Project Management Professional (PMP)

Project Management
Professional
PMP®
Ahmad H. Maharma
Master Of Engineering Management
PMP®,RMP®

Ahmad Maharma PMBOK 5th Edition 2

Getting Acquainted
• Name
• Title
• Why are you here?
• What do you want to learn from this course?
• A little known fact

Ground Rules
• Material & Book(s)
• Time & Breaks
• Smoking
• Mobile Phones
• Side Talks
• Respect
• Ask, ask, ask

How This Training is Delivered
• Lectures
• Exercises
• Group Work
• Discussions
• Quizzes

Basic definitions
• Non-for-profit Professional Association
• Started in 1969
• Over 400,000 members worldwide
• In more than 160 countries
PMI

PMI’s Membership

PMPs Certified

What is PMP®?
• A Credential initiated by PMI in 1984 “Project
Management Professional”
• Demonstrate to employers, clients and colleagues that
project managers possess project management
knowledge, experience and skills to bring projects to
successful completion
• The most recognized credential in project management
worldwide

Getting Certified
Title PMP®
Full Name Project Management Professional
Project Role Leads and directs project teams
Eligibility Requirements Candidate holds a baccalaureate university degree.
4,500 hours of Project Management Experience.
36 non overlapping months of Project Management Experience.
At least three years of project experience within last six years of experience.
35 contact hours of Project Management training including all nine knowledge
areas of project management
Exam 200 questions, 4 hours

PMP Exam
• 4 Hours Web-Based
• 200 Questions
• 175 Questions Counted
• Passing Score: 107

PMP Exam Structure
Area No. of Questions %
Initiation 26 13
Planning 48 24
Execution 60 30
Monitoring & Controlling 50 25
Closing 16 8

PMP Exam
• Exam tests:
• 1- Theoretical Knowledge (PMBOK)
• 2- Personal Skills
• 3- Practical Experience
• 4- Ethics & professional responsibility

Project Management Body
of Knowledge (PMBOK)
• Identifies that subset of the PMBOK that is generally recognized as a good
practice
• “Generally Recognized” means the knowledge and practice described are
applicable to most projects most of the time. There is consensus about their
value and usefulness.
• “Good Practice” means there is a general agreement that the application of
these skills, tools, and techniques can enhance the chances of success over
a wide range of projects.

Project Management
Professional
PMP®
Project Management Fundamentals

What is a Project?
“A Temporary endeavor undertaken to create a unique Product,
service, or result”

1- Temporary
• Definite Beginning (T-1)& End (T4)
• End reached when:
• Objectives reached
• Objectives cannot be met
• Need for project no longer exists
– Projects are not “ongoing” efforts
– Does not generally apply to outcomes

2- Unique
• Products
• Capability
• Results
• Repetitiveness does not change the fundamental
uniqueness of the project

3- Progressively Elaborative
• Developing in steps, and continuing by increments.
• Plans get improved and clearer as more information is
obtained and estimates are more accurate.

Projects Vs. Operation
20
Operation Project
Repeating process One of a kind, temporary
process
No clear beginning or ending Clear beginning and ending
Same output created each
time the work is performed
Output is unique
Everyone in work group
performs similar functions
Requires multi-disciplined team
Ahmad Maharma PMBOK 5th Edition

What is Project Management?
• Project management is the application of
knowledge, skills, tools and techniques to project
activities to meet project requirements. It includes:
 Identifying requirements
 Establishing clear & achievable objectives
 Balancing the competing demands for quality, scope, time
and cost
 Adapting the specifications, plans & approach

What Project Management is Not?
• Managing or buying a software.
• Preparing a schedule or a bar chart
• Preparing progress reports showing accomplishments
• Coordinating work and communicating with
stakeholders
• For Engineers ONLY
• Project Management is a science and art

Project Management Context
• Programs & Program Management
• Portfolios & Portfolio Management
• Project Management Office - PMO

Program Management
• A program is a group of related projects managed in a coordinated way to obtain
benefits and control that cannot be achieved from managing them individually.
• Program Management is the centralized coordinated management of a program to
achieve the program’s strategic objectives and benefits.

Program Management
Project
D
Project
C
Project
B
Project
A
Objective
(s)

Portfolio management
• A portfolio represents a collection of active programs, projects and other that are
grouped together to facilitate effective management of that work to meet strategic
business objectives.
• Portfolio management, therefore, is the centralized management of one or more
portfolios in order to achieve specific strategic business objectives.
• Focuses on ensuring that projects and programs are reviewed to prioritize resource
allocation, and that the management of the portfolio is consistent with and aligned
to organizational strategies.

Portfolio Management
Project
(E)
Program A
Project
(F)
Operations

Project Management Offices
(PMOs)
• An organizational unit to centralize and coordinate the management of projects under its domain
• The PMO can be understood as :
• “The organizational entity, staffed with skilled professional personnel, that provides services in core and
supporting areas during the planning and execution of a project/Program”
• Can have a wide range of authorities and responsibilities
• Takes one of 3 roles:
• 1- Providing policies, methodologies and templates
• 2- Provide support and guidance
• 3- Provide managers for projects, and coordinate managing them

PMO Types
• There are Three types of PMOs that may exist in an organization:
 Supportive PMO
 Controlling PMO
 Directive PMO

Supportive PMO
• The most common type of PMO
• Its purpose is to empower project managers and teams to
deliver their projects more successfully
• It doesn't control or direct projects, instead it focuses on
supporting projects through training, mentoring,
administration and reporting.

Controlling PMO
• Offers controlling services (such as project reviews, audits,
assessments and governance), in addition to the supporting
services to get project back on track
• Can influence project delivery
• It can also enforce standards, implement processes and
manage overall project risk

Directive PMO
• This is the least common, but sometimes most effective type of
PMO
• It offers directive services, where it does not just support and
control projects, but also responsible for actually running them
• Each of the Project Managers report to the PMO Director as
their supervisor. This helps to “corral” all of the project work
within an organization, to one department

Project Management Offices
(PMOs)
• The PMO may:
 Manage the interdependencies between projects
 Help provide resources
 Terminate projects
 Monitor compliance with organizational processes
 Help gather lessons learned
 Be more heavily involved during the project initiation
 Be part of the change control board
 Be a stakeholder

PMOs-Requirements for Success
1. Role should be clearly defined
2. Only one role, don’t try to do it all
3. Commitment and support of top management
4. All should be PMPs
5. Improve project performance through the use of proper
processes and techniques
6. The repercussions of failure!!

The Role of Project Manager

Knowledge
 What the Project Manager knows about Project
Management.

Performance
 What the Project Manager is able to do or
accomplish while applying his/ her project
management knowledge

Personal
 How the Project Manager behaves when
performing the project or related work.
 Encompasses:
 Attitude
 Core personality characteristics
 Leadership

Project Manager Interpersonal
Skills
Project
Manager
Interpersonal
Skills
Leadership
Team
Building
Motivation
Com-
munication
Influencing
Decision
making
Political &
cultural
awareness
Negotiation

PMBOK Reading
 Chapter 1

Project Management
Professional
PMP®
Project Management Framework

Project Lifecycle
 A collection of generally sequential and sometimes overlapping project phases
 Phases name and number are determined by:
 Management
 Nature of the project
 Control requirements
 Area of application
 Can be determined or shaped by the unique aspects of the organization, industry or
technology
 Can be documented by a methodology
• Provides the basic framework for managing the project

Project Lifecycle Vs. Product
Lifecycle
Product lifecycle outlives project lifecycle
Project lifecycle is part of product lifecycle

Cost & Staffing Level

The project through its lifecycle

Project Phases
• Divisions within a project where extra control is needed to
effectively manage the completion of a major deliverable.
• A deliverable is a measurable, verifiable work product.
• Each phase ends with a deliverable
• Number and structure of phases is determined by the
organization’s control requirements
• Some organizations have established policies that standardize
all projects.

