethe process of finalizing all activities across all of the Project
Management Process Groups to formally complete the project or phase.
Develop Project Charter
Inputs
Tools and Techniques
Outputs
Project statement of work
Expert Judgment
Project Charter
Business case
Facilitation Techniques
Agreements
Enterprise environmental
factors
Organizational Process
Assets
Project Charter
Project Title and Description

Measurable project objectives and related success criteria,
High-level requirements
Assumptions and Constraints
High level project descriptions and boundaries
High Level Risks
Summary milestone schedule
Summary budget
Stakeholder list
Project Approval Requirements( i.e. What constitutes the project
success, who decide that the project is successful, and who signs off
the project)
Project Manager Assigned and Authority Level (Who is given authority
to lead the project, and can he / she determine, manage and approve
changes to budget, schedule, staffing, etc.?)
Name and Authority of the sponsor or other persons authorizing the
project charter.
Project Selection Methods

Numeric Methods
Benefit Measurement Model (also called Comparative

approach )
Payback Period
Cost Benefit Analysis
Scoring Models
Net Present Value (NPV)
Internal Rate of Return (IRR)
Mathematical Models (also called Constrained Optimization)
Use linear, dynamic, non-linear, multi-objective programming

to solve problem

Non Numeric Method
Sacred cow
Operating necessity
Murder Board
Competitive necessity
Payback period the amount of time to recover your cost. It

compares the initial investment to the cash inflows expected over
the life of the product.
For example, Initial investment on a project is Rs. 4,00,000,

Expected cash inflows: Rs. 50,000 per quarter for first two
years, Rs. 100,000 per quarter thereafter.
What is the payback period?
Cash inflows = Rs. 50,000 x 4 (quarters in a year) = Rs. 2,
00,000 per year for first two years. Hence, year 1 inflow = Rs. 2,
00,000, year 2 inflow = Rs. 2, 00,000. Total Rs. 4, 00,000 in 2
years
So payback is reached in 2 years.
Benefit Cost Ratio (BCR) or profitability Index . This is the ratio of project benefit
and the project cost.
BCR = Revenue / Cost
Select the project with a higher BCR
Present Value (PV) is the expected future cash flows expressed in

todays monetary value
PV = FV / (1+r)
For example, Calculate the Present Value of $ 100,000

received three years from now. The interest rate is 10
percent.
PV = 100000 / (1+10/100)3 = $ 75,131
Net Present value (NPV) is the sum total of the Present Value of
Cash Inflows Cash Outflows
TIME PERIOD
INCOME/REVENUE
PRESENT VALUE AT
10% INT RATE
COSTS
PRESENT VALUE AT
10% INT RATE
200
200
50
45
100
91
100
83
300
225
TOTAL
NPV of the Project is 353-291 = 62

Select the project with higher NPV
353
291
Internal Rate of Return (IRR): The rate of interest at which the revenues and
costs are equal.
Select the project with a higher IRR.
Return On Investment (ROI) A return ratio that compares the net benefits of
a project/ product, verses its total cost.
ROI = Operating Income / Investments
Item
Criteria
Weight
Scoring Model Weighted Criteria (example, using

scale of 1-5)
Project A
4
Good ROI
12
20
Our Winner!!
(hmmmm)
25
16
4
Match New
Initiatives of
Competition
9
5
15
5
Provide
Better
Service
10
Project C
15
2
CEO Likes It
Project B
12
12
15
Total:
54
Total:
58
Total:
57
Total:
Total:
Sacred Cows and Pressing Needs
Sacred Cow selectionSenior Management wants it!

(it may often turn out well; many visionary projects
start here)
Business opportunity (make more $$$)
Savings potential (save $$$)
Keeping up with competition (example, many ecommerce projects were in response to competitors
initiatives)
Risk management (examples: disaster recovery
initiatives, Y2K)
Government or regulatory requirements
URGENT!
Murder Board
Murder Board" is a term often used for the team created to see if
they can push hard on a project plan to see where it will break.
This process is called by other names as well, depending on the
subject of the scrutiny and type of firm in which it is employed. For
a hard review of a proposal, it is usually called a "red team." Some
consulting firms call final briefing reviews "gauntlet drills."
Exercise 1: Which Project Will You Select

Method
Project A
Project B
Which One?
Scoring Model
17
20
Payback Period
24 Months
25 months
Benefit Cost Ratio
3.5
4.5
Net Present Value

(NPV)
95,000
80,000
9.5%
11.5%
IRR
Project Management Plan

The project management plan defines how the
project is executed, monitored and controlled, and
closed. The project management plan content will
vary depending upon the application area and
complexity of the project.
Develop Project Management Plan
Inputs
Outputs
Project Charter
Expert Judgment
Project
Management Plan
Outputs from other

Process
Facilitation techniques
Enterprise
environmental factor
Organizational
Process Assets
Components of Project Management Plan
Requirements Management Plan

Scope management plan
Schedule management plan
Cost management plan
Quality management plan
Process improvement plan
Human Resource management plan
Communication management plan
Risk management plan
Procurement management plan
Stakeholder management plan
Project baselines (include but not limited to scope, schedule and
cost baselines)

The project management plan may also include the following.
Life cycle selected for the project and the processes that will be
applied to each phase
Details of the tailoring decisions specified by the project
management team as follows
Project management processes selected by the project management team

Level of implementation for each selected process
Description of the tools and techniques to be used for accomplishing those
processes and
Description of how the selected processes will be used to manage the specific
project, including the dependencies and interactions among those processes and
the essential inputs and outputs.
Description of how work will be executed to accomplish the

project objectives
Change management plan that documents how the changes will
be monitored and controlled
Configuration management plan that documents how the
configuration management will be performed
Description of how the integrity of the project baselines will be

maintained
Requirements and techniques for communicating among

stakeholders
Key management reviews for the content, the extent of, and
timing to address, open issues and pending decisions
Direct and Manage Project Work

Direct and Manage Project Work is the process of performing
the work defined in the project management plan and
implementing approved changes to achieve the projects
objectives.
Activities in Direct and Manage Project Work

The activities include, but are not limited to:
Perform activities to accomplish project requirements;

Create project deliverables
Staff, train, and manage the team members assigned to the project
Obtain, manage, and use resources including materials, tools,

equipment, and facilities
Activities in Direct and Manage Project Work

The activities include, but are not limited to:
Establish and manage project communication channels, both external
and internal to the project team
Generate project data, such as cost, schedule, technical and quality
progress, and status to facilitate forecasting
Issue change requests and adapt approved changes into the projects
scope, plans, and environment
Manage risks and implement risk response activities
Collect and document lessons learned, and implement approved process
improvement activities
Direct and Manage Project WorkInputs
Outputs
Project Management
Plan
Expert Judgment
Deliverables
Project Management
Information System
Work Performance
Data
Meetings
Change Requests
Approved Change
Requests
Enterprise
environmental factor
Assets
Project
Management Plan
updates
Project Document
Updates
Monitor and Control Project Work

Monitor and Control Project Work is the process of tracking,
reviewing, and regulating the progress to meet the
performance objectives defined in the project management
plan.
Continuous monitoring gives the project management team
insight into the health of the project, and identifies any
areas that may require special attention. Control includes
determining corrective or preventive actions or re-planning
and following up on action plans to determine if the actions
taken resolved the performance issue.
Monitoring and Control Project Work

Inputs
Expert Judgment
Change requests
Schedule Forecasts
Analytical techniques
Work Performance
Reports
Cost Forecasts
Project Management
Information Systems
Validated Changes
Work Performance
Information
factors
Assets
Meetings
Outputs
Project management
plan updates
Project document
updates
Perform Integrated Change Control

Perform Integrated Change Control is the process of review
in all change requests, approving changes and managing
changes to the deliverables, organizational process assets,
project documents and the project management plan.
The Perform Integrated Change Control process is conducted
from project inception through completion. The project
management plan, the project scope statement, and other
deliverables are maintained by carefully and continuously
managing changes, either by rejecting changes or by
approving changes thereby assuring that only approved
changes are incorporated into a revised baseline.
Perform Integrated Change Control

Inputs
Project management Plan
Expert judgment
Work performance
reports
Meetings
Change requests
factors
Organizational process
assets
Change control tools
Outputs
Approved change
requests
Change log
Project management
plan updates
Project documents
updates
Close Project or Phase

Close Project or Phase is the process of finalizing all
activities across all of the Project Management Process
Groups to formally complete the project or phase.
When closing the project, the project manager will review
all prior information from the previous phase closures to
ensure that all project work is complete and that the
project has met its objectives.
Close Project or Phase

Inputs

Expert Judgment
Accepted Deliverables
Assets
Meetings
Outputs
Final product, service,
or result transition
assets updates
Exercise 2: Integration Management

Revising Key Terms
1. The project management plan is the collection of
______ Plans
2. Work Culture and company policies are called
Enterprise__________ Factors
3. ___________ is a document that gives the
project manager authority over the team
Answer to Exercise 2: Integration Management

Revising Key Terms
1. The project management plan is the collection of
Subsidiary Plans
2. Work Culture and company policies are called Enterprise
Environmental Factors
3. Project Charter is a document that gives the project
manager authority over the team
QUIZ !

Project Scope Management includes the processes
required to ensure that the project includes all the
work required, and only the work required, to
complete the project successfully. Managing the
project scope is primarily concerned with defining
and controlling what is and is not included in the
project.
Why Manage Project Scope?
Some of the issues faced in projects

Project teams believe the additional work is a change request, but
the client insists it is part of the original scope
The project suddenly finds itself crunched for time. A number of
additional requirements are coming up along with the continuing
development work
The client talks about a high level vision which the project is
expected to achieve, but the stakeholders are either unable to
articulate this vision in concrete objectives and deliverables or
provide conflicting views
Contradicting requirements. Different interpretation of the same
statement by different people
Commitment made to the customer without understanding the
application portfolio

Project Scope Management includes the processes
required to ensure that the project includes all the
work required, and only the work required, to
complete the project successfully. Managing the
project scope is primarily concerned with defining
and controlling what is and is not included in the
project.
Plan Scope Management The process of creating a scope

management plan that documents how the project scope will be
defined , validated and controlled
Collect RequirementsThe process of defining and documenting
stakeholders needs to meet the project objectives
Define ScopeThe process of developing a detailed description of the
project and product
Create WBSThe process of subdividing project deliverables and
project work into smaller, more manageable components
Validate ScopeThe process of formalizing acceptance of the
completed project deliverables
Control ScopeThe process of monitoring the status of the project
and product scope and managing changes to the scope baseline
Plan Scope Management

Plan Scope Management is the process of creating a scope
management plan that documents how the project scope will
be defined , validated and controlled.
The key benefit of this process is that it provides guidance
and direction on how scope will be managed throughout the
project.
Plan Scope Management
Inputs
Outputs
Expert Judgment
Scope
Management Plan
Project Charter
Meetings
factors
Organization process
assets
Requirements
Management Plan
Scope Management Plan

The scope management plan is a component of the project or
program management plan that describes how the scope will be
defined, developed, monitored, controlled, and verified. The scope
management plan is a major input into the Develop Project
Management Plan process, and the other scope management
processes.
Scope Management Plan

The components of a scope management plan include:
Process for preparing a detailed project scope statement
Process that enables the creation of the WBS from the detailed
project scope statement
Process that establishes how the WBS will be maintained and

approved
Process that specifies how formal acceptance of the completed
project deliverables will be obtained and
Process to control how requests for changes to the detailed project

scope statement will be processed.

The requirements management plan is a component of the project
management plan that describes how requirements will be analyzed,
documented, and managed.

Components of the requirements management plan can include, but
are not limited to:
How requirements activities will be planned, tracked, and reported;
Configuration management activities such as: how changes to the
product will be initiated, how impacts will be analyzed, how they will
be traced, tracked, and reported, as well as the authorization levels
required to approve these changes;
Requirements prioritization process;
Product metrics that will be used and the rationale for using them;
and
Traceability structure to reflect which requirement attributes will be
captured on the traceability matrix.
(Planning Process Group)
Collect Requirements is the process of defining and

documenting stakeholders need to meet the project
objectives
Many organizations categorize requirements into project
requirements and product requirements. Project
requirements can include business requirements, project
management requirements, delivery requirements, etc.
Product requirements can include information on technical
requirements, security requirements, performance
requirements etc.
Product Scope and Project Scope
Product Scope:
The features and functions in a product,

service, or result.
Project Scope:
The work that needs to be done in order

to deliver a product, service or result
with the specified features and
functions.
Inputs
Outputs
Interviews
Focus Groups
Facilitated Workshop
Group Creativity Techniques
Group Decision Making
Techniques
Questionnaires and surveys
Observations
Prototypes
Benchmarking
Context Diagrams
Document analysis
Requirements
Documentation
Requirements
management plan
Stakeholder management
plan
Project Charter
Stakeholder Register
Requirements
Traceability Matrix
Collect Requirements Requirement Traceability Matrix
Define Scope
Define Scope is the process of developing a detailed

description of the project and product. The preparation
of a detailed project scope statement is critical to project
success and builds upon the major deliverables,
assumptions, and constraints that are documented during
project initiation.
Define Scope -
Inputs
Outputs
Scope management
plan
Expert Judgment
Project Scope
Statement
Project Charter
Requirements
Documentation
Assets
Product Analysis
Alternatives Identification
Facilitated Workshops
Project Document
Updates
Project Scope Statement

Project scope statement describes, in detail, the projects
deliverables and the work required to create those deliverables
Project Objectives
Project constraints/assumptions
Product scope description
Initial identified risk
Project requirement
Schedule milestones
Project boundaries
Initial project organization
Project deliverables
Fund limitation
Product acceptance criteria
Configuration management
requirement
Approval requirement
Create WBS
Create WBS is the process of subdividing project

deliverables and project work into smaller, more
manageable components.
The planned work is contained within the lowest level WBS
components, which are called work packages. A work
package can be scheduled, cost estimated, monitored, and
controlled.
Create WBS
Inputs
Outputs
Scope management
plan
Decomposition
Scope Baseline
Expert judgment
Project Document
Updates
Project Scope
Statement
Requirements
Documentation
Enterprise
environmental factors
Assets
Create WBS
The Work Breakdown Structure breaks down deliverables
Work Packages are deliverables / work packages, NOT activities
A sample WBS for a car manufacturing project
Phase-Based WBS
Partial WBS for Software Project Based on Phase
Customer Relationship Management System
Project Management
Requirements
Planning
Client Interviews
Reporting
Review of Current Workflows
Administration
Meetings
Documentation Planning
Design
Logical Design
Build
Logical Design
Process Models
Process Models
Use Cases
Use Cases
Logical Data Models
Physical Data Models
Business Objectives
Preliminary Test Planning
Training Requirements
etc.
Component-Based WBS
Partial WBS for Luxury Townhouse Complex by Component
IYHTAYCAI* Village Project
(*If you have to ask, you can't affort it)
Project Management
Buildings
Land Planning
Sales and Marketing
Planning
Townhouse Units
Water and Sewers
Advertising
Reporting
Clubhouse
Roads and Access Lanes
Association Declarations
Administration
Gatehouses
Retention Ponds
General Legal
Meetings
Pro Shop
18-Hole Golf Course
Permits and Inspections
Maintenance Staffing Requirements
Permits and Inspections
WBS Dictionary Template
WBS Dictionary
Project Name:
WBS Owner:
WBS Name:
WBS Id:
Parent Id:
Start Date:
End Date:
WBS Detail:
WBS Element Description:
Acceptance Criteria:
Assumptions:
Resources Assigned:
WBS dependencies:
Cost:
Approved by:
Date:
Scope Baseline
Definition: An approved specific version of the detailed scope statement,

work breakdown structure (WBS), and its associated WBS dictionary
When finalizing scope baseline, the items that are eliminated from the project
must be formally documented as exclusions to the project.
If their exclusion is not properly documented, they may return again and
again as new requirements to be considered.
Validate Scope
Validate Scope is the process of formalizing acceptance of

the completed project deliverables. This process includes
reviewing deliverables with the customer or sponsor to
ensure that they are completed satisfactorily and obtaining
formal acceptance of deliverables by the customer or
sponsor.
Validate Scope
Once the scope of the project has been defined

and delivered, the scope of the project delivered must be verified.
This means getting approval of the delivered scope of the project from all of the
stakeholders.
It is a good practice to get the stakeholders to agree to the acceptance criteria at

the beginning of the project rather than at the end of it.
A set of acceptance criteria is drawn up and the acceptance criteria are agreed to
when the project scope is accepted by the stakeholders.
Validate Scope
Inputs
Inspection
Accepted deliverables
Requirements
Documentation
Group decision making

techniques
Change requests
Requirements Traceability
Matrix
Verified Deliverables
Work performance data
Outputs
Work performance
information
Project document
updates
Control Scope
(Monitoring and Controlling Process Group)
Monitoring the status of the project and product scope and

managing changes to the scope baseline.
Control Scope
(Monitoring and Controlling Process Group )

Inputs
Variance Analysis
Requirements
Documentation
Work Performance Data
Requirements Traceability
Matrix
Assets
Outputs
Work Performance
Information
Change Requests
Project Management
Plan Updates
Project Document
Updates
Organization Process
Assets Updates
Exercise 1: Correct Order

Arrange the following activities in correct order
Define
scope
Create
WBS
Collect
Requirements
Validate Scope
Exercise 2: Scope Management Crossword
Revising Key Terms : Complete the following

1.
____________ Scope means the features or functions of the thing or

service that you are building
2.
The process where you write the project scope statement is called
_________ Scope
Exercise 2: Scope Management Crossword

1. Product Scope means the features or functions of the thing or service that
you are building
2. The process where you write the project scope statement is called Define
Scope
QUIZ !

