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 7. Project Cost Management

Project Cost Management includes the processes involved in planning,

estimating, budgeting, financing, funding, managing, and controlling costs
so that the project can be completed within the approved budget.
• On some projects, especially those of smaller scope, cost estimating and 
cost budgeting are tightly linked and can be viewed as a single process 
that can be performed by a single person over a relatively short period of 
time. These are presented here as distinct processes because the tools 
and techniques for each are different.
• The ability to influence cost is greatest at the early stages of the 
project, making early scope definition critical.

Cost Management Concepts

Cost Estimating vs. Pricing

• Cost Estimating involves developing an assessment of how
much it will cost the performing organization to provide
the product or service.
• Pricing is a business decision ‐‐ how much the performing
organization will charge for the product or service.

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Life Cycle Costing
Project Cost Management is primarily concerned with the cost needed to
complete the project, A broader view of Project Cost Management is Life Cycle
Costing.
• Life Cycle Costing : includes operations and maintenance phases
• Value Analysis : find a less costly way to do same work
Project Cost Management should consider the effect of project decisions on the
cost of using the project product. (i.e., limiting the number of design reviews
may reduce the cost of the project but increase the product maintenance costs)

Cost Types
A cost can be either variable or fixed:
• Variable Costs: Costs that rise directly with the size of the project. (cost
of material, supplies and wages)
• Fixed Costs: Nonrecurring costs that do not change based on the
number of units.(set‐up, rental, etc.)
A cost can be either Direct or Indirect :
• Direct Costs: Costs incurred directly by a specific project. (team wages,
recognition, and costs of material)
• Indirect Costs: Costs that are part of the overall organization's cost of
doing business and are shared among all the current projects.

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• Sunk Costs: A historical or expended cost. Since the cost has been
expended, we no longer have control over the cost. Sunk costs are not
included when determining alternative courses of action. (stop or
continue project work)

• Opportunity Costs: The cost of choosing one alternative and, therefore,

giving up the potential benefits of another alternative.
• (You have two projects to choose from;
Project A with an NPV of $60,000 or Project B with an NPV of $90,000.
What is the opportunity cost of selecting project B? )
(Answer $60,000.)

• Depreciation Large assets (e.g., equipment) purchased by a company

lose value over time. Accounting standards call this depreciation. Several
methods are used to account depreciation:

– Straight‐line Method: Takes an equal credit during each year of the

useful life of an asset.

– Accelerated Method: Writes off the expense even faster than

straight‐line.
• Double‐declining balance

• Sum‐of‐the‐years digits

• Accelerated depreciation depreciates faster than straight line.

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 Profitability Measures for Project Selection

• Payback Period The number of time periods it takes to recover your

investment in the project .
The shortest Payback Period the better project selection

• Benefit Cost Ratio Benefit cost ratio relates to costing projects and to
determining what work should be done. This ratio compares the benefits to
the costs of different options.
• The greatest Benefit Cost Ratio the better project selection

• Present Value: Present value means the value today of future cash flows.

• Net Present Value (NPV) : is the present value of the total benefits
(income or revenue) less the costs over many time periods.

The greatest Net Present Value the better project selection

• Internal Rate of Return (IRR) The rate (read it as interest rate) at which
the project inflows (revenues) and project outflows (costs) are equal.

The greatest Internal Rate of Return the better project selection

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 Cost Estimate types
• Rough Order of Magnitude ROM(feasibility, conceptual)
– Range: ‐25% + 75%
– An approximate estimate made without detailed data
– Used during the initial evaluation of the project (Concept)
• Budget
– Range: ‐10% + 25%
– Used to establish the funds required for the project (Development)
– Also used to obtain approval for the project
• Definitive
– Range: ‐5% + 10%
– Prepared from well defined specifications, data, drawings, etc.
– Used for bid proposals, bid evaluations, contract changes, extra work, ..

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The Project Cost Management processes include:

7.1 Plan Cost Management— The process of defining how the project costs
will be estimated, budgeted, managed, monitored, and controlled.
7.2 Estimate Costs— The process of developing an approximation of the
monetary resources needed to complete project work
7.3 Determine Budget— The process of aggregating the estimated costs of
individual activities or work packages to establish an authorized cost baseline.
7.4 Control Costs— The process of monitoring the status of the project to
update the project costs and manage changes to the cost baseline.

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 Initiating  Planning  Executing  Monitoring  Closing   
Process Group Process Group Process Group &Controlling Process  Process Group
Group

Plan Cost
Management

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Key Concepts For Project Cost Management
 Project Cost Management should consider the effect of project decisions on 
the subsequent recurring cost of using, maintaining, and supporting the 
product, service, or result of the project (limiting the number of design 
reviews can reduce the cost of the project but could increase the resulting 
product’s operating costs).
 Management may address additional processes financial management 
techniques such as return on investment, discounted cash flow, and 
investment payback analysis if the prospective financial performance of the 
project’s product is performed inside of the project

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Trends And Emerging Practices In Project Cost Management
 The expansion of earned value management (EVM) to include the concept of
earned schedule (ES).

 Earned schedule theory replaces the schedule variance measures

used in traditional EVM (earned value − planned value) with ES and
actual time (AT).

 Using the alternate equation for calculating schedule variance ES −

AT, if the amount of earned schedule is greater than 0, then the
project is considered ahead of schedule.

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Tailoring   Considerations
 Does the organization have a financial database repository?
 Does the organization have existing cost estimating and budgeting‐
related policies, procedures, and guidelines?
 Does the organization use earned value management in managing 
projects?
 Does the organization use agile methodologies in managing projects? 
 Does the organization have audit and governance policies, procedures, 
and guidelines?

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 Considerations For Agile/Adaptive Environments
 Projects with high degrees of uncertainty or those where the scope is not 
yet fully defined may not benefit from detailed cost calculations due to 
frequent changes. 
 lightweight estimation methods can be used to generate a fast, high‐level 
forecast of project labor costs, which can then be easily adjusted as 
changes arise. 
 Detailed estimates are reserved for short‐term planning horizons in a 
just‐in‐time fashion.

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7.1 Plan Cost Management
Plan Cost Management is the process of defining how the project costs will be 
estimated, budgeted, managed, monitored, and controlled. 
The key benefit of this process is that it provides guidance and direction on how 
the project costs will be managed throughout the project.
This process is performed once or at predefined points in the project. 

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 7.1 Plan Cost Management

Inputs Tools & Techniques

Outputs
1. Project charter 1. Expert judgment
2. Project management 2. Data analysis 1. Cost management
plan 3. Meetings plan
3. Enterprise
environmental factors
4. Organizational process
asset

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Data Analysis
 A data analysis technique that can be used for this process includes 
alternatives analysis. 
 Alternatives analysis can include reviewing strategic funding options 
such as: self‐funding, funding with equity, or funding with debt.
T&T

 It can also include consideration of ways to acquire project resources 
such as making, purchasing, renting, or leasing.

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Cost Management Plan
The cost management plan can establish the following:
• Units of measure. 
• Level of precision This is the degree to which cost estimates will be

OUTPUTS
rounded up or down
• Level of accuracy. 
• Organizational procedures links
• Control thresholds
• Rules of performance measurement 
• Reporting formats, Process descriptions

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7.2 Estimate Costs

• Estimate Costs is the process of developing an approximation of the cost of

resources needed to complete project work. The key benefit of this process
is that it determines the monetary resources required for the project. This
process is performed periodically throughout the project as needed.

