Project Cost Management

Definition Project Cost Management is a group of processes required to ensure the project is completed within the approved budget. Processes There are following processes which are part of Project Cost Management. Resource Planning Cost Estimating Cost Budgeting Cost Control Resource Planning Determining physical resources needed (i.e., material, equipment, and people) and what quantities of each should be used and when they would be needed to perform project activities Cost Estimating Process of developing an approximation (or estimate) for the cost of the resources necessary to complete the project activities. There is a difference in Cost Estimating and Pricing Cost estimating: Assessing how much it will cost the organization to provide the product or service Pricing: Assessing how much the organization will charge for the product or service. Cost estimating also includes identifying and considering cost alternatives. Cost Estimating process is a part of "Project Planning Phase". (1) Cost Estimating - Inputs (1.1) Enterprise Environmental Factors: The Cost Estimating process considers: Marketplace conditions: What products, services, and results are available in the marketplace, from whom, and under what terms and conditions Commercial databases: Resource cost rate information is often available from commercial databases that track skills and human resource costs, and provide standard costs for material and equipment. (1.2) Organizational Process Assets: Existing formal and informal cost estimating-related policies, procedures, and guidelines are considered in developing the cost management plan. (1.3) Project Scope Statement: The project scope statement describes the business need,justification, requirements, and current boundaries for the project. It provides important information about project requirements that is considered during cost estimating (1.4) Work Breakdown Structure: Used to organize the cost estimates and to ensure that the cost of all identified work has been estimated. (1.5) WBS Dictionary: The WBS dictionary and related detailed statements of work provide an identification of the deliverables and a description of the work in each WBS component required to produce each deliverable. (1.6) Project Management Plan: The project management plan provides the overall plan for executing, monitoring, and controlling the project, and includes subsidiary plans that provide guidance and direction for cost management planning and control. Information like Resource requirements, Resource rates, and various Risks involved are considered while preparing cost estimate (2) Cost Estimating - Tools & Techniques (1.1) Analogous estimating : Analogous estimating is also called top-down estimating and uses the actual cost of a previous, similar project as the basis for estimating the cost of the current project. It is frequently used to estimate total project costs when there is a limited amount of detailed information about the project. Analogous estimating is a form of expert-judgment. (1.2) Determine Resource Cost Rates: The person determining the rates or the group preparing the estimates must know the unit cost rates, such as staff cost per hour and bulk material cost per cubic yard, for each resource to estimate schedule activity costs. (1.3) Bottom-up estimating : Estimating the cost of individual work items and then rolling up the costs to arrive at a project total - more accurate. (1.4) Parametric modeling : Using project characteristics (or parameters) in a mathematical model to predict costs (e.g., price per square foot). (1.5) Project Management Software: Project management software, such as cost estimating software applications, computerized spreadsheets, and simulation and statistical tools, are widely used to assist with cost estimating. (1.6) Vendor Bid Analysis: In cases where projects are won under competitive processes, additional cost estimating work can be required of the project team to examine the price of individual deliverables, and derive a cost that supports the final total project cost. (1.7) Reserve Analysis: Many cost estimators include reserves, also called contingency allowances, as costs in many schedule activity cost estimates. (1.8) Cost of Quality: Cost of quality can also be used to prepare the schedule activity cost estimate. (3) Cost Estimating - Outputs (3.1) Activity Cost estimates : Quantitative assessments of the cost of resources (e.g., units of currency or staff hours). (3.2) Activity Supporting detail: Description of estimated scope of work Documentation of the basis for the estimate Documentation of any assumptions made Range of possible results (3.3) Requested Changes: The Cost Estimating process may generate requested changes that may affect the cost management plan , activity resource requirements, and other components of the project management plan. (3.4) Cost Management Plan Update: If approved change requests result from the Cost Estimating process, then the cost management plan component of the project management plan is updated if those approved changes impact the management of costs. Cost Budgeting Allocating the value of the overall cost estimate to individual work items, in order to establish a cost baseline for measuring project performance. Cost Budgeting estimating is part of "Project Planning Phase". (1) Cost Budgeting - Input (1.1) Project Scope Statement: (1.2) Work Breakdown Structure: The project work breakdown structure (WBS) provides the relationship among all the components of the project and the project deliverables. (1.3) WBS Dictionary: The WBS dictionary and related detailed statements of work provide an identification of the deliverables and a description of the work in each WBS component required to produce each deliverable. (1.4) Activity Cost Estimates: The cost estimates for each schedule activity within a work package are aggregated to obtain a cost estimate for each work package. (1.5) Activity Cost Estimate Supporting Detail (1.6) Project Schedule: The project schedule includes planned start and finish dates for the project.s schedule activities, schedule milestones, work packages, planning packages, and control accounts. This information is used to aggregate costs to the calendar periods when the costs are planned to be incurred. (1.7) Resource Calendars (1.8) Contract: Contract information related to what products, services, or results have been purchased . and their costs . are used in developing the budget. (1.9) Cost Management Plan: The cost management plan component of the project management plan and other subsidiary plans are considered during cost budgeting. (2) Cost Budgeting - Tools & Techniques (2.1) Cost Aggregation: Schedule activity cost estimates are aggregated by work packages in accordance with the WBS. The work package cost estimates are then aggregated for the higher component levels of the WBS, such as control accounts, and ultimately for the entire project. (2.2) Reserve Analysis: Reserve analysis establishes contingency reserves, such as the management contingency reserve, that are allowances for unplanned, but potentially required, changes. Such changes may result from risks identified in the risk register (2.3) Parametric Estimating: The parametric estimating technique involves using project characteristics (parameters) in a mathematical model to predict total project costs. (2.4) Funding Limit Reconciliation: Large variations in the periodic expenditure of funds are usually undesirable for organizational operations. Therefore, the expenditure of funds is reconciled with the funding limits set by the customer or performing organization on the disbursement of funds for the project. (3) Cost Budgeting - Output (3.1) Cost baseline : Time phased budget that will be used to measure and monitor the cost performance of the project. (3.2) 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 a margin, to allow for either early progress or cost overruns. (3.3) Cost Management Plan updates: If approved change requests result from the Cost Budgeting process, then the cost management plan component of the project management plan is updated if those approved changes impact the management of costs. (3.4) Requested Changes: The Cost Budgeting process can generate requested changes that affect the cost management plan or other components of the project management plan. Cost Control 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 Monitoring cost performance to detect variances from the plan. Recording all appropriate changes accurately against the cost baseline Ensuring that all appropriate changes are recorded. Preventing incorrect, inappropriate, or unauthorized changes from being included. Informing the appropriate stakeholders of authorized changes. Act to bring expected costs within acceptable limits. Analyzing positive and negative variances. Cost Control process is part of "Project Controlling Phase". (1) Cost Control - Input (1.1) Cost baseline (1.2) Project Funding Requirements (1.3) Performance reports : Information on project scope and cost performance. Alert project management team to future problems. (1.4) Work Performance Information (1.5) Approved Change requests : Approved change requests from the Integrated Change Control process (Section 4.6) can include modifications to the cost terms of the contract, project scope, cost baseline, or cost management plan. (1.6) Project Management Plan: The project management plan and its cost management plan component and other subsidiary plans are considered when performing the Cost Control process. (2) Cost Control - Tools & Techniques (2.1) Cost change control system : Procedures used for making changes to the cost baseline. Paperwork Tracking system Approval levels (2.2) Performance measurement analysis: Assessment of the magnitude of any variation, the cause of the variance, and the corrective action needed. (2.3) 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. (2.4) Project Performance Reviews: Performance reviews compare cost performance over time, schedule activities or work packages overrunning and under running budget (planned value), milestones due, and milestones met. (2.5) Project Management Software: Project management software, such as computerized spreadsheets, is often used to monitor PV versus AC, and to forecast the effects of changes or variances. (2.6) Variance Management: The cost management plan describes how cost variances will be managed, for example, having different responses to major or minor problems. The amount of variance tends to decrease as more work is accomplished. (3) Cost Control - Outputs (3.1) Cost Estimates updates : Revised schedule activity cost estimates are modifications to the cost information used to manage the project. (3.2) Cost Baseline updates: Budget updates are changes to an approved cost baseline. (3.3) Performance Measurements: The calculated CV, SV, CPI, and SPI values for WBS components, in particular the work packages and control accounts, are documented and communicated. (3.4) Forecasted Completion: Either a calculated EAC value or a performing