Project Time Management includes the processes required to manage timely completion of
the project.
Plan schedule management The process of establishing the policies, procedures and
documentation for planning, developing, managing, executing and controlling the project schedule
Define ActivitiesThe process of identifying the specific actions to be performed to produce the
project deliverables.
Sequence ActivitiesThe process of identifying and documenting relationships among the project
activities.
Estimate Activity ResourcesThe process of estimating the type and quantities of material, people,
equipment, or supplies required to perform each activity.
Estimate Activity DurationsThe process of approximating the number of work periods needed to
complete individual activities with estimated resources.
Develop ScheduleThe process of analyzing activity sequences, durations, resource requirements,
and schedule constraints to create the project schedule.
Control ScheduleThe process of monitoring the status of the project to update project progress
and managing changes to the schedule baseline.
Plan Schedule Management

Plan schedule Management is the process of establishing the policies,
Procedures, and documentation for planning, developing, managing
and controlling the project schedule
The key benefit of this process is that it provides direction on how the
project schedule will be managed throughout the project.
Inputs
Outputs
Project management
plan
Expert Judgment
Schedule
management plan
Project charter
Enterprise Environment
Factors
Meetings
Assets
The schedule management plan can establish the following:

Project schedule model development. The scheduling methodology and the
scheduling tool to be used
Level of accuracy. The acceptable range used in determining realistic activity
duration estimates is
.
Units of measure. Each unit used in measurements (such as staff hours, staff
days, or weeks for time
Organizational procedures links. The WBS provides the framework for the
schedule
.
Project schedule model maintenance. The process used to update the status
and record progress of
Control thresholds. Variance thresholds for monitoring schedule performance

may be specified to indicate
An agreed-upon amount of variation to be allowed before some action needs to be taken.
Thresholds are typically expressed as percentage deviations from the parameters
established in the baseline plan.
Define Activities
Define Activities is the process of identifying and documenting the
specific actions to be performed to produce the project deliverables.
The key benefit of this process is to break down work packages into
Activities that provide a basis for estimating, scheduling, executing,
Monitoring , and controlling the project work.
Define Activities
Inputs
Outputs
Schedule management
plan
Decomposition
Activity List
Rolling Wave Planning
Activity Attributes
Expert Judgment
Milestone List
Scope Baseline
Enterprise Environment
Factors
Assets
Define Activities : Inputs

Schedule Management Plan - provides direction on how the project schedule will
be managed throughout the project.
Scope Baseline provides the project deliverables, assumptions and constraints
Enterprise Environmental Factors that can influence the Define Activities process
include, but are not limited to, the project management information system (PMIS).
Organizational Process Assets that can influence the Define Activities process
include, but are not limited to:
Existing formal and informal activity planning-related policies, procedures, and
guidelines, such as the scheduling methodology, that are considered in developing the
activity definitions, and
Lessons-learned knowledge base containing historical information regarding
activities lists used by previous similar projects.
Define Activities : Tools and Techniques

Decomposition involves subdividing the project work packages into smaller, more
manageable components called activities.
Rolling Wave Planning is a form of progressive elaboration planning where the work
to be accomplished in the near term is planned in detail and future work is planned at
a higher level of the WBS.
Templates is a standard activity list or a portion of an activity list from a previous
project is often usable as a template for a new project. The related activity attributes
information in the templates can also contain other descriptive information useful in
defining activities.
Define Activities : Outputs

Activity List is a comprehensive list including all schedule activities required on the
project.
Activity attributes depicts the multiple components associated with each activity
Activity ID, WBS ID, Activity Name, activity description, predecessor activities,
successor activities, logical relationships, leads and lags, resource requirements,
imposed dates, constraints, and assumptions.
Activity attributes can be used to identify the person responsible for executing the
work, geographic area, or place where the work has to be performed, and activity type
such as level of effort (LOE), discrete effort, and apportioned effort (AE).
Milestone List identifies all milestones and indicates whether the milestone is
mandatory, such as those required by contract, or optional, such as those based upon
historical information.
Sequence Activities
Sequence Activities is the process of Identifying and documenting

relationships among the project activities.
The key benefit of this Process is that it defines the logical sequence of
Work to obtain the greatest efficiency given all project constraint.
Sequence Activities
Inputs
Outputs
Schedule management
plan
Activity List
Activity Attributes
Milestone List
Factors
Assets
Precedence Diagramming
Method (PDM)
Dependency determination
Leads and Lags
Project Schedule
Network Diagrams
Project Document
Updates
Sequence Activities - Inputs

Schedule Management Plan - provides direction on how the project schedule will be
managed throughout the project.
Activity List Output of Define Activities process
Activity Attributes Output of Define Activities process
Milestone List - Output of Define Activities process
Project Scope Statement Output of Define Scope Process
Organizational Process Assets - The organizational process assets that can
influence the Sequence Activities process include, but
are not limited to, project files from the corporate knowledge base used for scheduling
methodology.
Sequence Activities Tools and Techniques

Precedence Diagramming Method (PDM)- Also known as activity on node (AON)
as the activities are represented on nodes and the logical relationship between
activities is represented through arrows
The relationship in the figure below represents that the Activity B is dependent on
Activity A. i.e. Activity B can only start after the completion of activity A

Types of dependencies in PDM
Finish to Start (FS) This relationship means Task A must complete before Task
B can begin. This is the most common relationship.
Finish to Finish (FF) - Finish of successor activity depends on finish of the
predecessor
Start-to-Start (SS) Start of a successor activity depends on start of a predecessor
activity.
Start- to Finish (SF) Finish of Successor depends on the start of preceding
activity.

Dependency Determination
There are three kinds of dependencies, Mandatory dependency, Discretionary

dependency and external dependency
Mandatory dependencies referred as hard logic are natural order of activities or
which are contractually required.
Discretionary dependencies referred as preferred logic, soft logic or preferential
logic are defined as best practices and are considered the preferred choice among the
other alternatives.
External dependencies are external to the project and are not in projects control.
E.g. Deliverable from other project or expected new law etc
Estimate Activity Resources

Estimate Activity Resources is the process of estimating the
type and quantities of material, human resources,
Equipment, or supplies required to perform each activity.
The key benefit of this process is that it identifies the type,
Quantity, and characteristics of resources required to
Complete the activity which allows more accurate cost and
duration estimate
Estimate Activity Resources

Inputs
Schedule Management
Plan
Activity List
Activity Attributes
Resource Calendars
Risk Register
Enterprise Environmental
Factors
Assets
Expert judgment
Alternatives analysis
Published estimating data
Bottom-up estimating
Project management software
Outputs
Activity resource
requirements
Resource
breakdown structure
Project
management
updates
Estimate Activity Resources - Inputs

Schedule Management Plan Identifies the level of accuracy and the units of
measure for the resource to be estimated
Activity List Identifies the activities which will need resources
Activity Attributes Provide the primary data input for use in estimating those
resources required for each activity in the activity list.
Resource Calendar Resource calendars specify when and how long identified
project resources will be available during the project
Enterprise Environmental Factors- The enterprise environmental factors that can
influence the Estimate Activity Resources process include but are not limited to
resource availability and skills
Organizational Process Assets that influence this process include but are not
limited to; Policies and Procedures related to staffing, policies and procedures related
to rental purchase of supplies and equipments, Historical information regarding types
of resources used for similar work on previous projects
Estimate Activity Resources Tools and Techniques

Expert Judgment is often required to assess the resource-related inputs to this
process. Any group or person with specialized knowledge in resource planning and
estimating can provide such expertise.
Alternatives Analysis
Many schedule activities have alternative methods of accomplishment. They include
using various levels of resource capability or skills, different size or type of machines,
different tools (hand versus automated), and make-or-buy decisions regarding the
resource.
Published Estimating Data
Several companies routinely publish updated production rates and unit costs of
resources for an extensive array of labor trades, material, and equipment for different
countries and geographical locations within countries.
Estimate Activity Resources Tools and Techniques

Bottom-Up Estimating When an activity cannot be estimated with a reasonable
degree of confidence, the work within the activity is decomposed into more detail. The
resource needs are estimated. These estimates are then aggregated into a total
quantity for each of the activitys resources. Activities may or may not have
dependencies between them that can affect the application and use of resources. If
there are dependencies, this pattern of resource usage is reflected and documented in
the estimated requirements of the activity.
Project Management Software Project management software has the capability to
help plan, organize, and manage resource pools and develop resource estimates.
Depending on the sophistication of the software, resource breakdown structures,
resource availability, resource rates and various resource calendars can be defined to
assist in optimizing resource utilization.
Estimate Activity Resources Outputs

Activity Resource Requirements identifies the types and quantities of resources
required for each activity in a work package. These requirements can then be
aggregated to determine the estimated resources for each work package. The amount
of detail and the level of specificity of the resource requirement descriptions can vary
by application area. The resource requirements documentation for each activity can
include the basis of estimate for each resource, as well as the assumptions that were
made in determining which types of resources are applied, their availability, and what
quantities are used.
Resource Breakdown Structure is a hierarchical structure of the identified
resources by resource category and resource type. Examples of resource categories
include labor, material, equipment, and supplies. Resource types can include the skill
level, grade level or other information as appropriate to the project. The resource
breakdown structure is useful for organizing and reporting project schedule data with
resource utilization information.
Project Documents may be updated include, but are not limited to:
Activity list,
Activity attributes, and
Resource calendars.
Estimate Activity Duration

Estimate Activate Durations is the process of estimating the
Number of work periods needed to complete individual
Activities with estimated resources.
The key benefit of this process is that it provides the
amount of time each activity will take to complete, which is
a major input to Develop schedule process.
Estimate Activity Duration

Inputs
Outputs
Schedule management
plan
Activity List
Activity Attributes
Activity Resource
Requirements
Resource Calendars
Risk Register
Resource Breakdown
Structure
Factors
Assets
Expert judgment
Analogous Estimating
Parametric Estimating
Three point estimates
techniques
Reserve Analysis
Activity duration
updates
Project document
updates
Estimate Activity Duration - Inputs

Schedule Management Plan defines the method used and the level of accuracy
along with other criteria required to estimate activity durations including the project
update cycle.
Activity List Defines activity list that will need duration estimates.
Activity Attributes- Output of Define Activities process
Activity Resource Requirements The number of resources allocated will impact
the duration of most of the activities.
Resource Calendars - can include the type, availability, and capabilities of human
resources. The type, quantity, availability, and capability, when applicable, of both
equipment and material resources, which could significantly influence the duration of
schedule activities, are also considered. Examples such as Existing conditions,
Availability information and length of the reporting periods. Examples of constraints
include , Available skilled resources and contract terms and requirement.
Estimate Activity Duration - Inputs

Project Scope Statement- The assumptions and constraints from the project scope
statement are considered when estimating the activity durations. This includes
Existing conditions
Availability of information
Length of the reporting periods
Examples of constraints include, but are not limited to
Available skilled resources
Contract terms and requirements
Enterprise Environmental Factors that can influence the Estimate Activity
Durations process include, but are not limited to: Duration estimating databases and
other reference data, Productivity metrics, and Published commercial information.
Organization Process Assets that can influence the Estimate Activity Durations
process include but are not limited to: Historical duration information, Project
calendars, Scheduling methodology and Lessons learned.
Estimate Activity Duration Tools and Techniques

Expert Judgment guided by historical information, can provide duration estimate
information or recommended maximum activity durations from prior similar projects.
Expert judgment can also be used to determine whether to combine methods of
estimating and how to reconcile differences between them.
Analogous estimating uses parameters such as duration, budget, size, weight, and
complexity, from a previous, similar project, as the basis for estimating the same
parameter or measure for a future project.
Parametric Estimating Parametric estimating uses a statistical relationship between
historical data and other variables (e.g., square footage in construction) to calculate
an estimate for activity parameters, such as cost, budget, and duration.
Reserve Analysis include contingency reserves, (sometimes referred to as time
reserves or buffers) into the overall project schedule to account for schedule
uncertainty. The contingency reserve may be a percentage of the estimated activity
duration, a fixed number of work periods, or may be developed by using quantitative
analysis methods.
Estimate Activity Duration Tools and Techniques

Three-Point Estimates (PERT) is based on statistical methods in particular normal
distribution. The estimation of activity duration is done based on the following three
points
Most likely (M). The duration of the activity, given the resources likely to be
assigned, their productivity, realistic expectations of availability for the activity,
dependencies on other participants, and interruptions.
Optimistic (O). The activity duration is based on analysis of the best-case scenario
for the activity.
Pessimistic (P). The activity duration is based on analysis of the worst-case scenario
for the activity.
PERT analysis calculates an Expected (E) activity duration using a weighted average
of these three estimates:
Double Triangular or Beta Distribution - E = O + 4M + P/6 , Standard Deviation SD= P-0/6
Triangular Distribution E= 0+M+P/3 ,
Standard Deviation = 02+M2+P2-OM-MP-PO/18
Develop Schedule
Develop schedule is the process of analyzing activity
sequences, durations, resource requirements, and
schedule constraints to create the project schedule model.
The key benefits of this process is that by entering schedule
activities , durations, resources, resource availabilities and
Logical relationships into the scheduling tool , it generates a
schedule model with planned dates for completing project
activities
Develop Schedule
Inputs
Schedule management
Activity List
Activity attributes
Project schedule
network diagrams
Activity resource
requirements
Resource calendars
Activity duration
estimates
Project scope
statement
Project staff
assignments
Resource Breakdown
Structure
Risk Register
Enterprise
Organizational
Process Assets
Schedule network analysis

Critical path method
Critical chain method
Resource optimization techniques
Modeling techniques
Leads and lags
Schedule compression
Scheduling tool
Outputs
Project schedule
Schedule baseline
Schedule data
Project Calendars
Project Management
Plan updates
Project document
updates
Develop Schedule - Inputs

Schedule Management Plan Identifies the scheduling method and tool used to
create the schedule and how schedule is to be calculated.
Activity List Identifies the activities that will be included in the schedule model
Activity attributes Provide the details used to build the schedule model.
Project schedule network diagram contains logical relationship between
predecessor and successor that will be used to build the schedule.
Activity resource requirements Identify the types and quantities of resources
required for each activity used to create the schedule model.
Resource calendars- specify when and how long identified project resources will be
available during the project
Activity duration estimates contain the quantitative assessment of the likely
number of work periods that will be required to complete an activity that will be used
to calculate the schedule.
Develop Schedule - Inputs

Project scope statement- contains assumptions and the constraints that can impact
the development of the schedule.
Enterprise Environmental Factors that can influence the Develop Schedule process
include, but are not limited to, a scheduling tool that can be used in developing the
schedule.
Organizational Process Assets The organizational process assets that can influence
the Develop Schedule process include, but are not limited to:
Scheduling methodology and Project calendar.
Develop Schedule Tools and Techniques

The critical path method calculates the theoretical early start and finish
dates, and late start and finish dates, for all activities without regard for
any resource limitations, by performing a forward and backward pass
analysis through the schedule network.
Critical Chain Method is a schedule network analysis technique that
modifies the project schedule to account for limited resources. The
resource-constrained critical path is known as the critical chain. The critical
chain method adds duration buffers that are non-work schedule activities to
manage uncertainty.

Resource Optimization Techniques that can be used to Adjust the
schedule model due to demand and supply of resources include.
Resource Levelling - Is necessary when resources have been overallocated, such as when a resource has been assigned to two or more
activities during the same time period, when shared or critical required
resources are only available at certain times or are only available in limited
quantities. Resource leveling can often cause the original critical path to
change.
Resource Smoothing A technique that adjusts the activities of a
schedule model such that the requirements for resources on the project do
not exceed certain predefined resource limits. There is no change in the
project completion date the activities may only be delayed within their free
and total float.

Modeling Techniques include
What-If Scenario Analysis- A schedule network analysis is performed

using the schedule to compute the different scenarios, such as delaying a
major component delivery, or introducing external factors, such as a strike
The outcome of the what if scenario analysis can be used to assess the
Feasibility of the project schedule under adverse conditions
Simulation involves calculating multiple project durations with different
sets of activity assumptions. The most common technique is Monte Carlo
Analysis in which a distribution of possible activity durations is defined for
each activity and used to calculate a distribution of possible outcomes for
the total project.

Applying Leads and Lags - Leads and lags are refinements applied during network
analysis to develop a viable schedule.
Schedule Compression
Crashing. A schedule compression technique in which cost and schedule tradeoffs are
analyzed to determine how to obtain the greatest amount of compression for the least
incremental cost. Examples of crashing could include approving overtime, bringing in
additional resources, or paying to expedite delivery to activities on the critical path.
Crashing only works for activities where additional resources will shorten the duration.
Crashing does not always produce a viable alternative and may result in increased risk
and/or cost.
Fast tracking. A schedule compression technique in which phases or activities
normally performed in sequence are performed in parallel. An example is constructing
the foundation for a building before completing all of the architectural drawings. Fast
tracking may result in rework and increased risk. Fast tracking only works if activities
can be overlapped to shorten the duration.

Scheduling Tool - Automated scheduling tools expedite the scheduling
process by generating start and finish dates based on the inputs of
activities, network diagrams, resources and activity durations. A scheduling
tool can be used in conjunction with other project management software
applications as well as manual methods.
Develop Schedule Outputs

Schedule Baseline - is a real or theoretical construct that captures the approved
schedule. It is used to provide a comparison or contrast with the actual progress of
work against the schedule and to determine if performance to date is within
acceptable parameters.
Project schedule displays the start and end dates of all the activities in the project
and the same for overall project. It can be represented in the form of Gantt Chart,
Milestone Chart or a project network diagram.
Schedule data is the data on the basis of which schedule was developed. It includes
resource requirements by time period, alternative schedules such as best-case or
worst case, not resource leveled or resource leveled with, or without imposed dates
and scheduling of contingency reserves
Develop Schedule Outputs

Project Calendars A project calendar identifies working days and shifts that are
available for scheduled activities. It distinguishes time period in days or part of days
that are available to complete scheduled activities from time period that are not
available.
Project Management Plan Updates Elements of the project management plan
that may be updated include
Schedule baselines
Project document updates includes updates to resource requirement, activity
attributes, risk registers and calendars
Exercise : Critical Path
For the network diagram below find Critical Path, float for activity A and E
For the network diagram below find Critical Path, float for activity A and E
Exercise : Forward and Backward Pass
Complete the following Project Network Diagram
Based on the portion of network diagram shown below find ES and LF for
activity F
Control Schedule
(Monitoring and Controlling Process Group)
Control Schedule is the process of monitoring the status of the

project to update project progress and manage changes to the
schedule baseline.
Control Schedule
Control Schedule is the process of monitoring the status of
project activities to update project progress and manage
changes to the schedule baseline to achieve the plan.
The key benefit of this process is that it provides the means
to recognize deviation from the plan and take corrective
action and preventive actions and thus minimizes risk.
Control Schedule
Inputs
Project management
plan
Project schedule
assets
Performance reviews
Project management
Software
Resource optimization
techniques
Modeling techniques
Leads and lags
Schedule compression
Scheduling tool
Outputs
Work performance
information
Schedule forecasts
Change Requests
Project Management
Plan updates
Project document
updates
asset updates
Control Schedule- Inputs

Project Management Plan is a formal, approved document that defines how the
project is executed, monitored and controlled.
Project Schedule is the primary input to this process, since it is the source against
which the results are controlled.
Work Performance Data details the work that is being executed, recently
completed, and next steps. This information is gathered from the Direct and Manage
Project execution process.
Project Calendars - A schedule model may require more than one project calendar
to allow for different work periods for some activities to calculate the schedule
forecasts.
Control Schedule- Inputs

Schedule Data will be reviewed and updated in the Control Schedule process.
Organizational Process Assets can be a system for formally evaluating schedule

change, or a software system to help detect changes or measuring variance
Control Schedule- Tools and Techniques

Performance Reviews keeps project manager updated on how project is progressing
against the base lined schedule. Some of the techniques that can be used for
performance reviews are :
Trend analysis examines project performance over time to determine whether
performance is improving or deteriorating.
Critical path method Comparing the progress along the critical path can help
determine schedule status. The variance on the critical path will have a direct impact
on the project end data. Evaluating the progress of activities on near critical paths can
identify schedule risk.
Critical Chain method- Comparing the amount of buffer remaining to the amount
of buffer needed to protect the delivery date can help determine schedule status. The
difference between the buffer needed and the buffer remaining can determine whether
corrective action is appropriate.
Earned Value Management - Measurements such as SV and SPI helps you to
know whether you are ahead or behind in terms of the schedule.

Project Management Software automates the other tools and techniques in control
schedule
Resource optimization techniques involves the scheduling of activities and
resources required by those activities while taking into consideration both the resource
availability and the project time.
Modeling techniques are used to review various scenarios guided by risk monitoring
to bring the schedule model into alignment with the project management plan and
approved baseline.