• Cost estimates are a prediction that is based on the information known at

a given point in time.
• Cost estimates should be reviewed and refined during the course of the
project to reflect additional detail as it becomes available and assumptions
are tested.

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 • The accuracy of a project estimate will increase as the project progresses 
through the project life cycle.

• For example, a project in the initiation phase may have a rough order of 
magnitude (ROM) estimate in the range of −25% to +75%. Later in the 
project, as more information is known, definitive estimates could narrow 
the range of accuracy to ‐5% to +10%. 

• Costs are estimated for all resources that will be charged to the project. 
labor, materials, equipment, services, and facilities an inflation allowance, 
cost of financing, or contingency costs. 

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7.2 Estimate Costs
Inputs Tools & Techniques

1. Project management  1. Expert judgment Outputs

plan 2. Analogous estimating
2. Project documents 3. Parametric estimating 1. Activity cost
3. Enterprise  4. Bottom‐up estimating estimates
environmental  5. Three‐point 
factors estimating 2. Basis of estimates
4. Organizational  6. Data analysis 3. Project documents
process assets 7. Project management  updates
information system
8. Decision making

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 Analogous Estimating
•using the actual cost of a previous, similar schedule activity as the basis
for estimating the cost of a future schedule activity.

Parametric Estimating

T&T
• uses a statistical relationship between historical data and other variables
(e.g., square footage in construction) to calculate a cost estimate
• Both the cost and accuracy of parametric models vary widely based on:
o The historical information used to develop the model is accurate
o The parameters used in the model are readily quantifiable
o The model is scalable, 

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Bottom‐up Estimating
• This technique involves estimating the cost of individual work packages or
individual schedule activities with the lowest level of detail.

• This detailed cost is then summarized or “rolled up” to higher levels for
reporting and tracking purposes.
T&T

• The cost and accuracy of bottom‐up cost estimating is typically motivated

by the size and complexity of the individual schedule activity or work
package.

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Three‐Point Estimates
The accuracy of single‐point activity cost estimates can be improved by considering 
estimation uncertainty and risk. 
• Most likely (CM). The cost of the activity, based on realistic effort assessment for 
the required work and any predicted expenses.

T&T
• Optimistic (CO). The activity cost based on analysis of the best‐case scenario
• Pessimistic (CP). The activity cost based on analysis of the worst‐case scenario
Two commonly used formulas are triangular and beta distributions. The formulas 
are:
Trianguler Distribution. cE = (cO + cM + cP) / 3
Beta Distribution (from a traditional PERT analysis). cE = (cO + 4cM + cP) / 6

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Data Analysis
1‐ Alternatives analysis. .An example would be evaluating the cost, schedule, 
resource, and quality impacts of buying versus making a deliverable.
2‐ Reserve Analysis Cost estimates may include contingency reserves to
T&T

account for cost uncertainty. The contingency reserve may be a percentage of

the estimated cost, a fixed number.
3‐ Cost of quality.  Assumptions about costs of quality may be used to 
prepare the estimates. This includes evaluating the cost impact of additional 
investment in conformance versus the cost of non‐conformance. 

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Cost Estimates
Cost estimates include quantitative assessments of the probable costs required to 
complete project work, as well as contingency amounts to account for identified risks, 
and management reserve to cover unplanned work. Cost estimates can be presented in 

OUTPUTS
summary form or in detail.

Basis of Estimates
The amount and type of additional details supporting the cost estimate vary by 
application area. Supporting detail for activity cost estimates may include:
• Documentation of the basis of the estimate (i.e., how it was developed),
• Documentation of all assumptions made and any known constraints,
• Indication of the range of possible estimates (e.g., €10,000 (±10%)).

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7.3 Determine Budget
 Determine Budget is the process of aggregating the estimated costs of
individual activities or work packages to establish an authorized cost
baseline. The key benefit of this process is that it determines the cost
baseline against which project performance can be monitored and
controlled. This process is performed once or at predefined points in the
project.

 A project budget includes all the funds authorized to execute the project.
The cost baseline is the approved version of the time‐phased project
budget that includes contingency reserves, but excludes management
reserves
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 7.3 Determine Budget

Inputs Tools & Techniques

1. Project management 1. Expert judgment

plan
2. Project documents
3. Business documents
4. Agreements
5. Enterprise environmental
factors
6. Organizational process
Outputs
2. Cost aggregation
1. Cost baseline
3. Data analysis
2. Project funding
4. Historical information
requirements
review
3. Project documents
5. Funding limit reconciliation
updates
6. Financing

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Reserve Analysis 

Project manager accommodate the cost risk in a project estimate through the
use of reserves.
1. Contingency reserves are estimated costs to be used at the discretion of
the project manager to deal with anticipated, but not certain, events.
These events are "known unknowns" and are part of the project scope
and cost baselines.
2. Management contingency reserves are budgets reserved for unplanned
changes to project scope and cost. These are "unknown unknowns," and
the project manager must obtain approval before spending this reserve.
Management contingency reserves are not a part of the project cost
baseline, but are included in the budget for the project.

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• Cost Baseline
a time‐phased budget that is used as a basis against which to measure,
monitor, and control overall cost performance on the project. It is
developed by summing estimated costs by period and is usually displayed

OUTPUTS
in the form of an S‐curve,

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Project Budget Components
OUTPUTS

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Project Funding Requirements
• Funding requirements, total and periodic (e.g., annual or quarterly), are
derived from the cost baseline and can be established to exceed, usually by

OUTPUTS
a margin, to allow for either early progress or cost overruns.

• Funding usually occurs in incremental amounts that are not continuous, and,
therefore, appears as a step function.

• The total funds required are those included in the cost baseline plus the
management contingency reserve amount.

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Cost Baseline, Expenditures, and Funding Requirements
OUTPUTS

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 7.4 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.
 The key benefit of this process is that it provides the means to recognize
variance from the plan in order to take corrective action and minimize risk.
Updating the budget involves recording actual costs spent to date. Any
increase to the authorized budget can only be approved through the Perform
Integrated Change Control process

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Project cost control includes:

• Influencing the factors that create changes to the cost baseline

• Ensuring requested changes are agreed upon

• Managing the actual changes when and as they occur

• Assuring that potential cost overruns do not exceed the authorized

funding periodically and in total for the project

• Monitoring cost performance to detect and understand variances

from the cost baseline

• Informing appropriate stakeholders of all approved changes and

associated cost

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 7.4 Control Costs

Inputs Tools & Techniques

Outputs
1. Project management 1. Expert judgment
plan 2. Data analysis
2. Project documents 3. To-complete performance 1. Work performance
3. Project funding index information
requirements 4. Project management 2. Cost forecasts
4. Work performance data information system 3. Change requests
5. Organizational process 4. Project management
assets plan updates
5. Project documents
updates

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Data analysis
• Earned value analysis
• Variance analysis
T&T

• Trend analysis
• Reserve analysis

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 Performance Measurement Analysis
• Performance measurement techniques help to assess the magnitude of
any variances that will invariably occur. The Earned Value Technique (EVT)
compares the cumulative value of the budgeted cost of work performed
(earned ‐ EV) at the original allocated budget amount to both the
budgeted cost of work scheduled (planned ‐ PV) and to the actual cost of
work performed (actual ‐ AC). This technique is especially useful for cost
control, resource management, and production.

