Project Management Process Threads

Overview:

Project Management can be broken into ten knowledge areas that must be managed on every project to ensure success. This allows a common vocabulary within the project management profession for discussing, writing, and applying project management concepts. Those knowledge areas are:

• Integration Management
• Scope Management
• Time Management
• Cost Management
• Quality Management
• Human Resources Management
• Communications Management
• Risk Management
• Procurement Management
• Stakeholder Management

Integration Management:

This thread incorporates all the others, requiring project managers to be able to look at project activities from both a tactical, day-to-day viewpoint and a larger, more strategic perspective. The processes and activities needed to identify, define, combine, unify and coordinate the various processes and project management activities within Project Management.  It includes developing a project charter, developing a project management plan, directing the project plan, monitoring the project work, managing change control, and closing out each phase in the project methodology.  Some relevant key terms/concepts include, but not are limited to:

Business Case:  a convincing and logical argument for why to proceed with the project being proposed – typical drivers include market demand, business need, customer requirements, technology advancements, legal requirements, ecological impact, and/or social need

Project Selection Methods:  the manner in which project options are evaluated, compared, and strategically selected.   “Bigger is Better” metrics include present value (PV), NPV (net present value), internal rate of return (IRR), benefit-cost ratio, economic value add (EVA = Net Operating Income After Tax – Cost of Capital, return on investment (ROI), return on invested capital (ROIC = Net Income After Tax – Invested Capital), where as “Smaller is Better” metrics include opportunity cost and payback period

Project Charter:  a document that names and authorizes the project manager to expend resources to achieve project objectives

Project Management Plan:  a formal, approved document defining how the project will be managed, executed, and controlled throughout the life cycle

Work Authorization System:  a control designed to ensure that the project tasks get assigned at the right time and in the right sequence

Change Requests:  any and all work efforts requested from any of the stakeholders that creates incremental scope and/or effort to the project baseline

Closure:  the last process in a phase or an entire project where lessons learned are captured, project documents are archived, success is recognized and celebrated, and the project team is released

Scope Management:

Scope Management is the process required to ensure that the project includes all the work required, and only the work required, to complete the project successfully.  When managing scope, the project manager is primarily concerned with defining and controlling what is and is not included in the project. Incomplete or inadequate scope planning and management can lead to project failure. This thread includes planning scope management approach, collecting requirements, defining the scope, creating a work breakdown structure (WBS), validating the scope, and controlling the scope.  Some relevant key terms/concepts include, but not are limited to:

Group Creativity Techniques:  different approaches that can be used to effectively collect requirements from stakeholder groups such as Brainstorming, Delphi (anonymous expert opinions gathered privately to prevent ‘groupthink’ bias), Nominal Group (brainstormed ideas are voted upon and ranked by priority), and Idea & Mind Mapping

Group Decision-Making Techniques:  different approaches used to drive a collective group decision, such as unanimity, majority, consensus, plurality, and dictatorship

Decomposition:  the process of breaking down things in to progressively smaller pieces

Aggregation:  the process of consolidating smaller things in to progressively larger categories

Work Breakdown Structure (WBS):  the hierarchical result of applying decomposition of project deliverables to increasingly more detail until each node can be accurately estimated, assigned, and tracked (see sample structure below)

Scope Baseline:  the combination of the initially approved project scope plus all approved changes

Time Management:

Time Management includes all activities required to ensure that projects are delivered in a timely fashion. From identifying the tasks and activities required to deliver the complete scope, to sequencing them and estimating their duration, time management requires project managers to develop a clear and realistic schedule of events, and then manage to that schedule.  This thread includes planning schedule management approach, defining activities, sequencing activities, estimating activity resources, estimating activity durations, developing the schedule, and controlling the schedule.  Some relevant key terms/concepts include, but not are limited to:

Project Network Diagram:  a diagram of the schedule activities in the order in which they must be performed (Activity-On-Node or Activity-On-Arrow)

Precedence Diagramming Method (PDM):  a network diagram where activities are represented by nodes and the arrows are dependencies (also called Activity-On-Node, or AON)

