BUS605 Study Guide

Site: Saylor Academy
Course: BUS605: Strategic Project Management
Book: BUS605 Study Guide
Printed by: Guest user
Date: Saturday, October 12, 2024, 1:49 AM

Description


Navigating this Study Guide

Study Guide Structure

In this study guide, the sections in each unit (1a., 1b., etc.) are the learning outcomes of that unit. 

Beneath each learning outcome are:

  • questions for you to answer independently;
  • a brief summary of the learning outcome topic; and
  • and resources related to the learning outcome. 

At the end of each unit, there is also a list of suggested vocabulary words.

 How to Use this Study Guide

  1. Review the entire course by reading the learning outcome summaries and suggested resources.
  2. Test your understanding of the course information by answering questions related to each unit learning outcome and defining and memorizing the vocabulary words at the end of each unit.

By clicking on the gear button on the top right of the screen, you can print the study guide. Then you can make notes, highlight, and underline as you work.

Through reviewing and completing the study guide, you should gain a deeper understanding of each learning outcome in the course and be better prepared for the final exam!

Unit 1: What is Project Management

1a. Examine how projects achieve an organization's strategic objectives

  • What is a strategic objective?
  • What are tangible and intangible benefits?
  • How can intangible benefits align with organizational objectives?
  • How can projects help an organization achieve a competitive advantage?

Organizations define strategic objectives as a way to stay focused on what is important and achieve the overall goals of the organization. Projects are one way in which an organization can achieve its objectives. However, projects can be expensive endeavors. Therefore, it is critical that projects align with strategic objectives to ensure that the projects stay focused on the most important concerns.

Organizations are concerned with both tangible and intangible benefits. For example, improving a manufacturing process and reducing waste are good examples of Six Sigma types of projects which yield specific, measurable results, often in terms of monetary results. However, there are intangible benefits from projects that are not easy to measure, yet important to the overall health of the organization. Projects that improve public opinion or employee satisfaction fall into this category.

Finally, projects can help an organization achieve a competitive advantage in the marketplace. Projects that seek to do things better, cheaper, and faster can often help the organization be first to market or offer a cheaper, better-quality alternative.

Review strategy in The Role of Strategy in Management.

 

1b. Distinguish between projects and on-going operations when presented with various scenarios

  • What are the characteristics that make up a project?
  • How are projects different from on-going operations?
  • Identify what happens when a project moves into the operational phase.

Projects have different characteristics from on-going operations. Projects are unique endeavors with the intention of creating a new product, good, or service. A project may seek to solve a problem or improve a process. Projects have specific beginning and ending dates. On-going operations are the normal work of the organization. For example, an organization that produces widgets may have assembly processes that run to create the widgets. These processes are repeatable rather than unique. One way in which to compare projects with on-going operations might be to consider the widget scenario. Making widgets through the assembly process is an on-going operation. However, developing a better process that helps the organization make widgets faster would be a project.

Projects often deliver results that become operational. For example, a project that develops a more efficient way of building widgets would then be operationalized as part of the new on-going process for making widgets. Project results often lead to improved manufacturing, business process improvement, or other such improvements that become part of the organization's day-to-day activities.

 

1c. Explain the role of organizational leadership in finding project opportunities and overcoming organizational challenges related to projects

  • What is the difference between management and leadership?
  • Identify several techniques for selecting projects.
  • What is Net Present Value?

Project sponsors are often key leaders within the organization that are focused on strategic objectives. Project sponsors initiate projects and provide funding. Project sponsors work with project managers to draft the project charter, the document that authorizes a project. However, it's important that projects have the support of leadership in providing motivation and vision. Leaders can help projects overcome objections from stakeholders, both inside and outside of the organization.

Organizational leaders are also focused on the strategic objectives of the organization and, therefore, are more likely to align projects to business goals and objectives. Leaders see the "big picture" and are, therefore, more likely to seek support from others on the leadership team. Organizational support can be important in clearly obstacles that may present themselves during project planning and execution.

There are several tools with which to provide financial justification for a project. Most of these tools are discussed in more detail in Unit 2 and Unit 3. However, an important financial tool is the net present value. Net present value analyzes the cost of a project against its anticipated benefits over time. For example, if a project is expected to cost $125,000 over one year but return a savings of $60,000 for the first year and 45,000 for the next three years with a discount rate of 12%, the net present value can be calculated as follows:

Discount rate 12%          
  Year 1 Year 2 Year 3 Year 4 Total

Income

$60,000  $45,000 $45,000 $45,000 $195,000

Costs

$125,000 $- $-  $- $125,000

Cash Flow

$(65,000) $45,000 $45,000  $45,000 $70,000
       

NPV

$38,466


To review, see What is Project Management? and Project Selection.

 

1d. Demonstrate best practices that contribute to a project's success or failure

  • What are several common reasons for project failure?
  • How can good project management help projects succeed?

Projects have a high rate of failure. Often project failure is related to projects that exceed the planned budget or schedule. However, projects can fail because they don't meet the expectations of stakeholders or experience a devastating risk that was unplanned. It's important to recognize the characteristics that can lead to project failure and know the best practices for avoiding such a fate.

Projects that suffer from budget problems often do so because of an increase in the scope of work without an increase in the budget needed to perform the work. Adequate change control procedures can help enforce project boundaries and minimize unexpected increases in scope.

Schedule problems can result from a variety of problems. Some may include the lack of resources that are needed for the project when they are needed. Human resources may not be available at the right time. Vendors may fail to deliver raw materials when needed.

Follow-up and follow-through are two ways in which a project manager can stay on top of potential problem areas within the project. A risk management plan with both mitigation and contingency plans can also help.

Procurement is another area where projects can incur problems. Vendors can be unreliable, fail to deliver on time, or fail to meet the quality needed. The vendor selection process should include verification of references. Having backup vendors is another way in which the project team can prepare for unreliable vendors.

To review, read Reasons Projects Succeed or Fail.