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The earned value technique involves developing these key values for each
schedule activity, work package, or control account:
‐ Planned value (PV). PV is the budgeted cost for the work scheduled to be
completed on an activity or WBS component up to a given point in time. The
total of the PV is sometimes referred to as the performance measurement
baseline (PMB). The total planned value for the project is also known as budget
at completion (BAC).
– Earned value (EV). EV is the budgeted amount for the work actually
completed on the schedule activity or WBS component during a given time
period.
– Actual cost (AC). AC is the total cost incurred in accomplishing work on the
schedule activity or WBS component during a given time period.

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The PV, EV, and AC values are used in combination to provide performance
measures of whether or not work is being accomplished as planned at any given
point in time.
The most commonly used measures are cost variance (CV) and schedule
variance (SV).
• Cost variance (CV). equals earned value (EV) minus actual cost (AC). Formula:
CV = EV ‐ AC

• Schedule variance (SV). equals earned value (EV) minus planned value (PV).
Formula: SV = EV ‐ PV

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These two values, the CV and SV, can be converted to efficiency indicators to
reflect the cost and schedule performance of any project.

• Cost performance index (CPI).

– A CPI value less than 1.0 indicates a cost overrun of the estimates.

– A CPI value greater than 1.0 indicates a cost under run of the
estimates.

– CPI equals the ratio of the EV to the AC. The CPI is the most
commonly used cost‐efficiency indicator.

• Formula: CPI = EV/AC

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• Schedule performance index (SPI). The SPI is used, in
addition to the schedule status, to predict the completion
date and is sometimes used in conjunction with the CPI to
forecast the project completion estimates. SPI equals the
ratio of the EV to the PV.

• Formula: SPI = EV/PV

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Planned Value (PV)

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Earned Value (EV)

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Actual Cost (AC)

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 Schedule Variance (SV)

PV   =  $42,000
EV   =  $38,000
AC   =  $48,000
SV   = EV – PV
= $38,000 ‐ $42,000 = ‐ $4,000
SPI  =  EV / PV 
= $38,000 / $42,000
= 0.904         Less than 1 
Project behind schedule

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Cost Variance (CV)
PV   =  $42,000
EV   =  $38,000
AC   =  $48,000
CV   = EV – AC
= $38,000 ‐ $48,000 = ‐ $10,000
CPI   =  EV / AC
= $38,000 / $48,000
= 0.79       Less than 1
cost overrun

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 Forecasting
• Forecasting  includes  making  estimates  or  predictions  of  conditions  in  the 
project's future based on information and knowledge available at the time 
of the forecast. 

• Forecasts are generated, updated, and reissued based on work performance 
information provided as the project is executed and progressed. 

• The work performance information is about the project's past performance 
and  any  information  that  could  impact  the  project  in  the  future,  for 
example, estimate at completion and estimate to complete.

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 The most common EAC forecasting approach is a manual, bottom‐up 
summation by the project manager and project team.
 The project manager’s bottom‐up EAC method builds upon the actual 
costs and experience incurred for the work completed, and requires a 
T&T

new estimate to complete the remaining project work. 
 Equation: EAC = AC + Bottom‐up ETC.

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 Performance Measurement
Cost
EAC

VAC
ETC BAC

ACWP CV
BCWS SV
BCWP

Projected
Schedule
Slippage Schedule Time
(to date) Slippage
(at completion)

Key:
BCWS (PV)- Budget cost for Work Schedule
BCWP (EV)- Budget cost for Work Performed
ACWP (AC)- Actual Cost of Work Performed
SV- Schedule Variance
CV- Cost Variance
ETC- Estimate to Complete
BAC- Budget at Completion
EAC- Estimate at Completion (-Lasted
Revised Estimate )
VAC- Variance at Completion
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Common Formula for Estimate at Complete (EAC) 
1‐ EAC based on atypical variances at the budgeted rate
EAC = AC + (BAC‐ EV).
EAC = Actual to date plus remaining budget (BAC – EV).
This approach is most often used when current variances are seen as
atypical and the project management team expectations are that similar
variances will not occur in the future.
2‐ EAC based on typical variances at the present CPI

EAC = (BAC) / (CPI)

EAC = project budget (BAC) modified cumulative cost performance index (CPI).
This approach is most often used when current variances are seen as typical of
future variance.

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3‐ EAC forecast for ETC work considering both SPI and CPI factors

EAC = AC + [(BAC – EV) / (cumulative CPI x cumulative SPI)].

ETC work will be performed at an efficiency rate that considers both the cost
and schedule performance indices.

• Each of these approaches is applicable for any given project and will
provide the project management team with an “early warning” signal if
the EAC forecasts are not within acceptable tolerances.

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To-Complete Performance Index (TCPI)

The equation for the TCPI is the work remaining (defined as the BAC minus
the EV) divided by the funds remaining (which can be either the BAC minus
the AC, or the EAC minus the AC).
If the cumulative CPI falls below the baseline, all future work of the project
will need to be performed immediately in the range of the TCPI (BAC) to stay
within the authorized BAC. Whether this level of performance is achievable is
a judgment call based on a number of considerations, including risk,
schedule, and technical performance. This level of performance is displayed
as the TCPI (EAC) line. The equation for the TCPI based on the EAC: (BAC –
EV) / (EAC – AC).
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 57

Work Performance Information

Performance reviews compare cost performance over time, schedule activities or work
packages overrunning and under running the budget, and estimated funds needed to
complete work in progress.
OUTPUTS

• Variance analysis.
. Cost and schedule variances are the most frequently analyzed.
• Trend analysis.
Trend analysis examines project performance over time to determine if performance is
improving or deteriorating.
• Earned value performance.
Earned value management compares the baseline plan to actual schedule and cost
performance.

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60

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 63

8. Project Quality Management

• Project Quality Management includes the processes for incorporating

the organization’s quality policy regarding planning, managing, and
controlling project and product quality requirements in order to meet
stakeholders’ objectives.

• Project Quality Management also supports continuous process

improvement activities as undertaken on behalf of the performing
organization

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• Definition of Quality: Quality is defined as the degree to which the
project fulfills requirements.

• ISO 9000 A family of standards created by the International Organization

for Standardization (ISO) to help ensure that organizations have quality
procedures and that they follow them. Many people think that ISO 9000
tells you what quality should be, or describes a recommended quality
system. This is not correct.

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Quality experts
• Joseph Juran advocated top management involvement, defined quality as
"fitness for use."

• W. Edwards Deming Developed 14 Steps to Total Quality Management,

advocated the Plan‐Do‐Check‐Act cycle as the basis for quality
improvement.

• Philip Crosby Popularized the concept of the cost of poor quality, advocated
prevention over inspection and "zero defects." He believed that quality is
"conformance to requirements."

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Total Quality Management (TQM) 
A philosophy that encourages companies and their employees to focus on finding 
ways to continuously improve the quality of their business practices and products.
Marginal Analysis 
Optimal quality is reached at the point where the incremental revenue from 
improvement equals the incremental cost to secure it.
Gold Plating 
• refers to giving the customer extras (e.g., extra functionality, higher‐quality 
components, and extra scope or better performance). 
• This practice is not recommended, as gold plating adds no value to the project. 
Often, such additions are included based on the project team's impression of 
what the customer would like. This impression may not be accurate

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Just in Time (JIT) 
• Many companies are finding that holding goods in inventory is too
expensive and unnecessary. Instead, they have their suppliers deliver
materials just when they are needed or just before they are needed,
thus decreasing inventory to close to zero.

• A company using JIT must have high quality, otherwise there will not
be enough supplies or raw material to meet production requirements.
A JIT system forces attention on quality.