Activity-On-Arrow (AOA):  a network diagram where activities are represented by the arrows connecting nodes, and the nodes are points in time (note: sometimes dummy activities represent dependencies but have 0 duration and are shown as dashed arrows – this method is known as Arrow Diagram Method)

Types of Dependencies:  there are mandatory (no option), discretionary (preferred), and external (outside of project control)

Logical Relationships:  dependencies between two activities where one activity must be started or finished before another activity can be started or finished (Finish-to-Start, Finish-to-Finish, Start-to-Start, Start-to-Finish)

Lead:  starting an activity prior to the finish of a preceding activity

Lag:  delaying the start of an activity after the finish of a preceding activity

Analogous/Top-down Estimating:  a top-down approach of using historical information from similar projects/activities to estimate effort, duration, and/or cost

Bottom-up Estimating:  a bottom-up approach of estimating effort, duration, and/or costs at lowest levels of the WBS first, followed by aggregating up to a summary level of the WBS

Parametric Estimating:  an approach of estimating effort, duration, and/or costs by using past performance information to form scalable categories for assigned and extending out

PERT/Three-point Estimating:  a weighted average approach to estimating effort, duration, and/or cost by using the formula [{Pessimistic Estimate + (4*Realistic Estimate) + Optimistic Estimate}/6] with a standard deviation of [(Pessimistic Estimate – Optimistic Estimate)/6]

Network Path:  a series of schedule activities having a relationship that carries through from the project’s start to finish

Critical Path:  the path of schedule activities where the delay of any one activity would delay the project finish and is therefore the path of highest risk

Float/Slack:  the amount of time a schedule activity could be delayed without delaying the project finish

Free Float:  the amount of time a schedule activity could be delayed without delaying the early start (ES) of a subsequent activity

Negative Float:  the situation of a schedule activity’s early finish (EF) being after a subsequent activity’s early start (ES)

Critical Path Method (CPM):  schedule analysis to determine the critical path, overall schedule, and each activity’s float

Critical Chain Method (CCM):  aggressive schedule management based on managing schedule buffers and keeping resources fully applied

Schedule Compression:  crashing (adding resources & cost) or Fast Tracking (adjusting dependencies and increasing risk) to shorten the overall schedule

Resource Optimization Techniques:  smoothing or leveling – adjusting resources to the level of resources available and then balancing workloads assigned

Modeling Techniques:  Monte Carlo analysis/simulation – compute large numbers of possible scenarios related to schedule

Milestone Schedule:  a high-level schedule showing only significant schedule points

Gantt Chart:  a schedule depiction using horizontal bars to represent activities where the bar length represents activity duration and the placement represents start and finish dates

Schedule Baseline:  a formal version of the project schedule that is placed under control

Cost Management:

Cost Management includes processes involved in estimating, budgeting and controlling costs so that the project can be completed within the approved budget. To do this, project managers must develop a clear estimate of the costs involved, including not just labor costs but also: materials, third-party services and miscellaneous expenses such as travel and facilities. A budget must be created that sets expectations for the investment required to achieve the results desired and teams must adhere to a disciplined cost control program so that costs are measured and managed as value is delivered.

Cost Management also involves the management of projected outcomes (value being delivered). Outcomes need to be agreed upon by the Project Leadership and the business area(s) that will be impacted by the project. Clearly identifying project outcomes is critical when making priority decisions around what projects to undertake or continue to execute. Additionally, confirming achievement of outcomes allows for better credibility of future outcomes estimates on subsequent efforts.  This thread includes planning cost management, estimating costs, determining budget, and controlling costs.  Some relevant key terms/concepts include, but not are limited to:

Variance:  difference between planned and actual, where the target value is zero while positive is favorable and negative is unfavorable

Performance Index:  ratio of planned to actual, where the target value is one while greater than one is favorable and less than one is unfavorable

Forecast:  the projection of what is expected to be true in the future - EAC, ETC, and VAC are all forecasted values