 

1e. Demonstrate how the triple constraint – scope, schedule, and budget – interplay within a project

  • What is the triple constraint, and why is it important?
  • What happens when one part of the triple constraint is impacted?
  • How can a project manager manage changes to the triple constraint?

The triple constraint includes project scope, schedule, and budget.

Scope: This includes the work to be completed during the project. The scope can include the deliverables from that work, meaning the tangible elements produced as a result of the work of the project. Equally as important as the work to be performed is the work that will not be performed during the project. Defining what will not be done helps provide boundaries for the project that avoids unnecessary work or "scope creep".

Schedule: Project work is broken into tasks and work packages needed to complete the project deliverables. Determining how long these tasks will take and sequencing them into a logical order of events is needed to develop a project schedule.

Cost/Budget: Determining the resources needed to complete project tasks and then assigning costs to each resource is how we develop the project budget.

A fourth element, quality, has been suggested as an important element in the project constraints. Each element of the triple constraint feeds quality. For example, if the schedule is compressed, it can affect the quality of the final deliverable. Therefore, the project manager often spends the majority of the time balancing scope, schedule, and budget. In fact, project reporting focuses heavily on reporting the status of the triple constraint.

The project manager must keep an eye on the triple constraint at all times. There are techniques that can help the project manager maintain focus. One way is by using a project priority matrix.

To review, watch Understanding The Project Management Triangle (or Triple Constraint).

 

Unit 1 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

  • Agile project management
  • best practices
  • framework
  • integration
  • interpersonal skills
  • knowledge areas
  • net present value
  • operations
  • process groups
  • project characteristics
  • project lifecycle
  • Project Management Office
  • strategy
  • triple constraint

Unit 2: The Project Lifecycle

2a. Differentiate the work completed during each phase of a project

  • Define the work completed during each phase of the project lifecycle.
  • What are the goals of the project team?

The Project Management Institute (PMI) defines five process groups and ten knowledge areas that can be used to manage the work of a project. These five process groups are Initiation, Planning, Executing, Monitoring and Controlling, and Closing. Process groups, while not technically project phases, mimic the flow of a project from start to finish. In fact, project workflow, or the project lifecycle, overlaps process groups. For example, project planning is often on-going after project execution begins.

Initiating: during project initiation, the project sponsor begins discussions with a project manager to define the needs and characteristics of the project. The project manager works with the sponsor and other key stakeholders to develop the project charter, the document that, once approved, authorizes the project work to begin. The project manager is gathering data such that it will build the charter.

Planning: during the planning phase, the project manager is working primarily on the scope, schedule, and budget of the project. The project manager is working to build a project team and find individuals that will be able to perform project work. The project team then assists the project manager in refining data from the project charter to create project management plans that will be used throughout the project to guide the team. Several make-buy decisions may be made during this time. A preliminary look at project risks and quality standards is also occurring.

Executing: during the execution phase, the work of the project begins. The project team works through the project tasks toward the completion of the project objectives. It is not uncommon for project execution to begin before the completion of all of the project plans.

Monitoring and Controlling: during the monitoring and controlling phase, the project manager is concerned with analyzing the status of the project execution and reporting that status to the project stakeholders and taking corrective action as needed to keep the project on track.

Closing: during the closing phase, the work of the project has been completed and the project team focuses on obtaining final approval of the work completed, closing out vendor contracts, capturing lessons learned, and returning project workers back to their original assignments.

For a solid explanation of project phases, read The Project Life Cycle (Phases) and section 3.1 of Project Initiation, Scope, and Structure.

 

2b. Apply appropriate project management techniques to each project phase

  • Can you identify several project management techniques used during each phase of the project?
  • How or when can project phases overlap?
  • What is the significant work effort in each project phase?
  • Relate the triple constraint to each phase of the project.

It's important to know what work is accomplished during each phase of the project. There are several techniques used during each phase to ensure that the phase is successful. For example, during the monitoring and controlling phase, several project status reports are produced. To produce these reports, careful review and analysis of project data are needed to make accurate assessments of the project's health. Additionally, making recommendations for corrective actions when needed requires an understanding of the data.

Some of the key deliverables and techniques used during each phase are as follows:

Initiating: during the initiation phase, the project charter and business case are the primary documents produced. The project manager needs to understand the appropriate use of several financial tools such as net present value, return on investment, or payback period to help justify the project. A weighted decision matrix is another tool that can help compare alternatives and select the best option.

Planning: during the planning phase, the project team will use several tools as they develop various project plans. The project team will decompose deliverables to develop the work breakdown structure. Activity lists can help with this. The team will identify stakeholders and develop a responsibility matrix and RACI chart to identify key stakeholders and their roles within the organization. A Gantt chart and other network diagrams may be produced to examine the workflow of the project and define critical tasks.

Executing: during this phase, the work of the project occurs. The project manager is working to keep the project on track and tasks moving forward. A change control board is one tool the project manager can use to help avoid unnecessary and unauthorized changes to the project scope that can impact the budget and schedule.

Monitoring and Controlling: during this phase, the project manager is actively monitoring the progress of the project by checking in with the project team and updating project software with task completion or other changes as needed. Project status reports are produced and status meetings occur when needed.

Closing: during this phase, procurements are closed and project documentation is archived. Project audits are important to ensure that procurements met contracted expectations and that the project met all requirements. Stakeholder approvals are obtained.

To review, see Project Initiation, Scope, and StructureProject Schedule Planning, Project Implementation Overview, Project Monitoring and Control, and Project Closing.

 

2c. Demonstrate the proper use of project management documents throughout the project management lifecycle

  • What are the document outputs for each phase of the project?
  • How do these documents help guide the team through project execution?

During each phase of the project, documents are prepared. These documents help guide the project team throughout the proper execution of the project to successful completion. Some of the most well-known project documents include the project charter, project plan, and work breakdown structure. However, there are several additional documents developed throughout the project lifecycle. For example, these documents help the project team know how to handle problems that may arise during a project (risks), vendor conflict resolution (procurement), and the quality measurements needed to evaluate the final project (quality).