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 Responsibility for Quality 

• The entire organization has responsibilities relating to quality. The

project manager has the ultimate responsibility for the quality of the
product of the project, but each team member must check his or her
work—self‐inspection.

• Senior management has the ultimate responsibility for quality in the

organization as a whole.

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The Project Quality Management processes include :

8.1 Plan Quality Management— The process of identifying quality
requirements and/or standards for the project and its deliverables, and
documenting how the project will demonstrate compliance with quality
requirements and/ or standards.
8.2 Manage Quality— The process of translating the quality management plan
into executable quality activities that incorporate the organization’s quality
policies into the project.
8.3 Control Quality— The process of monitoring and recording the results of
executing the quality management activities to assess performance and ensure
the project outputs are complete, correct, and meet customer expectations.

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 Initiating  Planning  Executing  Monitoring  Closing   
Process Group Process Group Process Group &Controlling  Process Group
Process Group

Plan Quality  Control 
Management Quality

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Key Concepts For Project Quality Management

 Project Quality Management addresses the management of the project
and the deliverables of the project.
 Quality measures and techniques are specific to the type of deliverables
being produced by the project.
 Failure to meet the quality requirements can have serious negative
consequences for any or all of the project’s stakeholders.

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Quality and grade are not the same concepts. 
Quality is “the degree to which a set of inherent characteristics fulfil 
requirements”. 

Grade as a design intent is a category assigned to deliverables having the same 
functional use but different technical characteristics. 

The project manager and the project management team are responsible for 
managing the trade‐offs associated with delivering the required levels of 
both quality and grade. 

 While a quality level that fails to meet quality requirements is always a 
problem, a low‐grade product may not be a problem. 

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Prevention over inspection. The cost of preventing mistakes is generally

much less than the cost of correcting them, as revealed by inspection..

Impact of Poor Quality
– Increased costs
– Low morale
– Low customer satisfaction
– Increased risk
– Rework
– Schedule delays
• Increases in quality can result in increased productivity and cost 
effectiveness and decreased cost risk.

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The project management team may have a working knowledge of statistical
control processes to evaluate data contained in the control quality outputs.
Prevention (keeping errors out of the process) and inspection (keeping errors
out of the hands of the customer).
Attribute sampling (the result either conforms or does not conform) and
Variables sampling (the result is rated on a continuous scale that measures the
degree of conformity).
Tolerances (specified range of acceptable results) and control limits (that
identify the boundaries of common variation in a statistically stable process or
process performance).

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There are five levels quality management as follows:
 The most expensive approach is to let the customer find the defects. 
 Detect and correct the defects before the deliverables are sent to the 
customer as part of the quality control process. 
 Use quality assurance to examine and correct the process itself and not 
just special defects.
 Incorporate quality into the planning and designing of the project and 
product.
 Create a culture that is aware and committed to quality in processes 
and products

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 Trends And Emerging Practices In Project Quality Management
• Customer satisfaction. Understanding, evaluating, defining , and managing
expectations so that customer requirements are met. This requires a
combination of conformance to requirements (the project must produce what
it said it would produce) and fitness for use (the product or service must
satisfy real needs).
• Continual improvement.
• The plan‐do‐check‐act (PDCA) cycle is the basis for quality
improvement as defined by Shewhart and modified by Deming.
• Total quality management (TQM), Six Sigma, and Lean Six Sigma may
improve both the quality of project management and end product,

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Management responsibility.
Success requires the participation of all members of the project team.
Management retains, within its responsibility for quality, a related
responsibility to provide suitable resources at adequate capacities.

Mutually beneficial partnership with suppliers.

An organization and its suppliers are interdependent.

Relationships based on partnership and cooperation with the supplier

are more beneficial to the organization and to the suppliers than
traditional supplier management.

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Tailoring   Considerations
 Policy compliance and auditing. What quality policies, procedures, tools, 
techniques, and templates exist in the organization? 
 Standards and regulatory compliance. Are there any specific quality 
standards in the industry ? Are there any specific governmental, legal, or 
regulatory constraints?
 Continuous improvement. How will quality improvement be managed in the 
project? 
 Stakeholder engagement. Is there a collaborative environment for 
stakeholders and suppliers?

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Considerations For Agile/Adaptive Environments

 Agile methods call for frequent quality and review steps built in
throughout the project rather than toward the end of the project.
 In order to facilitate frequent, incremental delivery, agile methods focus
on small batches of work, incorporating as many elements of project
deliverables as possible.
 Small batch systems aim to uncover inconsistencies and quality issues
earlier in the project life cycle when the overall costs of change are
lower.

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 8.1 Plan Quality Management
• Plan Quality Management is the process of identifying quality requirements
and/or standards for the project and its deliverables, and documenting how
the project will demonstrate compliance with relevant quality requirements.

• The key benefit of this process is that it provides guidance and direction on
how quality will be managed and validated throughout the project.

• Quality planning should be performed in parallel with the other planning

processes. For example, proposed changes in the deliverables to meet
identified quality standards may require cost or schedule adjustments and a
detailed risk analysis of the impact to plans.

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8.1 Plan Quality Management    

Inputs Tools & Techniques

1. Expert judgement
Outputs
1. Project charter
2. Data gathering
2. Project management plan 1. Quality management
3. Data analysis
3. Project documents plan
4. Decision making
4. Enterprise environmental 2. Quality metrics
5. Data representation
factors 3. Project management
6. Test and inspection plan updates
5. Organizational process
planning 4. Project documents
assets
7. Meetings updates

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Data Gathering
1‐ Benchmarking. 
Comparing actual or planned project practices or the project’s quality standards to 
those of comparable projects to identify best practices, generate ideas for 
improvement, and provide a basis for measuring performance. 

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2‐ Brainstorming. 
Can be used to develop the quality management plan that best fits the upcoming 
project.
3‐ Interviews. 
 Project and product quality needs and expectations, formal and informal, can 
be identified by interviewing experienced project participants, stakeholders, 
and subject matter experts.

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Data Analysis
1‐ Cost‐Benefit Analysis:
A cost‐ benefit analysis will help the project manager determine if the 
planned quality activities are cost effective. 
A cost‐benefit  analysis for each quality activity compares the cost of the 
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quality step to the expected benefit.
2‐ Cost of Quality (COQ): 
 Looking at how the costs of conformance and nonconformance to quality 
will cost the project and creating an appropriate balance. The optimal 
COQ is one that reflects the appropriate balance for investing in the cost 
of prevention and appraisal to avoid failure costs.

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 T&T
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Data Representation
1‐ Flowcharts. referred to as process maps because they display the sequence
of steps and the branching possibilities that exist for a process.
2‐ Logical data model visual representation of an organization’s data, described
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in business language and independent of any specific technology.

3‐ Matrix diagrams. they facilitate identifying the key quality metrics that are
important for the success of the project.
4‐ Mind mapping. Is a diagrammatic method used to visually organizing
information..

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 Test and Inspection Planning
During the planning phase, the project manager and the project team 
determine how to test or inspect the product, deliverable, or service to 
meet the stakeholders’ needs and expectations, and how to meet the 
goal for the product’s performance and reliability. 

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Quality Management Plan

A component of the project management plan, be formal or informal, detailed, or
broadly framed and include the following:
o Quality standards that will be used by the project;
OUTPUTS

o Quality objectives of the project;

o Quality roles and responsibilities;
o Project deliverables and processes subject to quality review;
o Quality control and quality management activities planned for the project;
o Quality tools that will be used for the project; and
o Major procedures relevant for the project, such as dealing with non‐
conformance, corrective actions procedures, and continuous improvement
procedures.

