PMBOK 6th Edition training slides

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PMP Exam Prep for PMP trainers based on PMBOK 6th guide , project management professi

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Project Management Professional (PMP) Exam Preparation:

Project Management Professional (PMP) Exam Preparation (Based on Guide to PMBOK 6th Edition ) www.ReadytoTrainMaterials.com 1 Developed by 4 of our PMP Trainers and Experts Covered the latest PMBOK edition 6 2018

PMP Materials in the Course:

PMP Materials in the Course www.ReadytoTrainMaterials.com 3

Slide4:

(Based on Guide to PMBOK 6th Edition)

Chapter One:

Chapter One Introduction www.ReadytoTrainMaterials.com 5

What is a Project ?:

Temporary endeavor : with a beginning and an end, not an on-going effort + Progressive Elaboration. What is a Project ? A Project is a temporary endeavor undertaken to create a unique, product, service, or result . www.ReadytoTrainMaterials.com 6

What is a Project?:

Fulfillment of project objectives may produce one or more of the following deliverables: A unique product that can be either a component of another item, an enhancement or correction to an item, or a new end item in itself (e.g., the correction of a defect in an end item); A unique service or a capability to perform a service (e.g., a business function that supports or distribution); www.ReadytoTrainMaterials.com 7 What is a Project?

What is a Project?:

A unique result, such as an outcome or document (e.g., research project that develops knowledge that can be used to determine whether a trend exists or new process will benefit society); and A unique combination of one or more products, services, or results (e.g., a software application, its associated documentation , and help desk services). www.ReadytoTrainMaterials.com 8 What is a Project?

Projects Drive Change:

Projects Drive Change Projects drive change in organizations. From a business perspective, a project is aimed at moving an organization from one state to another state in order to achieve a specific objective www.ReadytoTrainMaterials.com 9

Projects Enable Business Value Creation:

Projects Enable Business Value Creation value is the net quantifiable benefit derived from a business endeavor. The benefit may be tangible, intangible, or both www.ReadytoTrainMaterials.com 10 Examples of tangible elements include Monetary assets Stockholder equity Utility, Fixtures Tools Market share Examples of intangible elements include Goodwill Brand recognition Public benefit Trademarks Strategic alignment Reputation

Project Initiation Context:

Project Initiation Context www.ReadytoTrainMaterials.com 11

Importance of Project Management:

Importance of Project Management www.ReadytoTrainMaterials.com 12

The Importance of Project Management:

The Importance of Project Management www.ReadytoTrainMaterials.com 13

Example: The Website Creation Project :

Example: The Website Creation Project Consider a project authorized by a firm to create an intranet website that would display its employee related information. The outcome of the project is the website, and the duration will depend on the complexity and size of the work involved. The project will come to an end when the website is posted on the server and is ready for use by appropriate users. www.ReadytoTrainMaterials.com 14

Example: Operations in a Petrochemical Industry :

Example: Operations in a Petrochemical Industry One of the major petrochemical companies has set up a new refinery to meet its increasing market demand. The company plans to break-even in three years by achieving the desired volume of output from its new plant. Once the new plant is set up, the operations to be carried out in the new branch include daily production, routine maintenance of the plant, wages and salary credits to employees, purchase of raw materials, grievance handling, logistics, and supply of finished products to the market. www.ReadytoTrainMaterials.com 15

Relationship of Project, Program, Portfolio, and Operations Management:

Relationship of Project, Program, Portfolio, and Operations Management Program and project management focus doing programs and projects the “right” way; and Portfolio management focuses doing the “right” programs. www.ReadytoTrainMaterials.com 16

Programs and Portfolio:

Programs and Portfolio A program is defined as a group of related projects, subprograms, and program activities managed in a coordinated way to obtain benefits not available from managing them individually. Project may or may not be part of a program but a program will always have projects Project within a program are related through the common outcome or collective capability. A portfolio refers to projects, programs, subportfolios , and operations managed as a group to achieve strategic objectives , The projects or programs of the portfolio may not necessarily be interdependent or directly related. www.ReadytoTrainMaterials.com 17