Some documents that are helpful to the project manager include:

Initiating: during this phase, the project charter is the main document that is used to obtain approval to proceed. In addition to the project charter, the business case may be a separate document or included as part of the project charter. Finally, a well-defined scope statement should be the basis for the approval of the project and the development of the project management plans in the planning phase.

Planning: several project plans result from the planning phase. However, it's important to point out that the planning phase of a project often overlaps with the executing phase, as project execution frequently begins before all planning is complete. In this phase, the scope of work is finalized, the cost management plan is defined, and the schedule is created. Both the schedule and cost plans involve understanding the work needed to complete the deliverables of the project. Understanding the work means that the project team must understand the requirements of the project. A work breakdown structure is a document that contains all of the tasks to be completed, who will perform the tasks, the resources needed for the tasks, and the costs of all resources.

Make-buy decisions are made during the planning phase, which leads to decisions regarding procurements. Procurements involve obtaining goods and services from vendors or contractors outside of the organization. The procurement plan identifies needed goods and services and defines the bidding process that will be used for each as well as the preferred contract type.

Both potential project risks and quality standards are defined in the planning phase. Risks are evaluated as to their likelihood and impact on the project and assigned to specific individuals for monitoring. Quality standards represent the functional and technical requirement performance of the deliverables.

Finally, defining the stakeholders and their expectations is important as the project teams work to meet their goals. A communications plan is important in ensuring that all stakeholders are informed as needed as the project progresses. It defines the information that will be shared, who will receive it, when they receive it, and how they receive it.

Executing: during the execution phase, the project manager is referring to the various project plans as needed to guide the work performed. In order to keep project scope changes in check, the project team may refer to the change control procedures defined in the scope management plan.

Monitoring and Controlling: project status reports are an important part of this phase of the project. The communications plan helps guide the project team in the monitoring and gathering of data to produce these reports. Additionally, if problems occur, plans such as risk, quality, and procurement can help guide the team in resolving issues.

Closing: project closing involves obtaining approvals for the work completed, closing procurement contracts, paying vendors, releasing staff back to their work assignments, and celebrating success.

To review, see Project Initiation, Scope, and Structure, Project Schedule Planning, Project Implementation Overview, Project Monitoring and Control, and Project Closing.

 

Unit 2 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

  • business case
  • project charter
  • project initiation
  • RACI chart
  • responsibility assignment matrix
  • scope creep
  • scope of work
  • work breakdown structure

Unit 3: Initiating Projects

3a. Prepare a project charter for a given scenario

  • What are the components of the project charter?
  • How does a project charter assist the project team?
  • Is a project charter always necessary? When can a project charter be skipped?

Every project is unique. While organizations may adopt project standards or use a Project Management Office to ensure that project consistency is maintained, there are still nuances of execution unique to each project. As a result, the project charter needs to be flexible enough to take into consideration the needs of each specific project.

Once approved, the project charter authorizes the project. It's important to include enough information so that leadership can make informed decisions. The preliminary scope should address the deliverables well enough that it is clear what success will look like. A preliminary budget and timeline help identify what the project will need in order to be complete.

A good project charter will include:

  • An overview - a brief description of the project.
  • Objectives- measurable, quantifiable goals for the project.
  • Scope of work- a description of the work that will be performed during the project.
  • Timeline with major milestones - milestones represent the completion of major deliverables throughout the project process.
  • Deliverables - what tangible items are produced as a result of the project work.
  • Assumptions - what we believe to be true that will impact the planning and work on the project.
  • Constraints - the requirements with which we must work throughout the project.
  • Business case - the reason we are doing the project or how the project aligns with the goals and objectives of the organization.
  • Preliminary cost/budget - what we believe will be the financial needs to complete the project.
  • Preliminary risks - what risks might we face while executing the project.
  • Stakeholders - who are the primary stakeholders or interested parties.
  • Approval signatures - validates the approval of the project sponsor for the project.

To review, read Developing the Project Charter and Baseline Project Plan.

 

3b. Align the preliminary description of the project and expected outcomes with the project boundaries, constraints, and assumptions

  • What are SMART objectives?
  • Why is it important to define both what is within the project boundaries and outside of the project boundaries?
  • Why is the preliminary budget and schedule important to the project constraints?

Projects typically incur boundaries, constraints, and assumptions that must be acknowledged during project execution.

Boundaries refer to the scope of work that the project will and will not complete. It's important to identify the work that is within the scope or boundaries of the project as well as clearly identify any work that will be considered outside of the boundaries of the project. Think of a boundary as meaning that all of the work identified within the boundary will be included in the project, and anything outside of the boundaries will not.

Constraints refer to the limitations of resources a project must work within, typically schedule and budget. Constraints limit how the project team will complete their tasks. For example, a constraint might be that the team must complete their work by a specific date. The deadline constrains the project work.

Assumptions include any expectations that the project manager assumes to be true, such as the resources will be available when needed.

A well-defined preliminary scope of work will address boundaries, constraints, and assumptions so that the project sponsor or other approving authority has a clear picture of the project and can make an informed decision. Additionally, it's important that the preliminary project description carefully aligns with organizational goals. Goals should be SMART goals. This means goals should be Specific, Measurable, Attainable, Relevant, and Time-based. SMART goals encourage the organization to keep focused on what's important with clearly stated, specific intentions. Measurable ensures that there is evidence that the goal has been achieved. Goals must be attainable. It is of no use to set a goal that can not be achieved and spend valuable resources working on that goal. By keeping goals relevant, we seek to align goals with values that are important. Finally, time-based means that a clock is ticking. We expect goals to be achieved within a reasonable time period and not simply sit on a "To Do" list.

To review, read Project Initiation and Developing the Project Charter and Baseline Project Plan.

 

3c. Develop a business case to support a given project scenario

  • Why is a business case is being used?
  • What are the components of the business case?
  • How does the return on investment support the business case?