Project Lifecycle- Sequential
Phases

Project Lifecycle- Overlapping
Phases

Project Lifecycle-
The Spiral Model

TTM deliverables
• Marketing Deliverables
• Customer Journey Deliverables
• Financial & regulatory Deliverables
• ITN Deliverables
• Business processes Deliverables
• Sourcing Deliverables
• Project Deliverables

Stakeholders
• Persons or organizations who are actively involved in the
project, or whose interests maybe positively or negatively
affected by the performance or completion of the project
 Project Stakeholders:
 Sponsors
 Customers/ Users
 Vendors/ Suppliers
 Project Manager
 Project Management Team
 Project Team
 PMOAhmad Maharma PMBOK 5th Edition 53

Stakeholders

5 Steps to Managing Stakeholders
• Identify ALL of them
• Determine ALL their requirements
• Determine their expectations
• Communicate with them
• Manage their influence

Organizational influence
Projects don’t operate in vacuum, they are influenced
by organizational:
• Culture
• Style
• Structure
Organization’s degree of project management
maturity and systems can influence the project

Functional Organization
 Also known as “Silo” organization
 Functional managers control resources
 Communication happens “vertically”
 Good for operation-oriented organizations, such as
banks, government

Functional Organization

Advantages & Disadvantages
Advantages
• Clear Authority
• Career
Development
• Controlled
Disadvantages
• Poor
Coordination
• No Project
Accountability
• High Politics

Projectized Organization
 Also known as “No home”
 Systematic approach to project management
 Well defined project management methodology &
lifecycle
 Does not support learning & career development

Projectized Organization

Advantages
• Effective
Communication
• Project Driven
Coordination
• More focused
Disadvantages
• High Risk
• Poor Resource
Utilization
• “No Home”

Matrix organization
 Also known as “Two Bosses”
 Has three types:
 Weak matrix
 Balanced matrix
 Strong matrix

Weak Matrix

Balanced Matrix

Strong Matrix

Advantages
• Project Manager
Assigned.
• Communication and
Coordination
• Visible Project
Objectives
Disadvantages
• Two Bosses
• Competition of Priorities
• Hard to Control
• Tough Resource
Allocation
• Complex Communication

Organizational Influences on Project Management
PMBOK 5th Edition 68Ahmad Maharma

Project Management Process
Groups
Monitoring &
Controlling Processes
Closing
Processes
Initiation
Processes
Planning
Processes
Execution
Processes

Project Management Process
Groups
 A version of Deming’s Cycle
 Plan – Do – Check- Act (PDCA)

Interaction Between Process
Groups
Level of
Process
Interaction
Initiation
Process
Group
Planning
Process
Group
Execution
Process
Group
Monitoring &
Control Process
Group
Closing
Process
Group

72
Project Phases
• All projects are divided into phases
• All phases together are known as the Project Life Cycle
• Each phase is marked by completion of Deliverables

Ahmad Maharma 73PMBOK 5th Edition

Project Management Framework
• The PMBOK’s 10 Knowledge areas
Time
Management
Cost
Management
Scope
Management
Quality
Management
HR Management
Communication
Management
Procurement
Management
Integration
Management
Stakeholder
Management
Risk
Management
76Ahmad Maharma PMBOK 5th Edition

PM Knowledge Areas & Process Groups 47 processes
PM Process Groups
Knowledge Area
Processes
Initiating Process
Group
Planning Process Group Executing Process Group Monitoring & Controlling Process
Group
Closing
Process Group
Project Management
Integration
Develop Project
Charter
Develop Project Management
Plan
Direct and Manage Project
Execution
Monitor and Control Project Work
Integrated Change Control
Close Project
Project Scope
Management
Plan Scope Management
Collect requirements
Define Scope
Create WBS
Validate Scope
Control Scope
Project Time
Management
Plan schedule Management
Define Activity
Sequence Activity
Estimating Resource
Estimating Duration
Develop Schedule
Schedule Control
Project Cost
Management
Plan Cost Management
Estimating Cost
Budgeting Cost
Control Cost
Project Quality
Management
Quality Planning Perform Quality Assurance Perform Quality Control
Project HR
Management
Plan HR Management Acquire Project Team
Develop Project Team
Manage Project Team
Project
Communications
Management
Plan Communications Distribute Information Performance Reporting
Project Risk
Management
Plan Risk Management
Risk Identification
Qualitative / Quantitative Risk
Analysis
Risk Response Planning
Risk Monitoring and Control
Project Procurement
Management
Plan procurement Conduct procurement Administer Contract Close
procurement
Project Stakeholder
Management
Identify Stakeholders Plan stakeholder Management Manage stakeholders
expectations
Control stakeholder

Project Scope Management
Knowledge
Area
Process
Initiating Planning Executing
Monitoring &
Control
Closing
Scope
Plan scope Management
Collect Requirements
Define Scope
Create WBS
Validate Scope
Control Scope
Enter phase/
Start project
Exit phase/
End project
Initiating
Processes
Closing
Processes
Planning
Processes
Executing
Processes
Monitoring &

Project Time Management
Knowledge
Area
Process
Monitoring &
Control
Closing
Time
Define Activity
Sequence Activity
Estimating Resource
Estimating Duration
Develop Schedule
Control Schedule
Enter phase/
Start project
Exit phase/
End project
Initiating
Processes
Closing
Processes
Planning
Processes
Executing
Processes
Monitoring &

Project Cost Management
Knowledge
Area
Process
Monitoring &
Control
Closing
Cost
Plan Cost management
Estimating Cost
Determine Budget Control Costs
Enter phase/
Start project
Exit phase/
End project
Initiating
Processes
Closing
Processes
Planning
Processes
Executing
Processes
Monitoring &

Project Quality Management
Knowledge
Area
Process
Initiating Planning Executing Monitoring & Contol Closing
Cost Plan Quality
Management
Perform Quality
Assurance control Quality
Enter phase/
Start project
Exit phase/
End project
Initiating
Processes
Closing
Processes
Planning
Processes
Executing
Processes
Monitoring &

Project Human Resource Management
Knowledge Area
Process
Monitoring &
Control
Closing
Human
Resource
Plan Human Resource
Management
Acquire Project Team
Manage Project Team
Enter phase/
Start project
Exit phase/
End project
Initiating
Processes
Closing
Processes
Planning
Processes
Executing
Processes
Monitoring &

Project Communication Management
Knowledge Area
Process
Monitoring &
Control
Closing
Communication
Plan
Communication
Management
Manage Communications
Control
Communications
Enter phase/
Start project
Exit phase/
End project
Initiating
Processes
Closing
Processes
Planning
Processes
Executing
Processes
Monitoring &

Project Risk Management
Knowledge
Area
Process
Initiating Planning Executing Monitoring & Control Closing
Risk
Identify Risk
Perform Qualitative Risk Analysis
Perform Quantitative Risk Analysis
Plan Risk Response
Control Risks
Enter phase/
Start project
Exit phase/
End project
Initiating
Processes
Closing
Processes
Planning
Processes
Executing
Processes
Monitoring &

Project Procurement Management
Knowledge Area
Process
Monitoring &
Control
Closing
Procurement
Plan Procurement
Management
Conduct
Procurement
Control
Procurement
Close Procurement
Enter phase/
Start project
Exit phase/
End project
Initiating
Processes
Closing
Processes
Planning
Processes
Executing
Processes
Monitoring &

Project Integration Management
Knowledge
Area
Process
Scope
• Develop
Project
Charter
• Develop Project
Management
Plan
• Direct and
Manage Project
Execution
• Monitor and Control
Project Work
• Perform Integrated
Change Control
• Close
Project
Enter phase/
Start project
Exit phase/
End project
Initiating
Processes
Closing
Processes
Planning
Processes
Executing
Processes
Monitoring &

Project Stakeholder Management
Knowledge
Area
Process
Scope
Identify
Stakeholders
Plan
stakeholder
Management
Manage
stakeholders
expectations
Control stakeholder
Enter phase/
Start project
Exit phase/
End project
Initiating
Processes
Closing
Processes
Planning
Processes
Executing
Processes
Monitoring &

The Project Life Cycle

How do we define success?
 On time
 Within budget
 Scope integrity
 Achieving quality
Scope

Chaos Report
 31.1% of projects will be cancelled before they ever get
completed
 52.7% of projects will cost 189% of their original
estimates
 Only 16.2% of projects were completed successfully

Why Projects Fail?
 A subject for discussion

The Opera House Project-
Sydney
 Original cost estimate (in 1957) was US$ 7 million.
 The original completion date was 26 January 1963.
 Finally, the Opera House was formally completed in
1973, having cost $102 million.