Leads and lags have impact on the schedule and as the project progresses lead and
lags need to be adjusted to reflect reality so as to provide the most realistic view of
the schedule possible
Schedule compression includes shortening the duration of the plan through

Crashing and Fast tracking
Scheduling tool provides various features (Views, reports etc) that helps in
managing the schedule
Control Schedule- Outputs

Work Performance Information The updated schedule performance index (SPI)
, Schedule variance (SV) and other earned value measurements relevant to the
schedule need to be calculated and communicated out.
Change Requests Any change in the schedule due to change in scope or due to
any other valid reason requires Change Request.
Project Management Plan Updates - As the schedule changes, the project
management plan is updated.
Project Document Updates This includes any project document (Other than
project management plan) that has changed as a result of Control Schedule. For
example Scheduled data such as revised planned start and finish dates, Project
schedule and the Risk register
Organization Process Updates Any times a lesson is learned in Control Schedule,

it becomes a reusable asset for the performing organization.
Exercise 3: Time Management

Complete the following
1. Adding more resources to a project so you can get it done
faster is called____________ .
2. _________ is the process where you put the activities in
order.
Answers to Exercise 3: Time Management
1. Adding more resources to a project so you can get it done

faster is called Crashing .
2. Sequence Activities is the process where you put the
activities in order.
QUIZ !
pankaj sharma, 9810996356

Project Cost Management includes the processes involved in estimating,
budgeting, and controlling costs so that the project can be completed
within the approved budget.
Cost Management Processes
Process
Process Group
Plan Cost Management
Planning
Estimate Costs
Planning
Determine Budget
Planning
Control Costs
Monitoring and Controlling
Estimate Costs
Estimate Costs is the process of developing an approximation of the
monetary resources needed to complete project activities. The table below
shows five different types of estimates that can be used based on the need.
Estimate Type
Range
Order of Magnitude Estimates
-50% to +50%
Conceptual Estimate
-30% to +50%
Preliminary Estimate
-20% to +30%
Definitive Estimate
-15% to +20%
Control Estimate
-10% to +15%
Types of Cost
Direct Cost- Any cost that is identified specifically with a particular final
cost objective.
Indirect Cost- Any cost not directly identified with a single, final cost
objective (more than one project)
Fixed Cost - Periodic charge that does not vary with business volume
Variable Cost - Cost that fluctuates based on the business volume
Opportunity Cost: When there is a decision to be made between two

opportunities, the opportunity cost is the value / money forgone for the not
doing the project.
Types of Cost
Lifecycle Costing: Takes into account cost of development of a project

and also the cost of supporting during the lifecycle.
Sunk Cost - Cost already incurred which cannot be recovered regardless

of future events

The process that establishes the policies, procedures , and
documentation for planning , managing , expending , and
controlling project costs.

Inputs
Outputs
Project Management
Plan
Project Charter
Enterprise
Assets
Expert Judgment
Analytical Techniques
Meetings
Cost Management
Plan
Plan Cost Management- Inputs
Project Management Plan component that is important for this process are
primarily the scope and cost baselines.
Project Charter provides the summary budget from which the detailed project costs
are developed . It also defines the project approval requirements that will influence
the management of the project costs.
Enterprise Environmental Factors include factors such as Organization
structure/culture, Market conditions, currency exchange rates (for project sourced
from more than one country) that influence the project cost.
Organizational Process Assets include financial control procedures , historical
information . Existing formal and informal cost estimating and budgeting related
policies, procedures and guidelines.
Plan Cost Management- Tools and Techniques
Expert Judgment Guided by historical information, provides valuable insight about

the environment and information from prior similar projects. Judgment based upon
expertise in an application area, knowledge area , discipline, industry can be useful in
this process.
Analytical Techniques Some of the techniques payback period, return on
investment, internal rate of return, discounted cash flow and net present value can be
useful in this process
Meetings - Project teams may hold meetings planning meetings to develop the cost
management plan. These meetings may include, project sponsor, project manager,
selected team members , selected stakeholders, anyone with responsibility for project
costs.
Plan Cost Management- Outputs

Cost Management Plan is a component of the project management plan and
describes how the project costs will be planned, structured , and controlled. The cost
management plan can establish the following.
Units of measure - Each unit of measure for each resource.
Level of precision The degree to which activity cost estimates will be rounded up
or down.
Level of accuracy - The acceptable range (e.g. +_ 100%) used in determining
realistic activity cost estimates is specified , may include an amount for contingencies.
Control threshold Variance threshold for monitoring cost performance may be
specified to indicate an agreed upon amount of variation to be allowed before some
action need to be taken.
Plan Cost Management- Outputs
The cost management plan also contains.

Rules of performance measurement Earned value management (EVM) rules of
performance measurement are set. For example
Define the points in the WBS at which measurement of control accounts will be
performed
Establish the earned value measurement techniques (e.g. weighted
milestones, fixed formula, percent complete, etc) to be used and
Specify tracking methodologies and the earned value management
computation equations for calculating projected estimate at completion (EAC)
forecasts to provide a validity check on the bottom-up EAC
Estimate Cost
Estimate cost is the process of developing an approximation of the
monetary resources needed to complete project activities. The key
benefit of this process is that it determines the amount of cost
required to complete project work.
Estimate Costs
Inputs
Outputs
Cost Management Plan

Human Resource
Management Plan
Scope baseline
Project Schedule
Risk Register
Enterprise
Assets
Expert Judgment
Analogous Estimating
Parametric estimating
Bottom-up estimating
Three-point estimates
Reserve Analysis
Cost of Quality
Project management
estimating software
Vendor bid analysis
techniques
Activity Cost
estimates
Basis of estimates
Project document
updates
Estimate Costs - Inputs
Cost management plan The cost management plan defines how project costs will
be managed and controlled . It includes the method used and the level of accuracy
required to estimate activity cost.
Human Resource Plan provides detail on Project staffing attributes, personnel rates,
and related rewards/recognition, these are necessary components for developing the
project cost estimates.
Scope baseline include inputs from scope statement, Work Breakdown Structure and
WBS dictionary.
Project Schedule provides detail on the type and quantity of resources and the
amount of time which those resources are applied to complete the work of the project,
all these factors directly impact the cost
Risk Register provides input related to costs associated with risk response
Estimate Costs - Inputs
Enterprise Environmental Factors include availability of resources, published

commercial information
Organizational Process Assets include cost estimating policies, historical
information, cost estimating templates and lesson learned
Estimate Costs -Tools and Techniques

Expert Judgment guided by historical information, provides valuable
insight about the environment and information from prior similar projects. Expert
judgment can also be used to determine whether to combine methods of estimating and
how to reconcile differences between them.
Analogous Estimating relies on historical information (Previous projects executed by
the organization) to predict the cost of current project. This is a top-down approach is
good for fast estimates to get a general idea of what the project may cost. The accuracy
depends upon how similar the two projects actually are.
Parametric estimating uses a mathematical model based on known parameters to
predict the cost of a Project. A parameter can be cost per unit, cost per cubic yard etc.
Two Parametric estimating techniques are Regression Analysis and Leaning curve.

Bottom-up estimating produces a separate estimate for each scheduled activity. The
detailed cost is then summarized or rolled up to higher levels for subsequent reporting
and tracking purposes. The cost and accuracy of bottom-up cost estimating is typically
influenced by the size and complexity of the individual activity or work package.
Three-point estimates concept originated with the program evaluation and review
technique (PERT). PERT uses three estimates to define an approximate range for an
activitys cost:
Triangular Distribution
Estimated Cost = Optimistic + Most Likely + Pessimistic)/ 3
Beta Distribution
ESTIMATED COST = (Optimistic + 4*(Most Likely) + Pessimistic) / 6

Reserve Analysis adds reserve amount (Contingency) to the cost. This is done to take
care of uncertainties in the project.
Cost of Quality includes assumptions related to Cost of Quality
Project management software is helpful in performing calculations, Organizing and
storing large amount of information needed for preparing cost estimates and for
reporting purpose
Vendor bid analysis may include analysis of what the project should cost, based on the
responsive bids from qualified vendors.
Group Decision Making Techniques Team based approaches , such as
brainstorming, the Delphi or nominal group techniques, are used for engaging team
members to improve estimate accuracy and commitment to the emerging estimates.
Estimate Costs - Outputs
Activity Cost estimates details how much it would cost to complete each schedule
activity on the project
Basis of estimates include supporting documentation of the cost estimates and it
may include documentation of the basis of estimates , documentation of all
assumptions made , documentation of any known constraint , indication of the range
of possible estimates and indication of the confidence level of the final estimates
Project document updates include project risk register and cost management plan
Exercise : Estimate Cost

Revise Tools to Estimate Cost
1. You figure out a best case scenario and , a likely scenario and a worst
case scenario. Then you use a formula to come up with an expected cost
for the project. The tool used by you is ________
2. John creates a document with all the historical information from similar
project he had done in past and also takes input from a contractor who
provides his input. The tool used by John is_________
Answers to Exercise : Estimate Cost

Revise Tools to Estimate Cost
1. You figure figures out a best case scenario and , a likely scenario and a
worst case scenario. Then you use a formula to come up with an
expected cost for the project. The tool used by you is Three-point
estimate
2. John creates a document with all the historical information from similar
project he had done in past and also takes input from a contractor who
provides his input. The tool used by John is Expert Judgment
Determine Budget
Determine Budget is the process of aggregating the estimated costs of individual
activities or work packages to establish an authorized cost baseline. This baseline
includes all authorized budgets, but excludes management reserves.
Determine Budget
Inputs
Cost management
plan
Activity cost estimates
Basis of estimate
Scope baseline
Project Schedule
Resource Calendars
Risk register
Agreements
Assets
Cost Aggregation
Reserve Analysis
Expert Judgment
Historical relationship
Funding limit reconciliation
Outputs
Cost baseline
Project funding
requirements
Project document
updates
Determine Budget - Inputs

Cost Management Plan - describes how the project costs will be managed and
controlled
Scope baseline refers to collection of approved project scope statement and its
associated WBS and WBS dictionary.
Activity cost estimates of a work package is a summation of the activity cost
estimates of activities under the work package
Basis of estimate includes supporting detail for cost estimates contained in the basis
for estimates should specify any basic assumptions
Project Schedule helps in mapping the cost back to time for planning purpose
Determine Budget - Inputs

Resource Calendars along with Project schedule will help plan for when the costs will
be incurred
Agreements Applicable agreement information and costs relating to products,
services or results that have been or will be purchased are included when determining
the budget.
Organizational Process Assets include cost budgeting policies procedures ,
guidelines and reporting method
Determine Budget Tools and Techniques

Cost Aggregation involves aggregating the costs of individual activities to work
packages that are further aggregated to higher levels of WBS and finally into the
project cost
Reserve Analysis include contingency reserve and management reserves for the
project. Contingency reserves are allowances for response plan strategized for the
identified risks. These are also known as known unknowns . Management reserves
are allowance for unplanned changes to thee project scope and cost. The are also
known as unknown unknowns. Reserves are not the part of the project cost baseline.
Expert Judgment can be taken from experienced consultant in the project application
area. This can be from an internal organizational resource or external sources
Determine Budget Tools and Techniques

Historical relationship result in parametric estimates or analogous estimates that
involve parameter to develop mathematical models to predict total project costs.
Funding limit reconciliation refers to reconciliation of planned spending with the
funding limit
Determine Budget Outputs

Cost performance baseline is an authorized time-phased budget at completion
(BAC) used to measure, monitor, and control overall cost performance on the project.
It is developed as a summation of the approved budgets by time period and is
typically displayed in the form of an S-curve, as is illustrated in Figure below
(Reference PMBOK 4th edition). In the earned value management technique the cost
performance baseline is referred to as the performance measurement baseline (PMB).
Reference PMBOK 5th Edition
Determine Budget Outputs

Project funding requirements are derived from cost baselines. Total funding
requirement is sum of cost baseline and management reserve.
Project document updates include updates to risk register, cost estimates and
project schedule
Project Budget Components
Exercise 2: Determine Budget

Revise Tools to Determine Budget
Monika reads a newspaper article that says there has been sharp increase in steel
cost recently. She knows this was not in her contractors original plan and decides to
put a few hundred dollars aside to deal with the price hike if it should happen. The
tool used by Monika is
Reserve analysis
Cost aggregation
Fund Limit Reconciliation
Answers to Exercise 2: Determine Budget

Revise Tools to Determine Budget
Monika reads a newspaper article that says there has been sharp increase in steel
cost recently. She knows this was not in her contractors original plan and decides to
put a few hundred dollars aside to deal with the price hike if it should happen. The
tool used by Monika is
Reserve analysis
Cost aggregation
Fund Limit Reconciliation
Control Costs
Control Costs is the process of monitoring the status of the project

to update the project budget and managing changes to the cost
baseline.
Control Costs
Inputs
Outputs
Project management
plan
Project Funding
Requirements
Work Performance
data
Assets
Work performance
Information
Cost forecasts
Change Requests
Project
management plan
updates
Project document
updates
Organizational
Process assets
updates
Earned value management

Forecasting
To-complete performance
index TCPI
Performance reviews
Project management software
Reserve analysis
Control Costs - Inputs

Project Management Plan contains Cost management plan and Cost performance
Baseline, these are helpful in controlling the cost.
Project Funding Requirements As explained earlier include projected expenditures
plus anticipated liabilities
Work Performance Data provides information on the status and cost of project
activities and ensures that the project goals and objectives are met as per the project
management plan
Organizational Process Assets that can influence this process include cost
budgeting policies, procedures, guidelines , cost budgeting tools and reporting
methods
Control Costs Tools and Techniques

Earned value management is used to measure the performance of the project, It
integrates project scope, cost, and schedule measures to help the project management
team assess and measure project performance and progress. The EVM technique
involves evaluating the planned value , Earned Value and the Actual cost for each
schedule activity , work package or control account.
1. Planned Value (PV) is the authorized budget assigned to the scheduled work to be
accomplished for a schedule activity or work breakdown structure component. It is
also known as Budgeted Cost of Work Scheduled (BCWS)
2. Earned Value (EV) is the value of work performed expressed in terms of the
approved budget assigned to that work for a schedule activity or a WBS
component. It is also known as Budgeted cost of Work Performed (BCWP)
3. Actual Cost (AC) is the total cost actually incurred and recorded in accomplishing
work performed for an activity or work breakdown structure component.

Variance Analysis helps in analyzing the performance of the project vis--vis cost
and schedule baselines
Schedule Variance (SV) is a measure of schedule performance on a project.
It is equal to the earned value (EV) minus the planned value (PV). SV= EV-PV.
Cost variance (CV) is a measure of cost performance on a project. It is equal
to the earned value (EV) minus the actual costs (AC). CV = EV-AC
Schedule performance Index (SPI) in addition to project status is used to predict
the completion date. SPI = EV/PV
Cost Performance Index (CPI) measures the cost efficiency for the work completed,
it is the ration of EV to AC. CPI = EV/AC.

Forecasting Techniques are used to calculate Estimate at completion (EAC) and
Estimate to complete (ETC).
EAC = AC + ETC
EAC forecast for ETC work performed at the budgeted rate
EAC = AC + BAC EV
EAC forecast for ETC work performed at the present CPI
EAC = BAC / cumulative CPI
EAC forecast for ETC work considering both SPI and CPI factors.
AC + [(BAC EV) / (cumulative CPI x cumulative SPI)].

To-complete performance index (TCPI) is the calculated projection of cost
performance that must be achieved on the remaining work to meet a specified
management goal, such as the BAC or the EAC.
TCPI based on the BAC: Work Remaining (BAC EV) / Fund Remaining (BAC AC).
TCPI based on EAC : (BAC-EV)/(EAC-AC)
Performance reviews involves following three types of analysis
1. Variance Analysis compares actual project performance to planned or expected
performance. Cost and schedule variances are the most frequently analyzed.
2. Trend Analysis examines project performance over time to determine if
performance is improving or deteriorating.
3. Earned value management compares the baseline plan to actual schedule and
cost performance.

Project management software is often used to monitor the three EVM dimensions
(PV, EV, and AC), to display graphical trends, and to forecast a range of possible final
project results.
Reserve Analysis During cost control, reserve analysis is used to monitor the status
of contingency and management reserves for the project to determine if these reserves
are still needed or if additional reserves need to be requested.
Control Costs Outputs

Work Performance Information includes the calculated CV, SV, CPI, and SPI
values for WBS components, in particular the work packages.
Cost Forecasts includes a calculated EAC value or a bottom-up EAC value.
Organizational Process Assets Updates include Causes of variances, Corrective
action chosen and the reasons, and Other types of lessons learned from project cost
control.
Change Requests include change request to the cost performance baseline
or other components of the project management plan. Change requests can include
preventive or corrective actions and are processed for review and disposition through
the Perform Integrated Change Control process
Control Costs Outputs

Project Management Plan Updates Elements of the project management plan that
may be updated include Cost performance baseline, Cost management plan.
Project Documents Updates include updates to cost estimates, basis of
Estimates
Organizational Process Assets Updates
Organizational Process Assets that may be updated include, but are not limited to :
Cause of variances
Corrective action choosen and the reasons
Financial databases
Other types of lesson learned from project cost control
Exercise 1 : EVM
Practice Earned Value Formulae
Your current project is an $800,000 software development effort, with
two teams of programmers that will work for six months, at a total of
10,000 hours. According to the project schedule your team should be
done with 38% of the work. You find that the project is currently 40%
complete. You have spent 50% of the budget so far. Calculate the
following
1.
2.
3.
4.
BAC
EV, PV
SV, CV
SPI, CPI
Answer to Exercise - 1 : EVM

1. BAC = $ 800,000, AC = $ 400,000
2. PV = $ 80,000 * 38 / 100 = $ 304,000
EV = $ 80,000 * 40 / 100 = $ 320,000
3. SV = EV PV = $ 16,000
CV = EV AC = - $ 80,000
4. SPI = EV / PV = 1.05
CPI = EV / AC = 0.8
Exercise 2 : EVM
Youre managing a highway construction project. Your total budget is
$650,000, and there are a total of 7,500 hours of work scheduled on
the project. You check with your accounting department, and they tell
you that youve spent a total of $400,000. According to the schedule,
your crew should have worked 4,500 hours, but your foreman says
that the crew was allowed to work some overtime, and theyve
actually put in 5,100 hours of work. Based on this Calculate the
following Earned Value numbers:
PV =
EV =
CV =
BAC =
AC =
SV =
SPI = , CPI =

BAC = $ 650,000
AC = $ 400,000
PV = 650,000 x 60% = $390,000
EV = 650,000 x 68% = $ 442,000
CV =442,000 400,000 = $42,000
SV = $ 52,000
SPI = 1.13 , CPI = 1.11
Exercise - 3 : EVM
Its nine months into your project. The total budget for your project is
$4,200,000. Youve spent $1,650,000 so far, and youve got a CPI of
.875. Use the Earned Value Management formulas from forecasting to
figure out where things stand.
Find the following
EAC =
ETC =
VAC =

EAC = $ 4,200,000 / 0.875 = $ 4,800,000
ETC = $ 4,800,000 $ 1,650,000 = $ 3, 150,000
VAC = $ 4,200,000 $ 4,800,000 = $ 600,000
QUIZ !
What is Risk?
Project risk is an uncertain event that can have a positive or a negative impact
on the result
If a project risk materializes and has a negative impact on the project, it is

called Threat to the project e.g.
Unproven technology impacting project schedule
Loosing critical resource from project
If an uncertain event has a positive impact on the project, it is called

opportunities. E.g.
Emergence of new tool to increase productivity
New resource replacing the lost resource is a better one!
Not all risks are bad, however most of them are perceived as Threat to
success
Risk Vs Issue
Risk
Risk is an uncertain event or event
that might happen in future
Issue
Issue is an event that has already
occurred
Once risk is identified, its impact

should be analyzed and the
response plan should be prepared
Examples:
Lack of Business/Application
knowledge which may impact
the quality of work products
Once the impact of Issue is

analyzed, the same should be
resolved or escalated
Examples:
Client contact is not providing
review comments on
deliverables in spite of
repeated reminders
Project Risks Key characteristics
Some of the risks are known risks e.g.

Working in a project with competitor (multi-vendor scenario)
Doing a project in a new geography (cultural differences)
Project attracting environmentalists attention
Accident during Travel
To manage known risks, risk response plan is prepared
Known risks are predicted / identified based on the past experience of

similar projects
Project Risks Key characteristics
All the risks can not be predicted and such risks are known as unknown risks.
e.g.
Natural disaster
Unknown risks cannot be managed proactively
Most of the organizations address such risks through Business continuity and
Disaster Recovery plan
What is the difference between Risk and Issue?