Life-cycle Costing:  looking at the total cost of ownership from purchase (creation) through operations to disposal

Value Engineering:  getting the most project value in cost, quality, schedule, and benefit without sacrificing scope

Cost Aggregation:  rolling up activity costs to accounting periods or the WBS node where they will be managed

Cost Baseline:  what costs will be incurred in the project (the S-curve is the cumulative sum of the budgeted costs over the project life where costs start slowly and then accelerate before tapering off to form an S pattern)

Funding Limit Reconciliation:  adjusting project costs and timeframes to fit within funding availability timeframes

Cumulative:  from the start of the project up to a point in time

Periodic:  opposite of cumulative – for a given period of time only

Working Efficiency:  represented by the schedule performance indicator (SPI) and is optimally a value of one

To-Complete-Performance-Index:  spending efficiency required to meet targeted financial goals (usually greater than one if CPI is less than one, or less than one if CPI is greater than one) and is calculated by dividing the remaining work in terms of money by the remaining funds

Variance Analysis:  measuring the difference between planned and actual (costs or durations), where the ideal value is zero while positive is favorable and negative is unfavorable

Spending Efficiency:  cost performance indicator (CPI) index, where the optimal value is one

Quality Management includes processes and activities that determine quality policies, objectives and responsibilities so that the project will satisfy the needs for which it was undertaken. It is implemented through policy and procedures with continuous process improvement. Quality Management functions should include a review of the cost/benefit analysis to understand tradeoffs and compromises. Quality should be addressed throughout the delivery rather than as an after-the-fact “quality review.” It requires that project teams inspect, test, sample, and pilot to ensure that the project solution will meet the needs and expectations of the client.  This thread includes planning quality management, performing quality assurance, and controlling quality.  Some relevant key terms/concepts include, but not are limited to:

Prevention Over Inspection:  current quality philosophy based on the fact that it is less expensive to prevent an error than to fix one

Total Quality Management (TQM):  everyone in the organization is responsible for quality

7 Basic Quality Tools:  flowcharts, scatter diagrams, histograms, Pareto charts, checksheets, control charts, cause-and-effect diagrams

Other Quality Management and Control Tools:  affinity diagrams, process decision program charts, interrelationship digraphs, tree diagrams, prioritization matrices, activity network diagrams, matrix diagrams

Kaizen (continuous improvement):  constant process improvement

Just-In-Time (JIT):  near-zero inventory approach where product is pulled through the operation systems based upon actual demand rather than pushed through based upon forecasted demand

ISO 9000:  certification that you document and follow industry-set quality standards and processes

Six Sigma:  3.4 defects per million, or a statistical measure of 99.99966% accuracy of meeting specifications

Three Sigma:  2700 defects per million, or a statistical measure of 99.73% accuracy of meeting specifications

One Sigma:  317,500 defects per million, or a statistical measure of 68.25% accuracy of meeting specifications

Mutually Exclusive:  one choice or event excludes other possibilities

Statistical Independence:  2 outcomes are not dependent on each other

Probability Distribution:  table or graph showing mathematical possibility of an event occurring

Standard Deviation:  a measure of diversity of data observations – the average difference between a data point and the average of a given sample or population

Cost of Quality (COQ):  quality planning and appraisal costs

Control Chart:  graph of samples to determine if process is in control or product is performing with in specifications

Run Chart:  graph of a statistic over time to depict change

Statistical Sampling:  random sampling approach in order to cut costs instead of testing 100% of the population

Benchmarking:  comparing project quality standards to those of other similar projects

Flowcharting:  depicting relationships of components in a process

Pareto Chart (80/20 Rule):  ranking causes in descending order by the number of problem occurrences resulting from each respective cause – typically 80% of the results/outputs are caused by 20% of the causes/inputs

Scatter Diagram:  plot of data points against 2 variables to depict possible statistical correlation or dependence of the variables

Cause & Effect (Ishikawa/Fishbone) Diagram:  relating potential underlying causes to an effect or result in analysis