A business case is used in a project charter to demonstrate why the project needs to be done and how the project aligns with business goals and objectives. A good business case will identify the problem to be solved or the opportunity to be exploited. A thorough business case will also examine alternative approaches to the solution and clearly demonstrate why the project meets the best possible solution.

Components of a business case include:

  • Business objectives, problem, or opportunity: this can often be expressed as the current state and future state based on the completion of the project.
  • How the project solution addresses the problem or opportunity: what are the anticipated benefits?
  • What are the alternatives: why is this project the best alternative for meeting the objectives?
  • What is the expected value to the organization: for example, how much money will the project save the business? Often, but not always, organizational value is expressed in monetary terms.
  • What metrics were used to determine value: here is where you show your work. There are several financial metrics that are used to determine the value of a project. Some of these include net present value, return on investment, total costs of ownership, opportunity costs, and payback period, to name a few.

To review, read Developing a Business Case.

 

3d. Identify project stakeholders and key roles

  • Can you describe several types of project stakeholders and their roles in the project?
  • What are some techniques for analyzing stakeholders?
  • What are some elements that make up a project communications plan?

Project stakeholders are any individuals or groups of individuals that have an interest in the project or project outcome. Stakeholder satisfaction can make or break the success of a project. Identifying all stakeholders and planning to manage expectations and engagement is an important part of the project manager's job. Involving stakeholders early in the project can help ensure that unforeseen project problems may be avoided.

Stakeholders can be individuals, groups, or roles. For example, the CIO may be a project stakeholder or a role within the project. The same might be true for accountants or engineers. Identifying key roles can be helpful when defining the project resources needed in the work breakdown structure. Defining roles rather than naming individuals within the work breakdown structure ensures that the project documentation won't require as many changes should individuals come and go from the organization.

To review, read Stakeholder Management and Early Stakeholder Involvement in the Project Definition Phase: Case Renovation.

 

Unit 3 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

  • assumptions
  • baseline
  • boundaries
  • constraints
  • stakeholders

Unit 4: Planning Projects

4a. Break down the work required to complete a project and create a detailed project schedule

  • What is the purpose of a work breakdown structure?
  • How is a project schedule used by the project manager to manage the project?

Determining the scope of work is an important part of the initial project planning. Careful detail during planning can help ensure that accurate schedule estimates and resource requirements are defined. More attention to detail placed in the initial planning phase can help avoid unexpected surprises later in the project.

It is important to define the deliverables of the project with sufficient detail so that the project team is then able to determine the requirements of the deliverables. Documenting the characteristics, attributes, or functionality requirements of the deliverables is necessary. Often requirements are defined as functional, non-functional, technical, business, user, or regulatory.

  • Functional - describe what you want the deliverable to be able to do.
  • Non-functional - describe what the deliverable must look like, what it must perform, or how it must be developed.
  • Technical - describe how the deliverable should be developed technically or procedurally.
  • Business - describe the needs of the business that the deliverable must satisfy.
  • User - may be used to describe deliverable requirements such as the user interface or test cases.
  • Regulatory - describes any laws or regulations that the deliverable must satisfy.

Requirements should be measurable to verify that they have been achieved.

To review, read Scope Planning.

 

4b. Decompose project deliverables into work packages

  • What does it mean to decompose a deliverable?
  • What is the smallest unit of work that should be achieved?
  • What is a work package?

Breaking down the scope of work into deliverables and then into work packages is known as decomposing the deliverables. At this stage, the project manager seeks to identify all tasks needed to complete the deliverables required for the project. The work breakdown structure (WBS) helps us organize and track the tasks of the project.

Often, project team members will work together to decompose the deliverables into tasks and work packages. It's important to deal with one deliverable at a time and decompose tasks until a task takes no more than 40 hours to complete. The team will organize the tasks into a logical sequence of events and add durations to each task. Task dependencies should be identified. Once entered into the project software, a Gantt chart begins to become apparent.

To review, read Scope Planning.

 

4c. Demonstrate the use of appropriate network scheduling techniques such as Gantt, PERT, ADM, and CPM.

  • Describe the difference between the Gantt chart, PERT Chart, CPM, and ADM/AON.
  • Why should a project manager develop a CPM?
  • What is slack?

There are several ways in which a project manager can view the workflow of the project in a visual manner. Network diagrams create a visual sequence of activities. Each diagram tells a different story about the project. For example, the critical path method demonstrates the longest path through the project and, therefore, the tasks that, should a problem occur, would cause an overall delay in the project.

The network scheduling techniques used most often include:

  • Gantt: provides a visual representation of the project timeline by using horizontal bars to chart project activity durations. The chart also depicts relationships between tasks.
  • PERT: uses rectangles or nodes along with days to complete to represent tasks along the project. As there are often multiple paths through a project, the PERT chart provides a visual of all paths possible through the project.
  • CPM: similar to the PERT, the critical path method identifies tasks, their dependencies, and how long they will take to complete. With this information, the project manager can calculate the longest path through the project. The tasks on the longest path are considered critical tasks because if there are delays in any of these tasks, the project will be delayed.
  • ADM/AON: can be used to identify early start (ES), early finish (EF), late start (LS), or late finish (LF) impacts on tasks throughout the project.

To review, read Project Scheduling and watch The Critical Path Method.

 

4d. Determine the physical and human resources needed to complete a project

  • What are the different types of resources needed for a project?
  • What are some of the methods used in selecting resources?
  • Describe different techniques for determining the appropriate resources for the project.
  • What is the make-buy decision?

Projects require resources to meet deliverables. These resources may be human resources, such as employees or contractors needed to complete the project tasks, or physical resources, such as raw materials or equipment. Additionally, resources may include renting equipment, physical space, or travel.

Once the deliverables have been decomposed and tasks identified, resources should be assigned to each task. Using project software, the project manager can create a record for each resource needed. Then the resources can be assigned to tasks.