The Three Main Ones
 Among the following factors, which is the most important
contributor to project failure??!!
Lack of
Executive
Management
Support
Unclear Objectives
No User
Involvement

Reason 1
 Lack of User Involvement
– Correctly identify proper user
– Develop and Maintain a quality relationship with the
client
– Create and maintain a platform for communication
– Demonstrate results
– Educate the client
– Consider their feedback
– Identify and recruit an evangelist
– Conduct primary research
– Show respect
– Focus on real user needs

Reason 2
 No Executive Management Support
– Have a simple vision
– Get clear commitment
– Make fast decisions
– Have a decision pipeline
– Focus of education
– Use measurements
– Understand how and why you need to
negotiate
– Have a well thought plan
– Have a “kill switch”
– CELEBRATE

Reason 3
 Absence of clear business objectives
– Make sure everyone understands the project's
objectives
– Elevator pitch
– Consider the big picture
– Promote speed and clarity
– Have a yardstick
– Use RoI
– Collaborate with team members
– Use peer review
– Avoid having “too many cooks”
– Do your homework

Enterprise Environmental Factors
 The Internal and External environmental factors surrounding
and/or influencing the project negatively or positively.
 Are Inputs to most of the Project Management Processes.
 Can be categorized into Internal and External

Enterprise Environmental Factors
 Culture & structure
 Regulations & Standards
 Infrastructure
 Existing human resources
 Personnel administration
 Political climate
 Commercial databases
 Information systems
 Stakeholders risk tolerance
 Marketplace Conditions

Organizational Process Assets
 Include all process related assets in addition to the
organization’s knowledge bases
 Input to most of the project management processes
 Outputs of many processes may include updating or adding
to these process assets
 Can be categorized into:
 Processes and procedures
 Corporate knowledge base

Processes and Procedures
 Standard Processes.
 Templates.
 Communication Requirements.
 Financial Controls Procedures.
 Issue and Defect Management Procedures.
 Change Control Procedure.
 Risk Control Procedures.
 Approval Procedures.

Corporate Knowledge
 Process Measurement Database.
 Project Files.
 Historical Information and Lessons Learned.
 Issue and Defect Management Database.
 Configuration Management Knowledge Base.
 Financial Database.

PMBOK Reading
 Chapters 2 & 3

Project Management
Professional
PMP®
Phase #1: PROJECT INITIATION

Why projects start?
 A market demand,
 An Organizational need,
 A customer request,
 A technological advance,
 A legal requirement,
 A social demand,
 An Ecological impact.

Project Management
Professional
PMP®
Phase #1 : INITIATION
Chapter 4: Integration / 4.1 Develop Project Charter

Initiation Processes
Develop
Project
Charter
Integration
Identify
Stakeholders
Communication

Develop Project Charter
 The process of developing a document that formally
authorizes a project or a phase and documenting initial
requirements that satisfy the stakeholders needs and
expectations.

What is a Project Charter?
 A document that formally authorizes a project or a phase and
documents initial requirements that satisfy the stakeholders
needs and expectations
 Projects are chartered and authorized external to the project

Why a charter is needed?
 Defines the reason of the project
 Assigns the project manager and his/ her authority level
 Linking the project to the strategy and ongoing work of the
organization
 Helps in starting the planning for the project

Facts about the project charter
 A must for all projects and/ or phases
 Communicate the project purpose or justification, high level
objectives, project and product requirements and initial risks.
 Should be clear enough, yet broad to a level that the charter
doesn’t change over the project’s life.

Develop Project Charter
Project Statement
of Work (SOW)
Business Case
Agreements
Enterprise
Environmental
Factors
Organizational
Processes Assets
Expert Judgment
Facilitation
Techniques

Project Charter

Project Statement of Work
 A narrative description of products or services to be supplied
by the project.
 References:
 Business need.
 Product scope description.
 Strategic plan.
 For external projects, provided by customer as part of a bid
document.
 For internal projects, provided by sponsor or initiator.

Business Case
 A document that provides necessary information from a
business perspective on whether or not the project is worth
the investment

Agreements
 MoUs
 SLAs
 Letters of Agreement
 Letters of Intent

Expert Judgment
 Stakeholders.
 Consultants.
 Industrial groups.
 Professional and technical associations.
 Other units within organization.
 Subject matter experts (SMEs)
 Project management office (PMO)

Facilitation Techniques
 Brainstorming
 Conflict Resolution
 Problem Solving
 Meetings

Contents of project Charter
Purpose or justification
Project Description
Project and Product Requirements
Acceptance Criteria
Initial Risks
Summary Milestones
Estimated Budget
Project Manager Authority Level
Approval Requirements
Name & authority of the person(s) authorizing the
project charterAhmad Maharma PMBOK 5th Edition 117

Project Management
Professional
PMP®
Phase #1: PROJECT INITIATION
Chapter 13: Stakeholders / 13.1 Identify Stakeholders

Identify Stakeholders
Develop
Project
Charter
Integration
Identify
Stakeholders
Communication

Identify Stakeholders
Project Charter
Procurement
Documents
Enterprise
Environmental
Factors
Organizational
Process Assets
Stakeholder
Analysis
Expert Judgment
Meetings
Stakeholder
Register

Stakeholder Analysis
 The process of systematically gathering and analyzing
quantitative and qualitative information to determine whose
interests should be taken into account throughout the
projects.

3 Steps to Managing Stakeholders
1. Identify Your Stakeholders
2. Prioritize Your Stakeholders
3. Manage Your Stakeholders

Step1- Identify Stakeholders
 Identifying all stakeholders impacted by the project and
documenting relevant Information regarding their interests,
involvement, and impact on the project success.
 It is essential to identify all stakeholders to increase the
likelihood of project success.
 Should be done as early as possible.

Identify Stakeholders Purpose
 Enables the project manager to focus on the relationships
necessary to ensure the success of the project.

Stakeholder Register
 The Stakeholder Register is used to identify those people and
organizations impacted by the project and document relevant
information about each stakeholder.
 Includes all details related to the identified stakeholders.
 Identification information: Name, organizational position,
location, role in project, contact information.
 Assessment information: Major requirements, main
expectations, potential influence, phase.
 Stakeholder classification: Internal/ external, supporter/
neutral/ resistor, etc.

Step2- Prioritize Your
Stakeholders
 Identify the potential impact or support each stakeholder
could generate
 Classify them according to:
1. Power/Interest Grid
2. Power/ Influence Grid
3. Influence/ Impact Grid
4. Salience Model

Power/ Interest Grid
Keep
Informed
Monitor
(Minimum
Effort)
Manage
Closely
Keep
Satisfied
High
Low
Low High
Power
Interest

Step3: Assess Your Stakeholders
 Anticipate how key stakeholders react in different
situations, in order to plan how to influence them to
enhance their support and mitigate potential negative
impact.

PMBOK Reading
 Chapter 4
- Section 4.1
 Chapter 13
- Section13.1

Project Management
Professional
PMP®
Phase #2: PROJECT PLANNING

Project Management
Professional
PMP®
Chapter 4: Scope / 4.2 Develop Project Management Plan

Plan
 Documenting the actions necessary to define, prepare,
integrate, & coordinate all subsidiary plans into a project
management plan.

Plan
Project Charter
Outputs from
Planning
Processes
Enterprise
Environmental
Factors
Organizational
Process Assets
 Expert Judgment  Project
Management Plan

Project Management Plan
 Integrates and consolidates all of the subsidiary management
plans and baselines from the planning processes.
 Includes but not limited to:
 Project management processes selected by the project
management team.
 Level of implementation of each selected process.
 Descriptions of tools & techniques
 How the selected processes will be selected to manage the
specific project
 How work will be executed to accomplish objectives
 A change management plan

Project Management Plan
contents
 Subsidiary Plans
 Project Scope Management Plan
 Requirements Management Plan
 Schedule Management Plan
 Cost Management Plan
 Quality Management Plan
 Process Improvement Plan
 Staffing Management Plan
 Communication management Plan
 Risk Management Plan
 Procurement Management Plan
 Baselines
 Schedule
 Cost performance
 Scope