Project Risk Management includes the processes of conducting risk
management planning, identification, analysis, response planning
and monitoring and control on a project. The objectives of Project
Risk Management are to increase the probability and impact of
positive events, and decrease the probability and impact of
negative events in the project.
Project Risk Management Processes
Process
Process Group
Plan Risks Management,

Identify Risks, Perform
Qualitative Risk Analysis,
Perform Quantitative Risk
Analysis , Plan Risk Responses
Planning
Control Risks
Plan Risk Management

Plan Risk Management is the process of defining how to conduct
risk management activities for a project. The Plan Risk
Management process should begin as a project is conceived and
should be completed early during project planning.
Plan Risk Management

Inputs
Outputs
Project management
plan
Project charter
Stakeholder register
Enterprise
Organizational
Process Assets
Expert Judgment
Meetings
Risk management
plan
Plan Risk Management - Inputs
Project Management Plan . All approved subsidiary plans and baselines should be
taken into consideration in order to make the risk management plan consistent with
them. The project management plan provides baseline or current state of riskaffected areas including scope, schedule and cost.
Project Charter can provide various inputs such as high level risks, high level
project descriptions and high level requirements.
Stakeholder Register , which contains all details related to the projects stakeholder
, provide an overview of their role.
Plan Risk Management - Inputs

Enterprise Environmental Factors include the company culture and existing systems
that are dealt with and used by the project manager to run the project. The other
factors that can influence this process are risk attitudes and tolerances that describe
the degree of risk that an organization will withstand
Organizational Process Assets that can influence this process include risk
categories, common definitions of concepts and terms, risk statement formats,
standard templates, roles and responsibilities, authority levels for decision making,
lessons learned and stakeholder register
Plan Risk Management -Tools and Techniques

Analytical techniques are used to understand and define the overall risk management
context of the project. Risk management context is a combination of stakeholder risk
attitudes and the strategic risk exposure of a given project based on the overall project
Context. Some of the examples of these techniques are , use of strategic risk scoring
Sheets, a stakeholder risk profile analysis may be performed to grade and qualify the
project stakeholder appetite and tolerance.
Expert Judgment
To ensure that a comprehensive risk management plan is developed expert advice
should be taken from groups or individuals with specialized knowledge on the subject
area.
Plan Risk Management -Tools and Techniques

Meetings helps in development of the risk management plan. The
meeting will consist of the project manager, project team members, selected relevant
Stakeholders, and anyone other than these who will be performing the risk management
Activities
The following decisions can be taken at the meeting
1. Basic plans for conducting the risk management
2. Risk, cost elements and schedule activities are developed for inclusion in the project
budget and schedule respectively
3. Risk contingency reserve application approaches may be established or reviewed
4. Risk management responsibilities should be assigned
5. General organizational templates for risk management will be tailored as per the
project
Plan Risk Management - Outputs
Risk management plan describes the various risk management processes that will
be implemented, monitored and controlled throughout the project lifecycle. It can
include the following
1. Methodology Defines the approaches, tools and the data sources that may be
used to perform risk management on the project
2. Roles and Responsibilities Defines the lead, support and risk management
team membership for each type of activity in the risk management plan, assigns
people to these roles and clarifies their responsibilities
3. Budgeting - Assigns resources and estimates costs needed for risk management
for inclusion in the project cost baseline
4. Timing Defines when and how often the risk management process will be
performed throughout the project life cycle and establishes risk management
activities to be included in the project schedule.
5. Risk Categories provides a structure that ensures a comprehensive process of

systematically identifying risks to a consistent level of detail and contributes to the
effectiveness and quality of Identify risks process.
An organization can use a previously prepared categorization of typical risk. A risk
breakdown structure (RBS) is one approach to providing such a structure, but it
can also be addressed by simply listing the various aspects of the project.
The risk categories may be revisited during the Identify risks process. A good practice
is to review the risk categories during the Risk Management Planning process prior to
their use in Identify risks process. Risk categories based on prior projects may need to
be tailored, adjusted or extended to new situations before those categories can be
used on the current project.

Risk Breakdown Structure (RBS)
Source : PMI PMBOK Fourth

Edition

6. Definition of Risk Probability and
Impact
Source : PMI PMBOK Fourth

Edition

7. Definition of Risk Probability and Impact matrix, A grid mapping of
probability of happening of risk and the impact if happens, Based on the probability
and impact values the risks are rated as High, Moderate and Low.
8. Revised stakeholders tolerance, based on the project may be revised in the risk
management process.
9. Reporting formats, define how the outcomes of the risk management process will
be documented , analyzed and communicated. It describes the content and format of
the risk register as well as any other risk report required.
10. Tracking. Tracking documents how risk activities will be recorded for the benefit
of the current project and how risk management processes will be audited.
Sources of Project Risks
C
om
e
op
Sc
m
un
ic
at
io
n
Project Initiation
Lifecycle and
Environment Variables
Availability
Productivity
Expectation
Feasibility
Project
Risk
Performance
Services
Materials
Requirement
Standards
Time Objectives
Restraints
t
en
m
re
cu
ua
lit
y
o
Pr
Restraints
Cost Objectives
Time
Cost
Human
Resource
Ideas
Directives
Data Accuracy
Identify Risks Process

Risk Identification process determines which risks may affect the project and
documenting their characteristics. It is an iterative process as risk can be identified at
any levels in the project. Irrespective of risks having positive or negative
consequences, all risks events and their consequences should be identified.
Identify Risks
Inputs

Schedule management
plan
Human resource
management plan
Scope baseline
Activity duration estimates
Project documents
Procurement documents
factors
Assets
Documentation reviews
Information gathering techniques
Checklist analysis
Assumptions analysis
Diagramming techniques
SWOT analysis
Expert Judgment
Outputs
Risk Register
Identify Risks - Inputs

Risk Management Plan provides inputs regarding the assignment of roles and
responsibilities, provision for risk management activities in the budget and schedule,
and categories of risk, which are sometimes expressed in a Risk Breakdown Structure.
Cost Management Plan provides processes and controls that can be used to help
identify risks across the project
Schedule Management Plan provides insight to project time / schedule objectives
and expectations which may be impacted by risks (Known and Unknown)
Quality management plan contains information related to the quality management
plan which is an important input to Identify risk process as the project specific
approach may generate or alleviate risk by its nature or structure

Human Resource Management Plan . The human resource management plan
provides guidance on how project human resource should be defined , staffed , and
eventually released. It can also contain roles and responsibilities, project organization
charts, and the staffing management plan, which forms a key input to identify risk
process.
Scope baseline is a component of scope statement which should be evaluated as
potential causes of project risk
Activity Cost Estimates provide a quantitative assessment of likely cost to complete
schedule activities and ideally are expressed as a range, with the width indicating the
degree of risk
Activity duration estimates are useful in identifying risks related to the time
allowances for activities or project as a whole, with the width of the ranges of these
estimates indicating the relative degree of risk.
Stakeholder register contains information on stakeholders, which will be useful in
interviewing the key stakeholders for their inputs to this process

Project Documents that may be useful while identifying risks are assumptions log,
work performance reports, network diagrams, baselines and other project information
that may be useful in identifying risks.
Procurement Documents , If the project requires external procurement of
resources , procurement documents become a key input to the identify Risks process.
The complexity and the level of detail of the procurement documents should be
consistent with the value of, and risks associated with, planned procurement.
Enterprise Environmental Factors that can influence this process are published
information which consists of commercial database, academic studies, published
checklists, benchmarking, industry studies and risk attitudes.
Organizational Process Assets that can influence this process are project files,
organizational and project process controls, risk statement templates and lessons
learned
Identify Risks Tools and Techniques

Documentation reviews includes structured review of the project documentation,
which may include project files, project plans, assumptions, historical information, and
other information from the project level as well as individual activity level. It is also
essential to identify the quantity of plans and the consistency between the plans
Information gathering techniques There are five key techniques for information
gathering
Brainstorming session is conducted by a facilitator and a group of Subject Matter

Expert (SMEs), who perform brainstorming and arrive at a comprehensive list of
project risks. Identified risks are categorized by the type of risks. A risk breakdown
structure (RBS) can be used as a framework for risk identification.
Delphi Technique is conducted by a facilitator and a group of experts, who are
given a questionnaire to fill. The results are collected and summarized and the results
are again circulated to get feedback from the experts.
Interviewing is one of the main sources of risk gathering techniques where

experienced project managers, stakeholders and subject matter experts are
interviewed for risk identification.
Root Cause identification involves identifying the causes of risks and improves
the understanding of the risk. It sharpens the definition of the risk and allows
grouping risks by causes. Effective risk response can be developed if the root
cause of the risk is addressed
Checklist Analysis can be based on historical information gathered from previous

similar projects. The lowest level of Risk Breakdown Structure (RBS) can also be used
as a checklist. Checklists can be updated at the end of the project completion to add
new risks, if any. Checklists are not a very much efficient method of identifying risks.

Assumption Analysis reviews the validity of assumptions defined in the
project to ensure that risks are not missed due to inaccuracy or
incompleteness of the assumption. Assumptions are tested against their strength. The
consequences that might occur if the assumptions were false are also analyzed. In
such cases the assumptions are considered as risks.
Diagramming Techniques may include Cause and effect diagrams also known
as Ishikawa or fishbone diagrams, System or process flowcharts, and
influence diagrams, which are graphical representation of situations showing
causal influences
SWOT Analysis examines the project from its Strengths, Weaknesses,
Opportunities and Threats to identify the probable risk events.
Expert Judgment involves participation of SMEs based on their previous

experience and area of expertise
Identify Risks Outputs

Risks Register The identified risks are mentioned in the document called a Risk
Register, which becomes a component of the project management plan. Following
items can be included in the Risk Register
List of identified risks The list can state the EVENT that may occur , the
IMPACT and if CAUSE, EVENT may occur , then listing of EFFECT. Root causes of
the risk events can also be listed
List of potential responses If identified during the process of risk

identification, responses should be documented and it may be a useful input to the
plan Risk Responses process
Perform Qualitative Risk Analysis

Prioritizing risks for further analysis or action by assessing and combining
their probability of occurrence and impact.
Perform Qualitative Risk Analysis

Inputs
Outputs
Risk Management Plan

Scope baselines
Risk Register
Enterprise
assets
Risk probability and impact

assessment
Probability and impact matrix
Risk data quality assessment
Risk categorization
Risk urgency assessment
Expert judgment
Project document
updates
Perform Qualitative Risk Analysis - Inputs

Risk Management Plan documents the roles and responsibilities for :
Budgets and schedule activities for risk management
Risk Categories
Definition of probability and impact
The probability and impact matrix
Revised stakeholders risk tolerances
These inputs are documented during Perform Qualitative Risk analysis if not defined
during the risk management process.
Scope Baseline mentions the project deliverables, assumptions and constraints.
Depending on the project type, i.e. whether it is a state-of-the-art project or a
common recurring project type, the risks and level of uncertainty can be evaluated. A
project which is more complex than the ones the team has handled earlier and where
the uncertainty level is high requires more diligence during the process.
Perform Qualitative Risk Analysis - Inputs

Risk Register contains all the identified risks, its a component of the project
management plan
Enterprise Environmental Factors, may provide insight and context to the risk
assessment such as :
Industry studies of similar projects by risk specialists and
Risk databases that may be available from industry or proprietary sources
Organizational Process assets that can influence this process are information of
similar previous projects, studies of similar projects by risk specialists and risk
databases that may be available from industry or proprietary sources.
Perform Qualitative Risk Analysis Tools and

Techniques
Risk probability and impact assessment examines the likelihood that each specific risk will
occur and evaluates the potential effect of any of the project objectives such as time, cost, scope
or quality. It also evaluates the positive opportunities and negative threats. To assess the
probability and impact of each risk, a meeting or interview with subject matter experts either
internal or external to the organization is conducted where levels are assigned to each risk and
also the potential effects of these risks is evaluated in case the risk occurs
Probability and impact matrix assigns ratings to each risk and classifies them for either
perform quantitative risk analysis or plan risk responses. Ratings are assigned to risks based on
the combination of probability and impact. The risk may guide in providing risk responses as
indicated below
Risks that have a negative impact on the project objectives if they occur (threats) and that are
in the high risk (black zone of the matrix), may require priority action and aggressive response
strategies.
Threats in low risk (medium gray zone) may not require proactive management action
beyond being placed on a watch list or adding a contingency reserve.
For opportunities, those in the high-risk (black zone) that can be obtained most easily and offer
the greatest benefit should, therefore be targeted first
Opportunities in the low-risk (Medium gray zone) should be monitored

Techniques
Probability Impact Matrix
Source : PMI PMBOK Fourth Edition

Techniques
Risk data quality assessment involves determining the quality or usefulness of the data collected
to evaluate the risk as per the risk management plan. It involves examining degree to which the risk
is understood, and the accuracy, quality, reliability and integrity of the data about risk. If data quality
is unacceptable, it may be
necessary to gather higher-quality data.
Risk categorization Project risks can be categorized by the source of risk (e.g., using the RBS),
areas of the project affected (e.g. ,using the WBS) or other useful category (e.g. , project phase,
etc.) to determine areas of the project most exposed to the effects of uncertainty. Grouping risks by
common root causes can lead to developing effective risk responses.
Risk urgency assessment determines how soon the potential risks may occur, and it also identifies
near- term responses for those risks.
Expert judgment is required to assess the probability and impact of each risk to determine its
location in the probability impact matrix
Perform Qualitative Risk Analysis Outputs

Risk Register Updates Risk register is initiated during identify risk process ,and is updated with
information from Perform Qualitative Risk Analysis.
Following are the updates from Perform Quantitative Risk Analysis:
Relative ranking or priority list of the project risks. The probability and impact matrix can be
used to classify risks according to their individual significance. The project manager can then use the
prioritized list to focus attention on those items of high significance to the project, where responses
can lead to better project outcomes. Risk may be listed by priority separately for cost, time, scope
and quality as organizations may value one objective over another. A description of the basis for the
assessed probability and impact should also be included for the assessed risks.
Risk grouped by categories can reveal common root cause of the risk or project areas requiring
particular attention.
Cause of risk or project areas requiring particular attention. Discovering concentrations of
risk may improve the effectiveness of risk.
List of risks requiring response in the near-term. Those risks that require an urgent response
and those that can be handled at a later date may be put into different groups.
Perform Qualitative Risk Analysis Outputs

List of risks for additional analysis and response. Some risks might warrant
more analysis , including perform qualitative risk analysis as well as response action
Watch-lists of low priority risks. Risks that are not assessed as important in the
Qualitative Risk Analysis process can be placed on a watch-list for continued
monitoring
Trends in qualitative risk analysis results. As the analysis is repeated , a trend
for particular risks may become apparent and can make risk response or further
analysis more or less urgent/important
Perform Quantitative Risk Analysis Process

Numerically analyzing the effect of identified risks on overall
project objectives.
Perform Quantitative Risk Analysis Process

Inputs
Outputs

Schedule management
plan
Risk register
Enterprise
environmental Factors
assets
Data gathering and

representation techniques
Quantitative risk analysis and
modeling techniques
Expert Judgment
Project document
updates
Perform Quantitative Risk Analysis -Inputs

Risk management plan provides guidelines , methods and tools to be used in
quantitative risk analysis.
Cost management plan contains baseline data related to cost, this may help to
determine the approach for Quantitative analysis for the project.
Schedule management plan contains baseline data related to schedule, this may
help to determine the approach for Quantitative analysis for the project.
Risk register is used as a reference point for performing quantitative risk analysis
Organizational process assets that can influence this process are information of
previous projects, studies of similar projects by risk specialists and risk databases that
may be available from industry or proprietary sources.
Perform Quantitative Risk Analysis -Inputs

Enterprise Environmental Factors may provide insight and context to the risk
analysis, such as :
Industry studies of similar projects by risk specialists, and
Risk databases that may be available from industry or proprietary sources.
Organizational process assets that can influence this process are information of
previous projects, studies of similar projects by risk specialists and risk databases that
may be available from industry or proprietary sources.
Perform Quantitative Risk Analysis - Tools and

Techniques
Data gathering and representation techniques
Interviewing : Experienced project managers , stakeholders and subject matter

experts are interviewed to quantify the probability and impact of risks on project
objective. During interviewing different kind of probability distribution are used. In
case a triangular one is used then the three values for 3 point estimates are taken as
input from the SMEs which is used to quantify risk for each element.
Probability distributions : are basically of two types Asymmetrical distribution
or Uniform distributions
Asymmetrical distribution depicts shape which are compatible with the data
typically developed during project risk analysis. Asymmetrical distributions are of two
types- Continuous probability distributions represent the uncertainty in values, such as
durations of schedule activities and costs of project components, whereas Discrete
probability distributions can be used to represent uncertain events, such as the
outcome of a test or a possible scenario in the decision tree.
Perform Quantitative Risk Analysis -Outputs

Uniform distributions can be used if there is no obvious value that is more likely
than any other between specified high and low bounds
Quantitative risk analysis and modeling techniques
Commonly used techniques in Quantitative Risk Analysis and Modeling techniques
include:
Sensitivity analysis. This aid in determining which risks have the most potential
impact on the project. It examines the extent to which the uncertainty of each project
element affects the objective being examined when all other uncertain elements are
held at their baseline values. Sensitivity analysis can be done by using the Tornado
diagram.
Expected monetary value (EMV) analysis is a statistical concept that calculates
the average outcome when the future includes scenarios that may or may not happen
(i.e. analysis under uncertainty). The EMV of opportunities will generally be expressed
as positive values while those of risks will be negative. EMV is calculated by
multiplying the value of each possible outcome by its probability of occurrence and
adding them together.