The benefit of using project software is that the cost of the task can be automatically calculated based on the hours needed to complete the task and the costs of the resources required. For example, if a task is to frame the master bathroom and two carpenters are needed for 8 hours each at $35 per hour, and $1400 worth of lumber and $100 worth of nails and other hardware are required, the project software will calculate the cost for the task as follows:

Labor (2 carpenters for 16 hours at $35 per hour each) - $560
Materials (Lumber and misc hardware) - $1400 + $100 = $1500

The total cost of the task to frame the master bath would be $2,060.

To review, read Resource Management.

 

4e. Determine the cost of the resources needed to complete and deliver all project activities

  • What are some techniques for determining resource rates?
  • Can you describe the procurement process?
  • What is analogous estimating, and when should it be used?
  • What is parametric estimating, and when should it be used?

Estimating the costs of resources needed for the project includes a variety of different techniques, depending on the resource. How resource costs are defined is determined by the type of resource. For example, human resources are often referred to in terms of time, such as hours, weeks, or months of work. Raw materials may be referred to as units or lump sum costs. Then a cost per unit is assigned to the human or material resource.

Estimating involves research. Often several sources are needed to determine the most accurate estimate of the costs of resources. Maybe your organization uses a standard rate for various job activities, making it easier to input hourly pay rates based on function. If raw materials are needed, it's possible that the project manager will need to work with Purchasing to obtain bids for goods and services. However, a project manager might need to acquire cost data from several sources.

However, there are several other techniques that may be used to estimate costs, including parametric, analogous, and bottom-up estimating.

  • Parametric estimating involves looking at parameters such as square footage and estimating based on an average cost from other projects.
  • Analogous estimating involves looking at other similar projects and assuming costs would be the same.
  • Bottom-up estimating is accurate but time-consuming because the team must look at the lowest-level tasks and work back up to create the estimates.

To review, read Resource Planning.

 

4f. Analyze final budget based on the input of different stakeholders and approved financial resources

  • Can you describe several techniques for estimating project costs?
  • What are management reserves? What are contingency reserves?
  • When is it best to use analogous estimating?
  • Why is bottom-up estimating the most time-consuming?

Preparing project budgets involves an accurate estimation of the costs of the resources needed for the project. This may involve determining the hourly costs of employee resources, gathering vendor bids, or pricing raw materials. Accurate estimates help ensure that the project budget is accurate.

It's important to seek input from stakeholders regarding the estimates. It may be necessary to work with stakeholders and sponsors to review estimate data to ensure that the most accurate budget calculations have been made.

To review, read Budget Planning.

 

4g. Prepare various project plans, including scope, schedule, cost, risk, procurement, and quality

  • Describe several project documents used for scope, schedule, budget, risk, and procurement management.
  • Describe several document components that make up the scope, schedule, cost, risk, and procurement project plans.

Project planning produces a project management plan. Depending on the complexity of the project or the norms of the organization, this project plan may be a single document or multiple documents. Regardless, there are several components that make up the various portions of a project plan.

Often during the planning phase, the project team focuses on planning the project scope, schedule, and budget. However, the team will need to determine if outside resources will be needed to prepare initial procurement specifications. Using the preliminary risks from the project charter, the project team can begin to develop a more detailed risk management plan that addresses risk probability, impact, mitigation, and contingency plans. Finally, the project team should be focused on what quality will look like for the final deliverables and how quality will be assessed throughout the project.

Other important plans include communication and stakeholder management plans. These plans work hand in hand to help keep stakeholders informed and engaged in the aspects of the project that are important to them. Therefore a careful analysis of stakeholders is necessary to align their information needs to project reporting. Stakeholder satisfaction can make or break project success. As a result, appropriate care and consideration of stakeholder needs should be exercised.

To review, read Key Components of Project Management.

 

Unit 4 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

  • activity
  • analogous estimating
  • bottom-up estimating
  • cost
  • critical path
  • decompose
  • deliverable
  • duration
  • milestone
  • parametric estimating
  • procurement
  • requirements
  • resource
  • schedule compression
  • slack
  • top-down estimation
  • work package

Unit 5: Executing Projects

5a. Characterize effective project management teams in an organization

  • What is the difference between management and leadership?
  • Why are leadership skills so important for project managers?
  • What are some techniques for dealing with team conflict?
  • What is a high-performing project team?

Project managers are not managers in the truest sense. Therefore, they need to have several tools with which to manage disparate teams. These tools include the ability to motivate, influence, and inspire. However, in order for a team to follow a leader, there needs to be trust.

Often, conflict can arise with diverse groups of individuals. Conflicts can include disagreements between team members or a particularly difficult team member. These differences can occur when members feel they are not heard or valued. It's important to be sure that all viewpoints, including opposing viewpoints, are heard and given fair consideration. Group think, when the team begins to agree with each other rather than exploring alternative ideas, can result in poor decision-making.

Resolving conflict among the team may involve using a variety of different skills, including reframing or confronting the problem, restructuring the problem, enlisting the help of a neutral third party, and negotiating for compromise. It's important to understand several conflict management styles, such as:

  • Competitive (Win/Lose)- where the goal of the parties is to win while others lose.
  • Collaboration (Win/Win) - a preferred method where everyone is heard and everyone wins in the outcome.
  • Compromise (½ win/1/2 lose) - involves finding a middle road that everyone can feel comfortable with.
  • Accommodation (Lose/Win) - give up your position in favor of someone else's.
  • Avoidant - sometimes referred to as giving up. This position can lead to suppressed feelings and to deeper conflict or bickering at a later time.

To review, read What is Leadership?, Conflict Resolution Strategies, and Five Models for Understanding Team Dynamics.

 

5b. Examine team management techniques and practices in a project context

  • How can setting team goals and providing feedback help project teams work together?

Successful project teams require cultivation. Team members must know their expectations and understand the team norms. Accountability is important. Project managers need to know how to develop strong team-oriented members and instill a desire for success.

Project managers need to set clear goals for the project team and then hold the team responsible for achieving those goals. Goals without action and accountability rarely achieve the intended outcomes. Strong communication strategies are one way in which a project manager can set expectations for the team. Because a project team is a collective and the results represent those of the collective body, it is important to set goals for the team in general, as well as reward the team for the efforts.