organization-reported EAC value is documented and the value communicated to stakeholders. Either a calculated ETC value or a reported ETC value provided by the performing organization is documented and the value communicated to stakeholders. (3.5) Requested Changes: Analysis of project performance can generate a request for a change to some aspect of the project. (3.6) Recommended Corrective Actions: Corrective action is anything done to bring expected future project performance in line with the project plan. (3.7) Organizational Process Assets updates: Lessons learned are documented so they can become part of the historical databases for both the project and the performing organization. (3.8) Project Management Plan updates: Schedule activity, work package, or planning package cost estimate, as well as the cost baseline , cost management plan, and project budget documents are components of the project management plan. All approved change requests affecting those documents are incorporated as updates to those documents. Last Moment Revision: Actual Cost (AC): AC is the total cost incurred in accomplishing work on the schedule activity or WBS component during a given time period. It is also referred as ACWP (Actual Cost of Work Performed). Budget At Completion (BAC): The estimated total cost of the project when done. Budgeted Cost of Work Performed (BCWP): The sum of the approved cost estimates for activities completed during a given period (usually project-to-date). Budgeted Cost of Work Scheduled (BCWS): The sum of the approved cost estimates for activities scheduled to be performed during a given period. Chart of Accounts: Any numbering system used to monitor project costs by category (e.g., labor, supplies, materials). The project chart of accounts is usually based upon the corporate chart of accounts of the primary performing organization. Code of Accounts: Any numbering system used to uniquely identify each element of the WBS. Contingency Reserve: A separately planned quantity used to allow for future situations which may be planned for only in part ("known unknowns"). Contingency reserves are intended to reduce the impact of missing cost or schedule objectives. Contingency reserves are normally included in the project's cost and schedule baselines. Cost Budgeting: Allocating the cost estimates to individual project components. Cost Control: Controlling changes to the project budget. Cost Estimating: Estimating the cost of the resources needed to complete project activities. Cost Performance Index (CPI): The ratio of budgeted costs to actual costs (BCWP / ACWP). CPI is often used to predict the magnitude of a possible cost overrun using the following formula: original cost estimate/CPI = projected cost at completion. If CPI is less than 1, this means that the project is over budget. Cost of Quality: Total cost for keeping the quality up to a defined standard. It includes cost like performing reviews, audits etc. Cost Variance (CV): Any difference between the estimated cost of an activity and the actual cost of that activity. In earned value, CV = BCWP-ACWP. Earned Value: A method for measuring project performance. It compares the amount of work that was planned with what was actually accomplished to determine if cost and schedule performance is as planned. Earned Value (EV) is the physical work completed to date and the authorized budget for that. It is also referred as BCWP (Budgeted Cost of Work Performed). Estimate at Completion (EAC): The expected total cost of an activity, a group of activities, or of the project when the defined scope of work has been completed. Most techniques for forecasting EAC include some adjustment of the original cost estimate based on project performance to date. EAC = Actuals-to-date + ETC. Estimate To Complete (ETC): The expected additional cost needed to complete an activity, a group of activities, or the project. Most techniques for forecasting ETC include some adjustment to the original cost estimate based on project performance to date. This is also known as Forecast Final Cost. Fixed Costs: Costs that do not change based on the number of units. These costs are nonrecurring. Life Cycle Costing: The concept of including acquisition, operating, and disposal costs when evaluating various alternatives. Also known as the total cost of ownership. Management Reserve: A separately planned quantity used to allow for future situations which are impossible to predict. ("unknown unknowns") Management reserves are intended to reduce the risk of missing cost or schedule objectives. Use of management reserves requires a change to the project's cost baseline. Parametric Estimating: An estimating technique that uses a statistical relationship between historical data and other variables to calculate an estimate. Payback Period: The number of time periods up to the point at which cumulative revenues exceed cumulative costs and, therefore, the project has turned a profit. Percent Complete (PC): The percentage of the amount of work which has been completed on an activity or group of activities. 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. It is also referred as BCWS (Budgeted Cost of Work Scheduled). Project Cost Management: A subset of project management that includes the processes required to ensure that the project is completed within the approved budget. Schedule Performance Index (SPI): The ratio of work performed to work scheduled. (BCWP / BCWS). Schedule Variance (SV): Any difference between the scheduled completion of an activity and the actual completion of that activity. In earned value, BCWP - BCWS. Value Analysis: A cost-reduction tool that involves careful analysis of a design or item to identify all the functions and the cost of each. It considers whether the function is necessary and whether it can be provided at a lower cost without degrading performance or quality. Working Capital: Current assets minus liabilities. Cost baseline refers to what is expected to be spent on the project. It is usually an S-curve. That is the expenditure is less in the beginning, and the end. The expenditure is maximum during the middle of the project. BCWS: Baseline, Scheduled or Planned Costs BCWP: Amount budgeted for the work performed ACWP: Actual Cost of Work Performed BAC: Total Budgeted Costs EAC: Estimated at Completion VAC: Variance at Completion. The difference between the total amount the project was supposed to cost (BAC) and the amount the project is now expected to cost (EAC). VAC = BAC - EAC CPI = BCWP / ACWP (measures efficiency) CV = BCWP - ACWP SPI = BCWP / BCWS (measures efficiency) SV = BCWP - BCWS Percent Complete (accomplished): BCWP / BAC (real value of work accomplished) Percent Spent: ACWP / BAC EAC = BAC / CPI or EAC = ACWP + ETC ETC = EAC - ACWP

Project Time Management

Project Time Management

Definition Project Time Management is a group of processes required to ensure timely completion of the project. Processes There are following processes which are part of Project Time Management. Activity Definition Activity Sequencing Activity Resource Estimating Activity Duration Estimating Schedule Development Schedule Control Activity Definition Identify the activities that must be performed to produce the project deliverables. In other words activity definition defines the activities that must be performed to meet the project objectives The Activity Definition process will identify the deliverables at the lowest level in the work breakdown structure (WBS), which is called the work package. Activity Definition process is a part of "Project Planning Phase". (1) Activity Definition - Inputs (1.1) Enterprise Environmental Factors: Enterprise environmental factors that can be considered include availability of project management information systems and scheduling software tools. (1.2) Organizational Process Assets : Organizational process assets contain the existing formal and informal activity planning-related policies, procedures, and guidelines that are considered in developing the activity definitions. (1.3) Project Scope Statement: The project deliverables, constraints, and assumptions documented in the project scope statement are considered explicitly during activity definition. (1.4) Work Breakdown Structure : The work breakdown structure is a primary input to schedule activity definition. (1.5) WBS Dictionary : The WBS dictionary is a primary input to schedule activity definition. (1.6) Project Management Plan: The project management plan contains the schedule management plan, which provides guidance on the development and planning of schedule activities and the project scope management plan. (2) Activity Definition - Tools & Techniques (2.1) Decomposition: Subdividing project activities into smaller, more manageable components (2.2) Template : An activity list from a previous project or an activity list for a WBS element from the current project. (2.3) Rolling Wave Planning: Rolling wave planning is a form of progressive elaboration planning where the work to be accomplished in the near term is planned in detail at a low level of the WBS. The work to be performed within another one or two reporting periods in the near future is planned in detail as work is being completed during the current period. (2.4) Expert Judgment: Project team members or other experts who are experienced and skilled in developing detailed project scope statements, WBSs, and project schedules can provide expertise in defining activities. (2.5) Planning Component: Two planning components are: Control Account: A management control point can be placed at selected management points of the work breakdown structure above the work package level. These control points are used as a basis for planning when associated work packages have not yet been planned. All work and effort performed within a control account is documented in a control account plan. Planning Package: A planning package is a WBS component below the control account, but above the work package. (3) Activity Definition - Outputs (3.1) Activity list : A list of all the activities that will be performed on the project and a description of each activity. (3.2) Activity Attributes: These activity attributes are an extension of the activity attributes in the activity list and identify the multiple attributes associated with each schedule activity. (3.3) Milestone List: The list of schedule milestones identifies all milestones and indicates whether the milestone is mandatory or optional. (3.2) Requested Changes : The Activity Definition process can generate requested changes that can affect the project scope statement and WBS. Activity Sequencing Establishing the activity logic and the dependencies needed to create a realistic and achievable schedule. Activity Sequencing process is a part of "Project Planning Phase". (1) Activity Sequencing - Inputs (1.1) Activity list: A list of activities, output from activities definition. (1.2) Activity Attributes: These activity attributes are an extension of the activity attributes in the activity list and identify the multiple attributes associated with each