First
3 Chapters of PMBOK Guide
What is a Project
§ Project –
a temporary endeavor to create a unique product, service or result (or
enhancement of existing services/products) — may be collectively termed as
deliverable — (vs ongoing operations which
manage processes in transforming resources into output) sometimes may involve
handing over the deliverable to the operation teams for continuous operation and
sustainment
§ Project
drives changes in the organization and often is a means to create business values and to achieve organizational goals —
the net quantifiable benefit derived from a business endeavour which
can be tangible or intangible.
§ Projects
operate in an environment that may have favourable or unfavourable impacts on
them. Two major categories are:
§ Organization
Process Assets is a major input in all planning process,
which may be kept at PMO, directly related to project
management, including Processes and
Procedures (including templates (e.g. WBS, schedule network
diagrams, etc.), procedures for issuing work
authorizations, guidelines, performance measurements) and Organizational
Knowledge Repositories
§ Enterprise
Environment Factors (often are constraints) are
influences not under control of the project team that will affect the
project, either intra-organization and extra-organization, e.g. organizational
culture, organization structure, existing human resources, work authorization system, PMIS, market
conditions, legal requirements, technology
§ EEF
are inputs for all initiating, most planning process, not much in the
executing/controlling process, none in closing process
§ Projects
often involve more risks and uncertainties than operations and thus require
more planning
§ The
following factors influence the operation of the organization which may
lead to the need for projects:
§ Regulatory/legal/social
requirements changes
§ Stakeholders
needs/requests
§ Changes
in technology/business
§ Improvements,
rectification and enhancements to processes/products/services
§ A
project can be subdivided into phases, each phase
is a collection of logically related project activities that result in the
completion of deliverable(s). Towards the end of each phase is a “Phase Gate”
which determines whether the project will go on or not.
§ Process –
a package of inputs, tools and outputs, there are 49 processes defined by PMI. Processes are
grouped in the PMBOK® Guide into 5 Process Groups (NOTE: Process groups are not
the same as project phases).
§ Portfolio
> Program > Project
§ Program –
a group of coordinated projects, taking
operations into account, maybe with common goals, achieving benefits not realized by running projects
individually, if only the client/technologies/resource are the same, then the
projects should be managed individually instead of a program
§ Portfolio –
a group of programs and/or projects to achieve organizational strategic goals
within the organization with a view to maximizing the value to the organization
§ Actively
coordinating and managing portfolios, programs and projects through
organizational project management (OPM) best position the organization to
achieve strategic business goals.
§ Use
of portfolio/program/project management to bridge the gap between
organizational strategy and business value realization
Project Management
§ Project
Management – the application of (all appropriate)
knowledge, skills, tools & techniques and whatsoever to manage project
activities with a view to meet the project requirements and
achieve customer satisfaction
§ The
most important task is to align stakeholder expectations with
the project requirements, around 90% of the PM’s work is related to communication with stakeholders
§ PMBOK®
Guide is a framework/standard but not methodology (agile, scrum,
PRINCE3, etc.) — A framework allows flexibilities while a methodology would require
the use of a predefined system of practices, techniques, procedures and
rules.
§ Project
management emphasizes tailoring — selecting the appropriate project
management processes, inputs, tools, techniques, outputs and life cycle phases
according to the unique nature of each individual project.
§ Other
Competing constraints: Scope, Time, Cost, Quality, Risk,
Resources
§ Project
Management Business Documents
§ Project
Business Case — documents the economic feasibility vs benefits of the project
and is used for authorization of project management activities.