Project Management Plan Vs. Project
Documents
Project Management Plan Project Documents
Change Management Plan Activity Attributes Project Staff Assignment
CommunicationsManagement Plan Activity Cost Estimates Project Statement of Work
Configuration Management Plan Activity Duration Estimates Quality Checklists
Cost Baseline Activity List Quality Control Measurements
Cost Management Plan Activity Resource Requirements Quality Metrics
Human Resource Management Plan Agreements Requirements Documentation
Process Improvement Plan Basis of Estimates Requirements TraceabilityMatrix
Procurement Management Plan Change Log Resource Breakdown Structure
Scope Baseline Change Requests Resource Calendars
Quality Management Plan Forecasts Risk Register
Requirements Management Plan Issue Log Schedule Data
Risk Management Plan Milestone List Seller Proposals
Schedule Baseline Procurement Documents Source Selection Criteria
Schedule Management Plan Procurement Statement of Work Stakeholder Register
Scope Management Plan Project Calendars Team Performance Assessment
Stakeholder Management Plan Project Charter Work Performance ReportsAhmad Maharma PMBOK 5th Edition 136

PMBOK Reading
 Chapter 4
- Section 4.2

Project Management
Professional
PMP®
Chapter 5: Scope / 5.1 Plan Scope Management

Scope Planning
Plan Scope
Management
Collect
Requirements
Define
Scope
Create
WBS

Project Scope Vs. Product Scope
 Project Scope: The work that needs to be accomplished to
deliver a product, service, or result with the specified
features and functions
 Product Scope: The features and functions that characterize a
product, service, or result

Plan Scope
Management
Collect
Requirements
Define
Scope
Create
WBS

Plan Scope management
 The process of creating a scope management plan that
documents how the project scope will be defined, validated
and controlled.
 It provides guidance on how scope will be managed
throughout the project.

Project
Management Plan
Project Charter
Enterprise
environmental
factors
Organizational
Process Assets
Expert Judgment
Meetings
Scope
Management Plan
Requirements
Management Plan

Project Scope Management
Plan
 Part of Develop Project Management Plan
 The outcome of a planning effort that precedes performing
the processes of project scope management
 Documents how the scope will be defined, verified,
controlled, and how the work breakdown structure (WBS)
will be created and defined.
 Can be formal or informal depending on needs of the project.

It Includes:
 Processes for:
– Detailing the project scope statement.
– WBS creation, maintenance, and approval.
– Formal verification and acceptance of the completed
project deliverables.
– Control how requests to change the detailed project
scope statement will be processed.

Requirements Management Plan
(RQM)
 A Plan that documents how requirements will be analyzed,
document and managed (tracked, reported, prioritized…)
throughout the project life cycle.

Requirements Management Plan
(RQM) Components
 How Requirement activities will be planned, tracked and
reported
 Configuration Management Activities
 Requirements Prioritization Process
 Product Metrics
 Traceability Structure

Project Management
Professional
PMP®
Chapter 5: Scope / 5.2 Collect Requirements

Plan Scope
Management
Collect
Requirements
Define
Scope
Create
WBS

 The process of defining and documenting stakeholders’ needs
to meet project objectives.
 Requirements include the quantified and documented needs
and expectations of the sponsor, customer, and other
stakeholders.
 WBS, cost, schedule and quality planning are all built upon
these requirements.
 Need to be elicited, analyzed, and recorded in enough detail
to be measured once project execution begins

 Project Requirements include business requirements, project
management requirements, delivery requirements, etc.
 Product Requirements include information on technical
requirements, security requirements, performance
requirements, etc.

Scope
Management Plan
Requirements
Management Plan
Stakeholder
Management Plan
Project Charter
Stakeholder
Register
 Interviews
 Focus Groups
 Facilitated
Workshops
 Group Creativity
Techniques
 Group Decision
Making Techniques
 Questionnaires and
Surveys
 Observations
 Prototypes
 Benchmarking
 Context Diagram
 Document Analysis
Requirements
Documentation
Requirements
Traceability
Matrix

Interviews
 Talking to stakeholders directly.
 Asking questions and recording answers
 “One-on-one”, or multiple interviewers and/ or interviewees.
 Interviewing:
 Experienced participants
 Stakeholders
 Subject matter experts

Focus Groups
 Bring together prequalified stakeholders and subject matter
experts.
 Trained moderator guides the group through an interactive
discussion.
 More conservational than one-on-one

Facilitated Workshops
 Focused sessions that bring key cross-functional stakeholders
together to define product requirements
 Helps in building trust, foster relationships, and improve
communication.
 Reveal and resolve issues more quickly than individual
sessions.
 Examples: Joint Application Development (JAD) & Quality
Function Deployment (QFD)

Group Creativity Techniques
• Brainstorming. A technique used to generate and collect multiple ideas related to project and product
requirements.
• Nominal group technique. This technique enhances brainstorming with a voting process used to rank
the most useful ideas for further brainstorming or for prioritization.
• The Delphi Technique. A selected group of experts answers questionnaires and provides feedback
regarding the responses from each round of requirements gathering. The responses are only available to
the facilitator to maintain anonymity
• ldea/mind mapping. Ideas created through individual brainstorming are consolidated into a single map to reflect
commonality and differences in understanding, and generate new ideas.
• Affinity diagram. This technique allows large numbers of ideas to be sorted into groups for review and analysis.

Mind Map Example

Group decision Making
Techniques
Group decision making is an assessment process of multiple alternatives with an expected outcome in the
form of future actions resolution. These techniques can be used to generate, classify,
and prioritize product requirements.
There are multiple methods of reaching a group decision, for example:
• Unanimity. Everyone agrees on a single course of action.
• Majority. Support from more than 50% of the members of the group.
• Plurality. The largest block in a group decides even if a majority is not achieved.
• Dictatorship. one individual makes the decision for the group.
Almost any of the decision methods described previously can be applied to the group techniques used in the
requirements gathering process.

Questionnaires & Surveys
 Written sets of questions.
 Aim to quickly accumulate information from a broad group of
respondents.
 Most appropriate with broad audience, when quick
turnaround is needed, and where statistical analysis is
appropriate.

Observations
 Viewing user performance
 Also called “Job shadowing”
 Helpful for detailed processes when people that use the
product have difficulty or reluctant to articulate their
requirements
 Can uncover hidden requirements

Prototypes
 Provide a working model of the expected product before
actually building it.
 Support the concept of progressive elaboration through use
of iterative cycles of mock-up creation, user experimentation,
feedback generation and prototype revision.

Benchmarking
 Involves comparing actual or planned practices, such as
processes and operations, to those of comparable
organizations to identify best practices, generate ideas for
improvement, and provide a basis for measuring
performance.
 Compared organizations can be external or internal.

Context Diagrams
 Visually depict the product scope by showing a business
system (process, equipment, computer system…etc.), and
how people and other systems (actors) interact with it.
 Context diagrams show inputs to the business system, the
actor(s) providing the input, the outputs of the business
system, and the actor(s) receiving the output.

Context Diagrams

Requirements Documentation
 The document including the stakeholders’ requirements to
meet the business need for the project.
 Usually starts at a high level and then gets elaborated within
the life cycle of the project and according to the RQM

Requirements Documentation
Elements
 Business need or opportunity
 Functional requirements and non functional requirements
 Quality requirements
 Acceptance criteria
 Business rules
 Impacts to other organizational areas, and other entities inside or
outside the performing organization
 Support and training requirements
 Requirements assumptions and constraints

Requirements Traceability Matrix
 A tool that links project objectives to requirements to
deliverables to product features.
 The structure and level of details of the traceability matrix to be
used shall be documented in the RQM as different projects can
use different structures of traceability.
 This tool can be as simple as a table or as complex as a software
program.

Requirements Traceability Matrix
Contents
 Business needs, opportunities, goals, and objectives
 Project objectives
 Project scope, WBS deliverables
 Product design
 Product development
 Test strategy and test scenarios
 High level requirements to more detailed requirements

Example of Requirements
Traceability Matrix

Project Management
Professional
PMP®
Chapter 5: Scope / 5.3 Define Scope

Define Scope
Plan Scope
Management
Collect
Requirements
Define
Scope
Create
WBS

Define Scope
 The process of developing a detailed description of the
project and the product
 Critical to project success.
 Builds upon the major deliverables, assumptions, and
constraints documented in the project initiation.

Define Scope
Scope
Management Plan
Project Charter
Requirements
Documentation
Organizational
Process Assets
Expert Judgment
Product Analysis
Alternatives
Identification
Facilitated
Workshops
Project Scope
Statement
Project Document
Updates

Product Analysis
 Translating high-level product description into tangible
deliverables
 Includes techniques such as:
 Product breakdown
 System analysis
 Requirements analysis
 System engineering
 Value engineering
 Value analysis

Alternatives Identification
 A technique to generate different approaches to execute and
perform the work of the project.
 Includes techniques such as:
 Brainstorming
 Lateral thinking
 Pairwise comparison

Project Scope Statement
 The project scope statement describes in details the project
deliverables, and the work required to create those
deliverables.
 Common understanding among stakeholders,
 Enables more detailed planning,
 Guides the project team’s work during execution,
 Provides the baseline for evaluating changes.