schedule activity. (1.3) Milestone List (2) Activity Sequencing - Tools & Techniques (2.1) Precedence diagramming method (PDM ): Nodes represent activities and arrows show dependencies. This technique is also called activity-on-node (AON) and is the method used by most project management software packages. PDM includes four types of dependencies or precedence relationships: Finish-to-Start: Activity A must finish before Activity B can start. Start-to-Start: Activity A must start before Activity B can start. Finish-to-Finish: Activity A must finish before Activity B can finish. Start-to-Finish: Activity A must start before Activity B can finish. Here first two type of dependencies are most frequently used and last two dependencies are least frequently used. (2.2) Arrow Diagramming Method(ADM): This method of constructing a project network diagram uses arrows to represent the activities and connects them at nodes to show their dependencies. This technique is also called activity-on-arrow( AOA) and less prevalent then PDM. ADM uses only finish-to-start dependencies and may require the use of dummy activities to define all logical relationship correctly. (2.3) Conditional Diagramming Methods: Diagramming techniques such as Graphical Evaluation & Review Technique ( GERT) and System Dynamics models allow for non-sequential activities such as loops or conditional branches. Neither PDM nor ADM allows loops or conditional branches. (2.4) Network Templates: Standardized networks can be used to expedite the preparation of Project Network Diagram. This can include an entire project or only a portion of it. Portion or a network are often refrred to as subnet or fragments. (2.5) Dependency Determination:Three types of dependencies are used to define the sequence among the activities. Mandatory dependencies (Hard logic): Determined by the nature of work to be done. Discretionary dependencies (Soft logic): Defined by the project management team. External dependencies : Relationships between project activities and non-project activities. E.g. delivery of hardware of an external supplier. (2.6) Applying Leads and Lags: A lead allows an acceleration of the successor activity and A lag directs a delay in the successor activity. (3) Activity Sequencing - Outputs (3.1) Project Schedule network diagram : Schematic displays of project's activities and logical relationships (dependencies) between them A Project Network Diagram is often referred to as a PERT chart. Historically PERT( Program Evaluation and Revue Technique) was specific type of Network diagram. We will see complete formula for PERT in next process (3.2) Activity list updates : Adding, dividing or redefining activities so that the relationships are correctly diagrammed. (3.3) Activity Attributes updates: The activity attributes are updated to include the defined logical relationships and any associated leads and lags. (3.4) Requested Changes: Preparation of project logical relationships, leads, and lags might reveal instances that can generate a requested change to the activity list or the activity attributes. Activity Resource Estimating Estimating schedule activity resources involves determining what resources like persons, equipment, or materiel etc. and what quantities of each resource will be used, and when each resource will be available to perform project activities. Activity Resource Estimating process is part of "Project Planning Phase". (1) Activity Resource Estimating - Input (1.1) Enterprise Environmental Factors: The Activity Resource Estimating process uses the infrastructure resource availability information included in enterprise environmental factors (1.2) Organizational Process Assets: Organizational process assets provide the policies of the performing organization regarding staffing and the rental or purchase of supplies and equipment that are considered during activity resource estimating. (1.3) Activity List: The activity list identifies the schedule activities for resources that are estimated. (1.4) Activity Attributes: The activity attributes developed during the activity definition process provide the primary data input for use in estimating those resources required for each schedule activity in the activity list. (1.5) Resource Availability: Information on which resources such as people, equipment, and materiel etc are potentially available is used for estimating the resource types. This knowledge includes consideration of various geographical locations from which the resources originate and when they may be available. (1.6) Project Management Plan: The schedule management plan is a component part of the project management plan that is used in Activity Resource Estimating. (2) Activity Resource Estimating - Tools & Techniques (2.1) Expert Judgment: Expert judgment is often required to assess the resource-related inputs to this process. Any group or person with specialized knowledge in resource planning and estimating can provide such expertise. (2.2) Published Estimating Data: Several companies routinely publish updated production rates and unit costs of resources for an extensive array of labor trades, materiel, and equipment for different countries and geographical locations within countries. (2.3) Alternatives Analysis: Many schedule activities have alternative methods of accomplishment. They include using various levels of resource capability or skills, different size or type of machines, different tools etc. (2.4) Project Management Software: Project management software has the capability to help plan, organize, and manage resource pools and develop resource estimates. (2.5) Bottom-up Estimating: The resource needs of each lower, more detailed piece of work are estimated, and these estimates are then aggregated into a total quantity for each of the schedule activity.s resources. (3) Activity Resource Estimating - Outputs (3.1) Activity Resource Requirements: The output of the Activity Resource Estimating process is an identification and description of the types and quantities of resources required for each schedule activity in a work package (3.2) Activity Attributes updates: The types and quantities of resources required for each schedule activity are incorporated into the activity attributes. (3.3) Resource Breakdown Structure : The resource breakdown structure (RBS) is a hierarchical structure of the identified resources by resource category and resource type. (3.4) Resource Calendar updates: A composite resource calendar for the project documents working days and nonworking days that determine those dates on which a specific resource, whether a person or materiel, can be active or is idle. (3.5) Requested Changes: The Activity Resource Estimating process can result in requested changes to add or delete planned schedule activities within the activity list. Activity Duration Estimating Estimating the number of work periods likely to be needed to complete each activity. Activity duration estimating is part of "Project Planning Phase". (1) Activity Duration Estimating - Input (1.1) Enterprise Environmental Factors: One or more of the organizations involved in the project may maintain duration estimating databases and other historical reference data. This type of reference information is also available commercially. (1.2) Organizational Process Assets : Historical information on the likely durations of many categories of activities is often available. One or more of the organizations involved in the project may maintain records of previous project results that are detailed enough to aid in developing duration estimates. (1.3) Project Scope Statement: The constraints and assumptions from the project scope statement are considered when estimating the schedule activity durations. (1.4) Activity List & Attributes (1.5) Activity Resource Requirements: Duration estimates are influenced by resource effort and assignments. (1.6) Resource Calendar: The composite resource calendar developed as part of the Activity Resource Estimating process, includes the availability, capabilities, and skills of human resources. (1.7) Project Management Plan: The project management plan contains the risk register and project cost estimates Risk Register: has information on identified project risks that the project team considers when producing estimates of activity durations and adjusting those durations for risks. Activity Cost Estimates: The project activity cost estimates, if already completed, can be developed in sufficient detail to provide estimated resource quantities for each schedule activity in the project activity list. (2) Activity Duration Estimating - Tools & Techniques (2.1) Expert judgment: Used with historical information. (2.2) Analogous estimates : Also called Top-down estimating, Uses duration of a previous, similar activity as the basis. Its form of expert judgement. (2.3) Parametric Estimating: Estimating the basis for activity durations can be quantitatively determined by multiplying the quantity of work to be performed by the productivity rate. (2.4) Three-Point Estimates: Three-point estimates are based on determining three types of estimates: Most likely:The activity duration is based on a average-case scenario of what is described in the most likely estimate. Optimistic: The activity duration is based on a best-case scenario of what is described in the most likely estimate. Pessimistic : The activity duration is based on a worst-case scenario of what is described in the most likely estimate. (2.5) Reserve Analysis ( Contingency ): Project teams may choose to incorporate an additional time frame, called time reserve, contingency or buffer, that can be added to the activity duration or elsewhere in the schedule as recognition of schedule risk. (3) Activity Duration Estimating - Output (3.1) Activity Duration estimates : Quantitative assessments of the likely number of work periods required to complete an activity. (3.2) Activity attributes updates: The activity attributes are updated to include the durations for each schedule activity, the assumptions made in developing the activity duration estimates, and any contingency reserves. Schedule Development Determining the start and finish dates of project activities. If start and finish dates are not realistic, the project is unlikely to be finished on schedule. Schedule development process is part of "Project Planning Phase". (1) Schedule Development - Input (1.1) Organizational Process Assets (1.2) Project Scope Statement (1.3) Activity List & Attributes (1.4) Project Schedule Network Diagrams (1.5) Activity Resource Requirements (1.6) Resource Calendars (1.7) Activity Duration Estimates (1.8) Project Management Plan (2) Schedule Development - Tools & Techniques (2.1) Mathematical analysis: Calculating theoretical early and late start and finish dates for all activities Critical Path Method (CPM): Calculates a single, deterministic early and late start and finish date for each activity, to be used to determine which activities must be completed on time to avoid impacting the finish date of the project. The focus of CPM is calculating float to determine which