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Quality Metrics
• A quality metric specifically describes a project or product attribute and
how the Control Quality process will verify compliance to it.
• Some examples of quality metrics include percentage of tasks completed on

OUTPUTS
time, cost performance measured by CPI, failure rate, number of defects,
errors found per line of code, customer satisfaction scores, and percentage
of requirements covered by the test plan as a measure of test coverage.

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8.2 Manage Quality
 Manage Quality is the process of translating the quality management plan
into executable quality activities that incorporate the organization’s quality
policies into the project.
 The key benefits of this process are that it increases the probability of
meeting the quality objectives as well as identifying ineffective processes
and causes of poor quality.
 Manage Quality uses the data and results from the control quality process
to reflect the overall quality status of the project to the stakeholders. This
process is performed throughout the project.

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 8.2 Manage Quality

Inputs Tools & Techniques

1. Project management  1. Data gathering Outputs

plan 2. Data analysis
2. Project documents 3. Decision making 1.Quality reports
3. Organizational process  4. Data representation 2.Test and evaluation 
assets 5. Audits documents
6. Design for X 3.Change requests
7. Problem solving 4.Project 
8. Quality improvement  management plan 
methods updates
5.Project documents 
updates

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The Manage Quality process helps to:
‐ Design an optimal and mature 
‐ Build confidence that a future output will meets the specified requirements 
Confirm that the quality processes are used 
‐ Improve the efficiency and effectiveness of processes

 The project manager and project team may use the organization’s quality
assurance department to execute some of the Manage Quality activities.
 In agile projects, quality management is performed by all team members
throughout the project, but in traditional projects, quality management is
often the responsibility of specific team members
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 Data Analysis
1‐ Alternatives analysis. 
2‐ Document analysis. 
The analysis of quality reports, test reports, performance reports, and variance 
analysis, can point to and focus on processes that may be out of control.
3‐ Process analysis. 

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Identifies opportunities for process improvements, also examines problems, 
constraints, and non‐value‐added activities that occur during a process.
4‐ Root cause analysis (RCA). 
An analytical technique used to determine the basic underlying reason that 
causes a variance, defect, or risk. When all root causes for a problem are 
removed, the problem does not recur.

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Data Representation
1‐ Flowchart
2‐ Affinity diagrams. can organize potential causes of defects into groups 
showing areas that should be focused on the most.
3‐ Cause‐and‐effect diagrams. 
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known as fishbone diagrams, why‐why diagrams, or Ishikawa diagrams. This 
type of diagram breaks down the causes of the problem statement identified 
into discrete branches, helping to identify the main or root cause of the 
problem.

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4‐ Histogram
Histograms show a graphical representation of numerical data. Histograms can 
show the number of defects per deliverable, a ranking of the cause of defects, 
the number of times each process is noncompliant..
Pareto Chart

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• Pareto analysis involves identifying the vital few contributors that account
for the most quality problems in a system
• Also called the 80‐20 rule, meaning that 80% of problems are often due to
20% of the causes
• Pareto diagrams are histograms that help identify and prioritize problem
areas

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5‐ Matrix diagrams. 
Seeks to show the strength of relationships among factors, causes, and 
objectives that exist between the rows and columns that form the matrix.
6‐ Scatter diagrams. 
A graph that shows the relationship between two variables. Scatter diagrams 
can demonstrate a relationship between any element of a process, 
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environment, or activity on one axis and a quality defect on the other axis.

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Audits
A structured, independent review to determine whether project activities
comply with organizational and project policies, processes, and procedures.
The objectives of a quality audit are:
• Identify all the good/best practices being implemented,

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• Identify all the gaps/shortcomings,
• Share the good practices introduced or implemented in similar projects
• Proactively offer assistance in a positive manner to improve
implementation of processes to help the team raise productivity
• Highlight contributions of each audit in the lessons learned repository of
the organization

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Problem Solving
Finding solutions for issues or challenges. It can include gathering additional 
information, critical thinking, creative, quantitative and/or logical approaches.
‐ Defining the problem,
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‐ Identifying the root‐cause,
‐ Generating possible solutions,
‐ Choosing the best solution,
‐ Implementing the solution, and
‐ Verifying solution effectiveness.

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 Quality Improvement Methods
 Quality improvements can occur based on findings and  recommendations 
from quality control processes, the findings of the quality audits, or 
problem solving in the Manage Quality process.

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 Plan‐do‐check‐act and Six Sigma are two of the most common quality 
improvement tools used to analyze and evaluate opportunities for 
improvement.

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Quality Reports
The quality reports can be graphical, numerical, or qualitative. 
The information presented in the quality reports may include all quality 
management issues escalated by the team; recommendations for process, 
OUTPUTS

project, and product improvements; corrective actions recommendations 
(including rework, defect/bugs repair, 100% inspection, and more); and the 
summary of findings from the Control Quality process.

Test and Evaluation Documents
Created based on industry needs and the organization’s templates. They are 
inputs to the Control Quality process and are used to evaluate the achievement 
of quality objectives. 

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 8.3 Control Quality

 Control Quality is the process of monitoring and recording results of

executing the quality management activities in order to assess performance
and ensure the project outputs are complete, correct, and meet customer
expectations.
 The key benefit of this process is verifying that project deliverables and work
meet the requirements specified by key stakeholders for final acceptance.

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8.3 Control Quality

Inputs Tools & Techniques

Outputs
1.Project management  1.Data gathering
plan 1. Quality  control 
2.Data analysis
2.Project documents measurements
3.Inspection
3.Approved change  2. Verified deliverables
requests 4.Testing/product  
3. Work performance 
4.Deliverables evaluations
information
5.Work performance  5.Data 
4. Change requests
data representation
5. Project management 
6.Enterprise  6.Meetings
environmental factors
plan updates
7.Organizational process  6. Project documents 
assets updates

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Data Gathering
1‐ Checklists. 
help in managing the control quality activities in a structured manner.
2‐ Check sheets. 
known as tally sheets and are used to organize and facilitate the effective 

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collection of useful data about a potential quality problem. 
3‐ Statistical sampling. Choosing part of a population of interest for inspection. 
The sample is taken to measure controls and verify quality. 
4‐ Questionnaires and Surveys. 
Used to gather data about customer satisfaction after the deployment of the 
product or service. 

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Data Analysis
1‐Performance reviews. measure, compare, and analyze the quality metrics 
defined by the Plan Quality Management process against the actual results.
2‐ Root cause analysis (RCA). Root cause analysis is used to identify the source 
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of defects.

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Inspection
the examination of a work product to determine if it conforms to
documented standards. Inspections may be called reviews, peer reviews,
audits, or walkthroughs. In some application areas, these terms have narrow
and specific meanings.

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Inspections also are used to validate defect repairs.
Testing/Product  Evaluations
The intent of testing is to find errors, defects, bugs, in the product or service. 
Early testing helps identify non‐conformance problems and helps reduce the 
cost of fixing the nonconforming components.

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Data Representation
1‐ Cause‐and‐effect diagrams. 
2‐ Control charts.  Control charts are used to determine whether or not a 
process is stable or has predictable performance. 
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3‐ histograms.
4‐ Scatter diagrams..

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Control charts
•A control chart is a graphic display of data that illustrates the results of a
process over time. It helps prevent defects and allows you to determine
whether a process is in control or out of control
•When a process is within acceptable limits, the process need not be

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adjusted. When a process is outside acceptable limits, the process should
be adjusted.
•The upper control limit and lower control limit are usually set at + ‐1/ 3
sigma (i.e., standard deviation).