Project Scope Statement
Contents
 Product scope description
 Product acceptance criteria
 Project deliverables
 Project exclusions
 Project constraints
 Project assumptions

Constraints
 Applicable restrictions that will affect the performance of
the project.
 Factors that affect a scheduled activity or when an
activity can be scheduled.

Assumptions
 Are factors that, for planning purposes, are considered to be
true, real, or certain.
 Affect all aspects of project planning.
 Part of the project’s progressive elaboration.
 Generally involve a degree of RISK.
 Must be identified, documented and validated.

Project Management
Professional
PMP®
Chapter 5: Scope / 5.4 Create WBS

Create WBS
Plan Scope
Management
Collect
Requirements
Define
Scope
Create
WBS

Create WBS
 The process of subdividing project deliverables and project
work into smaller, more manageable components.
 WBS is a deliverable-oriented hierarchical decomposition of
the work to be executed by the project team to accomplish
the project objectives, and create the required deliverables.
 Each descending level represents an increasingly detailed
definition of the project work.
 Organizes and defines the total scope of the project.

WBS Types
 Phases- Deliverables
 Deliverables-Phases
 Combination of both

Example: WBS (Phases –
Deliverables)

Example: WBS (Deliverables–
Phases)

Create WBS
Scope
Management Plan
Project Scope
Statement
Requirements
Documentation
Enterprise
Environmental
Factors
Organizational
Process Assets
Decomposition
Expert Judgment
Scope Baseline
 Project Document
Updates

Decomposition
 Subdivision of project deliverables into smaller, more
manageable components until the work and deliverables are
defined to the work package level.
 The level of composition varies per deliverable/ phase with
the size and complexity of project.

Work Package
 The “Work Package” level is the lowest level in the WBS.
 Work Package is the point at which the cost and activity
duration can be reliable, estimated and packaged.

Decomposition Involves
 Identifying deliverables and related work.
 Structuring and organizing the WBS.
 Decomposing upper levels into lower level detailed
components.
 Developing and assigning identification codes.
 Verifying that the degree of decomposition is necessary and
sufficient.

WBS Dictionary Contents
 Code of account identifier
 Statement of work
 Responsible organization
 Schedule milestones
 Associated activities
 Resources required
 Cost estimates
 Quality requirements
 Acceptance criteria
 Technical references
 Contract information

Scope Baseline
 Scope statement
 WBS
 WBS dictionary

WBS Dictionary
 A document generated by the “Create WBS” process that
supports the WBS.
 Provides more detailed description of the components in the
WBS., including work packages and control accounts.

WBS is not
 Organizational Breakdown Structure (OBS)
 Bill Of Materials (BOM)
 Risk Breakdown Structure (RBS)
 Resource Breakdown Structure (RBS)

PMBOK Reading
 Chapter 5
- Sections 5.1-5.4

Project Management
Professional
PMP®
Chapter 6: Time / 6.1 Plan Schedule Management

PM Knowledge Areas & Process Groups 47 processes
PM Process Groups
Knowledge Area
Processes
Initiating Process
Group
Planning Process Group Executing Process Group Monitoring & Controlling Process
Group
Closing
Process Group
Project Management
Integration
Develop Project
Charter
Plan
Direct and Manage Project
Execution
Monitor and Control Project Work
Integrated Change Control
Close Project
Project Scope
Management
Collect requirements
Define Scope
Create WBS
Validate Scope
Control Scope
Project Time
Management
Define Activity
Sequence Activity
Estimating Resource
Estimating Duration
Develop Schedule
Control Schedule
Project Cost
Management
Estimating Cost
Budgeting Cost
Control Cost
Project Quality
Management
Quality Planning Perform Quality Assurance Perform Quality Control
Project HR
Management
Plan HR Management Acquire Project Team
Manage Project Team
Project
Communications
Management
Plan Communications Distribute Information Performance Reporting
Project Risk
Management
Risk Identification
Qualitative / Quantitative Risk
Analysis
Risk Response Planning
Risk Monitoring and Control
Project Procurement
Management
Plan procurement Conduct procurement Administer Contract Close
procurement
Project Stakeholder
Management
Identify Stakeholders Plan stakeholder Management Manage stakeholders
expectations
Control stakeholder

Project Time Management
Knowledge
Area
Process
Monitoring &
Control
Closing
Time
Define Activity
Sequence Activity
Estimating Resource
Estimating Duration
Develop Schedule
Control Schedule
Enter phase/
Start project
Exit phase/
End project
Initiating
Processes
Closing
Processes
Planning
Processes
Executing
Processes
Monitoring &

Project Time Planning
Estimate
Activity
Durations
Develop
Schedule
Sequence
Activities
Estimate
Activity
Resources
Define
Activities
Plan
Schedule
Management

Plan Schedule Management
Estimate
Activity
Durations
Develop
Schedule
Sequence
Activities
Estimate
Activity
Resources
Define
Activities
Plan
Schedule
Management

 The process of establishing policies, procedures, and
documentation for planning, developing, managing,
executing, and controlling the project schedule.
 The key benefit of the process is that it provides guidance and
direction on how the project schedule will be managed

Project
Management
Plan
Project
Charter
Enterprise
Environment
al factors
Org. Process
Assets
Expert
Judgment
Analytical
Techniques
Meetings
Schedule
Management
Plan

Analytical Techniques
 Scheduling Methodology
 Scheduling Tools & Techniques
 Estimating Approaches
 Formats
 Project Management Software

Schedule Management Plans
 A component of the project management plan.
 Establishes the criteria and activities for developing,
monitoring, and controlling the schedule.
 Can be formal or informal
 Can be highly detailed or broadly defined based on the needs
of the project

Schedule Management Plans
 Can include the following:
 Project schedule model development
 Level of accuracy
 Units of measure
 Organizational procedures links
 Project schedule management maintenance
 Control schedule
 Rules of performance measurement
 Reporting formats
 Process description

Project Management
Professional
PMP®
Chapter 6: Time / 6.2 Define Activities

Define Activities
Estimate
Activity
Durations
Develop
Schedule
Sequence
Activities
Estimate
Activity
Resources
Define
Activities
Plan
Schedule
Management

Define Activities
 The process of identifying the specific actions to be performed to produce the project
deliverables.
 Decomposed from the “work packages” at the WBS.
 Activities are the smaller components that represent the work necessary to complete the
work package.
 Activities provide basis for estimating, scheduling, executing, and monitoring and controlling
the project work.

Define Activities
Schedule
Managemen
t Plan
Scope
Baseline
Enterprise
Environmen
tal factors
Org. Process
Assets
 Decomposition
Rolling Wave
Planning
Expert
Judgment
Activity List
Activity
Attributes
Milestone List

Rolling Wave Planning
 Progressive detailing of the project management plan

Activity List
 A comprehensive list including all schedule activities
required for the project.
 Includes:
 Activity identifier
 Description of each activity

Project Management
Professional
PMP®
Chapter 6: Time / 6.3 Sequence Activities

Sequence Activities
Estimate
Activity
Durations
Develop
Schedule
Sequence
Activities
Estimate
Activity
Resources
Define
Activities
Plan
Schedule
Management

Sequencing Activities
 Schedule
Management
Plan
 Activity List
 Activity
Attributes
 Milestone List
 Enterprise
Environmental
Factors
 Project Scope
Statement
 Organizational
Process Assets
 Precedence
Diagrammin
g Method
(PDM)
 Dependency
Determinati
on
 Applying
Leads and
Lags
 Project
Schedule
Networking
Diagram
 Project
Documents
Update

Sequence Activities
 Identifying & documenting dependencies among schedule
activities
 Can be done using software or manually.