activities have the least scheduling flexibility. Program Evaluation and Review Technique (PERT): Uses a weighted average duration estimate to calculate duration. Uses the probability of an estimate.s accuracy. Expected Time = (Low + 4*Medium + High) / 6 Graphical Evaluation and Review Technique ( GERT ): allows for probabilistic treatment of both network logic and activity duration estimates ( ie. some activities may not be performed at all, come may be performed only in part and others may be performed more than once. (2.2)Duration Compression: Duration compression is a special case of mathematical analysis that looks for ways to shorten the project schedule without changing the project scope. Duration compression includes techniques such as: Crashing : Project crashing is a method for shortening the project duration by reducing the time of one or more of the critical project activities to less than its normal activity time. The objective of crashing is to reduce project duration while minimizing the cost of crashing. CRASHING is reducing project time by expending additional resources. CRASH TIME is an amount of time an activity is reduced. CRASH COST is the cost of reducing activity. Fast Tracking: Doing activities in parallel that would normally be done in sequence ( eg. starting to write code on a software project before the design is complete). Fat tracking often results in rework and usually increases risk (2.3) Resource Leveling Heuristics: Allocate scare resources to critical path activities first etc. (2.4) Project Management Software: MSP etc are widely used to prepare a project schedule (2.5) Applying Calendars: Project calendars and resource calendars identify periods when work is allowed. Project calendars affect all activities. (2.6) Adjusting Leads and Lags: Since the improper use of leads or lags can distort the project schedule, the leads or lags are adjusted during schedule network analysis to develop a viable project schedule. (2.7) Schedule Model: Schedule data and information are compiled into the schedule model for the project. (2.8) Critical Chain Method: Critical chain is another schedule network analysis technique that modifies the project schedule to account for limited resources. Critical chain combines deterministic and probabilistic approaches. (2.9) What-If Scenario Analysis: This is an analysis of the question .What if the situation represented by scenario .X. happens?" (3) Schedule Development - Outputs (3.1) Schedule Development: Includes planned start and expected finish dates for each activity. (3.2) Schedule Model Data : Supporting data for the project schedule includes at least the schedule milestones, schedule activities, activity attributes and documentation of all identified assumptions and constraints. (3.3) Schedule Baseline: A schedule baseline is a specific version of the project schedule developed from the schedule network analysis of the schedule model. It is accepted and approved by the project management team as the schedule baseline with baseline start dates and baseline finish dates. (3.4) Resource requirement updates : Updates based on the results of resource leveling. (3.5) Activity Attributes updates (3.6) Project Calendar updates (3.7) Requested Changes: The Schedule Development process can create requested changes that are processed for review and disposition through the Integrated Change Control process (3.8) Project Management Plan updates Schedule Control Schedule control is concerned with, Determining the current status of the project schedule Influencing factors that cause schedule changes ensuring these are agreed upon Determining that the schedule has changed Managing the changes when and as they occur. Schedule Control process is a part of "Project Controlling Phase". (1) Schedule Control - Input (1.1) Schedule management plan: Defines how changes to the schedule will be managed. (1.2) Schedule Baseline : The approved project schedule is called the schedule baseline; provides the basis for measuring and reporting schedule performance. (1.3) Performance reports : Provide information on schedule performance, such as which planned dates have been met and which have not. (1.4) Approved Change requests: Change request may occur in many forms - oral or written , direct or indirect, externally or internally..... (2) Schedule Control - Tools & Techniques (2.1) Progress Reporting: The progress reporting and current schedule status includes information such as actual start and finish dates, and the remaining durations for unfinished schedule activities. (2.2) Schedule change control system : Defines the procedure for changing the project schedule. It includes the paper work, tracking system, and approval levels necessary for authorizing changes. Schedule change control should be integrated with the integrated change control system. (2.3) Performance measurement (Earned Value): Assessment of schedule variations to determine whether they require corrective actions. For example, a major delay on a noncritical activity may have little effect on the overall project while a much shorter delay on a critical activity may require immediate action. (2.4) Project Management software: For tracking planned dates against actual dates and forecasting. Useful tool for Schedule Control. (2.5) Variance Analysis : Comparing target dates with the actual/forecast start and finish dates. (2.6) Schedule Comparison Bar Charts : To facilitate analysis of schedule progress, it is convenient to use a comparison bar chart, which displays two bars for each schedule activity. One bar shows the current actual status and the other shows the status of the approved project schedule baseline. (3) Schedule Control - Output (3.1) Schedule Model Data updates : A schedule update is any modification to the schedule information that is used to manage the project. Revisions are special category of schedule updates. (3.2) Schedule Baseline updates: Schedule revisions are a special category of project schedule updates. Revisions are changes to the schedule.s start and finish dates in the approved schedule baseline. (3.3) Performance Measurements: The calculated schedule variance (SV) and schedule performance index (SPI) values for WBS components, in particular the work packages and control accounts, are documented and communicated to stakeholders. (3.4) Requested Changes: Schedule variance analysis, along with review of progress reports, results of performance measures, and modifications to the project schedule model can result in requested changes to the project schedule baseline. (3.5) Corrective action : Anything done to bring expected future schedule performance back in-line with the project plan. (3.6) Organizational Process Assets updates: Lessons learned documentation of the causes of variance, the reasoning behind the corrective actions chosen, and other types of lessons learned from schedule control are documented in the organizational process assets (3.7) Activity List & Attributes Updates (3.8) Project Management Plan updates Last Moment Revision: Activity : An element of work performed during the course of a project. (Normally has duration, cost, and resource requirements.) Baseline : The original plan plus or minus approved changes. Arrow Diagram Method (ADM) : A network diagramming technique in which activities are represented by arrows. The tail of the arrow represents the start and the head of the arrow represents the end of the activity. Activities are connected at points called nodes to illustrate the sequence in which activities are expected to be performed. Also called Activity-On-Arrow (AOA). Backward Pass : The calculation of late finish and start dates for the uncompleted portions of all network activities. Determined by working backwards through the network logic from the project's end date. Concurrent Engineering: Generally speaking, an approach to project staffing that calls for the implementers to be involved in the design phase. (sometimes confused with fast tracking.) Critical Activity : An activity on a critical path. Critical Path : The series of activities which determines the earliest completion of the project. The critical path is usually defined as those activities with float less than or equal to a specified value (usually zero). Control Account: A management control point where scope, budget, actual cost, and schedule are integrated and compared to earned value for performance management. Control points are places at selected management points of the WBS. Each control account may include one or more work package but each work package may be associated with only one control account. Discretionary dependencies (Soft logic): Defined by the project management team. Dummy Activity: An activity of zero duration used to show a logical relationship in the arrow diagramming method. Dummy activities are used when logical relationships cannot be completely or correctly described with regular activity arrows. Dummies are shown graphically as a dashed line headed by an arrow. Early Finish Date (EF): In the critical path method, the earliest possible date in which the uncompleted portions of an activity or project can complete. Can change as the project progresses. Early Start Date (ES): In the critical path method, the earliest possible date in which the uncompleted portions of an activity or project can start Can change as the project progresses. External dependencies : Relationships between project activities and non-project activities. E.g. delivery of hardware of an external supplier. Float: The amount of time that an activity may be delayed from its early start without delaying the project finish date. (Also called slack, total float, and path float). Forward Pass : The calculation of the early start and early finish dates for the uncompleted portions of all network activities. Free Float (FF): The amount of time an activity can be delayed without delaying the early start of any immediately succeeding activities. Gantt Chart: A graphic display of schedule-related information using bars.GERT is another type of network diagram. It can support looping. Hammock: An aggregate or summary activity. Hanger: An unintended break in a network path. Hangers are usually caused by missing activities or missing logical relationships. Lag: A modification of a logical relationship which directs a delay in the successor task. Lags are inserted waiting times in between tasks. For example Task B cannot start until three days after task A completes. Late Finish Date (LF): In the critical path method, the latest possible date that an activity may be completed without delaying a specified milestone (usually the project finish date). Late Start Date (SF): In the critical path method, the latest possible date that an activity may begin without delaying a specified milestone (usually the project finish date). Lead : A modification of a logical relationship which allows an acceleration of the successor task. For example, in a FS relationship with a 10 day lead, the successor can start 10 days prior to the completion of the predecessor. Mandatory dependencies (Hard