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Control Chart
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 Rule of Seven Is a rule of thumb or heuristic. It refers to non‐random 
data points grouped together in a series that total seven on one side 
of the mean. The rule of seven tells you that although none of these 
points are outside of the control limits, they are not random and the 

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process may be out of control.
Assignable Cause/Special Cause Variation A data point, or rule of 
seven, that requires investigation to determine the cause of the 
variation.

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Quality Control Measurements

Quality control measurements are the documented results of Control
Quality activities. They should be captured in the format that was
specified in the quality management plan.
OUTPUTS

Verified Deliverables
A goal of the Control Quality process is to determine the correctness of
deliverables. The results of performing the Control Quality process are
verified deliverables that become an input to the Validate Scope process
for formalized acceptance.
If there were any change requests or improvements related to the
deliverables, they may be changed, inspected, and re‐verified.
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 111

9. Project Resource Management
• Project Resource Management includes the processes to identify,
acquire, and manage the resources needed for the successful
completion of the project.

• These processes help ensure that the right resources will be available
to the project manager and project team at the right time and place.

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The Project Resource Management processes include:
9.1 Plan Resource Management— The process of defining how to estimate,
acquire, manage, and utilize physical and team resources.
9.2 Estimate Activity Resources— The process of estimating team resources
and the type and quantities of material, equipment, and supplies necessary to
perform project work.
9.3 Acquire Resources— The process of obtaining team members, facilities,
equipment, materials, supplies, and other resources necessary to complete
project work.

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9.4 Develop Team— The process of improving competencies, team member

interaction, and the overall team environment to enhance project
performance..
9.5 Manage Team— The process of tracking team member performance,
providing feedback, resolving issues, and managing team changes to optimize
project performance.
9.6 Control Resources— The process of ensuring that the physical resources
assigned and allocated to the project are available as planned, as well as
monitoring the planned versus actual use of resources, and performing
corrective action as necessary.

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 Initiating  Planning  Executing  Monitoring &Controlling  Closing   
Process Group Process Group Process Group Process Group Process Group

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There is a distinction between the skills and competencies needed for the 
project manager to manage team resources versus physical resources. 
Physical resources include equipment, materials, facilities, and 
infrastructure.
Team resources or personnel refer to the human resources. Personnel may 
have varied skill sets, may be assigned full‐ or part‐time, and may be added 
or removed from the project team as the project progresses

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Key Concepts For Project Resource Management
• The project team consists of individuals with assigned roles and responsibilities 
who work collectively to achieve a shared project goal
• Participation of team members during planning adds their expertise to the 
process and strengthens their commitment to the project
The project manager should be both LEADER and MANAGER of the project team. 
As a leader, the project manager is also responsible for proactively developing 
team skills and competencies while retaining and improving team satisfaction and 
motivation. 
• The project manager should be aware of and subscribe to, professional and 
ethical behavior, and ensure that all team members adhere to these behaviors.

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Trends and Emerging Practices In Project Resource Management
Project management styles are shifting away from a command and control 
toward a more collaborative and supportive management approach that 
empowers teams by delegating decision making to the team members. 
Modern project resource management approaches 
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1‐ Resource management methods. lean management, just‐ in‐time (JIT) 
manufacturing, Kaizen, total productive maintenance (TPM), theory of 
constraints (TOC), 
2‐ Emotional intelligence (EI). The project manager should invest in personal 
EI by improving inbound (e.g., self‐management and self‐awareness) and 
outbound (e.g., relationship management) competencies..
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 3‐ Self‐organizing teams. The increase in using agile approaches mainly 
for the execution of IT projects has given rise to the self‐organizing team, 
where the team functions with an absence of centralized control. 
4‐ Virtual teams/distributed teams. The globalization of projects has 

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promoted the need for virtual teams that work on the same project, but 
are not colocated at the same site. 

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Tailoring   Considerations
• Diversity. What is the diversity background of the team?
• Physical location. What is the physical location of team members and 
physical resources?
• Industry‐specific resources. What special resources are needed?
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• Acquisition of team members. How will team members be acquired? Are 
team resources full‐time or part‐time?
• Management of team. How is team development managed? Are there 
organizational tools to manage team development? Will the team need 
special training?
• Life cycle approaches. What life cycle approach will be used on the project?

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Considerations for Agile/Adaptive Environments
• Projects with high variability benefit from team structures that 
maximize focus and collaboration, such as self‐ organizing teams with 
generalizing specialists.
• Collaboration is intended to boost productivity and facilitate innovative 

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problem solving. 
• Collaborative teams may facilitate accelerated integration of distinct 
work activities, improve communication and increase knowledge 
sharing in addition to other advantages.

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9.1 Plan Resource Management

Plan Resource Management is the process of defining how to

estimate, acquire, manage, and use team and physical resources.
The key benefit of this process is that it establishes the approach and
level of management effort needed for managing project resources
based on the type and complexity of the project.

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 9.1 Plan Resource Management
Tools & Techniques
Inputs

1. Project charter
2. Project management
plan
3. Project documents
4. Enterprise environmental
factors
Outputs
1. Expert judgment
2. Data representation
1. Resource
3. Organizational theory
management plan
4. Meetings
2. Team charter
3. Project documents

5. Organizational process updates

assets

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Data Presentation
Various formats exist to document team member roles and responsibilities.
Most of the formats fall into one of three types: hierarchical, matrix, and text‐
oriented.
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Matrix‐based charts.
A responsibility assignment matrix (RAM) is used to illustrate the
connections between work that needs to be done and project team
members. On larger projects, RAMs can be developed at various levels.

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RACI Chart Person
Activity Ahmed Mai Nahla Mona Amr
Define A R I I I
Design I A R C C
Develop I A R C C
Test A I I R I

R = Responsible  A = Accountable  C = Consult  I = Inform

Responsibility Assignment Matrix (RAM) Using a RACI Format
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Networking
The formal and informal interaction with others in an organization, industry,
or professional environment. It is a constructive way to understand political
and interpersonal factors that will impact the effectiveness of various staffing
management options.
Organizational Theory
Organizational theory provides information regarding the way in which
people, teams, and organizational units behave. Effective use of common
techniques identified in organizational theory can shorten the amount of
time, cost, and effort needed to create the Plan Resource Management
process outputs and improve planning efficiency.

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Resource management plan: 
– Identification of resources. 
– Acquiring resources. 
– Roles and responsibilities

OUTPUTS
– Project organization charts
– Project team resource management
– Training
– Team development
– Resource control
– Recognition plan. 

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Team Charter
The team charter is a document that establishes the team values, 
agreements, and operating guidelines for the team.
The team charter may include:
OUTPUTS

• Team values,
• Communication guidelines,
• Decision‐making criteria and process,
• Conflict resolution process,
• Meeting guidelines, and
• Team agreements.

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 9.2 Estimate Activity Resources

Estimate Activity Resources is the process of estimating team

resources and the type and quantities of materials, equipment, and
supplies necessary to perform project work.
The key benefit of this process is that it identifies the type, quantity,
and characteristics of resources required to complete the project.

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9.2 Estimate Activity Resources

Inputs Tools & Techniques

1. Project management
plan
2. Project documents
3. Enterprise environmental
factors
4. Organizational process
Outputs
1. Expert judgment
2. Bottom-up estimating
1. Resource
3. Analogous estimating
requirements
4. Parametric estimating
5. Data analysis
2. Basis of estimates
6. Project management 3. Resource

assets information system breakdown structure

7. Meetings 4. Project documents
updates

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 Data Analysis
Alternatives analysis is used to evaluate identified options in order to select
the options or approaches to use to execute and perform the work of the
project.