Precedence Diagramming Method
(PDM)
 Also known as Activity-On-Node
 Activities are represented in boxes (Nodes),
and arrows show dependencies

Dependencies Relationships
 Finish-to-Start
 Finish-to-Finish
 Start-to-Start
 Start-to-Finish
A
B
A
B
A
B
A
B

Dependencies Relationships
 Use the following Rule of Thumb to understand the
relationships better:
 Activity A should _ _ _ _ _ _
Before activity B can _ _ _ _ _ _

Types of Dependencies
 Mandatory
 Discretionary
 External
 Internal

Applying Leads & Lags
 Lead: The overlapping time
 Lag: The waiting time
 Float/ Slack: The time an activity can be delayed (wait) without affecting the
project finish date
A lead allows an acceleration of the successor activity.
A lag directs a delay in the successor activity.

Applying Leads & Lags
• Leads.
– May be added to start an activity before the predecessor activity is complete.
• Lags
– Inserted waiting time between activities
A
B
A
B

Project Management
Professional
PMP®
Chapter 6: Time / 6.4 Estimate Activity Resources

Estimate Activity Resources
Estimate
Activity
Durations
Develop
Schedule
Sequence
Activities
Estimate
Activity
Resources
Define
Activities
Plan
Schedule
Management

 Estimating the type and quantities of resources required to
perform each schedule activity

Types of Resources
 Material
 People
 Equipment

Schedule
Management
Plan
Activity List
Activity
Attributes
Resource
Calendars
Risk Register
Activity Cost
Estimates
Enterprise
Environment
Factors
Org. Process
Assets
Expert
Judgment
Alternatives
Analysis
Published
Estimating
Data
Bottom-up
Estimating
Project
Management
Software
 Activity
Resource
Requirements
 Resource
Breakdown
Structure (RBS)
 Project
Document
updates

Project Management
Professional
PMP®
Chapter 6: Time / 6.4 Estimate Activity Duration

Estimate Activity Durations
Estimate
Activity
Resources
Develop
Schedule
Sequence
Activities
Estimate
Activity
Durations
Define
Activities
Plan
Schedule
Management

 Approximating the number of work periods needed to
complete individual activities with estimated resources.
 Uses information on:
 Activity scope of work
 Required resource types
 Estimated resource quantities
 Resource calendar
 Progressively elaborative
 Takes elapsed time into account

 Schedule
Management Plan
 Activity List
 Activity Attributes
 Activity Resource
Requirements
 Resource Calendars
 Project Scope
Statement
 Risk Register
 Resource Breakdown
Structure
 Enterprise
Environment Factors
 Org. Process Assets
Expert
Judgment
Analogous
Estimating
Parametric
Estimating
Three Point
Estimates
(PERT)
Group Decision-
Making
Techniques
Reserve
Analysis
 Activity
Duration
Estimates
 Project
Document
Updates

Estimate Activity Durations: Tools and Techniques
Expert Judgment
Expert judgment, guided by historical information, can provide duration estimate information or
recommended maximum activity durations from prior similar projects.
Analogous Estimating
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.
Analogous duration estimating is frequently used to estimate project duration when there is a
limited amount of detailed information about the project for example, in the early phases of a
project.
Analogous estimating uses historical information and expert judgment.

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,
This technique can produce higher levels of accuracy depending upon the sophistication and
underlying data built into the model.
Parametric time estimates can be applied to a total project or to segments of a project, in
conjunction with other estimating methods, such as cost, budget, and duration.

Three-Point Estimating
The accuracy of activity duration estimates can be improved by considering
estimation uncertainty and risk.
• Triangular Distribution. tE = (tO + tM + tP) / 3
• Beta Distribution (from the traditional PERT technique). tE = (tO + 4tM + tP) / 6

Three Point (PERT) Estimates
 Time Expected (te)= (to+4xtm+tp)/6
 to: Optimistic Estimate
 tm= Average Estimate
 tp= Pessimistic Estimate
 Based on a the assumption of Beta distribution

Beta Distribution

Activity Optimistic Duration
 The total number of work periods in calendar units
assigned to perform the schedule activity, considering all of
the variables that could affect performance, and is
determined to be the shortest possible activity duration
 It is determined by answering the question
 How long will it take in the best case scenario?

Activity Pessimistic Duration
assigned to perform the schedule activity, considering all of
the variables that could affect performance, and is
determined to be the longest possible activity duration
 It is determined by answering the question
 How long will it take in the worst case scenario?

Activity Most Likely Duration
assigned to perform the schedule activity, considering all
of the variables that could affect performance, and is
determined to be the most probable activity duration
 It is determined by answering the question:
 How long will it most likely take?

Standard Deviation & variance
 Activity Std. Deviation (σactivity) = P – O
6
 Variance = (P – O)2
6
 Project Std Deviation (σ project)=
√ ∑ Variance Critical Path Activities

Estimates Certainty
 Confidence level in the value is approximately 50%
 Confidence level in the value + SD is approximately 85%
 Confidence level in the value + 1.645 × SD is approximately 95%
 Confidence level in the value + 2 × SD is approximately 98%
 Confidence level in the value + 3 × SD is approximately 99.9%

3-Points Estimate (PERT)
Expected
6
Ο4ΜP 
Standard
Deviation
6
ΟP
Variance





 
6
ΟP 2
 varianceSD

Exercise: Tree-point estimates (PERT)
Activity
Duration Expected
Duration
(PERT)
Activity
Standard
Deviation
Variance
range
Range of
the estimate
P M O
A 3 5 1
B 8 4 2
C 15 8 5
D 20 10 5
Project (Total) -

Exercise: PERT - Most tricky question (Answer)
• See that the question says that Duration Uncertainty is Pessimistic minus Optimistic in other
words P-O. We know that SD is (P-O ) / 6 , thus SD is "duration Certainty " / 6
Thus
For Path 1 : SD = 18/6 = 3
Variance = 3*3 = 9
For path 2 : SD = 24 /6 = 4
Variance = 4*4 = 16
Total Path Variance = 16 + 9 = 25
Sqrt (25) = 5
Meaning (P-O) / 6 = 5
(p-O) = 5 * 6
DURATION UNCERTAINTY = 30

Schedule Uncertainty & Risk
Analysis Process
 Schedule risk analysis uses information about the
uncertainty of activity durations to help answer the
following questions:
 What is the likelihood of finishing project as scheduled?
 How much contingency is needed to establish a completion
date with a probability of success that is acceptable to the
stakeholders?
 Which activities are the most likely to delay the project?
 What actions can be taken to control risks in the schedule?

Schedule Uncertainty & Risk
Analysis Process
 If estimating activity duration involves a great deal of
uncertainty, a commonly used technique is the application of
probabilistic estimates

Critical Path
 The longest path from the beginning to the end of the project.
Activities on the critical path cannot be delayed without
delaying the project.
 There can be more than one critical path (riskier)
 Project Manager should focus on critical path.

Network Diagram
A
2
B
3
C
1
D
4
E
3
F
2
G
4
H
2

Calculating Critical Path
 Specify the individual activities.
 Determine the sequence of activities.
 Draw the network diagram.
 Estimate activity completion time.
 Identify critical path.

Project Management
Professional
PMP®
Chapter 6: Time / 6.6 Develop Schedule

Develop Schedule
Estimate
Activity
Resources
Develop
Schedule
Sequence
Activities
Estimate
Activity
Durations
Define
Activities
Plan
Schedule
Management

Develop Schedule
 The process of analyzing activity sequences, durations,
resource requirements, and schedule constraints.
 Provides specific start and end dates for activities.
 Iterative process.

Develop Schedule
 Schedule
Management Plan
 Activity List
 Activity Attributes
 Project Schedule
Network Diagrams
 Activity Resource
Requirements
 Resource Calendars
 Activity Duration
Estimates
 Project Scope
Statement
 Risk Register
 Project staff
assignment
 Resource
Breakdown
Structure
 Org. Process Assets
 Enterprise
Environmental
Factors
 Schedule Network
Analysis
 Critical Path
Method
 Critical Chain
Method
 Resource
Optimization
Techniques
 Modeling
techniques
 Leads & Lags
 Schedule
Compression
 Scheduling Tool
 Project schedule
 Schedule baseline
 Schedule data
 Project Calendar
 Project
Management Plan
(updates)
 Project document
(updates)

Resource Optimization
Techniques
 Resource Leveling
 Resource Smoothing

Resource leveling
 Used when shared or critical resources are only available at certain times, or in limited
quantities, or to keep resource usage at a constant level.
 Usually changes the critical path.
Resource leveling can be used when shared or critical required resources are
only available at certain times, are Only available in limited quantities, or to
keep resource usage at a constant level.
Resource leveling is necessary when resources have been
over-allocated.
Resource leveling can often cause the original critical path to change.