logic): Determined by the nature of work to be done. Master Schedule: A summary level schedule which identifies the major activities and milestones. Milestone: A significant event in the project, usually completion of a major deliverable. Milestone Schedule: A summary level schedule which identifies the major milestones. Path Convergence: In mathematical analysis, the tendency of parallel paths of approximately equal duration to delay the completion of the milestone where they meet. Precedence Diagram Method (PDM): A network diagramming technique in which activities are represented by nodes. Activities are linked by precedence relationships to show the sequence in which the activities are to be performed. Program Evaluation and Review Technique (PERT): An event-oriented network analysis technique used to estimate project duration when there is a high degree of uncertainty with the individual activity duration estimates. Project Network Diagram: Any schematic display of the logical relationships of project activities. Always drawn from left to right to reflect project chronology. Often incorrectly referred to as a "PERT chart". Resource Leveling: Any form of network analysis in which start and finish dates are driven by resource management concerns.Resource leveling refers to keeping the resources same across the duration of the project. Resource-Limited Schedule: A project schedule whose start and finish dates reflect expected resource availability. The final project schedule should always be resource limited. Resource pool: Description of the available resources and the times they are available to work on the project Scheduled Finish Date (SF): The point in time work was scheduled to finish on an activity. The scheduled finish date is normally within the range of dates delimited by the early finish date and the late finish date. Scheduled Start Date (SS): The point in time work was scheduled to start on an activity. The scheduled start date is normally within the range of dates delimited by the early start and late start dates Simulation: involves calculating multiple project durations with different sets of activity assumptions. The most common technique is Monte Carlo Analysis, in which a distribution of probable results is defined for each activity and used to calculate a distribution of probable results for the total project. Time-Scaled Network Diagram: Any project network diagram drawn is such a way that the positioning and length of the activity represents its duration. Essentially, it is a bar chart that includes network logic. Work Item: Synonymous with activity. If a project has more than one critical paths then the risk to the project increases. Longest path through the network diagram is called the critical path. The activities on the critical paths are called critical activities. Slack or Float is the amount of time a task can be delayed without delaying the project. Tasks on the critical path have zero float. Bar charts (or Gantt charts) are used to display tasks and their dates in a graphical fashion. They are used to display information of the type task 1 is scheduled from date A to date B. Typically the date range is displayed in the X-axis and the tasks on the Y-axis. Bar charts do not show task dependencies. They are generally used to track progress and show to the team. Milestone charts are similar to bar charts but display only major events. They display major milestones (for example bridge design completed). They are used to report status to Management.

Project Scope Management

Project Scope Management

Initiation

Formal authorization that the project exists

Recognition the project should continue into the next phase

Definition Project Scope Management is a group of processes required to ensure that the project includes all the work required, and only the work required, to complete the project. Processes There are following processes which are part of Project Scope Management. Scope Planning Scope Definition Create WBS Scope Verification Scope Control The term "Scope" may refer to Product Scope: The features and functions that are to be included in a product or service. Project Scope: The work that must be done in order to deliver a product with the specified features and functions. Following sections describe each process along with Input, Output and Required Tools and Techniques. Scope Planning Scope planning is the process of progressively elaborating and documenting the project work (project scope) that produces the product of the project. Identifies the project objectives and deliverables and forms basis of agreement. Scope Planning process starts in "Project Planning Phase" and uses the outputs of the Initiation Process. (1) Scope Planning - Inputs (1.1)Enterprise Environmental Factors: Enterprise environmental factors include items such as the organization.s culture, infrastructure, tools, human resources, personnel policies, and marketplace conditions that could affect how project scope is managed. (1.2) Organizational Process Assets: Organizational process assets are the formal and informal policies, procedures, and guidelines that could impact how the project.s scope is managed. Those of particular interest to project scope planning include: Organizational policies as they pertain to project scope planning and management Organizational procedures related to project scope planning and management Historical information about previous projects that may be located in the lessons learned knowledge base. (1.3) Project Charter: Formally recognizes the existence of a project. (1.4) Preliminary Project Scope Statement (1.5) Project Management Plan (2) Scope Planning - Tools & Techniques (2.1) Expert Judgment: Expert judgment related to how equivalent projects have managed scope is used in developing the project scope management plan. (2.2) Templates, Forms, Standards: Templates could include work breakdown structure templates, scope management plan templates, and project scope change control forms. (3) Scope Planning - Outputs: (3.1) Scope Management Plan: Guidelines for how scope is to be managed and how scope changes are to be integrated into the project. It includes A process that specifies how formal verification and acceptance of the completed project deliverables will be obtained A process that enables the creation of the WBS from the detailed project scope statement, and establishes how the WBS will be maintained and approved A process to prepare a detailed project scope statement based upon the preliminary project scope statement A clear description of how scope changes will be identified and classified. Scope Definition Scope definition involves subdividing the major project deliverables into smaller, more manageable components to: Improve the accuracy of cost,time and resource estimates. Define a baseline for performance measurement and control. Facilitate clear responsibility assignments. Scope Definition process is a part of "Project Planning Phase". (1) Scope Definition - Inputs (1.1) Organizational Process Assets (1.2) Project Charter : If a project charter is not used in a performing organization, then comparable information needs to be acquired or developed, and used to develop the detailed project scope statement. (1.3) Preliminary Project Scope Statement: If a preliminary project scope statement is not used in a performing organization, then comparable information, including the product scope description, needs to be acquired or developed and used to develop the detailed project scope statement. (1.4) Project Scope Management Plan (1.5) Approved Change Requests : Approved change requests can cause a change to project scope, project quality, estimated costs, or project schedule. Changes are often identified and approved while the work of the project is ongoing. (2) Scope Definition - Tools & Techniques (2.1) Product Analysis : Product analysis includes techniques such as product breakdown, systems analysis, systems engineering, value engineering, value analysis, and functional analysis. (2.2) Alternatives Identification : Identifying alternatives is a technique used to generate different approaches to execute and perform the work of the project. (2.3) Expert Judgment: Each application area has experts who can be used to develop portions of the detailed project scope statement. (2.3) Stakeholder Analysis: Stakeholder analysis identifies the influence and interests of the various stakeholders and documents their needs, wants, and expectations. The analysis then selects, prioritizes, and quantifies the needs, wants, and expectations to create requirements. (3) Scope Definition - Outputs (3.1) Project Scope Statement : The project scope statement describes, in detail, the project.s deliverables and the work required to create those deliverables. The project scope statement also provides a common understanding of the project scope among all project stakeholders and describes the project.s major objectives. The detailed project scope statement includes, either directly or by reference to other documents which includes following: Project objectives Product scope description Project requirements Project boundaries Project deliverables Product acceptance criteria Project constraints & assumptions Initial project organization Initial defined risks Schedule milestones Fund limitation & Cost estimate Project configuration management requirements Project specifications Approval requirements (3.2) Requested Changes: Requested changes to the project management plan and its subsidiary plans may be developed during the Scope Definition process. Requested changes are processed for review and disposition through the Integrated Change Control process. (3.3) Project Scope Management Plan (Updates): The project scope management plan component of the project management plan may need to be updated to include approved change requests resulting from the project.s Scope Definition process. Create WBS The 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. The WBS organizes and defines the total scope of the project. The WBS subdivides the project work into smaller, more manageable pieces of work, with each descending level of the WBS representing an increasingly detailed definition of the project work. The planned work contained within the lowest-level WBS components, which are called work packages, can be scheduled, cost estimated, monitored, and controlled. Create WBS process is a part of "Project Planning Phase". (1) Create WBS - Inputs (1.1) Organizational Process Assets (1.2) Project Scope Statement (1.3) Project Scope Management Plan (1.4) Approved Change Requests (2) Create WBS - Tools & Techniques (2.1) Work Breakdown Structure Templates: Although each project is unique, a WBS from a previous project can often be used as a template for a new project, since some projects will resemble another prior project to some extent. (2.2) Decomposition : Decomposition is the subdivision of project deliverables into smaller, more manageable components until the work and deliverables are defined to the work package level. The work package level is the lowest level in the WBS, and is the point at which the cost and schedule for the work can be reliably estimated. Decomposition of the total project work generally involves the following activities: Identifying the deliverables and related work Structuring and organizing the WBS Decomposing the upper WBS levels into lower level detailed components Developing and assigning identification codes to the WBS components Verifying that the degree of decomposition of the work is necessary and Sufficient. (3) Create WBS - Outputs (3.1) Project Scope Statement (Updates) : If approved change requests result from the Create WBS process, then the project scope statement is updated to include those approved changes. (3.2) Work Breakdown Structure (WBS): BWS is a graphical representation of the hierarchy of the project. The WBS template can be reused across projects. WBS forces the project team to think through all the levels of the project. If a task is not in the WBS, then it is not part of the project. WBS is a grouping of project components that organizes and defines the total scope of the project. WBS is used to confirm understanding of the project scope. WBS simplifies a complex project and using WBS it becomes easy to estimate accurate duration, cost, budget, resources. 