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Many activities have multiple options for accomplishment. They include
using various levels of resource capability or skills, different sizes or types of
machines, different tools (manual versus automated), and make‐rent‐or‐ buy
decisions regarding the resources.

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Resource Requirements
Resource requirements identify the types and quantities of resources 
required for each work package or activity in a work package and can be 
aggregated to determine the estimated resources for each work package, 
OUTPUTS

each WBS branch, and the project as a whole
Basis Of Estimates
• Method used to develop the estimate,
• Resources used to develop the estimate 
• Assumptions associated with the estimate,
• Known constraints,
• Range of estimates,
• Confidence level of the estimate, and
• Documentation of identified risks influencing the estimate.
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 9.3  Acquire Resources
• Acquire Resources is the process of obtaining team members, facilities,
equipment, materials, supplies, and other resources necessary to complete
project work.
• The key benefit of this process is that it outlines and guides the selection
of resources and assigns them to their respective activities.
• The resources needed for the project can be internal or external to the
project‐performing organization.
• Internal resources are acquired (assigned) from functional or resource
managers. External resources are acquired through the procurement
processes.

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9.3 Acquire Resources

Inputs Tools & Techniques Outputs

1. Decision making 1. Physical resource 

1. Project management
2. Interpersonal and
assignments
plan
2. Project team 
2. Project documents team skills
assignments
3. Enterprise 3. Pre-assignment
3. Resource calendars
environmental factors 4. Virtual teams 4. Change requests
4. Organizational 5. Project management 
plan updates
process assets
6. Project documents 
updates
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7. EEF updates
8. OPA updates

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 Constraints that can limit flexibility in the Human Resource Planning
process are:
I. Organizational structure. An organization whose basic structure is a weak
matrix means a relatively weaker role for the project manager.
II. Collective bargaining agreements. Contractual agreements with unions or
other employee groups can require certain roles or reporting
relationships.
III. Economic conditions. Hiring freezes, reduced training funds, or a lack of
travel budget are examples of economic conditions that can restrict
staffing options.

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Decision Making
Availability. Identify whether the team member is available to work on the 
project within the time period needed. 
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.
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Ability. Verify that the team member has the competencies needed by the 
project.
Knowledge. Consider if the team member has relevant knowledge of the 
customer, similar implemented projects, and project environment.
Skills. Determine whether the member has the relevant skills. 
Attitude. The member has the ability to work with others as a cohesive team.
International factors. Consider team member location, time zone and 
communication capabilities.
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Pre‐Assignment
project team members are known in advance; that is, they are pre‐assigned.
Negotiation
Staff assignments are negotiated on many projects with:
•Functional managers 

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•Other project management teams
Acquisition
When the performing organization lacks the in‐house staff needed to complete
the project, the required services can be acquired from outside sources
Virtual Teams
Virtual teams can be defined as groups of people with a shared goal, who fulfill 
their roles with little or no time spent meeting face to face. 
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Physical Resource Assignments
Documentation of the physical resource assignments records the material, 
equipment, supplies, locations, and other physical resources that will be 
used during the project.
OUTPUTS

Project Team Assignments
Documentation of team assignments records the team members and their 
roles and responsibilities for the project. 
Documentation can include a project team directory and names inserted 
into the project management plan, such as the project organization charts 
and schedules

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 9.4  Develop Team
Develop Team is the process of improving competencies, team
member interaction, and the overall team environment to enhance
project performance.
The key benefit of this process is that it results in improved
teamwork, enhanced interpersonal skills and competencies,
motivated employees, reduced attrition, and improved overall
project performance.

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9.4  Develop Team

Inputs Tools &

Techniques
Outputs
1. Project management 1. Colocation
plan 2. Virtual teams 1. Team performance 
2. Project documents 3. Communication technology assessments
3. Enterprise environmental 4. Interpersonal and team
2. Change requests
3. Project management 
factors skills
plan updates
4. Organizational process 5. Recognition and rewards
4. Project documents 
assets 6. Training updates
7. Individual and team 5. Enterprise 
assessments environmental updates
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8. Meetings 6. Organizational process 
assets updates

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 Project managers require the skills to identify, build, maintain, motivate, 
lead, and inspire project teams to achieve high team performance and to 
meet the project’s objectives
High team performance can be achieved by employing these behaviors:
• Using open and effective communication,

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• Creating team‐building opportunities,
• Developing trust among team members,
• Managing conflicts in a constructive manner, 
• Encouraging collaborative problem solving, 
• Encouraging collaborative decision making.

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Objectives of developing a project team include:
o Improving the knowledge and skills of team members to increase their ability to 
complete project deliverables, while lowering costs, reducing schedules, and 
improving quality;
o Improving feelings of trust and agreement among team members to raise 
morale, lower conflict, and increase teamwork;
o Creating a dynamic, cohesive, and collaborative team culture to improve  
productivity, team spirit, and cooperation; and allow cross‐training and 
mentoring between team members to share knowledge and expertise;
o Empowering the team to participate in decision making and take ownership of 
the provided solutions to improve team productivity.

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 One of the models used to describe team development is the Tuckman ladder 
There are five stages of development that teams may go through. Usually these 
stages occur in order.

•Forming. This phase is where the team meets and learns about the project and what their
formal roles and responsibilities are. Team members tend to be independent and not as open
in this phase.
• Storming. During this phase, the team begins to address the project work, technical
decisions, and the project management approach. If team members are not collaborative and
open to differing ideas and perspectives the environment can become destructive.
• Norming. In the norming phase, team members begin to work together and adjust work
habits and behaviours that support the team. The team begins to trust each other.
• Performing. Teams that reach the performing stage function as a well‐organized unit. They
are interdependent and work through issues smoothly and effectively.
• Adjourning. In the adjourning phase, the team completes the work and moves on from
the project.

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Colocation “tight matrix”

Colocation involves placing many or all of the most active project team
members in the same physical location called “war room” to enhance their
ability to perform as a team. Colocation can be temporary, such as at
strategically important times during the project, or can continue for the entire
project.
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Virtual Teams
The use of virtual teams can bring benefits such as the use of more skilled
resources, reduced costs, less travel and relocation expenses,.
Virtual teams can use technology to create an online team environment
where the team can store files, use conversations threads to discuss issues,

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Communication  Technology
Shared portal. A shared repository for information sharing (e.g., website, 
collaboration software or intranet) is effective for virtual project teams.
Video conferencing. Video conferencing is an important technique for 
effective communication with virtual teams.

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Audio conferencing. Communication within a team using audio conferencing 
is another technique to build rapport and confidence within virtual teams.
Email/chat. Regular communications using email and chat is also an effective 
technique.

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Team‐Building Activities
• The objective is to help individual team members work together effectively.
• One of the most important skills in developing a team environment involves
handling project team problems and discussing these as team issues.
• As an ongoing process, team building is crucial to project success.
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Interpersonal and Team Skills
Behavioral competencies that include proficiencies such as communication skills, 
emotional intelligence, conflict resolution, negotiation, influence, team building, 
and group facilitation. They are valuable assets when developing the project 
team.