§ Project
Benefits Management Plan —describes how and when the benefits of the
deliverables of the project will bring and describes how to measure the
benefits (also including the alignment with organization strategies,
assumptions and risks)
§ Project
Charter — authorizes the project and names the project manager
§ Project
Management Plan — how the project will be performed and managed
– documents assumptions & decisions, helps communication
between stakeholders, goals, costs &
time scheduling (milestones), project management system and subsidiary
management plans and documents
§ Project
Success Measures — project success is now more inclined to be measured by
considering the achievement of project objectives as documented in this
document
Role of the Project Manager
§ Project
Manager: an individual assigned by the organization
to lead the team and is responsible for achieving project objectives
§ is
the leader of the project irrespective of the
authority
§ should
consider every process to determine if they are needed for individual projects
(tailoring)
§ the
exact role of project manager is to be tailored to suit the needs of individual
organizations and projects
§ may
report to the functional manager, program manager, PMO manager, operation
manager, senior management, etc., maybe part-time or devoted
§ identifies
and documents conflicts of project
objectives with organization strategy as early as possible
§ Skills
required of project managers:
§ Technical
project management — process tailoring, planning, managing
schedule/cost/resources/risk
§ Leadership — communication (within team and with stakeholders), team
building, motivation, influencing, coaching, trust building, conflict
management, negotiation
§ Strategic
and business management — be aware of
the high-level strategies of the organization and effectively implement
decisions/actions that align with strategic goals (Organization Strategy may be
expressed through mission and vision)
§ Project
Manager must balance the constraints and tradeoffs, effectively communicate the
info (including bad news) to the sponsor for informed decisions
§ Project
Manager needs to involve project team members in the planning process
§ Project
Manager needs to perform integration at process level, cognitive level and
context level
§ Project
Team includes Project Manager, project management staff, project staff, PMO,
SME (subject matter experts can be outsourced), customer representative (with
authority), sellers, business partners, etc., maybe virtual or collocated
§ Senior
management must be consulted for changes to high-level constraints
§ Leadership
vs Management:
§ Lead:
guide through interactive discussion from one point to another
§ Manage:
direct a person to perform a set of expected behaviour
§ Leadership
styles:
§ Laissez-faire
§ Transactional
§ Servant
leader
§ Transformational
§ Charismatic
§ Interactional
Organization System
§ The
organizational system determines the power, influence, competence, leadership
and political capabilities of the people who can act within the system. e.g.
§ Management
Elements — general management principles/rules of the organization, e.g.
disciplinary action, division of skills, authorization model/practices,
communication channels
§ Organizational
Governance Frameworks — framework/processes describing how authority within the
organization is exercised
§ Organizational
Structure Types
§ Organic
or Simple
§ Virtual
§ Projectized (project
manager has the ultimate authority over the project, team members are often
collocated)
§ Matrix (Strong,
Balanced, Week)
§ Functional
§ Composite/Hybrid –
a combination of different types, depending on the actual need
§ PMO
§ Tight
Matrix = co-location, nothing to do with the organization type (not
necessarily a matrix org.)
§ Functional organizations
=> the project manager has little authority, often called project expeditor
(no authority) or coordinator (little authority), project coordination
among functional managers
§ Matrix organization => multiple bosses and more complex
§ 3
forms: supportive, controlling and directive (lead
the project as PM)
§ functions:
training, resource coordination, methodology, document repository, project
management oversight, standards, career management of PMs
§ may
function as a stakeholder / key decision maker (e.g. to terminate the projects)
§ control
shared resources/interdependence across projects at the enterprise level
§ play
a decisive role in project governance
§ Project
Life Cycle: includes: initiating, planning and organizing,
carrying out/executing work, closing the project. Project life cycles are
independent of a product life cycle.
§ Within
a project life cycle, there can be one or more phases of the development of the
product, service, or result (a.k.a. development life cycles) with the following
models:
§ Predictive [plan
driven/waterfall] – scope, time and cost determined early in the lifecycle, may
also employ rolling wave planning
§ Iterative
– repeat the phases as understanding of the project increases until the exit
criteria are met, similar to the rolling wave planning, high-level objectives,
either sequential/overlapping phase, scope/time/resources for each phase may be
different
§ Incremental
– features/scope are added to each incremental cycle
§ Adaptive [change
driven/agile] – for projects with high levels of change, risk and/or
uncertainty, each iterative is very short (2-4
weeks), work is decomposed into product
backlog, each with a production-level product, scrum is one of the most
effective agile methods, stakeholders are involved throughout the
process, time and resources are fixed, allow low change cost/keep stakeholder influence high
§ Hybrid
§ The life
cycle chosen must be suitable for the intended deliverable and flexible enough
to deal changes.
§ each
project phase within the product lifecycle may include all the five project management process groups
§ Product
life cycle: development > production > adoption &
growth > maturity > decline > end of life
§ The Configuration Management Knowledge Bases contain
baselines of all organization standards
§ Lessons
Learned – focus on the deviances from plan (baseline) to actual results
and how to solve these discrepancies
§ The
work authorization system (WAS) is a system used
during project integration management to make sure that the right work
gets done at the right time
§ PMIS includes
configuration system and change control system
§ Never
accept a change request to trim down one element of the triple constraint
without changing the rest.