Resource leveling

Modeling Techniques
 What-If Scenario Analysis
 Simulation

6.6.2 Develop Schedule: Tools and
Techniques
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. In
resource smoothing, as opposed to resource leveling, the project’s critical path is not changed
and the completion date may not be delayed. In other words, activities may only be delayed within
their free and total float. Thus resource smoothing may not be able to optimize all resources.

What-If Scenario Analysis
 An analysis of the question “what if the situation represented by
scenario ‘X’ happens”.
 Can be used to assess the feasibility of the schedule under
adverse conditions, and in preparing contingency and response
plans.

Schedule Compression
 Fast Tracking
 Crashing

Fast Tracking
 A schedule compression technique in which phases or
activities normally performed in sequence are performed in
parallel.
 Can result in rework and increased risks.

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 latest
incremental cost.
 Can result in increased cost.

Crashing

Critical Chain Method
 A schedule network analysis technique that modifies the project schedule to account for
limited resources (according to PMBOK…).
 Combines deterministic and probabilistic approaches.

Project schedule
 Milestone Chart
 Bar Chart
 Project schedule network chart

Schedule Baseline
 Project schedule with baseline start dates and baseline finish
dates.

Start & Finish Dates
 ES: Earliest start time.
 EF: Earliest finish time.
 LF: Latest finish time.
 LS: Latest start time.

Critical Path Method Basic

275
Figure 6-9. Calculating Early and Late
Start and Finish Dates

Critical Path Method Basic

Forward Pass
 Schedule Calculations That Identify The Early Start and Finish
Dates of Tasks and The Project.
 ES = EF of Preceding Task (latest if more than one).
 EF = ES + Duration.

Backward Pass
 Schedule Calculations That Identify The Late Start and
Finish Dates of Tasks and The Project.
 LF = LS of succeeding Task (earliest if more than one).
 LS = LF - Duration

Float
 Float or slack is the amount of time that a task in a project
network can be delayed without causing a delay to:
 Subsequent tasks (free float)
 Project completion date (total float)
 Total Float = LF – EF
 OR
 LS - ES
 Free Float = Min ES (Succeeding Task) – EF

Critical Path

Critical Path
A
2
B
3
C
1
D
4
E
3
F
2
G
4
H
2

A
2
1 2
21
B
3
3 5
53
E
3
3 5
97
C
1
6 6
1515
D
4
6 9
96
F
2
10 11
1110
G
4
12 15
1512
H
2
16 17
1716
Critical Path

286
Figure 6-8. Determining the Critical Path
for Project X

287
Using Critical Path Analysis to Make
Schedule Trade-offs
• Free slack or free float is the amount of time an activity
can be delayed without delaying the early start of any
immediately following activities.
• Total slack or total float is the amount of time an
activity can be delayed from its early start without
delaying the planned project finish date.

Exercise

289
Exercise

290
Answer

291
Answer

292
Answer

293
Answer

294
Exercise

295
Exercise

296
Answer

297
Answer

298
Answer

299
Answer

300
Answer

301
GERT

Gantt Chart
• Graph or bar chart with a bar for each project
activity that shows passage of time
• Provides visual display of project schedule
• Slack
• amount of time an activity can be delayed without
delaying the project

| | | | |
Activity
Design house
and obtain
financing
Lay foundation
Order and
receive
materials
Build house
Select paint
Select carpet
Finish work
0 2 4 6 8 10
Month
Month
1 3 5 7 9
Example of Gantt Chart

Project Network
• Activity-on-node (AON)
• nodes represent activities, and arrows
show precedence relationships
• Activity-on-arrow (AOA)
• arrows represent activities and nodes are
events for points in time
• Event
• completion or beginning of an activity in
a project
1 32
Branch
Node

PMBOK Reading
 Chapter 6
- Sections 6.1 – 6.6

Project Management
Professional
PMP®
Chapter 7: Cost / 7.1 Plan Cost management

Project Cost Management
Plan Cost
Management
Estimate
Costs
Determine
Budget

Project Cost management
 On smaller projects, cost estimating and cost budgeting are so
tightly linked that they can be done together and by one
person.
 The work done in cost management is preceded by a cost
planning effort by the project management team.
 Techniques such as Life-Cycle Costing & Value Engineering can
improve decision making and reduce cost while improving
quality and performance of project deliverables.

Life-Cycle Costing
 A decision making tool that involves tradeoffs between short
term project costs and long term product or service
operational costs.
 It examines the effects of project decisions not only on project
activities, but also on the cost of maintaining, using and
supporting of the product, service, or result of the project.

Plan Cost
Management
Estimate
Costs
Determine
Budget

 The process of establishing policies, procedures, and
documentation for planning, managing, expending, and
controlling project costs.
 The key benefit of the process is that it provides guidance and
direction on how the project schedule will be managed

Project Management
Professional
PMP®
Chapter 7: Cost / 7.2 Estimate Cost

Estimate Costs
 Project
Management
Plan
 Project Charter
 Enterprise
Environmental
Factors
 Org. Process
Assets
 Expert Judgment
 Analytical
Techniques
 Meetings
 Cost
Management
Plan

Cost Management Plan
 Part of Develop Project Management Plan
 The outcome of a planning effort that precedes performing
the processes of project cost management
 Sets out the format and establishes the criteria for planning,
structuring, estimating, budgeting, and controlling project
costs.
 Documents cost management processes and their associated
tools and techniques

Cost Management Plan
Establishes
 Level of accuracy
 Level of precision
 Units of measure
 Organizational procedures links
 Control thresholds
 Rules of performance measurement
 Reporting formats
 Process descriptions
 Additional details

Estimate Costs
Plan Cost
Management
Estimate
Costs
Determine
Budget

Cost Estimating Vs. Cost
Budgeting
 Cost Estimating: Developing an approximation of the costs of
the resources needed to complete project activities
 Cost Budgeting: Aggregating the estimated costs of individual
activities of work packages to establish a cost baseline

Estimate Costs
 Cost
Management
Plan
 Scope Baseline
 Project Schedule
 Human Resource
Plan
 Risk Register
 Enterprise
Environmental
Factors
 Org. Process
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
 Group Decision-
Making
Techniques
 Activity Cost
Estimates
 Basis of
Estimates
 Project
Document
Updates

Analogous Estimating
 Using cost of previous similar projects as basis for estimating.
 Less Costly BUT less accurate.
 Used when information is limited (early phases).
 Reliable when previous projects are similar in fact, not just in
appearance.

Parametric Estimating
 Uses relationship between historical data and certain
parameters (cost per square meter, cost per meter, etc).

Bottom-Up Estimating
 A method for estimating a component of work.
 The cost is estimated for individual work packages or
activities, and they are then summarized or “rolled-up” to
higher levels.
 Cost and accuracy are influenced by the size and complexity
of the individual package or activity.

Vendor Bid analysis
 Includes analysis of what the project should cost, based on
responsive bids from qualified vendors.

Activity Cost Estimates
 A quantitative assessment of the likely costs of the resources
required to complete project activities.

Basis of Estimates
 Documentation of basis of estimates (how it was developed).
 Documentation of assumptions made.
 Documentation of any known constraints.
 Indication of range of estimates.
 Indication of confidence level of the final estimate.

Cost Elements
 Human Resources – Labor
 Hour rate, fringe benefits, overtime, overhead, per diem
 Equipment & Software
 Depreciation, purchase cost, support & Maintenance
 Facilities
 Rent, depreciation, utilities, admin overhead
 Supplies
 Stationary, food, leisure, gas for cars, tickets
 Special expenses

Types of Cost
• Variable Costs
– Change with the amount of production/work
– e.g. material, supplies, wages
• Fixed Costs
– Do not change as production change
– e.g. set-up, rental
• Direct Costs
– Directly attributable to the work of project
– e.g. team travel, recognition, team wages
• Indirect Costs
– overhead or cost incurred for benefit of more than one project
– e.g. taxes, fringe benefit, janitorial services

Project Management
Professional
PMP®
Chapter 7: Cost / 7.3 Determine Budget

Determine Budget
Plan Cost
Management
Estimate
Costs
Determine
Budget

Determine Budget
 The process of aggregating the estimated costs to individual
activities or work packages to establish an authorized cost
baseline.