Techniques

Techniques
Perform Quantitative Risk Analysis
Source: A Guide to the Project Management Body ofPankaj

Knowledge,
Fourth Edition
Sharma,
9810996356
(PMBOK Guide) 2008 Project Management Institute, Inc., All Rights Reserved.
Perform Quantitative Risk Analysis Tools and

Techniques
Modeling and simulation. A project simulation uses a model that translates the
uncertainties or potential risks specified at a detailed level of the project into their
potential impact on project objectives.
Simulation techniques compute the project model using the inputs such as cost or
schedule to determine the probability distribution. Simulation techniques should be the
preferred one for predicting schedule or cost risks as compared to other techniques
Simulations are typically performed using the Monte Carlo technique. In a simulation,
the project model is computed many times (iterated) with the input values randomized
from a probability distribution function (e.g. cost of project elements or duration of
schedule activities) chosen for each iteration from the probability distribution of each
variable. A probability distribution is then calculated.
Expert Judgment Subject matter experts internal or external to the organization
such as Engineering or statistical experts are required to identify potential cost and
schedule impacts , to evaluate probability and to define inputs to tools
Perform Quantitative Risk Analysis Outputs

Risk Register Updates The register initiated in the Identify Risks process and is updated in
Perform Qualitative Risk Analysis process. The risk register is a component of the
project management plan. Updates include the following components :
Probabilistic analysis of the project. Estimates are made of potential project schedule and
cost outcomes, listing the possible completion dates and costs with their associated confidence
levels. This output typically expressed as a cumulative distribution is used with stakeholder
risk tolerances to permit qualification of the cost and time contingency reserves
Probability of achieving cost and time objectives. With the project facing the risks, the
probability of achieving project objectives under the current plan can be estimated using
quantitative risk analysis results
Prioritized list of quantified risks. This list of risks includes those that pose the greatest
threat or present the greatest opportunity to the project. These include the risks that require
the greatest cost contingency and those that are most likely to influence the critical path.
Trends in quantitative risk analysis results. As the analysis is repeated a trend may
become apparent that leads to conclusions affecting risk responses
Plan Risk Responses

Developing options and actions to enhance opportunities and
reduce threats to project objectives
Plan Risk Responses

Inputs
Outputs
Risk management
plan
Risk register
Strategies for negative risks or

threats
Strategies for positive risks or
opportunities
Contingent response strategy
Expert Judgment
Project
management plan
updates
Project document
updates
Plan Risk Responses - Inputs

Risk management plan include roles and responsibilities, risk analysis definitions,
risk thresholds for low, moderate and high risks and the time and budget required to
conduct the project Risk Management Processes. Some components of the Risk
Management Plan that are important inputs to Plan Risk Responses may include risk
thresholds for low, moderate and high risks to help understand those risks for which
responses are needed, assignment of personnel and scheduling and budgeting for risk
response planning.
Risk register provides important inputs related to this process and this include the
relative rating or priority list of project risks, a list of risk for additional analysis and
response, trends in qualitative risk analysis results, root causes, risk grouped by
categories and a watch list of low priority risks.
Plan Risk Responses Tools and Techniques

Strategies for negative risks or threats
Avoid. Risk avoidance involves changing the project management plan to eliminate the threat
posed by an adverse risk, to isolate the project objectives from the risks impact or to relax the
objective that is in jeopardy, such as extending the schedule or reducing scope. Some risks that
arise early in the project can be avoided by clarifying requirements, obtaining information, improving
communication or acquiring expertise.
Transfer. Risk transference requires shifting the negative impact of a threat, along with
ownership of the response to a third party. Transferring the risk simply gives another party
responsibility for its management, it doesnt eliminate it. Risk transference nearly always involves
payment of a risk premium to the party taking on the risk. Transference tools can be quite diverse
and can include but are not limited to the use of insurance, performance, bonds, warranties,
guarantees etc.
Mitigate. Risk Mitigation implies a reduction in the probability and impact of an adverse risk event
to an acceptable threshold. E.g. Conducting more tests, a more stable supplier etc
Accept. This includes passive or active acceptance. Passive acceptance requires no action , the
most common active acceptance strategy is to establish a contingency reserves, including amounts
of money or resources to handle known or unknown threats/ opportunities

Strategies for positive risks or opportunities
Exploit .This strategy may be selected for risks with positive impacts where the organization
wishes to ensure that the opportunity is realized. This strategy seeks to eliminate the uncertainty
associated with a particular upside risk by making the opportunity definitely happen. Directly
exploiting responses include assigning more talented resources to the project to reduce time to
completion or to provide better quality than originally planned.
Share. Sharing a positive risk involves allocating ownership to a third party who is best able to
capture the opportunity for the benefit of the project. E.g. forming risk-sharing partnerships, teams,
special-purpose companies or joint ventures, which can be established with the express purpose of
managing opportunities.
Enhance . This strategy modifies the size of an opportunity by increasing probability and /or
positive impacts and by identifying and maximizing key drivers of these positive-impact risks.
Seeking to facilitate or strengthen the cause of the opportunity and proactively targeting and
reinforcing its trigger conditions, might increase the probability
Accept. Accepting an opportunity is being willing to take advantage of it if it comes along, but not
actively pursuing it.

Contingent response strategy. Some responses are designed for use only if certain
events occur. For some risks, it is appropriate for the project team to make a response
plan that will only be executed under certain predefined conditions, if it is believed
that there will be sufficient warning to implement the plan. Events that trigger the
contingency response such as missing intermediate milestones or gaining higher
priority with a supplier, should be defined and tracked
Expert Judgment. Expertise may be provided by any group or person with
specialized education, knowledge, skill, experience or training in establishing risk
responses.
Plan Risk Responses Outputs

Project Management Plan Updates- Elements of the project management plan that
may be updated include

Procurement management plan
Human resource management plan
Scope baseline
Schedule baseline
Cost baseline.

Project Document Updates. This include components of the Risk register such as
Identified risks their descriptions, areas of the project (e.g. WBS element) affected,
their causes (e.g. RBS element) and how they may affect project objectives
Risk owners and their assigned responsibilities
Output from the Perform Qualitative and Perform Quantitative Risk Analysis
processes, including prioritized lists of project risks and probabilistic analysis of the
project
Agreed upon response strategies
Specific actions to implement the chosen response strategy
Symptoms and warning signs of risks occurrence

Budget and schedule activities required to implement the chosen responses
Contingency reserves of time and cost designed to provide for stakeholders risk
tolerance.
Contingency plans and trigger that call for their execution
Fallback plans for use as a reaction to a risk that has occurred and the primary
response proves to be inadequate
Residual Risks that are expected to remain after planned response have been taken
as well as those that have been deliberately accepted
Secondary risks that arise as a direct outcome of implementing a risk response
Contingency reserves that are calculated based on the quantitative analysis of the
project and the organizations risk thresholds.
Control Risks
Implementing risk response plans, tracking identified risks, monitoring
residual risks, identifying new risks, and evaluating risk process
effectiveness throughout the project.
Control Risks
Inputs
Project management plan

Risk register
Work performance reports
Risk reassessment
Risks audits
Variance and trend analysis
Technical performance measurement
Reserve analysis
Status meetings
Outputs
Work Performance
Information
Change requests
Project management
plan updates
Project document
updates
assets updates
Control Risks- Inputs

Project management plan consists of the risk management plan which includes the
assignment of people, time, and resources to the project risk management process.
Risk register which is a subset of the project management plan, includes a list of
identified risks agreed upon risk responses, specific implementation actions, symptoms
and warning signs of risk, residual and secondary risks, watch-list of low priority risks
and cost contingency reserves.
Work Performance Data includes information such as project deliverables status ,
schedule progress and incurred costs.
Work Performance reports gather and summarize the information required by the
stakeholders. This information is an analysis of the work performed during the
execution process vis--vis project baseline and is relevant to the risk management
process.
Control Risks- Tools and Techniques

Risk reassessment indicates reassessing the identified risks and identification of new risks as
defined in the risk management plan. Project risk reassessment should be performed regularly and it
can be included as an agenda item at the project status meetings.
Risks audits are scheduled audits that document the effectiveness of risk responses with respect to
their dealing with identified risks and their associated root causes. This aids in determining the
effectiveness of the risk management process.
Variance and trend analysis Performance data provides the data for variance and trend analysis.
Using this data and applying the earned value analysis and similar methods of project variance and
trend analysis; it is possible to monitor the overall project performance.
Technical performance measurement. This involves identifying the variance in the technical
performance from the planned technical schedule. Any variance from the defined milestone(s) can
aid the project team to forecast the degree of success in achieving the projects scope.
Reserve analysis. During the planning phase, contingency reserves are defines as a part of risk
response plan. During execution some of the reserves get exhausted. This tool determines if the
remaining reserves are sufficient to tackle the remaining risks.
Meetings. Status review meetings help in monitoring the risks
Control Risks- Outputs

Work Performance Information , as a Control Risks output , provides a mechanism
to communicate and support decision making.
Change requests - During this process, there may be requested change due to
implementation of the contingency plans or workarounds. These changes are reviewed
and approved through the integrated change control process.
Project management plan updates may arise as a result of the approved change
requests
Project document updates- Project documents that may be updated as a result of
this process are assumptions log updates and technical documentation updates.
Organizational process assets updates- The risk management processes produce
information that should be documented for future reference. The organizational
process assets may be updated to include templates for the risk management plan,
including the probability and impact matrix and risk register, risk breakdown structure
and lessons learned from the project risk management activities.
QUIZ !
What is Quality?
Standard Definition:
Quality is the degree to which a set of inherent
characteristics fulfil requirements PMBOK
Guide (Glossary)
Conformance of requirements of the customer

Philip Crosby
Fitness for use Joseph Juran
What is Grade?
Grade is a category or rank given to entities having the same
functional use but different technical characteristics. (as per
PMBOK Guide ).
Importance of Quality?
Why is quality important?
Quality = Customer Satisfaction = Business growth

Quality = Pride in delivery = Higher Team Morale
Lack of quality = Cost
Lack of quality = Loss of customer confidence
Lack of quality = Loss of Reputation = Difficulty in gaining new
business
Lack of quality could lead to loss of life
Quality Principles
Quality is concerned with Prevention over Inspection.
Inspection is typically used to prove that the system works (because

youve put good quality practices in place), rather than a way to
reject the failures.
A good quote to remember is, Quality should be planned in not

inspected in because the cost of rework can be very high.

Processes and activities of the performing organization that determine
quality policies, objectives, and responsibilities so that the project will
satisfy the needs for which it was undertaken
Quality Management Processes
Process
Process Group
Plan Quality Management
Planning
Perform Quality Assurance
Executing
Control Quality

Identifying quality requirements and/or standards for the project and product, and
documenting how the project will demonstrate compliance.
This process is important to ensure that the resulting product is of acceptable quality.
This is performed in parallel with the development of the project management plan
and other planning process

Inputs
Outputs
Project Management
Plan
Risk register
Requirement
documentation
Enterprise
Assets
Cost-benefit analysis
Cost of quality (COQ)
Seven basic quality tools
Benchmarking
Design of experiments
Statistical sampling
Additional quality planning
tools
Meetings
Management Plan
Process
improvement plan
Quality Metrics
Quality Checklists
Project document
updates
Quality
Plan Quality Management - Inputs

Project Management Plan The following contents of the project management plan
are useful in creating Quality management plan
Scope baseline include Project scope statement, Work breakdown structure and WBS
dictionary.
Schedule baseline contains the accepted schedule performance measures , including start and
finish dates
Cost Base line documents the accepted time interval being used to measure cost performance
Other management plans . These plans contribute to the overall project quality and may
highlight actionable areas of concern with regard to the project quality
Stakeholder register aids in identifying those stakeholders possessing a particular

interest in, or having an impact on quality
Risk register will list all the risks that may have impact on the quality
Plan Quality Management - Inputs

Requirement Documentation .Requirement documentation captures the
requirements that the project shall meet pertaining to stakeholder expectations. The
component of the requirements document include but is not limited to project and
quality requirement
Enterprise Environmental Factors that influence the plan quality management
process include , Government agency regulation, standard & guidelines and rules
specific to the application area, operating conditions that may impact the quality and
cultural perception that may influence expectations about quality
Organizational Process Assets that influence the Plan Quality Management
process include Organizational quality policies, procedures and guidelines. The
performing organizations quality policy, as endorsed by senior management , sets the
organizations intended direction on implementing its quality management approach;
Historical databases and lesson learned from previous phases or projects
Plan Quality -Tools and Techniques
Cost-benefit analysis considers the cost benefit trade offs, the benefit of quality
activities must outweigh the costs e.g. higher productivity, less rework and lower cost.
Cost of quality (COQ) considers the expense of all the activities within a project to
ensure quality and is the sum of the following
Appraisal Cost includes cost related to Audit, Inspection and Testing
Prevention Cost includes cost related Training, documentation , quality planning and
process reviews
Internal Failure Cost includes cost related to rework , scrap etc
External Failure Cost is related to the defects found by the customer. It includes
liabilities, Warranty work and lost business
Seven Basic Quality Tools The seven basic QC tools include
Control chart determines whether or not the process is stable or has

predictable performance. It illustrates the performance of project over time
and is typically used in projects , or operations , where there are repetitive
activities (Help desk, manufacturing , a series of testing). Upper (UCL) and
lower(LCL) control limits together form the acceptable range of variation in
the process. The UCL is typically set at +3 or +6 sigma while the LCL is set
at -3 0r -6 sigma. The table below shows the four sigma values
representing normal distribution.
Tolerances means the result is acceptable if it falls within the
range specified and, Control Limits means that the process is in
control if the result falls within the control limits.

Single Point outside
the UCL is an
indication of process
breakdown
7 points on one side of CL could

indicate a change in the actual mean
of the process i.e the prediction
interval would have changed.
7 points moving in one direction

also indicates possible appearance
of a special cause that needs
investigation
UCL
90
80
CL
70
60
50
LCL
40
30
20
10
0
1
11
Source : http://en.wikipedia.org/wiki/Control_chart
13
15
17
19
21
23
25
27
29
31
Plan Quality Tools and Techniques

Cause and effect diagram (Ishikawa diagram or Fishbone diagram) is a
graphical representation that depicts how different factors relate together and how
these relations may contribute to inadequate quality.

Flowcharting depicts the sequence of operation, inspection ,decisions etc in a
system. This help in analyzing where quality problem may happen

Histogram is a statistical tool used in the analysis and determination of possible
solutions to quality control problem. It depicts how often the problem happens or its
frequency

Pareto Chart A Pareto chart is a specific c type of histogram, ordered by frequency of
occurrence. It shows how many defects were generated by type or category of
identified cause . Rank ordering is used to focus corrective action. The project team
should address the causes creating the greatest number of defects first.

Check sheets, which are also known as tally sheets and may be used as a checklist
when gathering data. Check sheets are used to organize facts in a manner that will
facilitate the effective collection of useful data about a potential quality problem.
Plan Quality - Tools and Techniques
Benchmarking is a technique where projects quality standards are compared to best

practices of other projects . Based on the difference corrective actions are made to
the current project
Design of experiments approach relies on statistical what-if scenarios to determine
what variables within project will result in the best outcome
Statistical sampling is used to test a random sample instead of testing the entire
population. Attribute Sampling is the results conforms, or it does not where as,
Variable Sampling is when the result is rated on a continuous scale that measures
the degree of conformity.
Flowcharting depicts the relationship between the process steps graphically. It can
be used to predict where quality problems may happen
Proprietary quality management methodologies includes methodologies such
as Six Sigma, QFD, CMMI etc
Additional planning tool includes brainstorming, affinity diagrams and nominal
group techniques
Plan Quality - Outputs
Quality Management Plan defines how the project team will implement the
organizations quality policy
Process improvement plan explains how quality activities will be streamlined and
improved. The areas to consider include process boundaries, process configuration,
process metrics and targets for improved performance
Quality Metrics define how the quality will be measured. Quality metrics is also called
as operational definitions
Quality Checklists ensures that a set of required steps have been performed and
they were performed in the proper sequence
Project document updates that may be updated as plan quality is performed are
Stakeholder register and responsibility assignment matrix.

Auditing quality requirements and the results from quality control measurements to
ensure appropriate quality standards and operational definitions are used. This is
performed as an ongoing activity in the project life cycle

Inputs
Outputs
Quality management
Plan
Process improvement
plan
Quality Metrics
Quality control
measurements
Project documents
Quality management and

control tools
Quality Audits
Process Analysis
Change Requests
Project
Management Plan
Updates
Project Document
Updates
Organizational
Process Asset
Updates
Perform Quality Assurance - Inputs

Quality Management Plan describes the quality assurance and continuous process
improvement approaches for the project.
Process Improvement Plan The projects quality assurance activities should be
supportive of and consistent with the performing organizations process improvement
plan.
Quality Metrics provide an objective means of measurement
Quality control measurements are used to analyze and evaluate the quality
standards and processes of the performing organization
Project documents may influence quality assurance work and should be
monitored within the context of a system for configuration management.
Perform Quality Assurance Tools and Techniques

Quality Management and Control Tools
The perform Quality Assurance uses the tools and techniques of the Plan Quality
Management and Control quality process. In addition, other tools that are available
include
Affinity Diagram. Similar to mind-mapping techniques in that they are used to
generate ideas that can be linked to form organized patterns of thought about a
problem. The creation of WBS may be enhanced by using the affinity diagram to give
structure to the decomposition of scope.
Process decision program charts (PDPC). Used to understand a goal in
relation to the steps for getting to the goal. The PDPC is a useful method for
contingency planning because it aids teams in anticipating intermediate steps that
could derail achievement of the goal.
Interrelationship digraphs. Provide a process for creative problem solving in
moderately complex scenarios that posses intertwined logical relationships for up to 50
relevant items.

Quality Management Other tools
Tree Diagrams. Also known as systematic diagrams and may be used to represent
decomposition hierarchies such as the WBS, RBS (Risk breakdown structure), and OBS
(Organizational breakdown structure ). As the tree diagrams permit the creation of
nested branches that terminates into a single decision point , they are useful as
decision trees for establishing an expected value for a limited number of dependent
relationships that have been diagrammed systematically.
Prioritization matrices. Identify the key issues and the suitable alternatives to be
prioritized as a set of decisions for implementation. Criteria are prioritized and
weighted before being applied to all available alternatives to obtain a mathematical
score that ranks the options.

Quality Management Other tools
Activity networks diagrams . Previously known as arrow diagrams. They include
both the AOA (Activity on Arrow) and , most commonly used , AON (Activity on Node)
formats of a network diagram.
Matrix diagrams. A quality management and control tool used to perform data
analysis within the organizational structure created in matrix. The matrix diagram
seeks to show the strength of the relationships between factors , causes , and
objectives that exist between the rows and columns that form the matrix.

Quality Audits - A quality audit is a structured , independent process to determine if
project activities comply with organizational and project policies , processes , and
procedures.
Process Analysis - follows the steps outlined in the process improvement plan to
identify needed improvements . This analysis also examines problems experienced ,
constraints experienced , and non value added activities identified during process
operations. Process analysis includes root cause analysis a specific technique used
to identify a problem , discover the underlying causes that lead to it, and develop
preventive actions.
Perform Quality Assurance Outputs

Change Requests are the outcome of updating quality standards and processes to
improve organizations effectiveness and efficiency
Project Management Plan Updates includes updates in Quality management plan,
Schedule management plan, Cost management plan as a result of Quality assurance
activities
Project Document Updates include updates to training plans , process
documentation and quality audit report
Organizational Process Asset Updates includes updating quality standards and
processes to improve organization's effectiveness and efficiency
Control Quality
Monitoring and recording results of executing the quality activities to assess
performance and recommend necessary changes. This process takes place throughout
the project lifecycle , involves inspection , measurement and testing of deliverables
and their comparison with the baseline
Control Quality
Inputs

Quality Metrics
Quality Checklists
Work Performance data
Approved change requests
Deliverables
Project documents
Organizational Process Assets
Outputs
Quality Control
measurements
Validated
changes
Validated
deliverables
Work
performance
information
Change requests
Project
management plan
updates
Project document
updates
Organization
process assets
updates
Seven basic quality toold

Statistical sampling
Inspection
Approved change requests
review
Control Quality- Inputs

Project management plan contains the quality management plan, which describes
how quality control will be performed within the project
Quality Metrics will be used to measure whether the work result meet quality
specification
Quality Checklists will assist in assessing conformance of the deliverables to quality
Work Performance Data evaluate actual progress against the planned progress.
Approved change requests include modification such as defect repairs, revised work
methods and revised schedule
Deliverables of the project are primary input to this process
Control Quality - Inputs

Project Documents such as Agreements , Quality audit reports and change logs
supported with corrective actions plans, Training plans and assessments of
effectiveness.
Organizational Process Assets that influence the control quality process include,
but are not limited to:
The organizations quality standard and policies
Standard work guidelines
Issue and defect reporting procedures and communication policies
Control Quality Tools and Techniques

Seven Basic Quality Tools
Statistical sampling is based on selecting and testing a random sample

instead of the entire population.
Inspection is the examination (reviews, peer reviews, audits, or walkthroughs) of a
work product to determine whether it conforms to documented standards.
Approve Change Request Review All approved change requests should be

reviewed to verify that they were implemented as approved
Control Quality Outputs

Quality control measurements are the documented results of quality control
activities in the format specified during quality planning.
Validated changes involve inspection of any changed or repaired items and they will
be either accepted or rejected before notification of the decision is provided. Rejected
items may require rework.
Verified deliverables - A goal of quality control is to determine the correctness of
deliverables. The results of the execution quality control processes are validated
deliverables.
Work Performance Information is the performance data collected from various
controlling processes, analyzed in context and integrated based on relationship across
areas
Control Quality Outputs

Change requests as a result of corrective or preventive action. These changes should
be initiated in accordance with the Integrated change control Process
Project management plan updates includes update to quality management plan
and the process improvement plan
Project documents that may be updated include, but are not limited to, quality
standards, Agreements , Quality audit report and change log supported with corrective
action plans.
Organization process assets updates includes updates to Completed checklists,
lesson learned documentation etc.
Exercise 4: Quality Management

1. ___________ is more important than inspection in Quality Management
2. When a process has data points above the upper limit or blow the lower
limit , those data points are out of _________
3. ______________ is the process of monitoring and recording results of
executing the quality activities to assess performance and recommend
necessary changes.
Answers to Exercise 4: Quality Management

1. Prevention is more important than inspection in Quality Management
2. When a process has data points above the upper limit or below the lower
limit , those data points are out of Control
3. Perform Quality Control is the process of monitoring and recording
results of executing the quality activities to assess performance and
recommend necessary changes.
QUIZ !