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Training
All activities designed to enhance the competencies of the project team members. 
It can be formal or informal, including classroom, online, on‐the‐job training, 
mentoring, and coaching. Training costs could be included in the project budget
Recognition and Rewards

T&T
It is important to recognize that a particular reward given to any individual will be
effective only if it satisfies a need which is valued by that individual. Award
decisions are made, formally or informally, during the process of
managing the project team through project performance appraisals.

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Motivation
•Expectancy Theory
• Employees who believe their efforts will lead to effective performance
and who expect to be rewarded for their accomplishments remain
productive as rewards meet their expectations.
•Fringe Benefits
•The "standard" benefits formally given to all employees, such as
education benefits, insurance and profit sharing.

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 Maslow hierarchy of needs
Maslow's message is that people do not work for security or money.
They work to get a chance to contribute and to use their skills.
Maslow calls this "self-actualization." He created a pyramid to show
how people are motivated and said that one cannot ascend to the next
level until the levels below are fulfilled.

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MCGREGOR'S THEORY OF X AND Y

‐ McGregor believed that all workers would fit in one of two groups, X and Y.
THEORY X ‐ Based on the picture, take a guess what theory X is.
People need to be watched every minute. People are incapable, avoid
responsibility, and avoid work whenever possible.
THEORY Y - Based on the picture, take a guess as to what theory Y is.
People are willing to work without supervision and want to achieve. People can
direct their own efforts.

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Herzberg's Theory This theory deals with hygiene factors and motivating agents.
Hygiene Factors Poor hygiene factors may destroy motivation, but improving them,
under most circumstances, will not improve motivation. Hygiene factors are not
sufficient to motivate people. Examples of these are:
Working conditions, Salary, Personal life, Relationships at work, Security, Status
Motivating Agents What motivates people is the work itself, including such things as:
Responsibility
Self‐actualization
Professional growth
Recognition
The lesson to project managers—motivating people is best done by rewarding them and
letting them grow.

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Team Performance Assessments
The evaluation of a team’s effectiveness may include indicators such as:
• Improvements in skills that allow individuals to perform assignments more 
effectively,
• Improvements in competencies that help the team perform better as a 
OUTPUTS

team,
• Reduced staff turnover rate, 
• Increased team cohesiveness where team members share information and 
experiences openly and help each other to improve the overall project 
performance.
As a result of conducting an evaluation of the team’s overall performance, the 
project management team can identify the specific training, coaching, 
mentoring, assistance, or changes required to improve the team’s 
performance.
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 9.5  Manage Team

Manage Team is the process of tracking team member performance,

providing feedback, resolving issues, and managing team changes to
optimize project performance.
The key benefit of this process is that it influences team behavior,
manages conflict, and resolves issues

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Managing the project team

• Team management involves a combination of skills with special emphasis
on communication, conflict management, negotiation, and leadership.
Project managers should provide challenging assignments to team
members and provide recognition for high performance.
• The project manager needs to be sensitive to both the willingness and the
ability of team members to perform their work and adjust their
management and leadership styles accordingly.
• Team members with low‐skill abilities will require more intensive oversight
than those who have demonstrated ability and experience.

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 9.5 Manage Team

Inputs Tools & Techniques

1. Project management Outputs

1. Interpersonal and
plan
team skills 1. Change requests
2. Project documents
2. Project management 2. Project management plan
3. Work performance
information system updates
reports
3. Project documents
4. Team performance
updates
assessments
4. Enterprise environmental
5. Enterprise environmental
factors updates
factors
6. Organizational process
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Interpersonal and Team Skills

Conflict Management
 Conflict is inevitable in a project environment. Sources of conflict include
scarce resources, scheduling priorities, and personal work styles.
 Successful conflict management results in greater productivity and
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positive working relationships.

 If the differences become a negative factor, project team members are
initially responsible for their resolution. If conflict escalates, the project
manager should help facilitate a satisfactory resolution.
 Conflict should be addressed early and usually in private, using a direct,
collaborative approach. If disruptive conflict continues, formal procedures
may be used, including disciplinary actions.

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Characteristics of conflict and the conflict management process:
• Conflict is natural and forces a search for alternatives,
• Conflict is a team issue,
• Openness resolves conflict,
• Conflict resolution should focus on issues, not personalities, and

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• Conflict resolution should focus on the present, not the past.

Factors that influence conflict resolution methods include:
• Relative importance and intensity of the conflict,
• Time pressure for resolving the conflict,
• Position taken by players involved, and
• Motivation to resolve conflict on a long‐term or a short‐term basis.

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Seven Sources Of Conflict

Many project managers think that the main source of conflict on a project is
personality differences. They may be surprised to learn that this is rarely
the case. It only becomes personal if the root cause of the problem is not
resolved.
o Schedules
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o Project priorities
o Resources
o Technical opinions
o Administrative Procedures
o Cost
o Personality

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There are five general techniques for resolving conflict:
• Withdraw/Avoid. 
• Smooth/Accommodate. 
• Compromise/Reconcile. 
• Force/Direct. 

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• Collaborate/Problem Solve. 

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Decision Making.  The ability to negotiate and influence the organization 
and the project management team. 
Guidelines for decision making include:
• Focus on goals to be served,
•
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Follow a decision‐making process,
• Study the environmental factors,
• Analyze available information,
• Develop personal qualities of the team members,
• Stimulate team creativity, and
• Manage risk.

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 Emotional intelligence. is the ability to identify, assess, and manage the 
personal emotions .The team can use emotional intelligence to reduce tension 
and increase cooperation.
Leadership. Successful projects require strong leadership skills. It is important to
communicate the vision and inspire the project team to achieve high

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performance.
Influencing.
Since project managers often have little or no direct authority over their team
members in a matrix environment, their ability to influence stakeholders on a
timely basis is critical to project success.

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Leadership Styles
•Directing Telling others what to do
•Facilitating Coordinating the input of others
•Coaching Instructing others
•Supporting Providing assistance along the way
•Autocratic Making decisions without input
•Consultative Inviting ideas from others
•Consensus Problem solving in a group with decision‐making based on group
agreement
Project manager needs to provide more direction at the beginning of the project
,During project executing, do more coaching, facilitating and supporting.

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 9.6  Control Resources

Control Resources is the process of ensuring that the physical resources

assigned and allocated to the project are available as planned, as well as
monitoring the planned versus actual utilization of resources and taking
corrective action as necessary.
The key benefit of this process is ensuring that the assigned resources
are available to the project at the right time and in the right place and
are released when no longer needed.

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9.6 Control Resources

Inputs Tools & Techniques

1. Project management 1. Data analysis

Outputs

plan 2. Problem solving

2. Project documents
3. Work performance data
4. Agreements
5. Organizational process
assets
3. Interpersonal and 1. Work performance
team skills information
4. Project management 2. Change requests
information system 3. Project management plan
updates
4. Project documents
updates

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Control Resources is concerned with:
 Monitoring resource expenditures,
 Identifying and dealing with resource shortage/surplus in a timely manner,
 Ensuring that resources are used and released according to the plan and 
project needs,
 Informing appropriate stakeholders if any issues arise with relevant 
resources,
 Influencing the factors that can create resources utilization change, and
 Managing the actual changes as they occur.

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Data Analysis
Alternatives analysis. can be analyzed to select the best resolution for correcting 
variances in resource utilization. 
Cost‐benefit analysis. helps to determine the best corrective action in terms of 
cost in case of project deviations.
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Performance reviews. measure, compare, and analyze planned resource 
utilization to actual resource utilization. 
Trend analysis. As the project progresses, the project team may use trend 
analysis, based on current performance information, to determine the resources 
needed at upcoming stages of the project.

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