Human Resource Management:

Human Resource Management includes the processes that organize, manage and lead the project team.  Project managers must engage in organizational planning, staff acquisition, and team development.  This thread includes planning human resource management, acquiring the project team, developing the project team, and managing the project team.  Some relevant key terms/concepts include, but not are limited to:

Maslow’s Hierarchy of Needs:  5 categories of needs exist in an hierarchy, in which meeting needs in one category does not motivate an individual unless the needs of all lower categories are already met

Helzberg’s Motivation-Hygiene:  hygiene factors do not motivate but must be minimally present in order for other motivational factors to function

McGregor’s Theory-X & Theory-Y:  X-managers believe constant supervision is necessary where as Y-managers believe people can be trusted to work

Fiedler’s Contingency:  effectiveness of a leader’s style (task or relationship oriented) is contingent upon the situation

McClelland’s Theory of Needs:  workers may be motivated by meeting their varying degrees of need for achievement, power, and/or affiliation

Expectancy:  the realistic (believable) expectation of a reward is a motivator

Responsibility Assignment Matrix (RAM):  work packages in row headings and roles in column headings while check marks at the intersection cells map out specific work to specific roles

RACI Chart:  specific type of RAM where intersection cells contain an ‘R’ (Responsible), ‘A’ (Accountable), ‘C’ (Consult), ‘I’ (Inform) assignment rather than just a checkmark

Staffing Management Plan:  contained in the Human Resource plan and describes how and the when the team will be staffed, trained, and released

Communications Management:

Communication Management is required to ensure timely and appropriate generation, collection, distribution, storage, retrieval, reporting, and ultimate disposition of project information.  This thread includes planning communication management, managing communications, and controlling communications.  Always remember that 90% of project management time should be spent on communicating.  Some relevant key terms/concepts include, but not are limited to:

Communications Management Plan:  a document that articulates who the stakeholder audiences are, what types of communications will be distributed, who sends and receives what types of communications, and how often communications will occur

# of Communication Channels:  n(n-1)/2

Communication Strategies:  Interactive, push, and/or pull

Contract-related Communications:  formal and/or written

Feedback:  verbal & nonverbal cues from listener to acknowledge comprehension of the message

Nonverbal Communications:  body language, posture, facial expressions, gestures, and hand motions

Paralingual:  vocal but not verbal – tone of voice, volume, pitch, etc.

Risk Management:

Risk Management includes the processes of conducting risk management planning, identification, analysis, response planning and monitoring /control on a project.  The objectives of Risk Management are to increase the probability and impact of positive events and decrease the probability and impact of negative events in the project.  This thread includes planning risk management, identifying risks, performing qualitative risk analysis, performing quantitative risk analysis, planning risk responses, and controlling risks.  Some relevant key terms/concepts include, but not are limited to:

Risk/Uncertainties:  can be good or bad – good (positive) risks are considered as opportunities while bad (negative) risks are considered as threats

Procurement Management:

Procurement Management is the process necessary to purchase or acquire products, services or results needed from outside the project team to perform the work.  Includes the contract management processes required to develop and administer contracts or purchase orders issued by authorized team members.  This thread includes planning procurement management, conducting procurements, controlling procurements, and closing procurements.  Due to legalities, all contracts and related change requests and communications should always be formal and written.  Some relevant key terms/concepts include, but not are limited to:

Point of Total Assumption (PTA):  the cost point at which the seller assumes 100% of the risk of additional and ongoing costs, where PTA = [Target Cost + {(Ceiling Price – Target Price)/Buyer’s Share}] and Price = Cost + Fee (or Profit)

Stakeholder Management:

This thread includes identifying stakeholders, planning stakeholder management, managing stakeholder engagement, and controlling stakeholder engagement.  In essence, it is about the creation and maintenance of relationships with the aim to satisfy the varying needs of varying audiences.  Some relevant key terms/concepts include, but not are limited to:

Stakeholder:  anyone with an interest (positive or negative) in the project

Information Management System:  facilitates the storage and reporting of information