Processes required to ensure timely and appropriate generation, collection,
distribution, storage, retrieval and ultimate disposition of project
information. This knowledge area is made up of five processes to
determine what to communicate, to whom, how often, and when to
reevaluate the plan
An effective project manager spends about 90% of his time communicating
and 50% of that time is spent communicating with the project team
Communication Model Various Elements

Sender
The person who needs to initiate the communication
Receiver
The person who gets the message
Medium
The thing used to transmit the message
Feedback
A response to a message
Noise
Something that interferes with the message
Encode
Modify a message so that it can be sent
Decode
Modify a message that has been sent so that it can

be understood
Exercise 1: Communication Model

Revising Key Terms : Communication Model
1. _____________ is used to transmit the message

2. The person who gets the message is _____________
3. Something that interferes with the message is
_______________
Answers to Exercise : Communication Model

Revising Key Terms : Communication Model
1. Medium is used to transmit the message.

2. The person who gets the message is Receiver.
3. Something that interferes with the message is Noise.
Kinds of Communication
Formal vs Informal
Verbal vs Non-verbal
Official vs Non-official
Written vs Oral
Vertical vs Horizontal
Kinds of Communication
Communication
Type
Example
Formal Written
RFP, Project Charter
Informal Written
E-mail, Memos
Formal Verbal
Speech
Informal Verbal
Conversations
Additional Information
Nonverbal Communication
Means gestures, facial expressions, and physical appearance while you
are communicating your message
Para lingual Communication

Is the tone and pitch of your voice when you are telling people whats going
on with your project
Feedback
Is when you respond to communication.
Active listening
When you give feedback to someone who is speaking
Exercise 2: Kinds of Communication

Revising Key Terms : Kinds of Communication
1.
The Project manager writes a requirement specification for your project. This is an
example of ___________ kind of communication.
A. Informal verbal
B. Informal written
C. Formal verbal
D. Formal written
2.
You sent an email to some of your team members to get more information about an
issue that has been identified on your project. This is an example of ___________ kind
of communication
A. Informal verbal
B. Informal written
C. Formal verbal
D. Formal written
Answers to Exercise 2: Kinds of Communication

Revising Key Terms : Kinds of Communication
1.
The Project manager writes a requirement specification for your project. This is an
example of ___________ kind of communication.
A. Informal verbal
B. Informal written
C. Formal verbal
D. Formal written
2.
You sent an email to some of your team members to get more information about an
issue that has been identified on your project. This is an example of ___________ kind
of communication
A. Informal verbal
B. Informal written
C. Formal verbal
D. Formal written
Communication Management Processes
Process
Process Group
Plan Communications
management
Planning
Manage Communications
Executing
Control Communications
Plan Communication Management

Determining the project stakeholder information needs and defining a
communication approach. It entails:
How often communication will be distributed and updated

Mode of communication (email, teleconference etc)
Information that will be included in the project communications
Stakeholders that will receive this information
Plan Communications Management

Inputs
Outputs
Project
management plan
Stakeholder
Register
Enterprise
Environmental
Factors
Organizational
Process Assets
Communications
requirements analysis
Communications
technology
Communication models
Communication method
Meetings
Communications
Management Plan
Project
document updates
Plan Communications Management - Inputs

Project Management Plan provides information on how the project will
be executed , monitored , controlled , and closed.
Stakeholder Register provides the information needed to plan the
communication with project stakeholders.
Enterprise Environmental Factors , plan communication management
process is tightly linked with enterprise environmental factors, since the
structure of an organization will have a major effect on the projects
communication requirements.
Organization Process Assets, Lesson learned and historical information
are of particular importance because they can provide insights on both the
decision taken regarding communication issues and the result of the
decision in previous similar project
Plan Communications Management - Tools and

Techniques
Communication Requirements Analysis , The analysis of the
communication requirements determine the information needs of
the project stakeholders. The project manager should also consider the
number of potential communication channel or paths as an indicator of the
complexity of a projects communications. For Example if there are n
people involve in a project communication. The total number of channels
would be n(n-1)/2
4 people 6 channels
6 people 15 channels

Techniques
Communication Technology, The method used to transfer information
among project stakeholder may vary significantly. For example, a project
team may use technique from brief conversation to extended meetings, or
from simple written documents to extensive materials which are accessible
online as a method of communication .
Factors that can affect the choice of communication technology include :
Urgency of the need for information

Availability of technology
Ease of use
Project environment
Sensitivity and confidentiality of the information

Techniques
Communication Models, Basic model of communication includes
following parameters
Encode : Thoughts and ideas translated to a language which can be
understood by other
Message & Feedback Message : Output of encoding
Medium : The method used to convey the message
Decode : Converting feedback back to understandable form

Techniques
Communication Methods are broadly classified into
Interactive communication
Push Communication
Pull Communication
Meetings , The plan communication process requires discussion and
dialogue with the project team to determine the most appropriate way to
Update and communicate project information and to respond to request
from various stakeholders for that information. These discussions and
dialogue are commonly facilitated through meetings, which may be
conducted face to face or online and in different locations, such as the
project site or customers site.
Plan Communications Management - Outputs

Communication Management Plan contains the following
information
Stakeholder communication requirements

Information to be communicated including language , format , content
and level of detail;
Reason for distribution of that information
Time frame and frequency for the distribution of required information
and receipt of acknowledgement or response , if applicable
Person responsible for communicating the information
Person responsible for authorizing release of confidential information
Person or groups who will receive the information
Person or groups who will receive the information
Methods or technologies used to convey the information, such as
memos, e-mail, and /or press releases;
Plan Communications Management - Outputs

Communication Management Plan contains the following
information
Methods or technologies used to convey the information, such as

memos, e-mail, and /or press releases;
Glossary of common terminology
Flow charts of the information flow in the project, workflows with
possible sequence of authorization , list of report, and meeting plans
etc and
Communication constraints usually derived from a specific legislation
or regulation , technology , and organization policies etc
The communications management plan can also include guidelines and

templates for project status meetings , project team meetings , emeetings and e-mail messages.
Communication Plan
Communication
Team Briefing
Format
Restricted Intranet
Weekly Web Bulletin
Internal Intranet
Technical Incident
Report
Budget and Schedule
Detail
Accomplishments and
Setbacks
Schedule Milestones
Cost-to-Date Milestones
Current Top 5 Risks
Email
Frequency
Daily at 9:00
Distribution
Team and stakeholders
with access to secure
project info area
Weekly
Team, sponsor, senior
management
Immediately after Incident Webmaster, IT Department
Spreadsheets and Detailed

Gantt Chart
Email and Intranet
Bi-Weekly
Weekly
Sponsor, Senior
Management
All internal stakeholders
Email and Intranet

Email and Intranet
Weekly
Weekly

Email and Intranet
Weekly
This process updates stakeholders on the progress of the project as per the
communications management plan. The information that gets distributed
includes status reports, review meetings etc
Inputs
Outputs
Communication
management plan
Work performance
reports
Enterprise
Organizational
process assets
Project
communications
Project
management plan
updates
Project
document updates
Organizational
Process assets
updates
Communication
technology
Communication models
Communications method
Information management
system
Performance reporting
Control Communications Process
This process tracks how the project is progressing against the plan
and provide report to stakeholders on status, progress metrics
(Schedule and Cost variance) and forecasts
Control Communications Process

Inputs
Outputs
Project
management plan
Project
communications
Issue log
Work performance
data
Organizational
Process assets
Work
performance
information
Change
requests
Project
management plan
updates
Project
document updates
Organizational
Process assets
updates
Information
management system
Expert Judgment
Meetings
Project Communication Management

Communication Channels
Channels = n(n-1)/2
Where n is the number of people on the project
If there are five people on the project, then we have 10
communication channels.
This is calculated as follows: 5*(5-1) /2 = 10
Communication Filtering
When a portion of the message is lost in communication.
Common reasons of filtering:

Ambiguous language
Predefined mindset
Hidden agenda in message content
Senders reputation
Senders status in the organization
Dysfunctional emotional behavior
Environmental Background
Exercise : Communication Management

1.
2.
3.
A contract is always __________ communication

A stakeholder with high interest and low power must be kept
_______ of your projects progress
Information should be distributed to all _______
Answers to Exercise : Communication Management

1.
2.
3.
A contract is always formal communication

A stakeholder with high interest and low power must be kept
Informed of your projects progress
Information should be distributed to all stakeholders
Exercise 4: Number of Lines of Communication
Practicing the concept

You are managing a project with five team members and one
sponsor. Draw all the channels of communication on this picture.
Solution: Lines of Communication = 6 * (6 1)/2 = 15
QUIZ !

Processes that organize, manage and lead the project team. Project team is comprised of the
people with assigned roles and responsibilities for completing the project.
Human Resource Management Processes
Process
Process Group
Plan Human Resource

Management
Planning
Acquire Project Team
Executing
Develop Project Team
Executing
Manage Project Team
Executing
Plan Human Resource Management
Identifying and documenting project roles, responsibilities and required skills,

reporting relationships and creating a staffing management plan.
Plan Human Resource Management

Inputs
Project Management
Plan
Activity Resource
Requirement
Enterprise
Assets

Organization charts and
position descriptions
Networking
Organizational theory
Expert Judgment
Meetings
Outputs
Human Resource
Plan
Plan Human Resource Management- Inputs

Project Management Plan provides useful information such as , how work will
be executed to accomplish the project objectives, A change management plan that
documents how changes will be monitored and controlled, how integrity of the
project baselines will be maintained . Need and method of communication among
stakeholders.
Activity Resource Requirements provides information on the preliminary resource
requirement of the project. These requirements are progressively elaborated during
the Human resource planning phase.
Enterprise Environmental Factors that can influence this process include
Organization culture and structure , Existing human resources, Personnel
administration policies and marketplace condition.
Organizational Process Assets that can influence this process include
Organizational standard processes and policies and standardized role descriptions,
Templates for organizational charts and position descriptions, and Historical
information on organizational structures that have worked in previous projects.
Plan Human Resource Management -Tools and

Techniques
The objective of Organization charts and position descriptions is to ensure that

each work package has an unambiguous owner and all the team members have clear
understanding of their roles and responsibilities. Three formats that are most common
for creating this document are hierarchical, matrix, and text-oriented
Fig Reference PMBOK 4th Edition
Plan Human Resource Management -Tools and

Techniques
Sample RACI Chart
Fig Sample RACI Chart-Reference PMBOK 4th Edition
Plan Human Resource Management-Tools and

Techniques
Networking is the process of communicating with others (within Organization,

industry or professional environment). It includes luncheon meetings, informal
conversations including meetings and events, trade conferences, and symposia.
Networking within the organization helps project manager in understanding the
political and organizational force that will influence the project.
Organizational theory -Different organizational structures have different individual
response, individual performance, and personal relationship characteristics.
Organizational theory provides information regarding the way in which people, teams,
and organizational units behave. This information helps in effective planning and in
reducing the amount of time, cost and effort needed to create the plan
Plan Human Resource Management - Outputs
Human Resource Plan has three components roles and responsibility, organization
charts and the staffing management plan.
Roles and responsibility details role, authority, responsibility and competency

for the resource requirement of the project.
Project Organization Chart is a graphic display of project team members and
their reporting relationships. It can be formal or informal, highly detailed or
broadly framed, based on the needs of the project.
Staffing Management Plan details how and when the project will be staffed,
released, training needs of resources, recognition & rewards, compliance and
resource calendar. It also includes policies and procedures that protect team
members from safety hazards.

Confirming human resource availability and obtaining the team necessary to complete
project assignments

Inputs
Human resource
management plan
Enterprise
assets
Pre-assignment
Negotiation
Acquisition
Virtual Teams
Multi- criteria decision analysis
Outputs
Project Staff
Assignments
Resource Calendars
Project
Management Plan
Updates
Acquire Project Team - Inputs

Human Resource Management Plan provides information on how project human
resource should be identified, staffed, managed, controlled and eventually released.
It also contains details on skills required , roles and responsibilities for a particular
position and the competency level that a project demands.
Enterprise Environmental Factors that can influence this process are existing
information for human resources including who are available, competency levels,
prior experience personnel administration policies, processes and procedures
Organizational Process Assets that can influence the Acquire Project Team process
include, but are not limited to, organization standard policies, processes, and
procedures.
Acquire Project Team Tools and Techniques

Pre-assignment refers to assigning the project team members in advance, this is
needed when specific skilled resources are required or the resources are defined in the
project charter
Negotiation with functional managers and other project managers is required if
project manager needs specific skills for the project
Acquisition is needed when specific skills are not available in the organization. This
can involve hiring individual consultants or subcontracting work to another
organization
Virtual teams can be defined as groups of people with a common goal who fulfill their
roles with little or no time spent meeting face to face. Communication is important in
such teams, the availability of electronic communication such as e-mail, audio
conferencing, web-based meetings and video conferencing has made such teams
feasible.
Acquire Project Team Tools and Techniques

Multi Criteria Decision Analysis, Selection criteria are often used as a part of
acquiring the project team . By use of a multi- criteria decision analysis tool, criteria
are developed and used to rate or score potential team members. The criteria are
weighted according to the relative importance of the needs within the team. Some
examples of selection criteria that can be used to score team members are:
Availability . Identify whether the team member is available to work on the
project within time period needed. If there are any concerns for availability during
project timeline.
Cost. Verify if the cost of adding the team member is within the prescribed budget.
Experience, Verify that the team member has the relevant experience that will
contribute to the project success.
Ability, Verify that the team member has the competencies needed by the project.
Knowledge and Skills. The team member has relevant knowledge of the
customer, similar implemented projects, nuances of the project environment and
relevant skills to use a project tool.
Attitude that includes his ability to gel with other members of the team.
International factors such as location of the team member, time zone and
communication capabilities
Acquire Project Team Outputs
Project Staff Assignments includes assignment of resource to each role defined

initially. The documentation of these assignments can include a project team directory,
memos to team members, and names inserted into other parts of the project
management plan, such as project organization charts and schedules.
Resource Calendars documents the time periods that each project team member
can work on the project. This should be created keeping in mind each persons
schedule conflicts, involvement in other projects and his/her holiday
Project Management Plan Updates Elements of the project management plan that
may be updated include, but are not limited to the human resources plan.

Process of improving competencies, team interaction, and the overall team
environment to enhance project performance.

Inputs
Outputs
Human resource
management plan
Project staff
assignments
Resource Calendars
Team Performance
assessments
Enterprise
updates
Interpersonal Skills
Trainings
Team building activities
Ground rules
Co-location
Recognition and rewards
Personnel assessment tools
Develop Project Team - Inputs

Human Resource Management Plan provides guidance on how project human
resource should be defined , staffed , managed , controlled , and eventually released.
It identifies training strategies and plans for developing the project team. Items such
as rewards, feedback, additional training and disciplinary actions can be added to the
plan as a result of ongoing team performance assessments and other form of project
team management.
Project staff Assignments details the assignments or activities to be performed by

the Project team
Resource Calendars identify the times when the project team members can
participate in team development activities.
Develop Project Team Tools and Techniques

Interpersonal Skills also referred to as soft skills are very critical for team
development. It include skills such as empathy, influence, creativity, and group
facilitation, these are valuable assets when managing the project team.
Trainings help in enhancing the competencies of the project team members.
Training can be formal or informal. Training can be formal or informal ; classroom
based ,on line, instructor-led or on the job training.
Team building activities are critical to improve interpersonal relationships,

resolving team issues and to keep the team motivated so that team members work
together effectively . They are critical for the team members who operate virtually
from remote locations . Project managers should obtain top management support,
obtain commitment of team members, introduce appropriate rewards and
recognition, create a team identity, manage conflicts effectively, promote trust and
open communication among team members, and, above all, provide good team
leadership to build effective teams.

Traditionally, a team goes through five stages of development.
Forming: a group of people come together to accomplish a shared purpose.

Storming: Disagreement about mission, vision, and approaches combined with the
fact that team members are getting to know each other can cause strained
relationships and conflict.
Norming: The team has consciously or unconsciously formed working relationships

that are enabling progress on the teams objectives.
Performing: Relationships, team processes, and the teams effectiveness in working
on its objectives are synching to bring about a successfully functioning team.
Adjourning : In the adjourning phase, the team completes the work and moves on
from the project.

Histogram is a statistical tool used in the analysis and determination of possible
solutions to quality control problem. It depicts how often the problem happens or its
frequency
Ground Rules define the acceptable behavior by the project team members. This
allows team members to discover values that are important to one another
Co-Location involves placing many or all of the most active project team members in
the same physical location to enhance their ability to perform as a team. E.g. create a
war room where all the team members work, or co-locate the project team at the
customers site.
Recognition and Rewards helps in keeping the team motivated and to boost their
spirits. People are motivated if they feel they are valued in the organization and this
value is demonstrated by the rewards given to them.
Recognition and Rewards Theories of

Motivation
Abraham Maslows Hierarchy of Needs (1954)
(In order of priority)
Self
Actualization
Self fulfillment, growth, learning
Esteem
Accomplishment, Respect, Attention,

Appreciation
Social
Love, affection, approval, friends,

association
Security, stability, freedom from threat
and physical harm
Safety
Physiological
Air, water, food, house, clothing
Recognition and Rewards Theories of Motivation

McGregors Theory X
The average worker is inherently lazy and needs supervisions
The average worker dislikes work and avoids work whenever possible
To induce adequate effort, the supervisor must threaten punishment and exercise careful supervision
The average worker avoids increased responsibility and seeks to be directed
Theory X relies on Strict Rules, Performance incentives, Rewards, Threats to job

security

McGregors Theory Y
Workers are willing to do the job without continuous supervision
The average worker wants to be active and finds the physical and mental effort on the job satisfying
Greatest results come from willing participation which will tend to produce self-direction towards goals without coercion and
control
The average worker seeks opportunity for personal improvement and self respect
Theory Y relies on worker participation in decisions, cordial manager-worker relationships, worker

designed job methodology, worker individualism

William Ouchis
Theory Z
According to Theory Z, people who dont fit either Theory X or Theory Y are really a combination of the two.

Herzbergs Motivation Hygiene Theory
As per this theory presence of hygiene factors doesnt motivate someone , however their
absence de-motivates. Motivation factors will motivate but they will not work without the
hygiene factors in place.
I.
Motivating factors
I.
Achievements
II.
Recognitions
III. Work Itself

IV.
Responsibility
V.
Advancement
VI.
Possibility for growth
Hygiene Factors are Company Policy, Paycheck, status, Relationship with co-workers
Expectancy Theorem of Motivation by Victor Vroom

1. You need to give people an expectation of a reward in order to motivate them
2. The rewards or awards should be achievable, if they are impossible to achieve,
they will de-motivate them
3. People are motivated by achievements

4. People expect to be rewarded for achievements
McLellands Achievement Theory

1.
2.
3.
4.
People need achievement, power and affiliation to be motivated.