There are several good team-building techniques that can help a project manager achieve a high-performing project team. Understanding the different personalities of team members is important. Acknowledging feelings and seeking fairness can help create a sense of trust among team members. Interpersonal communication with the team should always enforce accountability. Finally, the team needs to see that you, as the project manager, are fighting for them when needed. This goes a long way to building trust in your leadership.

To review, read Building Successful Teams.

 

5c. Apply appropriate change control processes to manage the project's triple constraint

  • What are the uses of a scope document?
  • How should scope changes be documented and approved?
  • What is the difference between a deviation and a change?

Uncontrolled project changes are often referred to as scope creep. Scope creep can cause project delays (schedule) or cost overruns (budget). The triple constraint of project management tells us that changes to one area of the triple constraint (scope, schedule, or budget) will impact the other areas. It has to!

For example, requiring a task to be completed sooner than originally planned may require additional workers to be added to the task and therefore impact the budget of the project. Or, adding additional requirements to a deliverable may require additional workers, raw materials, or time to implement, impacting the budget and schedule.

Projects teams should use some formal processes for submitting changes to the project for evaluation and approval of project sponsors. The project team can evaluate the impact of the requested change to the scope, schedule, and budget of the project and provide important information to the sponsor that can be used to make an informed decision. A formal change approval process can help the project team acquire additional time or money to manage the work to be completed.

To review, read Starting a Project.

 

5d. Demonstrate good interpersonal skills needed for the successful management of stakeholders, sponsors, team members, vendors, suppliers, and others interested in the project

  • What does it mean to be politically savvy?
  • What is necessary among the project team to use persuasion?
  • How can becoming a good listener help build your people skills?

Often referred to as soft skills, interpersonal skills are important for project managers. Project managers that do not have direct authority over their project team members need to use interpersonal skills and leadership to influence and encourage the project team.

Some interpersonal skills include the following:

  • Persuasion - the ability to sell yourself and your ideas.
  • Thinking on your feet - the ability to speak well when under pressure.
  • Recognize organizational politics - understanding the political climate in your workplace and using your advantage and the advantage of others without causing harm.
  • Building teams - the ability to build strong relationships among the members of the team to accomplish the project goals.
  • Manage conflict - the ability to implement conflict resolution techniques within teams to the benefit of all parties.

To review, read Developing Interpersonal Skills Is Key to Your Success.

 

5e. Determine appropriate correction actions to take when project risk is realized

  • What is a risk mitigation plan?
  • What is a risk contingency plan?
  • How does a risk assessment chart help the project manager?
  • What is a risk register?

Projects face risks. Performing a risk assessment during the planning phase of the project and periodically throughout project execution helps the project manager develop contingency and mitigation plans. Such plans provide guidance should a project risk be realized.

Risk planning involves accurately identifying potential risks to the project. This can be done through group activities such as brainstorming or by involving key project stakeholders. Once risks have been identified, they should be evaluated for their impact on the project and their likelihood of occurring. Risks that have a high impact and high likelihood of occurring should receive the greatest attention during the planning part. Often a risk matrix or risk waterfall chart can provide a visual representation of impact and likelihood.

For risks with high probability and likelihood, mitigation and contingency plans are recommended. Mitigation plans are used to seek to avoid the risk from occurring. Contingency plans, often called backup plans, are used to provide alternatives should a risk be realized.

A risk register is used to capture project risks. The risk description, potential impact, probability, likelihood, priority, mitigation/contingency summary, and risk owner are some of the data used to prepare the risk register. The project manager/project team should refer to the risk register throughout the project to stay on top of potential problems before they occur.

To review, read Manage Risk and Risk Monitoring and Control.

 

5f. Identify appropriate techniques for quality analysis given a scenario

  • What is quality assurance?
  • What is quality control?
  • When should a project manager employ a Pareto chart, cause and effect diagram, histograms, or control charts?

The triple constraint deals with project scope, schedule, and budget. However, a project manager needs to balance the triple constraint while focusing on the quality of the deliverables. Quality is often considered the fourth constraint because of the importance placed on quality and project success. Quality activities can cost a project and need to be clearly balanced with project requirements to ensure that money isn't spent trying to go above and beyond what is required. However, poor quality can lead to defects, rework, and failures of deliverables.

Quality consists of assurance and control activities. There are several quality tools for both assurance and control activities. Quality assurance activities revolve around the prevention of defects. Here we seek to manage quality through the implementation of quality standards and processes. In quality control, we are verifying that the quality efforts have been successful. Inspection and other statistical analysis techniques are employed.

Some of the tools used in a quality analysis include:

  • Checklists - a checklist or a list to tally issues.
  • Histograms - provide a graphical representation of frequency distribution.
  • Run charts- a line over graphed data that demonstrates changes in a process over time.
  • Control charts - a run chart with limits.
  • Pareto charts - a bar chart of frequencies that show the largest to smallest.

Using graphical representations can help identify large discrepancies, making it easier to see where action needs to be taken.

To review, read Quality Management and Basic Tools in Quality Control.

 

5g. Compare the impact of risk on the project's scope, schedule, or budget

  • How can a change control board help minimize risk impact?
  • What reports can help a project manager report risk impact?
  • What are two types of corrective actions?

Risks can impact the project's triple constraint. This is why it is so important to attempt to prevent risks from occurring whenever possible. This process is known as risk mitigation. Mitigation focuses on avoiding the risk before it occurs and requires active monitoring of the risk.

However, should risks occur, having contingency plans in place can help minimize the impact on the project scope, schedule, and budget. Contingency plans represent the corrective actions that will be taken should the risk be realized. Often contingency plans include reserve money or pre-authorized increases in staff, outsourcing, or increased materials costs. Negotiating these corrective actions in advance can help not only soften the blow associated with a risk realized but can speed up resolutions.

Active monitoring is needed to take quick action. Often risks are assigned to individuals on the project team for monitoring. When mitigation plans are in place, status reporting should be included with regular project status reports.