§ Sponsor –
provides resources/support to project, lead the process through initiation
(charter/scope statement) through formally authorized, later involved in
authorizing scope/budget change/review
§ Customer
– NOT necessarily provide the financial resources, may be external to the
organization, final acceptance of the
product
§ Business
Partners – certification body, training, support, etc.
§ Project
Statement of Work (SOW): describes the business need,
high-level scope of deliverables and
strategic plan of the organization, created by the sponsor/initiator/buyer
§ Project
Charter is not a contract
§ Project
Management Plan is NOT a project schedule
§ Project
Management System: includes a list of project management processes, level
of implementation (what actions to take in the management processes),
description of tools and techniques, resources, procedures, change control system [forms with tracking
systems, approval levels]
§ Requirement
Traceability Matrix (RTM) – a matrix connecting deliverables to
requirements and their sources (for
managing scope)
§ Work
Breakdown Structure (WBS) – a hierarchal chart of decomposing
deliverables into work packages
§ Activity
List – a full list of all activities with
indication of relationship to the work packages
§ Activity
Attributes – further information (duration, start date,
end date, etc.) of all the activities in the list (for scheduling)
§ Roles
and Responsibilities (RAR) – a document listing all the roles and
description of their responsibilities in the project (often by category)
§ Responsibility
Assignment Matrix (RAM) – a matrix connecting people to work
packages/activities, e.g. the RACI matrix (responsible, accountable, consult,
inform), usually only one person
is accountable for each activity
§ Resources
Breakdown Structure (RBS) – a hierarchical chart listing all the
resources by categories, e.g. marketing, design, etc.
§ Risk
Breakdown Structure (RBS) – a hierarchical chart listing all risks by
categories
§ Project
Management Data and Information
§ Work
Performance Data – raw data collected
§ Work
Performance Info – analyzed in context and
integrated data, e.g. some forecasts
§ Work
Performance Reports – work performance information compiled in
report format
§ Sunk
costs – money already spent, not to be considered whether to terminate a
project, similar to committed cost (often through contracts)
§ Direct
costs, indirect (shared) costs, Fixed costs, Variable costs
§ Law
of diminishing returns – beyond a point, the
more input, the less return
§ Working
capital – assets minus liability, what the company
has to invest in the projects
§ Payback
period – a time to earn back capital investment
§ Benefit-cost
ratio (BCR) – an indicator, used in the formal
discipline of cost-benefit analysis, that attempts to summarize the overall
value for money of a project
§ Depreciation –
straight-line depreciation vs accelerated depreciation (the amount of
depreciation taken each year is higher during the earlier years of an asset’s
life)
§ Under double declining balance, the asset is depreciated
twice as fast as under straight line. Using the example above, 10% of the cost
is depreciated each year using a straight line. Doubling the rate would mean
that 20% would be depreciated each year, so the asset would be fully
depreciated in 5 years, rather than 10.
§ Under sum-of-the-years-digits, the asset is depreciated
faster than the straight line but not as fast as declining balance. As an example
of how this method works, let’s say an asset’s useful life is 5 years. Adding
up the digits would be 5+4+3+2+1 or a total of 15. The first year, 5/15 is
expensed; the next year 4/15 is expensed, and so on. So if the asset’s cost is
$1000, 5/15, or $333.34 would be expensed the first year, $266.67 the second
year, and so on.
§ Economic
value added – the value of the project brought minus the
cost of project (including opportunity costs) e.g. for a project cost of $100,
the estimated return for 1st year is $5, assuming the same money can be
invested to gain 8% per year, then the EVA is $5 – $100 * 8% = -$3
§ Net
present value (NPV) – the sum of the present values (PVs) of the
individual cash flows of the same entity
§ Present
value (PV) – or called present discounted value, is a future amount of money
that has been discounted to reflect its current value, as if it existed today
(i.e. with inflation, etc.)
§ Future
value (FV) – is the value of an asset at a specific date
§ Internal
Rate of Return (IRR) – The
inherent discount rate or investment yield rate produced by the project’s
deliverables over a pre-defined period of time.
§ Forecast (future)
vs Status Report (current status) vs Progress Report (what have been done/delivered)
§ Journey
to Abilene (Abilene’s Paradox) – committee
decisions can have a paradox outcome, the joint decision is not welcome by
either party (because of fear of raising objections)
§ when
something unusual happens, always refer to the PM Plan/Charter for instruction
on how to proceed; if not found, ask for direction from the
management
§ unresolved
issues will lead to conflicts
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