Achievement is when someone performs well and is recognized for it
Power means he or she has a lot of control or influence in the company
Affiliation , a strong sense from being a part of a working team and having good
relationships with coworkers

Ouchis Theory
1. Formulated from Quality movement and Quality circles

2. Both Management and Workers need to be involved, and they should trust each
other

The Oldham-Hackman job characteristics model
I.
Skill Variety the number of job skills that the job holder has the opportunity
to exercise
II.
Task Identity the degree to which your work and its result are identifiable as
belonging to you
III. Task Significance the degree to which your job has an influence on others
IV. Autonomy the discretion you have about the way that you do the job
V.
Feedback the information that you get back about the result of your work
Forms of Power
Below are the five Kinds of Power that can help the project managers maximize his ability
to influence and manage the team
Formal positional, granted by organizational/upper mgmt
Expert power earned through a recognized level of knowledge or skill in a

specific area
Reward the power to give a positive consequences, like promotions, salary rise
etc.
Penalty the power to provide negative consequences, like suspension,

termination, reprimands
Referent power gained when team members admire, and willingly follow an
individual as a role model
Exercise : Forms of Power at Work

Revising Key Terms : Forms of Power at Work
1. A functional manager assigns a tester to work on the project managers
team. This is an example of _________ power
2. The programmers always listen to the team lead because hes really a
good software architect. This is an example of _________ power
Answers to Exercise : Forms of Power at Work

Revising Key Terms : Forms of Power at Work
1. A functional manager assigns a tester to work on the project managers
team. This is an example of Legitimate power
2. The programmers always listen to the team lead because hes really a
good software architect. This is an example of Expert power
Leadership Style
Following are the leadership style that managers can use to interact with organizational
members
Autocratic traditional figure of a boss who makes binding decisions

regardless of what subordinates think or desire
Laissez-Fare Other extreme of autocratic, the staff can pursue anything

they wish, enhances free thinking
Democratic participative, decisions made jointly by management and staff
Develop Project Team Outputs

Team Performance assessments gives insight to project manager on areas that
need improvement.
Enterprise Environmental Factors Updates The Enterprise environmental factors

that may be updated as a result of the Develop Project Team process include, but are
not limited to, personnel administration, including updates for employee training
records and skill assessments.
Manage Project Team

Tracking team member performance, providing feedback, resolving issues and
managing changes to optimize project performance.
Manage Project Team

Inputs
Outputs
Human resource
management plan
Project staff
assignments
Team Performance
Assessments
Issue log
Work performance
reports
assets
Change Requests
Project
management plan
updates
Project document
updates
Enterprise
updates
Organizational
process assets
updates
Observation and
Conversation
Project performance
appraisals
Conflict management
Interpersonal skills
Manage Project Team - Inputs

Human Resource Management Plan contains the human resource plan which
includes roles and responsibilities, project organization and staffing management plan
Project staff assignments provide a list of team members assigned to the project
that needs to be evaluated under the appraisal process
Team Performance Assessment is done on continuous basis formally or informally
by the project management team. This helps in issues and conflict resolution
Issue Log, Issues arise in the course of managing the project team. An issue log can
be used t document and monitor who is responsible for resolving specific issues by a
target date.
Work Performance Reports provide information on project performance vis--vis
project management plan. It aids in determining the future resource requirements,
recognition and rewards and updates to the staffing management plan.
Organizational process assets that can influence this process include certificates of
appreciation, newsletters, website, bonus structure, corporate apparel and
organizational perquisites
Manage Project Team Tools and Techniques

Observation and Conversation are used to stay in touch with the team members
work and attitudes. The project management team monitors progress toward project
deliverables, accomplishments that are a source of pride for team members, and
interpersonal issues.
Project performance appraisals helps in clarification of roles and responsibilities,
constructive feedback to team members, discovery of unknown or unresolved issues,
development of individual training plans, and the establishment of specific goals for
future time periods.

Interpersonal skills use a combination of technical, human and conceptual
skills to analyze situations and interact appropriately with team members. E.g.
Leadership, Influence and effective decision making
Conflict Management results in greater productivity and positive
working relationships. When managed properly, differences of opinion can lead to
increased creativity and better decision making. Below are the source of conflicts on
the Project
More than 50% conflicts on the projects are due to disagreement over
schedules, priorities and resources)
1.
Schedules
2.
Project Priorities
3.
Human Resources
4.
Technical Opinions
5.
Procedures
6.
Cost
7.
Personality

Conflict Resolution Methods
Confronting/Problem Solving. Treating conflict as a problem to be solved by

examining alternatives; requires a give-and-take attitude and open dialogue.
Withdrawing/Avoiding. Retreating from an actual or potential conflict
situation.
Smoothing/Accommodating. Emphasizing areas of agreement rather than
areas of difference.
Compromising. Searching for solutions that bring some degree of satisfaction to
all parties.
Forcing. Pushing ones viewpoint at the expense of others; offers only win-lose
solutions.
Collaborating. Incorporating multiple viewpoints and insights from differing
perspectives; leads to consensus and commitment.
Manage Project Team Outputs

Change Requests due to change in staffing. The change request should be processed
and approved through integrated change control process. Staffing changes may include
moving people to different assignments , outsourcing some of the work, and replacing
the team member who leave.
Project Management Plan Updates may include changes in the human resource
management plan
Project Documents Updates that may be updated include
Issue Log
Role description
Project staff assignment
Enterprise Environmental Factors updates include input to organizational
performance appraisals and personnel skill updates
Organizational process assets updates include Historical information and lessons
learned documentation Templates, and Organizational standard processes.
Manage Project Team Outputs

Enterprise Environmental Factors updates include input to organizational
performance appraisals and personnel skill updates
Organizational process assets updates include Historical information and lessons
learned documentation Templates, and Organizational standard processes.
Change Requests due to change in staffing. The change request should be processed
and approved through integrated change control process
Project management plan updates include updates to staffing management plan
Exercise 2: Resolving Conflict

Revising Key Terms : Conflict Management
Figure out the conflict resolution technique that is being used in the cases
below:
1. I dont really have time to deal with this right now. Just figure it out and
get back to me.
2. Hold on a second. Lets sit down and figure out what the real problem is.
Exercise 2: Resolving Conflict

Revising Key Terms : Conflict Management
Figure out the conflict resolution technique that is being used in the cases
below:
1. I dont really have time to deal with this right now. Just figure it out and
get back to me - Withdrawal
2. Hold on a second. Lets sit down and figure out what the real problem is
Problem Solving / Confronting
Halo Effect
Extending the impression of a particular outstanding trait to influence the total
judgment of a person E.g. : Assuming that a person who is good in technology will be
a good project manager
Exercise 3: HR Management
1.
2.
The main output of the Acquire Project Team process is

___________ assignments
The _________ effect causes people with technical expertise
to be put in the position for which they are unqualified
Exercise 3: HR Management
1.
2.
The main output of the Acquire Project Team process is

Project Resources assignments
The Halo effect causes people with technical expertise to be
put in the position for which they are unqualified
QUIZ !
Connoisseur Consulting Solutions
Project Stakeholder Management
Key Learning Objectives

Who are Stakeholder and effective way to manage them
Project Stakeholder Management processes
Identify Stakeholder
Plan Stakeholder Management
Manage Stakeholder Engagement
Control Stakeholder Engagement
Quiz Quarter
What is Stakeholder Management?

Stakeholder Management includes the processes required to
identify people, groups or organizations that could impact or be
impacted by the project, to analyze stakeholder expectations and
their impact on the project and to develop appropriate
management strategies for effectively engaging stakeholder in
project decisions and execution.
Identify Stakeholders
Identify Stakeholders is the process of identifying the people, groups or
organizations that could impact or be impacted by decision, activity or
outcome of the project analyzing and documenting relevant information
regarding their interest , involvement, interdependencies, influence and
potential impact on project success.
The key benefit of Identify stakeholder process is that it allows the project
manager to identify the appropriate focus for each stakeholder or group of
stakeholders
Identify Stakeholders
Inputs
Project Charter
Procurement
Stakeholder
analysis
documents
Expert judgment
Enterprise
Meetings
Environmental
Factors
Tools & Techniques
Organizational
process assets
Outputs
1. Stakeholder
Register
Identify Stakeholders - Inputs

Project Charter - can provide information about internal and
external parties related with the project and affected by the result or
the execution of the project, such as project sponsor(s), customers,
team members , groups and departments participating in the project,
and other people or organizations affected by the project.
Procurement Documents If the project is the result of a
procurement activity or is based on an established contract , the
parties in that contract are key project stakeholders. Other relevant
parties such as suppliers should also be considered as part of the
project stakeholder list.
Identify Stakeholders - Inputs

Enterprise Environmental Factors relevant to Identify
stakeholders are:
Organizational culture and structures
Governmental or industry standards (e.g. Regulations, product
standards); and
Global , regional or local trends and practices or habits.
Organizational Process Assets relevant to Identify
stakeholder are :
Stakeholder register templates
Lessons learned from previous projects or phases and
Stakeholder register from previous projects.
Identify Stakeholders -Tools and Techniques

1. Stakeholder Analysis - Identifies the interests, expectations and influence of the
stakeholders and relates them to the purpose of the project.
There are multiple classification models used for stakeholders analysis , such as :
Power /Interest grid, grouping the stakeholders based on their level of authority
(power) and their level or concern (interest) regarding the project outcomes
Power /Influence grid, grouping the stakeholders based on their level of authority
(power) and their active involvement (influence) in the project.
Influence/ Impact grid , grouping the stakeholders based on their active involvement (
Influence ) in the project and their ability to effect changes to the projects planning or
execution ( impact ).
Salience model, describing classes of stakeholders based on their power (ability to
impose their will), urgency (need for immediate attention), and legitimacy (their
involvement is appropriate).
Identify Stakeholders -Tools and Techniques

2. Expert Judgement include suggestions and recommendations of Subject Matter
Experts such as :
Senior Management
Other units within the organization
Identified key stakeholders
Project managers who have worked on projects in the same area
Subject Matter Experts in the business project area
Industry groups and consultants
Professional and technical associations , regulatory bodies and non governmental
organizations (NGOs)
3. Meetings Project meetings designed to develop an understanding of major project
stakeholders and they an be used to exchange and analyze information about roles ,
interest , knowledge and the overall position of each stakeholder facing the project.
Power Grid Matrix
Identify Stakeholders - Output

The main output of Identify Stakeholder process is stakeholder
register. It contains following details.
Identification Information :
Name, Organizational Position, Location, Role in the project, Contact
info
Assessment Information:
Major Requirement, Main expectation, Potential Influence
Stakeholders Category:
External/Internal, Supporter, Neutral, Resister

Plan Stakeholder Management is the process of developing
appropriate management strategies to effectively engage
stakeholders throughout the project life cycle, based on the
analysis of their needs, interests and potential impact on the
project success.

Inputs
Tools & Techniques
Outputs
Project Management
Expert judgment
Plan
Meetings
Management Plan
Stakeholder Register
Procurement document
Enterprise
assets
Stakeholder
updates
Plan Stakeholder Management Inputs

Project Management Plan - The information that is taken from
Project Management Plan to create stakeholder plan includes
Life cycle selected for the project and the processes that will be
applied to each phase;
Description of how work will be executed to accomplish the project
objectives;
Description of how human resources requirements will be met and
how roles and responsibilities, reporting relationships, and staffing
management will be addressed and structured for the project;
Change management plan that documents how changes will be
monitored and controlled
Need and techniques for communicating among stakeholders
.
Plan Stakeholder Management Inputs

Stakeholder Register Provides the information needed to plan
appropriate ways to engage project stakeholders.
Enterprise Environmental Factors - such as organizational
culture, structure, and the political climate. These factors help in
determining the best options to support a better adaptive process
for managing stakeholders
Organizational Process Assets such as lessons learned
database and historical information are of particular importance as
they provide insight into previous stakeholder management plans
and their effectiveness. These can be used to plan the stakeholder
management activities for the current project.
Plan Stakeholder Management Tools and

Techniques
Expert Judgment Suggestions and guidance should be sought
from groups or individuals with specialized training or subject matter
expertise or insight into the relationships within the organization,
such as
Senior Management
Project Team Members
Other units or individuals within the organization
Identify key stakeholders
Project managers who have worked on the projects in the same
area
Professional and technical associations , regulatory bodies and non
governmental organizations.

Techniques
Meetings Should be held with experts and the project team to define
the required engagement levels of all stakeholders. This information
can be used to prepare the stakeholder management plan

Techniques
Analytical Techniques includes comparison of the current
engagement level of stakeholder to the planned engagement levels
required for successful project completion. Stakeholder engagement
throughout the lifecycle of the project is critical to project success.
The engagement level of the stakeholders can be classified as follows:
Unaware Unaware of project and potential impacts

Resistant Aware of project and potential impacts and resistant to
change
Neutral Aware of project yet neither supportive nor resistant
Supportive Aware of project and potential impacts and supportive
to change
Leading Aware of project and potential impacts and actively
engaged in ensuring the project is a success.
Stakeholders Engagement Assessment

Matrix
Plan Stakeholder Management Outputs

Stakeholder Management Plan
is a component of the project

management plan that explains the management strategies required to effectively
engage stakeholders. In addition to the data gathered in the stakeholder register it
provides.
Desired and current engagement levels of key stakeholders
Scope and impact of change to stakeholders
Identified interrelationships and potential overlap between stakeholders
Stakeholder communication requirements for the current project phase;
Information to be distributed to stakeholders, including language, format,
content , and level of detail;
Reason for the distribution of that information and the expected impact to
stakeholder engagement;
Time frame and frequency for the distribution of required information to
stakeholders.
Method for updating and refining the stakeholder management plan as the
project progresses and develops.
Plan Stakeholder Management - Outputs

Project Document Updates includes project schedules and
stakeholder register

Manage Stakeholder Engagement is the process of communicating and
working with stakeholders to meet their need/expectations, address
issues as they occur, and foster appropriate stakeholder engagement in
project activities throughout the project life cycle.

Inputs
Tools & Techniques
Outputs
Stakeholder Management
Communication Methods
Issue Log
Plan
Interpersonal skills
Change Requests
Communication
Management Skills
Project Management
Management Plan
Change Log
assets
Plan updates
Project documents
updates
assets updates
Manage Stakeholder Engagement - Inputs

Stakeholder Management Plan This plan explains the management strategies
required to effectively engage stakeholders.
Communication Management Plan This plan explains what to be communicated o
whom and at what frequency. What to be communicated to external stakeholders or
not
Change log Document changes that occur during a project. It is important to
communicate . The impact of these changes on cost, time and quality should be
communicated to the relevant stakeholders.
Organizational Process Assets - The organizational process assets that can
influence the Manage Stakeholder Engagement process include Issue management
procedures, Change management procedure and Organizations communication
requirement.
Manage Stakeholder Engagement Tools

and Techniques
Communication Methods The methods of communication identified for each
stakeholder in the communications management plan are utilized during stakeholder
engagement management. Based on the stakeholders communication requirements,
the project manager decides how, when, and which of these communication methods
are to be used in the project
Interpersonal skills - This include conflict management skills, communication
skills, ability to overcome resistance to the change.
Management Skills - The project manager applies management skills such as

negotiation, facilitation and ability to influence people to coordinate and harmonize
the group toward accomplishing
the project objectives
Manage Stakeholder Engagement Outputs

Issue Log It is good to maintain an issue log for managing stakeholder issues. This
log is updated as new issues are identified and current issues are resolved.
Change Requests - Managing stakeholder engagement may result in a change
request to the product or the project. It may also include corrective or preventive
actions to the project itself or to the interaction with the impacted stakeholders, as
Appropriate
Project Management Plan updates - Stakeholder management plan or
communication management plan might be updated when new stakeholder
is identified Project documents updates Organizational process assets
updates
Manage Stakeholder Engagement Outputs

Project documents updates - Project documents that may be updated include, but
are not limited to, the stakeholder register. This is updated
as information on stakeholders change, when new stakeholders are identified, or if
registered stakeholders are no longer involved in or impacted by the project, or other
updates for specific stakeholders are required.
Organizational process assets updates - The organizational process assets that may
be updated include,
Project records. Project records include correspondence, memos, meeting minutes, and
other documents describing the project.
Lessons learned documentation. Documentation includes the root cause analysis of
issues faced, reasoning behind the corrective action chosen, and other types of lessons
learned about stakeholder management. Lessons learned are documented and
distributed, and become part of the historical database for both the project and the
performing organization.

Control Stakeholder Engagement is the process of
monitoring overall project stakeholder relationship
and adjusting strategies and plans for engaging
stakeholders.

Inputs
1. Project Management Plan
2. Issue Log
Tools & Techniques

1. Information Management
Outputs
1. Work Performance
Systems
Information
3. Work Performance Data
2. Expert Judgment
2. Change Requests
4. Project Documents
3. Meetings
3. Project Management
Plan updates
4.
Project documents
updates
5. Organizational process
assets updates
Inputs - Control Stakeholder Engagement

1. Project Management Plan - The information related to Project Management that will be utilized
include
The lifecycle selected for the project and the processes that will be applied to each phase.
How work will be executed to accomplish the project objectives
How human resources requirements will be met, how roles and responsibilities , reporting
relationships, and staffing management will be addressed and structured for the project;
A change management plan that documents how change will be monitored and controlled
Needs and techniques for communication among stakeholders
2. Issue Log The issue log is updated as new issues are identified and current issues are resolved
3. Work Performance Data include reported percentage of work completed , technical
performance measures, start and finish dates of schedule activities, number of change requests,
number of defects , actual costs, actual durations etc.
4. Project Documents Multiple project documents originating from initiation , planning, execution
, or control processes may be used as supporting inputs for controlling stakeholder engagement.
These include
Project schedule
Issue Log
Change Log
Project Communications
Tools and Techniques - Control Stakeholder

Engagement
1. Information Management Systems An information management system
provides a standard tool for the project manager to capture , store, and distribute
information to stakeholders about the project cost, schedule progress, and
performance.
2. Expert Judgement - Suggestions should be sought from subject matter expert
such as :
Senior Management
Other units or individuals within the organization
Identified key stakeholders
Project Managers who have worked on projects in the same area
Subject matter experts in the business or project area
Professional and technical associations, regulatory bodies and non
governmental organization
3. Meetings Status review meetings are used to exchange and analyze information
about stakeholder engagement
Outputs- Control Stakeholder Engagement

1. Work Performance Information is the performance data collected from various
controlling processes, analyzed in context , and integrated based on relationships
across areas. Thus work performance data have been transformed into work
performance information.
2. Change Requests - Analysis of project performance and interactions with
stakeholders often generates change requests. These change requests include
Recommended corrective actions include changes that bring the expected
future performance of the project in line with the project management plan
and ;
Recommended preventive actions can reduce the probability of incurring
future negative project performance.

1. Project Management Plan Updates Elements of the project management
plan that may be updated include :
Change Management Plan
Communication management plan
Cost Management Plan
Human resource management plan
Procure management plan
Requirements management plan
Stakeholder management plan

1. Project Documents Updates Following documents may be updated.
Stakeholder register - This is updated as information on the stakeholders
change, when new stakeholders are identified, or if registered stakeholders
are no longer involved in or impacted by the project, or other updates for
specific stakeholders are required.
Issue log This is updated as new issues are identified and current issues
are resolved.