Slide18:

Project, Program, Portfolio Project E www.ReadytoTrainMaterials.com 18

Comparative Overview of Portfolios, Programs, and Projects:

Comparative Overview of Portfolios, Programs, and Projects 19

Portfolios, Programs, and Projects:

Portfolios, Programs, and Projects Portfolio management aligns portfolios with organizational strategies by selecting the right programs or projects, prioritizing the work, and providing the needed resources . Program management harmonizes its program components and controls interdependencies in order to realize specified benefits . Project management enables the achievement of organizational goals and objectives www.ReadytoTrainMaterials.com 20

Organizational Project Management:

www.ReadytoTrainMaterials.com 21 Organizational Project Management

Interrelationship of PMBOK® Guide Key Components in Projects:

Interrelationship of PMBOK® Guide Key Components in Projects www.ReadytoTrainMaterials.com 22

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Chapter 2:

Chapter 2 The Environment in Which Projects Operate www.ReadytoTrainMaterials.com 24

Project Influences:

Project Influences www.ReadytoTrainMaterials.com 25

EEFS Internal to The organization:

EEFS Internal to The organization 26

EEFS External to The Organization:

EEFS External to The Organization 27

Organizational Process Assets:

Organizational Process Assets Processes, policies, and procedures Organizational knowledge bases. www.ReadytoTrainMaterials.com 28

Organizational Knowledge Repositories:

Organizational Knowledge Repositories Configuration management knowledge Financial data Historical information and lessons learned Issue and defect management data Project files from previous projects www.ReadytoTrainMaterials.com 29

Organizational Governance Frameworks:

Organizational Governance Frameworks www.ReadytoTrainMaterials.com 30

Factors to consider in selecting an organizational structure :

Factors to consider in selecting an organizational structure www.ReadytoTrainMaterials.com 31

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Chapter 3:

Chapter 3 The Role of The Project Manager www.ReadytoTrainMaterials.com 33

Project Manager’s Sphere of Influence:

Project Manager’s Sphere of Influence www.ReadytoTrainMaterials.com 34

Slide35:

Project Manager is the person responsible for accomplishing the project objectives. Characteristics: Knowledge: Project Management Knowledge (Not Technical Knowledge ). Performance. Personal: Decision Maker, Integrity and Honesty, leadership, Negotiation, communication. www.ReadytoTrainMaterials.com 35

The Industry Trends:

The Industry Trends Product and technology development; New and changing market niches ; Standards (e.g., project management, quality management, information security management ); Technical support tools; Economic forces that impact the immediate project; Influences affecting the project management discipline; Process improvement and sustainability strategies www.ReadytoTrainMaterials.com 36

Project Manager Competences:

Project Manager Competences www.ReadytoTrainMaterials.com 37

Technical Project Management Skills:

Technical Project Management Skills Focus on the critical technical project management elements for each project they manage. Tailor both traditional and agile tools, techniques, and methods for each project. Make time to plan thoroughly and prioritize diligently . Manage project elements, including, but not limited to, schedule, cost, resources, and risks www.ReadytoTrainMaterials.com 38 1

Strategic and Business Management Skills:

Strategic and Business Management Skills Explain to others the essential business aspects of a project Work with the project sponsor, team, and subject matter experts to develop an appropriate project delivery strategy Implement that strategy in a way that maximizes the business value of the project. www.ReadytoTrainMaterials.com 39 2

Leadership Skills:

Leadership Skills Dealing with People Qualities and SKILLS of a Leader (Being a visionary, Being optimistic and positive, Being collaborative, Managing relationships and conflict, Communicating Politics, Power, and Getting Things done www.ReadytoTrainMaterials.com 40 3

Comparison of Leadership and Management:

Comparison of Leadership and Management www.ReadytoTrainMaterials.com 41

Leadership Styles:

Leadership Styles www.ReadytoTrainMaterials.com 42

Personality:

Personality Personality refers to the individual differences in characteristic patterns of thinking, feeling, and behaving. characteristics or traits Authentic Courteous Creative Cultural Emotional Intellectual Managerial Political Service-oriented Social Systemic www.ReadytoTrainMaterials.com 43

Integration and Complexity:

Integration and Complexity Three dimensions of complexity: System behavior. The interdependencies of components and systems. human behavior. The interplay between diverse individuals and groups . Ambiguity . Uncertainty of emerging issues and lack of understanding or confusion www.ReadytoTrainMaterials.com 44

Chapter 4:

Chapter 4 Project Integration Management www.ReadytoTrainMaterials.com 45

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Interpersonal And Team Skills:

Interpersonal And Team Skills www.ReadytoTrainMaterials.com 47

Monitor & Control Project Work :

Monitor & Control Project Work The process of tracking, reviewing, and reporting the progress to meet the performance objectives defined in the project management plan. Control includes determining corrective or preventive actions or re-planning and following up on action plans. www.ReadytoTrainMaterials.com 48

Monitor and Control Project Work - Inputs:

Monitor and Control Project Work - Inputs Performance Reports: Reports should be prepared by the project team detailing activities, accomplishments, milestones, identified issues and problems. Performance reports can be used to report the key information, but not limited to : Current status. Significant accomplishments for the period. Scheduled activities. Forecasts and Issues. www.ReadytoTrainMaterials.com 49

Perform Integrated Change Control:

Perform Integrated Change Control Process of reviewing all change requests; approving changes and managing changes to deliverables, organizational process assets, and the project management plan; and communicating their disposition. Changes may be requested by any stakeholder involved with the project. It reviews all requests for changes or modifications to project documents, deliverables, baselines, or the project management plan and approves or rejects the changes. www.ReadytoTrainMaterials.com 50

Perform Integrated Change Control:

Perform Integrated Change Control It should be written formally and entered to change control and configuration control systems. Project manager has the authority to approve or reject the change requests, when required, it will be the responsibilities of Change Control Board ( CCB). www.ReadytoTrainMaterials.com 51

A Change Control Board (CCB):

A Change Control Board (CCB) It is an internal unit or department charged with not only monitoring, controlling, coordinating, and implementing changes to all elements of project work, but also with accepting or rejecting changes that have been requested by stakeholders. Normally, the CCB operates closely with the project’s sponsor, customers, and other key stakeholders. The responsibilities of the CCB will have been documented, and agreed to by the stakeholders, customers, and project team. www.ReadytoTrainMaterials.com 52

Perform Integrated Change Control – Tools &Techniques:

Perform Integrated Change Control – Tools &Techniques Change Control Meetings A change control board is responsible for meeting and reviewing the change requests and approving or rejecting those change requests . All change control board decisions are documented and communicated to the stakeholders for information and follow up actions. The status of all the changes , approved or not, will be updated in the change request log as part of the project document updates. www.ReadytoTrainMaterials.com 53

Change Log:

Change Log A change log is used to document changes that occur during a project. These changes and their impact to the project in terms of time, cost, and risk, are communicated to the appropriate stakeholders. www.ReadytoTrainMaterials.com 54

Manage Project Knowledge:

Manage Project Knowledge Manage Project Knowledge is the process of using existing knowledge and creating new knowledge to achieve the project’s objectives and contribute to organizational learning The lessons learned register can include the category and description of the situation. The lessons learned register may also include the impact, recommendations, and proposed actions associated with the situation. The lessons learned register may record challenges, problems, realized risks and opportunities, or other content as appropriate www.ReadytoTrainMaterials.com 55

Close Project or a Phase:

Close Project or a Phase It is the process of finalizing all activities across all of the project management process groups to formally complete the project or phase process. This phase includes the procedures to investigate and document the reasons for actions taken if a project is terminated before completion. www.ReadytoTrainMaterials.com 56

Chapter 5:

Chapter 5 Project Scope Management www.ReadytoTrainMaterials.com 57

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Control Scope:

Control Scope It is the process of monitoring the status of project and product scope and managing changes to the scope baseline Uncontrolled scope changes result in scope creep. www.ReadytoTrainMaterials.com 59

Chapter 6:

Chapter 6 PROJECT Schedule MANAGEMENT www.ReadytoTrainMaterials.com 60

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Project Schedule Management:

Project Schedule Management 62

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Estimate Activity Durations : Tools & Techniques:

Estimate Activity Durations : Tools & Techniques www.ReadytoTrainMaterials.com 64

Estimate Activity Durations : Tools & Techniques:

Agile Release Planning Agile release planning provides a high-level summary timeline of the release schedule (typically 3 to 6 months) based on the product roadmap and the product vision for the product’s evolution. Estimate Activity Durations : Tools & Techniques www.ReadytoTrainMaterials.com 65

Develop Schedule: Outputs Project Schedule:

Develop Schedule: Outputs Project Schedule Can be represented by: Bar charts Milestone charts. Project schedule network diagrams www.ReadytoTrainMaterials.com 66

Bar (Gantt Chart):

Bar (Gantt Chart ) www.ReadytoTrainMaterials.com 67

Milestone Chart:

Milestone Chart www.ReadytoTrainMaterials.com 68

Develop Schedule: Outputs Project Calendars:

Develop Schedule: Outputs Project Calendars working days and shifts that are available for scheduled activities. It distinguishes time periods in days or parts of days that are available to complete scheduled activities from time periods that are not available for work. www.ReadytoTrainMaterials.com 69

Develop Schedule-Outputs:

Develop Schedule-Outputs Schedule Network Analysis Schedule network analysis is a technique that generates the project schedule. It employs a schedule model and various analytical techniques, such as critical path method, critical chain method, what-if analysis, and resource levelling to calculate the early and late start and finish dates for the uncompleted portions of project activities. www.ReadytoTrainMaterials.com 70

Develop Schedule: Outputs Project Calendars:

Develop Schedule: Outputs Project Calendars project calendar identifies working days and shifts that are available for scheduled activities. www.ReadytoTrainMaterials.com 71

Sample of Questions:

Sample of Questions www.ReadytoTrainMaterials.com 72

Exercise:

Exercise Q1. The estimate for a task is O = 3 days, P = 7 days, M = 4 days. What is the standard deviation of the task? A. 5/6 of a day. B. 2/3 of a day. C. 1 ½ days. D. 5 2/3 days. www.ReadytoTrainMaterials.com 73

Exercise:

Exercise Q2. You are the project manager for a new project and have figured out the following dependencies: Task 1 can start immediately and has an estimated duration of 3 weeks Task 2 can start after Task1 is completed and has an estimated duration of 3 weeks Task 3 can start after Task 1 is completed and has an estimated duration of 6 weeks Task 4 can start after Task 2 is completed and has an estimated duration of 8 weeks Task 5 can start after task 4 is completed and after Task 3 is completed . This task takes 4 weeks. What is the duration of the critical path? A. 18.5 weeks -B. 19 weeks -C. 20 weeks - D. 18 weeks www.ReadytoTrainMaterials.com 74

Exercise:

Q3. A project has three critical paths. Which of the following BEST describes how this affects the project? A. It makes it easier to manage. B. It increases the project risk. C. It requires more people. D. It makes it more expensive. Exercise www.ReadytoTrainMaterials.com 75

Exercise:

Q4. You are taking over a project and determine the following: Task B has an early finish of day 3, a late finish of day 6, and an early start of day 2. Task L is being done by a hard-to-get resource. The CPI is 1.1 and the SPI is 0.8. Based on the information above, what would you be most concerned about? A. Float. B. Resources. C. Cost. D. Schedule. Exercise www.ReadytoTrainMaterials.com 76

Exercise:

You are the project manager for a project with the following network diagram. Studying the diagram, which path is the critical path? A. ABCD B. EBCD C. EFH D. EGH Exercise www.ReadytoTrainMaterials.com 77

Control Schedule:

Control Schedule The process of monitoring the status of the project to update the project schedule and managing changes to the schedule baseline www.ReadytoTrainMaterials.com 78

Chapter 7:

Chapter 7 Project Cost Management www.ReadytoTrainMaterials.com 79

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80

Project Cost Management:

Project Cost Management Costing is different from Pricing. Costing includes the monetary resource required to complete the project and pricing normally include a profit margin. Costing is based on WBS and controlled by Control Accounts Costing shall be ideally done by a team who perform the work Padding is not a good practice www.ReadytoTrainMaterials.com 81

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Tools and Techniques Earned Value Management (EVM):

Actual Cost (AC) It indicates the actual money that has been spent for work that has been completed. Example: Work package XX have a 4 stages and each stage will take one week to complete with $500 estimated cost per stage. End of 2nd week 3 stages were completed and contractor has spend 1700. What is the PV, EV & AC PV on 2nd Week = Total value of planned work to be completed on second week in monetary terms (500 X 2 = 1000) EV on 2nd week = Estimated value of work completed (500 X 3 = 1500) AC on 2nd Week = Actual cost spend of work already completed (1700) Tools and Techniques Earned Value Management (EVM) www.ReadytoTrainMaterials.com 83

Tools and Techniques Earned Value Management (EVM):

SV (Schedule Variance) = EV-PV (Difference between estimated value of work completed and estimated value of work planned) CV (Cost Variance) = EV-AC (Difference between estimated value of work completed and actual cost of work completed) SPI (Schedule Performance Index) = EV/PV CPI (Cost Performance Index) = EV/AC Tips EV comes first in all equations. For Schedule related equation there is PV and AC for cost related Tools and Techniques Earned Value Management (EVM) www.ReadytoTrainMaterials.com 84

Control Costs- Tools and Techniques:

Forecasting Using the earned value analysis, team can now forecast the project performance. Estimate at completion (EAC) may differ from Budget at Completion (BAC) Estimate to complete (ETC) is the estimate of remaining work. Now Estimate at completion = AC + ETC. Control Costs- Tools and Techniques www.ReadytoTrainMaterials.com 85

Control Costs- Tools and Techniques:

EAC can be calculated by: There will be no variation for remaining work and will progress as planned before ETC = BAC – EV & that means EAC = AC + ETC (BAC-EV) The changes project experience will continue to occur for remaining work. EAC = BAC/CPI (Only cost efficiency is considered now) Here team considers that remaining work will be completed at the same efficiency rate considering cost and schedule performance EAC = AC + (ETC/CPI x SPI) & ETC = BAC-EV. Control Costs- Tools and Techniques www.ReadytoTrainMaterials.com 86

Earned Value: Graphical Representation:

Earned Value: Graphical Representation www.ReadytoTrainMaterials.com 87

Earned Value Management (EVM):

Earned Value Management (EVM) Terms and formulas Definition Example Earned Value (EV) As of today, what is the estimated value of the work actually accomplished? $100 k Actual cost (AC) As of today, what is the actual cost incurred for the work accomplished? $200k Planned Value (PV) As of today, what is the estimated value of work planned to be done? $300 k Cost Variance (CV)=EV-AC Negative is over budget Positive is under budget $100k-$200k=-$100 Schedule Variance (SV)=EV-PV Negative is behind schedule Positive is ahead schedule $100k-$300k=-$200 Cost Performance Index(CPI)=EV/AC We are getting $.....worth of work out of every $1 spent. Are funds being used efficiently? $100k/$200k=.5 Schedule Performance Index (SPI)=EV/PV We are(only) progressing at>>> percent of the rate originally planed $100k/$300k=.33 Revised total duration Baseline duration/schedule performance index 4/.33=12 months www.ReadytoTrainMaterials.com 88

Earned Value Technique :

Earned Value Technique Terms and Formulas Definition Budget at Completion (BAC) How much did we budget for the total project effort? Estimate at Completion (EAC)=BAC/CPI What do we currently expect the total project cost(a forecast)? Estimate to Complete (ETC)=EAC-AC From this point on, how much MORE do we expect it to cost to finish the project (a forecast) Variance at Completion (VAC)=BAC-EAC As of today how much over or under budget do we expect to be at the end of the project? EAC is an important forecasting value www.ReadytoTrainMaterials.com 89