8/80 rule for WBS: No task should be less than 8 hours or more than 80 hours. (3.3) WBS Dictionary: The document generated by the Create WBS process that supports the WBS is called the WBS dictionary and is a companion document to the WBS. The detailed content of the components contained in a WBS, including work packages and control accounts, can be described in the WBS dictionary. (3.4) Scope Baseline: The approved detailed project scope statement and its associated WBS and WBS dictionary are the scope baseline for the project. (3.5) Project Scope Management Plan (Updates): If approved change requests result from the Create WBS process, then the project scope management plan may need to be updated to include approved changes. (3.6) Requested Changes: Requested changes to the project scope statement and its components may be generated from the Create WBS process, and are processed for review and approval through the integrated change control process. Scope Verification This is the process of obtaining formal acceptance of the project scope by the stakeholders.It requires reviewing work products and results to ensure that all are completed correctly and satisfactorily. The Scope Verification is the process in which the project customer formally accepts the project deliverables. Scope Verification happens at the end of each phase. It is the customer feedback on a detailed basis. While Scope Verification focuses on customer acceptance, Quality Control focuses on correctness of work. Scope Verification process is a part of "Project Controlling Phase". (1) Scope Verification - Inputs (1.1) Project Scope Statement: The project scope statement includes the product scope description that describes the project.s product to be reviewed and the product acceptance criteria. (1.2) WBS Dictionary : The WBS dictionary is a component of the detailed project scope definition, and is used to verify that the deliverables being produced and accepted are included in the approved project scope. (1.3) Project Scope Management Plan (1.4) Deliverables (2) Scope Verification - Tools & Techniques (2.1) Inspection: This includes activities, such as measuring, examining, and testing, undertaken to determine whether results conform to requirements. There are following two ways to perform inspections. Delhpi Technique: This method is used to obtain expert opinion on technical issues, the required scope or risk involved. A request is sent to the experts and their returned responses are compiled and then sent back to them for further review to get consensus. Management by Objective(MBO): is a management philosophy with three objectives - Establish unambiguous and realistic objectives Periodically Evaluate if objectives are being met Take corrective actions. MBO works only if management supports it. (3) Scope Verification - Outputs (3.1) Accepted Deliverables : The Scope Verification process documents those completed deliverables that have been accepted by the client. (3.2) Requested Changes: Requested changes may be generated from the Scope Verification process, and are processed for review and disposition through the Integrated Change Control process. (3.3) Recommended Corrective Actions Scope Control Project Scope Control includes : Influencing the factors which create scope changes to ensure that changes are agreed upon. Determining that a scope change has occurred. Managing the actual changes when they occur. The system includes the paperwork, tracking systems, and approval levels necessary for authorizing changes. Scope change control process is a part of "Project Controlling Phase". (1) Scope Control - Inputs (1.1) Project Scope Statement: The project scope statement includes the product scope description along with its associated WBS and WBS dictionary that describes the project.s product to be reviewed and the product acceptance criteria. (1.2) Work Breakdown Structure (1.3) WBS Dictionary: The WBS dictionary is a component of the detailed project scope definition, and is used to verify that the deliverables being produced and accepted are included in the approved project scope. (1.4) Project Scope Management Plan (1.5) Performance Reports: Performance reports provide information on project work performance, such as interim deliverables that have been completed. (1.6) Approved Change Requests: An approved change request impacting project scope is any modification to the agreed-upon project scope baseline, as defined by the approved project scope statement, WBS, and WBS dictionary. (1.7) Work Performance Information (2) Scope Control - Tools & Techniques (2.1) Change Control System: Defines procedures for changing project scope. (2.2) Variance Analysis: Project performance measurements are used to assess the magnitude of variation. (2.3) Replanning: These approved change requests can cause updates to components of the project management plan. (2.4) Configuration Management System: A formal configuration management system provides procedures for the status of the deliverables, and assures that requested changes to the project scope and product scope are thoroughly considered and documented before being processed through the Integrated Change Control process. (3) Scope Control - Outputs (3.1) Project Scope Statement (Updates): If the approved change requests have an effect upon the project scope, then the project scope statement is revised and reissued to reflect the approved changes. (3.2) Work Breakdown Structure (Updates) : If the approved change requests have an effect upon the project scope, then the WBS is revised and reissued to reflect the approved changes. (3.3) WBS Dictionary (Updates) : If the approved change requests have an effect upon the project scope, then the WBS dictionary is revised and reissued to reflect the approved changes. (3.4) Scope Baseline (Updates): (3.5) Requested Changes: The results of project scope control can generate requested changes, which are processed for review and disposition according to the project Integrated Change Control process. (3.6) Recommended Corrective Action: A recommended corrective action is any step recommended to bring expected future project performance in line with the project management plan and project scope statement. (3.7) Organizational Process Assets (Updates): The causes of variances, the reasoning behind the corrective action chosen, and other types of lessons learned from project scope change control are documented and updated in the historical database of the organizational process assets. (3.8) Project Management Plan (Updates): If the approved change requests have an effect on the project scope, then the corresponding component documents and cost baseline, and schedule baselines of the project management plan, are revised and reissued to reflect the approved changes. Last Moment Revision: Scope : The sum of the products and services to be provided in a project. Product Scope: The features and functions that are to be included in a product or service. Project Scope: The work that must be done in order to deliver a product with the specified features and functions. Scope Change: Any change to the project scope. Scope Change Control: Controlling changes to project scope. Scope Definition: Decomposing the major deliverables into smaller, more manageable components to provide better control. Scope Planning: Developing a written scope statement that includes the project justification, the major deliverables, and the project objectives. Scope Management: A plan which describes how project scope will be managed and how. Scope Statement: A documented description of the project as to its output, approach, and content. (What is being produced?, How is it being produced?, and What is included?) Work Breakdown Structure (WBS): A deliverable-oriented grouping of project elements which organizes and defines the total scope of the project. Work Package: A deliverable at the lowest level of the work breakdown structure. A work package may be divided into activities. Organizational Breakdown Structure (OBS): Provides a hierarchically organized depiction of the project organization arranged so that the work packages can be related to the performing organizational units. Bill of Materials (BOM): Presents a hierarchical tabulation of the physical assemblies, subassemblies, and components needed to fabricate a manufactured product. Risk Breakdown Structure (RBS): A hierarchically organized depiction of the identified project risks arranged by risk category. Resource Breakdown Structure (RBS): A hierarchically organized depiction of the resources by type to be used on the project. WBS Dictionary : The WBS dictionary is a component of the detailed project scope definition, and is used to verify that the deliverables being produced and accepted are included in the approved project scope. 8/80 rule for WBS: No task should be less than 8 hours or more than 80 hours. Delhpi Technique: This method is used to obtain expert opinion on technical issues, the required scope or risk involved. A request is sent to the experts and their returned responses are compiled and then sent back to them for further review to get consensus. Management by Objective(MBO): is a management philosophy with three objectives

Project Integration Management

Project Integration Management