Having reserves available in the budget is another way in which to speed up resolution. Contingency reserves are those monies set aside to address any risks that are realized. Management reserves are set aside in the event of unforeseen problems in the project. Reserves can be in either money or time.

To review, read Manage Risk and Risk Monitoring and Control.

 

Unit 5 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

  • contingency plan
  • contingency reserves
  • corrective action
  • leadership
  • management
  • management reserves
  • mitigation plan
  • Pareto chart
  • persuasion
  • quality assurance
  • quality control
  • risk impact

Unit 6: Monitoring and Controlling Projects

6a. Plan various communication requirements during project execution

  • What is synchronous communication?
  • What is asynchronous communication?
  • How can a stakeholder register help plan project communications?

Communication might be the most important task a project manager faces. Keeping stakeholders informed can be critical to the presumed success of the project. However, it's important to know who needs to know what information and the medium in which they prefer to receive the information. This is where communications planning is important.

A communications plan can identify the key individuals that need to be informed about the project, what they need to know, how often they need to know, and how they prefer to be informed. Using a communications matrix, the project manager learns the information that needs to be communicated in the preferred format and frequency.

While developing the communications plan, uncovering the exact nature of the information to be communicated should be the goal. For example, the project sponsor may wish to see several key performance indicators (KPIs) related to project performance on a weekly basis. The project sponsor may prefer the information delivered in a written report via email or may wish to meet with the project team.

Synchronous communication strategies involve methods that are in real-time with the receiver and sender. For example, meeting face-to-face or through virtual platforms would constitute synchronous communication. However, asynchronous communication means that the receiver and sender are not communicating at the same time. An example of asynchronous communication includes email, where information is sent to the receiver and the receiver reviews the information at their convenience. Several methods of communication may be required during project execution, and the communications plan can be used to capture these preferences.

Regardless of requirements, learning the needs of stakeholders and making attempts to meet those needs will go a long way to demonstrating project success.

To review, read Communication Planning and watch Project Communications Planning.

 

6b. Compare actual progress to plans, update information, monitor implementation of project and changes

  • What is a change control board?
  • What are the options for managing constrained resources?
  • What is resource loading?

Project managers work hard during the planning stage of the project to prepare for smooth project execution. However, as a project moves through the execution phase, problems can occur or changes can be made. Therefore, it's important to compare the original plans to the actual execution progress to help steer a project back on track. For example, a project that is running behind schedule because of increased scope may require additional resources to help get the project back on track.

Another time when plans need to change may be the result of formal project changes approved by change control boards. When project changes are formally approved, there may be changes to the schedule, budget, or scope that need to be documented. Project software may need to be corrected with new or revised tasks, new or revised resources, or new or revised costs.

Project managers actively monitor the progress of projects during execution. They gather data on task completion, risks, and quality in order to prepare detailed project reports. Careful monitoring allows for fast and accurate corrections should problems arise. Project managers are constantly looking at the current state of the project (as is) and comparing it to where the project should be (to be). Corrective actions may come in the form of requesting more resources, extending task schedules, or even seeking alternative vendors, depending on the findings.

To review, read Allocating and Managing Constrained Resources and Project Monitoring, Analytics, and Control.

 

6c. Apply metrics and reporting techniques to monitor and control a project

  • What are key performance indicators?
  • Who should determine the metrics that are reported for a project?
  • How do metrics help control the project?

It has been said that what gets measured gets managed. By that, we mean that what is important we need to pay attention to. There are several ways in which a project manager can track important aspects of a project. One technique is to work with key stakeholders and define appropriate metrics or measurements with which to watch. Thresholds should be set for metrics that define when action should be taken and what action may be appropriate.

Project key performance indicators (KPIs) typically revolve around four areas: timeliness/schedule, budget/cost, quality, and effectiveness. Some schedule KPIs include time spent on task vs. time planned, resource capacity, and resource conflicts. Some budget KPIs include budget variance, planned value, and cost performance. Some quality KPIs include the number of errors, customer satisfaction or loyalty, and the number of customer complaints. Finally, some KPIs to measure effectiveness include project milestones completed on time, the number of change requests, and the number of canceled projects.

Using metrics, earned value management, and other tools can help stakeholders during gate reviews. Gate reviews often occur when a significant amount of project work is completed and the stakeholders meet to review the work. During gate reviews, stakeholders are concerned that the project is progressing as planned. Projects that are significantly over budget or behind schedule will be evaluated to decide if the project should continue.

To review, read Effective Status Reporting Practices.

 

6d. Identify variances and tolerances to set the boundaries for acceptable results

  • What is a cost variance?
  • What is a schedule variance?
  • How does a project manager use variance information to take corrective action?

It's important to understand how to calculate both cost and schedule variance within your projects and understand what the data means. Luckily, the calculations are not difficult. Numbers greater than one or positive numbers are good (ahead of schedule or under budget), and negative numbers are bad (over budget or behind schedule). To calculate accurate numbers, a baseline that identifies the scope, schedule, and costs for the project needs to be available. A baseline of the project represents the project information at a point in time.

  • Cost variance - a cost variance means there is a difference between the planned cost and the actual cost of the project. This can mean that the project has cost more or less than anticipated.
  • Schedule variance - a schedule variance means that there is a difference between the amount of work that was planned to be completed and the actual amount of work completed.

Variances alone won't tell a project manager why the project is behind schedule or over budget. Digging deeper and analyzing the data is required. However, active monitoring of variances allows the project manager to take control and make corrections as quickly.

To review, watch Calculating and Understanding Cost Variance and Calculating and Understanding Schedule Variance.

 

6e. Evaluate the use of earned value analysis to complete work performance reports

  • How does earned value compare actual work performed to planned work performed?
  • What does a negative SPI tell us about the project schedule?
  • What does a negative CPI tell us about the project budget?

Earned value management is an analysis tool that can be used to determine if a project is on schedule or on budget. Several calculations are needed to define the indexes used. However, the calculations are simple and the data is readily available in most project software.