1. Organizational Process Assets Updates Following are the organization
process assets that may be updated.
Stakeholder notifications - Information may be provided to stakeholders
about resolved issues, approved changes and general project status.
Project reports - Formal and informal project reports describe project
status and include lessons learned, issue logs, project closure reports , and
outputs from other knowledge areas
Project presentations - Information formally or informally provided by the
project team to any or all project stakeholders
Project records Project records include correspondence, memos, meeting

minutes, and other documents describing the project.
Feedback from stakeholders Information received from stakeholders
concerning project operations can be distributed and used to modify or
improve future performance of the project.
Lesson learned documentation - Documentation includes the root cause
analysis of issues faced, reasoning behind the corrective actions chosen, and
other types of lessons learned about stakeholder management. Lesson
learned are documented and distributed so that they become part of the
historical database for both the project and performing organization.
pankaj sharma, Mobile 9810996356

Processes necessary to purchase or acquire products, services or results needed from
outside the project team.
Procurement Management Processes
Process
Process Group
Plan Procurements
Planning
Conduct Procurements
Executing
Control Procurements
Close Procurements
Closing
Plan Procurements
Plan Procurements is the process of documenting project purchasing decisions,
specifying the approach, and identifying potential sellers
Plan Procurements
Inputs

Requirements
documentation
Teaming agreements
Risk Register
Project Schedule
Factors
Assets
Make or buy analysis

Expert Judgment
Market research
Meetings
Outputs
Procurement
management plan
Procurement
statements of work
Make or buy decisions
Procurement
documents
Source selection
criteria
Change requests
Project document
updates
Plan Procurements - Inputs

Project Management Plan - describes the need, justification, requirements, and current
boundaries for the project. It consists of Scope statement, WBS and WBS dictionary.
Requirements documentation include Important information about project
requirements that is considered during planning for procurements.
Risk Register include risk-related information such as identified risk, risk owners and risk responses
Activity resource requirements state the type and quantities of resources needed for project
activities
Project Schedule provides information on project timelines and milestones
Activity cost estimates are used to evaluate the price quoted in the bids or proposals received
from potential sellers
Stakeholder Register describes the details on the participants and their interest in the project
Plan Procurements - Inputs

Enterprise Environmental Factors includes condition of marketplace, what product and service
are available in the market, who is the seller and what are his terms and condition
Organizational Process Assets includes policies and procedures , standards ,guidelines,
performance measurement criteria, defect management procedures, change control procedures and
historical information. Some organizations may define certain constraint on procurement decisions.
This also include the various types of contractual agreements used by the organization, All legal
contractual relationships generally fall into one of two broad families: either fixed price or
cost reimbursable. Also, there is a third hybrid type commonly in use called the time and materials
contract.
The next slides describes the different contract types in details
Plan Procurements -Tools and Techniques

Types of Contract
Time & Material T & M
The seller is paid for the amount of time it

takes to accomplish the work and he is
also reimbursed for the materials used for
the project
Firm Fixed Price - FFP
The seller is paid a fixed price for an

agreed upon unit of work done by him
Fixed Price Incentive Fee FPIF
The seller is paid a fixed price plus an

incentive amount for achieving pre-agreed
project metrics
Fixed Price with Economic Price

Adjustment Contracts FP-EPA
The seller is paid a fixed price. The

contract is reviewed at pre-defined
intervals in the project for adjustments to
the contract price based on certain
parameters

Types of Contract
Cost Plus Fixed Fee CPFF
The contractor is reimbursed its cost plus

an additional fixed fee. Not desirable from
the buyers point of view
Cost Plus Incentive Fee - CPIF
Seller is reimbursed for an agreed upon

performance cost along with a preestablished fee plus an incentive bonus. In
this case, the buyer and seller share the
uncertainty to a certain degree
Cost Plus Award Fee
Seller is reimbursed for an agreed upon

performance cost plus all legitimate cost

Make or buy analysis helps project management team to decide whether it is beneficial
(in terms of cost and quality) to procure a product or service or it can be produced within
the organization.
Market Research includes examination of industry and specific vendor capabilities.

Procurement teams may leverage information gained at conferences , online reviews and
a variety of sources to identify market capabilities.
Meetings , by collaborating with potential bidders , the organization purchasing the
material or service may benefit while supplier can influence a mutually beneficial
approach or product.
Plan Procurements - Outputs
Procurement management plan describes how the procurement process will be

managed from planning procurement to close procurement. It contains detail on
1. Types of Contracts to be used
2. Risk management issues
3. Whether independent estimates will be used and whether they are needed as
evaluation criteria
4. Standardized procurement documents, if needed
5. Process of managing multiple providers (sellers)
6. Coordination with other project aspects
7. Any constraints and assumptions that could affect planned procurements
8. Handling the long lead times to purchase certain items from sellers and
coordinating the extra time needed to procure these items with the development
of the project schedule
9. Handling make or buy decision and linking them to the Estimate Activity
Resources and Develop schedule process.
Procurement statements of work defines the products, services , or result to be

procured in details so that the seller can be sure that he can provide appropriate
products , services, or results. It is developed from the project scope baseline and
defines only that portion of the project scope that needs to be procured and stated in
the contract.
Procurement documents define the buyers requirements and facilitate complete
and correct response from the prospective sellers in the form of a proposal, which
aids in the selection of the seller(s). The most commonly used procurement
documents are RFP (Request for Proposal), IFB (Invitation for Bid and RFI (Request for
Information
Source selection criteria are the set of guidelines on the basis of which a particular
seller is selected from among the proposals received. Some of the source selection
criteria are sellers understanding of need , overall- life-cycle cost, technical capability,
Risk, past performance of the seller, Financial capacity, Warranty etc
Make or - Buy Decisions, A make-orbuy analysis results in a decision of whether
particular work can best be accomplished by the project team or needs to be
purchased from outside sources.
Change requests may be there during this process due to updates in the project plan
or its subsidiary plan and other components. These changes are reviewed and
approved through the integrated change control process.
Project Documents Updates that may be updated include requirement
documentation, requirements traceability matrix and risk register.
Exercise 1: Make or Buy Analysis

Practicing Key Concepts
Youve been contracted by a construction company to manage their contracting.
They have a choice of either buying an excavator or renting it. To buy it, the
company would have to pay $105,000, but owning it will require approximately
$10,000 in maintenance costs per year. The price to rent the excavator is $5000 per
month, with a one-time service charge of $2000. Whats the minimum number of
months the company needs to use the excavator in order for it to make sense to
buy it rather than rent?
1.
2.
3.
4.
8 months
16 months
21 months
25 months
Exercise 2: Plan Procurements
Which document are we referring below?

1. A type of procurement document used to request proposals from
prospective sellers of products or services.
2. A type of procurement document used to request price
quotations from prospective sellers of common or standard
products or services.
Exercise 2: Plan Procurements
Which document are we referring below?

1. A type of procurement document used to request proposals from
prospective sellers of products or services.
RFP
2. A type of procurement document used to request price
quotations from prospective sellers of common or standard
products or services.
RFQ
Conduct Procurement
Conduct Procurements is the process of obtaining seller responses, selecting a seller,
and awarding a contract
Conduct Procurement
Inputs
Project Management
Plan
Procurement
documents
Source selection
criteria
Seller proposals
Project documents
Make or buy decisions
Teaming agreements
Assets
Bidder conferences
Proposal evaluation techniques
Independent estimates
Expert Judgment
Advertising
Procurement negotiation
Outputs
Selected sellers
Agreements
Resource calendars
Change requests
Project
management plan
updates
Project document
updates
Conduct Procurement - Inputs

Project Management Plan contains procurement management plan and this
describes how the procurement process will be managed from preparing procurement
documentation through close procurements
Procurement Documents as explained earlier provide an audit trail for contracts and
other agreements
Source Selection criteria are set of guidelines, either subjective or objective, that
are used by the performing organization to select a particular contract/ vendor (seller)
from among the proposals received.
Seller proposals are responses to the procurement document package that will be
used for selection of the sellers by the organizations evaluation body

Project documents that are important inputs to this process include risk register and
risk related contract decisions.
Make- or -buy decisions as explained earlier is based on the outcome of Make orbuy- Analysis. The factors that influence the decision making include , core
competencies of the organization, value delivered, risk associated with meeting the
need in a cost=effective manner and internal capability as compared to the vendor
community.
Procurement Statement of Work provides suppliers with a clearly stated set of
goals , requirements, and outcomes from which they can provide a quantifiable
response. The statement of work include
Specifications
Quantity desired
Quality levels
Performance data, period of performance, work location and other requirements

Organizational Process Assets that can influence this process include listings of
prospective and previously qualified sellers and information on relevant past
experience with sellers, prior agreements
Conduct Procurement Tools and Techniques

Bidder conferences are meetings wherein the prospective supplier (sellers) are called
in to ensure that all the supplier have a clear understanding of the work defined in the
procurement documents.
Proposal evaluation techniques are used to evaluate the proposals by giving a
rating score to each proposal
Independent estimates are sometimes prepared by the procuring organization using
internal expert in estimation or an outside professional estimator
Expert Judgment includes a team of experienced and skilled experts for evaluation of
proposals under various areas of expertise as mentioned in the procurement
documents and contract
Conduct Procurement Tools and Techniques

Advertising is used by the performing organization to invite the potential sellers to be
Contracted
Analytical Techniques, procurements involve defining a need in such as way
that vendors can bring value through offerings. To ensure that the need can be and is
met, analytical techniques can help organizations identify the readiness of a vendor to
provide the desired end state. By examining past performance information, teams may
identify areas that may have more risk and that need to be monitored closely to
ensure success of the project
Procurement negotiations between the buyers and the potential sellers are
performed with the goal of reaching mutual agreement on the contractual terms and
conditions. The goal is to reach a win-win scenario between the buyer and seller.
Conduct Procurements Outputs

Selected Sellers are those who have met the evaluation criteria and negotiated a
draft contract with the buyer, which will become the actual contract when the contract
is awarded
Agreement is a formal document governing the relationship between the buyer and
the seller. The contract describes the work to be performed and perhaps the way in
which the work will be performed. An important to include with the contract is how
disputes will be resolved. Depending upon the application area, an agreement can also
be called an understanding , a contract, a subcontract, or a purchase order.
Regardless of the document complexity , a contract is a mutually binding legal
agreement that obligates the seller to provide the specific products, services, or
results and obligates the buyer to compensate the seller. The major component of
agreement are:

Major components of an agreement
Statement of work or deliverables

Schedule baselines
Period of performance
Roles and responsibilities
Sellers place of performance
Pricing
Payment Terms
Place of delivery
Inspection and acceptance criteria
Warranty
Product Support
Limitation of liability
Fees and retainer

Major components of an agreement
Penalties
Incentives
Insurance and performance bonds
Subordinate subcontractor approvals
Change request handling and
Termination clause and alternative dispute resolution (ADR) mechanism. The ADR
method can be decided in advance as a part of the procurement award.

Resource Calendar state the availability and the quantity of contracted resource and
the project period (dates) during which the resources are active or idle
Change Requests to the project management pan, its subsidiary plans and other
components are processed for review and disposition through the Perform Integrated
Change Control process.
Project Management Plan Updates, the elements of the project management plan
that may be updated include Cost baseline, Scope baseline, Schedule baseline,
Communication management plan, and Procurement management plan.
Project Document Updates, the project documents that may be updated include,
requirement documentation, requirement traceability documentation, risk register and
stakeholder register.

Selected Sellers are those who have met the evaluation criteria and negotiated a
draft contract with the buyer, which will become the actual contract when the contract
is awarded
Procurement Contract Award is a formal document governing the relationship
between the buyer and the seller. The contract describes the work to be performed
and perhaps the way in which the work will be performed. An important to include
with the contract is how disputes will be resolved.
Resource Calendar state the availability and the quantity of contracted resource and
the project period (dates) during which the resources are active or idle
Change Requests As discussed earlie
Project Management Plan Updates As discussed earlier
Project Document Updates As discussed earlier
Control Procurements
Managing procurement relationships, monitoring contract performance and
making changes and corrections as needed.
Control Procurement
Inputs
Outputs
Project Management
Plan
Procurement
documents
Agreement
Approved change
requests
Work Performance
reports
Work performance
Data
Contract change control system

Procurement performance
reviews
Inspections and audits
Payment system
Claims administration
Records management system
Work performance
information
Change requests
Project
management plan
updates
Project document
updates
Organizational
process assets update
Control Procurement - Inputs

Project Management Plan describes how the procurement process will be managed
from developing procurement documentation through contract closure.
Procurement documents contain complete supporting records for administration of
the procurement processes; this includes procurement contract awards and the
statement of work
Agreements As Explained earlier Agreements are understanding between parties,
including understanding of the duties of each parties.
Approved change requests include modifications to the terms and condition of the
contract including the procurement statement of work, pricing and the description of
the products , services or results.
Control Procurement - Inputs

Work Performance Reports is a seller performance related documentation that
include
Technical documentation. Sellers- developed technical documentation and other
deliverable information are provided in accordance with the terms of the contract.
Work performance information. The sellers performance reports indicate which
deliverables have been completed and which have not.
Work Performance Data includes information on a regular basis of the performance
and status of the sellers project work activities. It includes information such as which
deliverables have been completed and which have not, whether the quality standards
defined for the project are being adhered to and the payment is being made for the
costs that have been stated in the contract.
Control Procurement Tools and Techniques

Contract change control system is a component of integrated change control system
and it describes the process of updating the contract
Procurement performance reviews are periodic reviews initiated by the buyer to
measure the projects progress against the plan
Inspections and audits are done by the buyer and supported by the seller to identify
any non-compliance to the projects process or deliverables.
Performance reporting provides information to management about how effectively
the seller is achieving his contractual objective.
Payment system helps to ensure that invoices and payments match up and that the
right amount is being invoiced for the right deliverables at the right time.
Control Procurement Tools and Techniques

Claims administration are basically disagreements (about scope or change request).
It is preferred that the claims should be resolved by the parties involved as per the
dispute resolution procedure . If not resolved by the parties involved, then the disputes
are resolved by the process of Arbitration whereby a third neutral party is given the
task of getting the dispute resolved.
Records management system is a part of the project management information
systems (PMIS). In addition to the documentation, it also consists of processes, control
functions, and automated tools. This system should index various documents for their
easy retrieval and archival.
Control Procurement Outputs

Work Performance Information provides a basis for identification of current or
potential problems to support later claims or new procurements. By reporting on the
performance of a vendor, the organization increases the knowledge of the
performance of the procurement , which supports improved forecasting , risk
management and decision making. Performance reports also assist in the event there
is a dispute with the vendor.
Change requests, changes to the project management plan, its subsidiary plans, and
other components , such as the cost baseline, schedule baseline, and procurement
management plan may result from the control procurement process.
Project management plan updates includes update to the procurement
management plan ,schedule baseline and cost baseline
Control Procurement Outputs

Project Documents Updates include updates to procurement documentation, it
include the procurement contract with all supporting schedules, requested unapproved
contract changes , and approved change requests. It also includes any seller
developed technical documentation and other work performance information such as
deliverable s, seller performance reports and warranties, financial documents including
invoices and payment records, and the result of contract related inspections.
Organizational process assets updates that will be updated as a result of this
process includes documentation related to sellers unsatisfactory performance, request
for contract changes or clarifications, payments made by the buyer to the seller and
also the documents related to sellers performance.
Exercise : Control Procurements

Revising Tools and Techniques
1. ___________________ involves process to change the
procurement contract. It can involve the approvals, paperwork
and the dispute resolution mechanism required for the change
control.
2. ______________ system refers to how the payments are made to
the seller.
Answer to Exercise : Control Procurements

Revising Tools and Techniques
1. Contract Change Control System involves process to change the
procurement contract. It can involve the approvals, paperwork
and the dispute resolution mechanism required for the change
control.
2. Payment system refers to how the payments are made to the
seller.
Close procurements
Process of completing each project procurement. It involves administrative activities
such as updating the project records with results and archiving the information for
future use and finalizing open claims in accordance with the terms and conditions
stated in the contract document
Close Procurement process closes the procurement applicable to that phase of the
project
Close procurements
Inputs
Outputs
Project Management
Plan
Procurement
documentation
Procurement audits
Procurement Negotiations
Records management system
Closed
procurements
Organizational
process assets
updates
Close procurements- Inputs

Project Management Plan Discussed Earlier
Procurement documentation includes information on contract schedule, scope,

quality and cost performance along with all contract change documentation, payment
records and inspection results. This information can be used for lessons learned
information and as a basis of evaluating contractors for future contracts.
Close procurements- Tools and Techniques

Procurement Audits is a structured review of the procurement processes from the
plan procurements process through administer contracts process. The purpose of
procurement audit is to identify the improvement areas and the flawed procurement
processes and/ or procedure. This will assist in reusing the successful/updated
procedures in other projects.
Procurement Negotiations refers to the settlement for any outstanding issues,
claims and disputes through negotiation. Whenever the settlement cannot be achieved
through direct negotiation, some form of alternative dispute resolution(ADR) including
mediation or arbitration can be explored
Records Management System is used by the project manager to manage contract
and procurement documentation and records. Contract documents and
correspondence are archived through the records management system as part of the
close procurement process
Close procurements- Outputs

Closed Procurements is the process in which the buyers contract administrator
sends formal written notice to the seller that the contract is complete.
Organizational Process Assets Updates will be updated due to modification in the
procurement files and lessons learned documentation. Also, deliverable acceptance
and rejection will be stated in the final contract documentation with supporting
reasons.
Exercise 5: Contract Type

Reviewing Associated Risks to Buyers & Sellers
Explain the risks from buyer and seller perspective in case of the following
types of contracts
1.
2.
3.
4.
5.
6.
Firm fixed price

Fixed price plus incentive fee (FPIF)
Cost plus fixed fee
Cost plus award fee
Cost plus incentive fee
Time and Material (T&M)
Negotiations Techniques
Deadline: imposing a deadline to reach an agreement

Stalling: one party may claim that an agreement cannot be finalized
because of his limited authority
Fair and Responsible: a negotiator may claim that the price for a
product is equitable because thats what another company is
paying.
Delay: are useful when tempers are beginning to flare, to divert from
a subject, etc (Ex: arrival of refreshments, request for recess etc)
Withdrawal: one party may attack an issue, then retreat
Negotiations Techniques
Arbitration: a third party may be brought in when agreement cannot

be reached. (out of court settlement)
Fait Accompli: a party may claim that what is being asked for has
already been accomplished and cannot be changed
Exercise 5: Procurement Management

1. An Invitation for __________ is a document that ask sellers for
the price of work
2. The buyer selects the __________ selection criteria before
contacting potential sellers
3. The ___________contract has high risk to the seller because the
seller must cover costs that go beyond the price
QUIZ !

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Author - Pankaj Sharma

Pankaj Sharma, 9810996356

Author - Pankaj Sharma

Pankaj Sharma, 9810996356

Author - Pankaj Sharma

A temporary endeavor means that every project has a definite

Unique means that the product or service or result is different from

Progressively elaborated - proceeding in steps

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Author - Pankaj Sharma

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Closes after attaining the objectives

Objective is to sustain business

Prototyping the new car model

Assembly line production

Pankaj Sharma, 9810996356

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Author - Pankaj Sharma

Why Projects Fail ?

Lack of clearly defined purpose

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Author - Pankaj Sharma

What Is Project Management ?

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Project Management Benefits

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Project Management Process Groups

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Initiating Process Group

Processes within this group launches the project or a project phase

Pankaj Sharma, 9810996356

Author - Pankaj Sharma

Planning Process Group

It involves creation of Project Management Plan that acts as a

Author - Pankaj Sharma

Executing Process Group

Executing process group consists of processes to complete the work in

Pankaj Sharma, 9810996356

Author - Pankaj Sharma

Monitoring and Controlling Process Group

Controlling processes are the activities that

Pankaj Sharma, 9810996356

Author - Pankaj Sharma

Closing Process Group

This process group includes all processes to close all activities in a

Author - Pankaj Sharma

Process Group Interaction

Pankaj Sharma, 9810996356

Author - Pankaj Sharma

Project Life Cycle

Projects are divided into phases

Number of phases depends on complexity and size of the project

Reviews are conducted at the end of each phase to measure performance

Phase end reviews allows to decide if the project should continue

The collection of phases is called project life cycle

Pankaj Sharma, 9810996356

Author - Pankaj Sharma

Characteristics of Project Phase

Pankaj Sharma, 9810996356

Author - Pankaj Sharma