Definition Project Integration Management is a group of processes required to ensure that the various elements of the project are properly coordinated. Processes There are following processes which are part of Project Integration Management. Develop Project Charter Develop Preliminary Project Scope Statement Develop Project Management Plan Direct and Manage Project Execution Monitor and Control Project Work Integrated Change Control Close Project Develop Project Charter The project charter is the document that formally authorizes a project. The project charter provides the project manager with the authority to apply organizational resources to project activities. The project charter, either directly, or by reference to other documents, should address the following information: Requirements that satisfy customer, sponsor, and other stakeholder needs, wants and expectations Business needs, high-level project description, or product requirements that the project is undertaken to address Project purpose or justification Assigned Project Manager and authority level Summary milestone schedule Stakeholder influences Functional organizations and their participation Organizational, environmental and external assumptions Organizational, environmental and external constraints Business case justifying the project, including return on investment Summary budget. Develop Project Charter process is a part of "Project Initiation Phase". (1) Develop Project Charter - Inputs (1.1) Contract (When Applicable): A contract from the customer.s acquiring organization is an input if the project is being done for an external customer. (1.2) Project Statement of Work (SOW): The statement of work (SOW) is a narrative description of products or services to be supplied by the project. (1.3) Enterprise Environmental Factors: This includes items such as, but not limited to: Organizational or company culture and structure. Governmental or industry standards Personnel administration Existing human resources Company work authorization system Marketplace conditions Stakeholder risk tolerances (1.4) Organizational Process Assets: When developing the project charter and subsequent project documentation, any and all of the assets that are used to influence the project's success can be drawn from organizational process assets. (2) Develop Project Charter - Tools & Techniques (2.1) Project selection methods: As a project manager you may not be involved in selecting a project but you should know the selection method. There are two main type of Project Selection Methods. Benefits Measurement Methods: These project selection methods involve comparing the values of one project against another. There are the following type of Benefit Measurement project selection techniques - Murder Boards - This involves a committee asking tough questions from each project Scoring Models - Different projects are given scores based on certain defined criteria. Project with higher score is selected. Benefits Cost Ratio - This technique involves computing benefits to cost ratio (BCR) for a project. Project with higher BCR is selected. Payback period - This technique involves considering how long it takes back to "pay back" the cost of the project. Inflation or interest earned in not considered in this technique. A project with lower pay back period is better. Discounted Cash Flow - This technique takes into account the interest earned on the money. The Future Value (FV) of projects is compared. FV=PV(1+i)n PV is the present value of the project. A project with higher present value is better. Internal Rate of Return (IRR) - A project that has higher IRR is better, as it is giving higher return on money. Constrained Optimization Methods: These Project selection methods are used for large projects. These are techniques based on mathematical models. The Constrained Optimization techniques are - Linear Programming Non-Linear Programming Integer Algorithm Dynamic Programming Multi-objective Programming (2.2) Expert Judgement: Experts with specialized knowledge or training assess the inputs to this process. (2.3) Project Management Information System: The Project Management Information System (PMIS) is a standardized set of automated tools available within the organization and integrated into a system. The PMIS is used by the project management team to support generation of a project charter, facilitate feedback as the document is refined, control changes to the project charter, and release the approved document. (2.4) Project Management Methodology: A project management methodology can be either a formal mature process or an informal technique that aids a project management team in effectively developing a project charter (3) Develop Project Charter - Output (3.1) Project Charter Develop Preliminary Project Scope Statement The project scope statement is the definition of the project.what needs to be accomplished. A project scope statement includes: Project and product objectives Product or service requirements and characteristics Product acceptance criteria Project boundaries Project requirements and deliverables Project constraints & assumptions Initial project organization Initial defined risks Schedule milestones Initial WBS Order of magnitude cost estimate Project configuration management requirements Approval requirements The preliminary project scope statement is developed from information provided by the initiator or sponsor. The project management team in the Scope Definition process further refines the preliminary project scope statement into the project scope statement. Develop Preliminary Project Scope Statement is part of "Project Initiation Phase". (1) Develop Preliminary Project Scope Statement - Inputs (1.1) Project Charter (1.2) Project Statement of Work (1.3) Enterprise Environmental Factors (1.4) Organizational Process Assets (2) Develop Preliminary Project Scope - Tools & Techniques (2.1) Project Management Methodology: The project management methodology defines a process that aids a project management team in developing and controlling changes to the preliminary project scope statement. (2.2) Project Management Information System: The project management information system, an automated system, is used by the project management team to support generation of a preliminary project scope statement. (2.3) Expert Judgment: Expert judgment is applied to any technical and management details to be included in the preliminary project scope statement. (3) Develop Preliminary Project Scope Statement - Output (3.1) Preliminary Project Scope Statement Project Plan Development Taking the results of other planning processes and putting them into a consistent, coherent document that can be used to guide both project execution and project control. It includes: The project management processes selected by the project management team The level of implementation of each selected process The descriptions of the tools and techniques to be used for accomplishing those processes How the selected processes will be used to manage the specific project. How work will be executed to accomplish the project objectives How changes will be monitored and controlled How configuration management will be performed The need and techniques for communication among stakeholders Project Plan Development process is a part of "Project Planning Phase". (1) Project Plan Development - Inputs (1.1) Preliminary Project Scope Statement (1.2) Project Management Processes: This includes all the project management process defined by PMI which will be discussed in subsequent chapters. (1.3) Enterprise Environmental Factors (1.4) Organizational Process Assets (2) Project Plan Development - Tools and Techniques (2.1) Project planning methodology: Structured approach used to guide the development of the project plan. (2.2) Stakeholder skills and knowledge : Create an environment in which stakeholders can contribute appropriately. (2.3) Project mgmt. information system (PMIS): Consists of the automated and manual tools and techniques used to gather, integrate, and distribute information and outputs from other PM processes. (2.4) Expert Judgment: Expert judgment is applied to develop technical and management details to be included in the project management plan. (3) Project Plan Development - Outputs (3.1) Project plan: The project management plan can be composed of one or more of the following subsidiary plans Project scope 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 The project management plan can have one or more following components Milestone list Resource calendar Schedule baseline Cost baseline Quality baseline Risk register Direct and Manage Project Execution The Direct and Manage Project Execution process requires the project manager and the project team to perform multiple actions to execute the project management plan to accomplish the work defined in the project scope statement. Some of those actions are: Perform activities to accomplish project objectives Expend effort and spend funds to accomplish the project objectives Implement the planned methods and standards Adapt approved changes into the project.s scope, plans, and environment Create, control, verify, and validate project deliverables Manage risks and implement risk response activities Direct and Manage Project Execution is a part of "Project Plan Execution Phase". (1) Direct and Manage Project Execution - Inputs (1.1) Project plan: The subsidiary management plans ( Scope management plan, risk management plan, procurement management plan, configuration management plan, change control management plan etc.) and the performance measurement baselines are the key inputs to the project plan execution. (1.2) Approved Corrective Actions: Approved corrective actions are documented, authorized directions required to bring expected future project performance into conformance with the project management plan. (1.3) Approved Preventive Actions:Approved preventive actions are documented, authorized directions that reduce the probability of negative consequences associated with project risks. (1.4) Approved Change Requests: Approved change requests are the documented, authorized changes to expand or contract project scope. (1.5) Approved Defect Repair: The approved defect repair is the documented, authorized request for product correction of a defect found during the quality inspection or the audit process. (1.6) Validated Defect Repair: Notification that re inspected repaired items have either been accepted or rejected. (1.7) Administrative Closure Procedure: The administrative closure procedure documents all the activities, interactions, and related roles and responsibilities needed in executing the administrative closure procedure for the project (2) Direct and Manage Project Execution - Tools & Techniques (2.1) Project Management Methodology: The project management methodology defines a process that aids a project team in executing the project management plan. (2.2) Project Management Information System: The project management information system is an automated system used by the project management team to aid execution of the activities planned in the project management plan. (3) Direct and Manage Project Execution - Outputs (3.1) Deliverables: A deliverable is any unique and verifiable product, result or capability to perform a service that is identified in the project management planning documentation, and must be produced and provided to complete the project. (3.2) Requested Changes: Changes requested to expand or reduce project scope, to modify policies or procedures, to modify project cost or budget, or to revise the project schedule. (3.3) Implemented