Earned value compares the actual work completed with what should have been completed at a given point in time to determine if the project is on schedule or on budget. This requires the project manager to accurately record work completed in project software. The data is then used to calculate how much work should have been performed against how much was actually performed, telling the project manager if the project is on schedule, ahead of schedule, or behind schedule. Cost data for tasks are recorded and then used to tell the project manager if the project is on budget, under budget, or over budget.

Some important earned value indices include:

Schedule Performance Index (SPI) - SPI = EV / PV. Used to indicate if a project is on schedule, behind schedule, or ahead of schedule. A value less than 1 indicates that the project is behind schedule. A value greater than 1 indicates that the project is ahead of schedule.

Cost Performance Index (CPI) - CPI = EV / AC. Used to determine if a project is on budget, over budget, or under budget. A value less than 1 indicates that the project is over budget. A value greater than 1 indicates that the project is under budget.

To review, read PMI Earned Value Management Terms and Formulas and watch Earned Value Management (EVM).

 

6f. Determine if a project is on schedule or on budget using project software reporting features

  • Can you identify several reports available in project software that can help a project manager report a project's status?
  • What report(s) will tell the project manager the work already completed?
  • What report(s) will tell the project manager where costs are over budget?

Project software, such as Microsoft Project or SmartSheet, can produce reports that help the project manager deliver the project status to interested stakeholders. Reports such as burndown charts, and cost overviews can tell what work has been completed and the costs incurred for individual work items. Additionally, project software can provide graphs and charts that help display a visual picture of the project.

In order to make use of the project software fully, several items of data must be captured regarding project tasks. Some data include accurate resource assignment and costs of resources, actual work completed on the tasks, and the project baseline set.

  • Burndown chart - will show the planned work, completed work, and remaining work left for the project.
  • Cost Flow - shows a project's total costs, planned, costs, and remaining costs.
  • Cost Overruns - shows both task cost variances and resource cost variances.
  • Resource Cost - shows the total costs of resources to date.
  • Earned Value Management - provides earned value indices.
  • Critical Tasks/Late Tasks/Slipping Tasks - shows tasks that are critical to the project and need to be monitored, tasks that are late and/or slipping and need to be addressed.

To review, watch Reports For Tasks And Resources In Microsoft Project.

 

Unit 6 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

  • CPI
  • Earned Value Management
  • EVM
  • KPI
  • project software
  • SPI

Unit 7: Closing Projects

7a. Evaluate lessons learned for future project implications

  • What are lessons learned?
  • When should lessons be captured?
  • How should lessons be shared with future projects?

Capturing lessons learned during the project can be helpful to future projects. Formally capturing these lessons as part of the project closeout report is one way in which lessons can be shared. However, for lessons learned to be truly useful, they must be used in future projects.

Not all lessons learned are negative or bad. In fact, often lessons learned can lead to useful information for future projects. For example, suppose a new vendor turned out to be exemplary in terms of quality and service. This information can be captured and shared with future projects that may require their services.

Lessons learned are often captured at the end of the project when the project team sits down to discuss final project details. However, lessons should be captured throughout project execution so that important points are not forgotten as the project progresses.

Most importantly, lessons learned need to be captured in a way that makes them available for future projects. Whether that be in writing or stored electronically, the ability for project managers to access lessons learned is important for them to be of value.

Organizational culture may impact how lessons are captured and shared. Open, sharing cultures would encourage the transparency of lessons learned. However, some organizational cultures may be more competitive and less like to "share dirty laundry" and therefore not be as transparent about sharing what might be considered negative aspects of a project's execution. Understanding organizational norms with respect to sharing of information will be important when considering how best to capture and disperse lessons learned from projects.

To review, read Project Closure and Auditing.

 

7b. Describe the importance of stakeholder approval during project closing

  • What is a project audit?
  • Why is a project audit important?
  • Why is customer satisfaction so important at project closeout?

Regardless of whether the project successfully meets requirements, quality standards, completes on time, or on budget, stakeholders dictate the success or failure of a project. The overall approval of project stakeholders is critical to being able to claim a successful project. This is why stakeholder management is an important process throughout the project. Further, defining exactly what project success will look like can go a long way to helping assure that stakeholders are able to easily identify project success.

A project audit can help the project team ensure that the project has been completed as per the requirements of the stakeholders. Involving stakeholders in the project audit can be important, as stakeholders play a key role in deciding a project's success. Additionally, involving the project stakeholders can help assure an accurate telling of the project's story.

To review, read Project Closure and Audits.

 

7c. Examine the various tasks that need to be addressed in project closure related to contracts and procurements

  • What tasks are performed during contract closeout?
  • What happens to project documents during the closeout phase?

There are several tasks needed to close out a project with respect to procurements. Closing all vendor contracts and assuring that the contractors are paid is one important task. However, prior to closing contracts, it's important to assure that all terms of the contract have been fully met. This involves auditing the contractor's performance and deliverables to assure all terms have been met. Some procurement contracts include clauses for on-time delivery, either bonuses for early delivery or penalties for lateness. Either way, quality inspections and audits are needed and should include the project team or any appropriate stakeholders.

Once product verification is made and contract terms audited, the contract can be set for payment. Furthermore, all appropriate parties should be formally notified, and all contract documentation closed and archived.

To review, read Project Completion.

 

7d. Discuss the importance of celebrating the project team through rewards and recognition

  • Why is it important to celebrate when a project completes?

Celebrating a job well done helps the project team feel valued and recognizes the successful completion of the project. It's not uncommon for a project to end with little or no recognition of the work. At times, project team members may be far removed from stakeholders and may not even know if the deliverables meet with stakeholder approval. This can cause feelings of letdown and disappointment with team members who may have accomplished significant, exciting work as part of their efforts. Celebrating a successful project acknowledges the work and provides opportunities to share final closing information with team members. A celebration can help bring a formal closure to the project for those involved.

To review, read Celebrate.

 

Unit 7 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

  • audit report
  • change management
  • lessons learned
  • post-project evaluations
  • recovery manager
  • strategic influence points