Determine Budget
Cost
Management
Plan
Scope Baseline
Activity Cost
Estimates
Basis of Cost
Estimates
Project
Schedule
Risk Register
Resource
Calendars
Agreements
Organizational
Process Assets
Cost Aggregation
Reserve Analysis
Expert Judgment
Historical
Relationships
Funding Limit
Reconciliation
Cost
Performance
Baseline
Project Funding
Requirements
Project
Document
Updates

Funding Limit Reconciliation
 The expenditure of funds should be reconciled with any
funding limits on the commitment of funds for the project.
 Variance between the funding limits and the planned
expenditures sometimes necessitate the rescheduling of work
to level out the rate of expenditures.
 Can be accomplished by placing imposed date constraints for
work into the project schedule.

Cost Performance Baseline
 Time-phased budget at completion (BAC) used as basis
against which to measure, monitor, and control overall cost
performance.

Cost Performance Baseline

Cost Aggregation
• Reserves & risk management are important
while estimating!
– Contingency reserves:  Cost Baseline
the cost impacts of the remaining risk
– Management reserves:  Cost Budget
extra fund to cover unforeseen risk or
changes to the project
Activity estimates
Work package estimates
Control account estimates
Project estimates
Contingency reserves
Management reserves
Cost baseline
Cost Budget

Contingency Reserves
 Contingency reserves is usually percentage of total estimate
or based on risk analysis, to account for the risks that are
“known unknowns” of the project.
 Under the control of the project manager.

Management Reserves
 Budgets reserved for unplanned, but potentially required
changes to project scope. These are the risks that are
“unknown unknowns”.
 Under the control of organization’s management.

Cost Budgeting
1. Activities
$75
$25 $25$25
$100 $100
$275
$400
$675
$225
$900
$140
$1040
2. Work
packages
3. Control
Account
4. Project
5.Contingency
Reserve
6.Cost
Baseline
7.Management
Reserve
8.Cost Budget

Project Selection Methods
System Description
Benefit Measurement
Models (Economic
Models)
Analyze the predicted value of the completed projects in different
ways.
May present the value in terms of:
 Benefit Cost Ratio (BCR)
 Return on Investment (ROI)
 Present Value (PV) & Net Present Value (NPV)
 Internal Rate of Return (IRR)
 Opportunity Cost
Mathematical Models
(Constrained
Optimization)
Uses different types of mathematical formulas and algorithms to
determine the optimal course of action.
 Linear programming
 Nonlinear programming
 Dynamic programming
 Integer Programming
 Multi-objective programming

Benefit Measurement Models (Economic Models)
Accounting Concept Description Keys for Project Selection Notes
Present value (PV)
Value today of future cash
flows.
The higher the PV, the better. PV= FV/(1+r)n
Net present value (NPV)
Present value of cash inflow
(benefits) minus present
value of cash outflow (costs).
A negative NPV is
unfavorable. The higher the
NPV, the better.
Accounts for different project
durations.
Internal rate of return (IRR)
The interest rate that makes
the net present value of all
cash flow equal zero.
The higher the IRR, the
better.
The return that a company would
earn if it invests in the project.
Payback period
The number of time periods
needed to hit the break-even
point.
The lower the payback
period, the better.
Benefit cost ratio (BCR)
A ratio identifying the
relationship between the
cost and benefits of a
proposed project.
A BCR less than 1 is
unfavorable. The higher the
BCR, the better.
Opportunity cost
The difference in return
between a chosen
investment and one that is
passed up.
Sunk costs
A cost that has been incurred
and cannot be reversed.
This should not be a factor in
project decisions.

Present Value (PV) and (NPV)
• Present Value (PV) – Present Value of future Cash flows. Higher the better.
• NOTE: present value and NPV are only mention once or twice on the exam
• You will not have to calculate it, nor know formula, just understand the concept
• Amount of money is always more valuable sooner than later, as this enables to take advantage of
investment opportunities.
• Higher PV more preferable project. A potential investment project is selected, if value of NPV is
>= ZERO
• PV = FV / (1 + i) n
• Example:
• Project X is expected to make $50,000 in two years. Project Y is expected to make
to $80,000 in three years. If the cost of capital is 5 percent, which project to choose?
• Using PV formula, PV = FV / (1 + i) n , PV for Project X is $69,107 and Project Y is $45,351.
• Project Y will return the highest investment to the company and should be chosen over Project X.

Net Present Value
 The present value of total benefits (income or revenue) minus
the cost over many time periods.
 Allows for comparison of many projects, to select the best to
initiate.
 If NPV is +ve: the investment is a good choice.
 The project with highest NPV is the best.

Net Present Value
 NPV=  (FV/ (1+i)n)
 Where FV= Future Value
 i= Interest Rate
 n= Number of period intervals

Net Present Value Example
Note that
totals are
equal, but
NPVs are
not because
of the time
value of
money

Internal Rate of Return (IRR)
• This is just another way of interpreting the benefit from the project.
• It looks at the cost of the project as the capital investment and translates the profit into the
interest rate over the life of that investment.
• Calculations for IRR are not part of this certification. It is enough if you understand that the
greater the value for IRR, the more beneficial the
• Example:
• You have two projects to choose from: Project A with an IRR of 21%, or project B with an IRR of
15%, which once you prefer?
• Answer: Project A.

Internal Rate of return (IRR)
Is the interest rate at which the costs of the
investment lead to the benefits of the investment.
The project with highest IRR is the best.

Payback Period
 The period of time required for the return on an investment
to "repay" the sum of the original investment.
 For example, a $1000 investment which returned $500 per
year would have a two year payback period.
 The project with lowest payback period is the best

Payback Period
• The payback period is the length of time required to recover the initial cash outlay on the project.
• For example, if a project involves a cash outlay of 600,000$ and generates cash inflows of.
100000$, 150000$, 150000$ and 200000$ in the first, second, third and fourth years respectively,
• its pay back period is 4 years because the sum of cash flows during the four years is equal to the
initial outlay. According to the payback criterion,
• the shorter the payback period, the more desirable the project.
• Payback period = cost of period or investment / Annual cash flow
• Example:
• You have two projects to choose from , Project A with payback period of 6 months or project B
with payback period of 18 months, which one would you prefer?
• Answer : Project A

Benefit Cost Ratio
• This is the value obtained by dividing the benefit by the cost.
• The greater the value, the more attractive the project
• A benefit cost ration >1 means the benefit are grater than the cost
• A benefit cost ration <1 means the cost are grater than the benefit
• A benefit cost ration =1 means the benefit are equal the cost
• For example, if the projected cost of producing a product is 10,000$, and you expect to sell it for
40,000$,
then the BCR is equal to 40,000$/10,000$, which is equal to 4. For the benefit to exceed cost, the
BCR must be greater than 1.
Example:
If BCR of project A is 2.3, and the BCR of project B is 1.7, which project would you select?
Answer : Project A

Charting the Payback Period

Economic Value Added (EVA)
• Economic Value Added (EVA) – Value added to organization by the project
• Economic value should rarely appear in questions or choices

Opportunity Cost.
• Opportunity cost (opportunity lost) is the NPV of the next best project, you are not doing,
because you have decided to invest in a project.
• Let us assume that you have 100,000 rupees and you are investing this money in project ‘A’,
whose NPV=200,000 and because of this you are unable to do project ‘B’, whose NPV=150,000 or
project ‘C’, whose NPV = 120,000, then the opportunity cost is 150,000, which is the NPV of
project ‘B’, which is the next best option after ‘A’.
• Example:
• You have two projects to choose from: Project A with an NPV of 45,000$, or project B with an NPV
of 85,000$, what Is the opportunity cost of selecting project B ?
• Answer : 45,000$

Sunk Cost
• Sunk Cost – Cost already incurred. This should not be taken into account while taking
decision.
• Are expended costs; accounting standards that sunk costs should not be considered
when deciding whether to continue with a troubled project.
Example :
You have project with an initial budget of 1,000,000 $ , you are halfway through the
project and have spend 2,000,000 $, do you consider the 1,000,000 $ over budget
when determining whether to continue with the project.
• Answer: NO, the money spent is gone

Law of Diminishing return
• Law of Diminishing return – After a point, adding more
resources will not have proportional benefit.
• Example:
• A single programmer may produce at 1 module per hour. With
second a programmer the two may produce 1.75 module/ hour.
With third programmer, the group may produce 2.25 modules/
hour

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