Change Requests: Approved change requests that have been implemented by the project management team during project execution. (3.4) Implemented Corrective Actions: The approved corrective actions that have been implemented by the project management team to bring expected future project performance into conformance with the project management plan (3.5) Implemented Preventive Actions: The approved preventive actions that have been implemented by the project management team to reduce the consequences of project risks. (3.6) Implemented Defect Repair: During project execution, the project management team has implemented approved product defect corrections. (3.7) Work Performance Information: Information on the status of the project activities being performed to accomplish the project work is routinely collected as part of the project management plan execution. Monitor and Control Project Work The Monitor and Control Project Work process is performed to monitor project processes associated with initiating, planning, executing, and closing. The Monitor and Control Project Work process is concerned with: Comparing actual project performance against the project management plan Assessing performance to determine whether any corrective or preventive actions are indicated, and then recommending those actions as necessary Analyzing, tracking, and monitoring project risks to make sure the risks are identified, their status is reported, and that appropriate risk response plans are being executed Maintaining an accurate, timely information base concerning the project's product(s) and their associated documentation through project completion Providing information to support status reporting, progress measurement, and forecasting Monitoring implementation of approved changes when and as they occur. Providing forecasts to update current cost and current schedule information Monitor and Control Project Work is a part of "Project Controlling Phase". (1) Monitor and Control Project Work - Inputs (1.1) Project Management Plan (1.2) Work Performance Information (1.3) Rejected Change Requests: Rejected change requests include the change requests, their supporting documentation, and their change review status showing a disposition of rejected change requests. (2) Monitor and Control Project Work - Tools & Techniques (2.1) Project Management Methodology: The project management methodology defines a process that aids a project management team in monitoring and controlling the project work being performed in accordance with the project management plan. (2.2) Project Management Information System: The project management information system (PMIS), an automated system, is used by the project management team to monitor and control the execution of activities that are planned and scheduled in the project management plan. The PMIS is also used to create new forecasts as needed. (2.3) Earned Value Technique: The earned value technique measures performance of the project as it moves from project initiation through project closure. The earned value management methodology also provides a means to forecast future performance based upon past performance. (2.4) Expert Judgment: Expert judgment is used by the project management team to monitor and control project work. (3) Monitor and Control Project Work - Output (3.1) Recommended Corrective Actions: Corrective actions are documented recommendations required to bring expected future project performance into conformance with the project management plan. (3.2) Recommended Preventive Actions: Preventive actions are documented recommendations that reduce the probability of negative consequences associated with project risks. (3.3) Forecasts: Forecasts include estimates or predictions of conditions and events in the project.s future, based on information and knowledge available at the time of the forecast. (2.4) Recommended Defect Repair: Some defects, which are found during the quality inspection and audit process, are recommended for correction. (2.5) Requested Changes: Changes requested to expand or reduce project scope, to modify policies or procedures, to modify project cost or budget, or to revise the project schedule. Integrated Change Control Coordinating changes across the entire project. Integrated Change Control is a part of "Project Controlling Phase". (1) Integrated Change Control - Inputs (1.1) Project Management plan (1.2) Requested Changes (1.3) Work Performance Information (1.4) Recommended Preventive Actions (1.5) Recommended Corrective Actions (1.6) Recommended Defect Repair (1.7) Deliverables (2) Integrated Change Control - Tools & Techniques (2.1) Project Management Methodology: The project management methodology defines a process that aids a project management team in implementing Integrated Change Control for the project. (2.2) Project Management Information System: The project management information system, an automated system, is used by the project management team as an aid for implementing an Integrated Change Control process for the project, facilitating feedback for the project and controlling changes across the project. (2.3) Expert Judgment: The project management team uses stakeholders with expert judgment on the change control board to control and approve all requested changes to any aspect of the project. (3) Integrated Change Control - Outputs (3.1) Approved Change Requests (3.2) Rejected Change Requests (3.3) Project Management Plan (Updates) (3.4) Project Scope Statement (Updates) (3.5) Approved Corrective Actions (3.6) Approved Preventive Actions (3.7) Approved Defect Repair (3.8) Validated Defect Repair (3.9) Deliverables Close Project The Close Project process involves performing the project closure portion of the project management plan. Two procedures are developed to establish the interactions necessary to perform the closure activities across the entire project or for a project phase: Administrative closure procedure: This procedure details all the activities, interactions, and related roles and responsibilities of the project team members and other stakeholders involved in executing the administrative closure procedure for the project Contract closure procedure: This procedure details all activities and interactions needed to settle and close any contract agreement established for the project, as well as define those related activities supporting the formal administrative closure of the project. This procedure involves both product verification and administrative closure. Close Project process is a part of "Project Closure Phase". (1) Close Project - Input (1.1) Project Management Plan (1.2) Contract Documentation: Contract documentation is an input used to perform the contract closure process, and includes the contract itself, as well as changes to the contract and other documentation (1.3) Enterprise Environmental Factors (1.4) Organizational Process Assets (1.5) Work Performance Information (1.6) Deliverables (2) Close Project - Tools & Techniques (2.1) Project Management Methodology: The project management methodology defines a process that aids a project management team in performing both administrative and contract closure procedures for the project. (2.2) Project Management Information System: The project management team uses the project management information system to perform both administrative and contract closure procedures across the project. (2.3) Expert Judgment: Expert judgment is applied in developing and performing both the administrative and contract closure procedures. (3) Close Project - Outputs (3.1) Administrative Closure Procedure. (3.2) Contract Closure Procedure (3.3) Organizational Process Assets (Updates) (3.4) Final Product, Service, or Result: Formal acceptance and handover of the final product, service, or result that the project was authorized to produce. Last Moment Revision: Baseline: A baseline is an approved configuration item, e.g. a project plan that has been signed off for execution and a starting point against which changes can be measured. Change Control Board (CCB): A formally constituted group of stakeholders responsible for approving or rejecting changes to the project baselines. Code of Accounts: Any numbering system used to uniquely identify each element of the work breakdown structure Deliverable: Any measurable, tangible, verifiable outcome, result, or item that must be produced to complete a project or subproject. Delphi Technique: A forecasting technique used to gather information about future events on a project. It relies on gathering expert opinions. Management By Objectives (MBO): A system of managerial leadership that defines individual managerial responsibilities in terms of corporate objectives. Operation: Work that is ongoing and repetitive. Program: A group of related projects managed in a coordinated way. Programs usually include an element of ongoing activity. Project : A temporary endeavor undertaken to create a unique product or service. Project Charter: A formal document issued by senior management which explains the purpose of the project including the business needs the project and the resulting product. It provides the project manager with the authority to apply organizational resources to project activities. Project Life Cycle: A collection of generally sequential project phases whose name and no. are determined by the control needs of the organization(s) involved in the project. Project Notebook: A detailed project plan. The notebook is updated throughout the life of the project. Project Phase: A collection of logically related project activities, usually culminating in the completion of a major deliverable. Project Plan: A formal, approved document used to guide both project execution and project control. The primary uses of the project plan are to document planning assumptions and decisions, to facilitate communication among stakeholders, and to document approved scope, cost, and schedule baselines. A project plan may be summary or detail. Project Management: The application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project. Responsibility Assignment Matrix (RAM): A structure which relates the project organization structure to the WBS to help ensure that each element of the project's scope of work is assigned to a responsible individual. Plan: Scope change will be integrated into the project. Includes an assessment of how likely and frequently the project scope may change and a description of how scope changes will be identified and classified. Stakeholder: Individuals and organizations who are involved in or may be affected by project activities. Statement of Work (SOW): A narrative description of products or services to be supplied under contract. Work Authorization: Process of sanctioning all project work. Work Authorization/Release: In cases where work is to be performed in segments due to technical or funding limitations, work authorization / release authorizes specified work to be performed during a specified period. Work Package: A deliverable at the lowest level of the work breakdown structure. A work package may be divided into activities.