Exercise:

Exercise You have a project to build a box. The box is six sided, each side is to take one day to build and is budgeted for $1000 per side. The sides are planned to be completed one after the other. Today is the end of day three. Using the following project status chart, calculate PV,EV,AC,BAC,CV,CPI,SV,SPI,EAC,BTC,VAC. Describe your interpretation based on the calculation: Task Progress Cost spent Side 1 100% 1,200 Side 2 100% 1,000 Side 3 75% 750 Side 4 50% 500 Side 5 0% 0 Side 6 0% 0 Project is below/over budget? Project is late/a head schedule? How much more money we need? www.ReadytoTrainMaterials.com 90

Slide91:

Parameter Calculation Result PV 1000+1000+1000 3000 EV (100% x 1000)+(100% x x1000)+ (755 x x1000) + 50% x1000) 3025 AC 1200+1000+750+500 3450 BAC 6 x 1000 6000 CV 3025/3450 -425 CPI 3025/3450 .88 SV 3025/3000 25 SPI 3025/3000 1.01 EAC 6000/.88 6818.18 ETC 6818.18-3450 3368.18 VAC 6000-6818.18 -818.18 Over budget, getting .88 dollar we spent Ahead schedule, progressing 101% of the rate planned Probably will spend $ 6818 at the end (estimation) Need $ 3368 to complete Over budget at the end for about $ 818 (estimation) Exercise www.ReadytoTrainMaterials.com 91

Control Costs- Tools and Techniques:

To Complete Performance Index (TCPI) TCPI predicts the efficiency that must be achieved for remaining work to complete the remaining works with available budget. TCPI = Work Remaining/Funds remaining = (Budget At Completion – Earned Value ) / (BAC – Actual cost) = (BAC-EV)/(BAC-AC). Control Costs- Tools and Techniques www.ReadytoTrainMaterials.com 92

Control Costs- Tools and Techniques:

To Complete Performance Index (TCPI) If it is obvious that earlier estimated budget at completion can not be achieved, Project manager develops a forecasted estimate at completion (EAC). Once approved through integrative change control process, EAC will superseded BAC and cost baselines will be revised. Now TCPI = (BAC-EV)/(EAC-AC) Now TCPI = Work Remaining/Funds remaining as per forecasted EAC = (Budget At Completion – Earned Value ) / (EAC – Actual cost). Control Costs- Tools and Techniques www.ReadytoTrainMaterials.com 93

Control Costs- Tools and Techniques:

To Complete Performance Index (TCPI) Control Costs- Tools and Techniques www.ReadytoTrainMaterials.com 94

Control Costs- Tools and Techniques:

TCPI (based on original estimate or forecasted budget) will set a new baseline for performance efficiency to be achieved to complete the works with funds remaining. If CPI falls below TCPI baseline, remaining works will not be completed with available funds. All future works shall be accelerated to bring CPI within TCPI range. Control Costs- Tools and Techniques www.ReadytoTrainMaterials.com 95

Control Costs- Tools and Techniques:

TCPI value >1 means in future, more work must be achieved per every dollar spent in the future compared to actual work achieved previously per dollar. TCPI value <1 means in future lesser work need to be achieved for every dollar spent compared to past performance. Control Costs- Tools and Techniques www.ReadytoTrainMaterials.com 96

Control Costs- Tools and Techniques:

Examples A project has the following Earned value data assessed: AC: $ 4,000,000 CV: $ -500,000 SPI: 1.12 BAC: $ 9,650,000 What is the Earned value of the project? What is the CPI? What is the TCPI? In your project, there have been several changes in the cost and schedule estimates and the original estimating assumptions are no longer valid. What is the Estimate at Complete for your project? BAC = $ 300,000, AC = $ 100,000, EV = $ 150,000, CPI = $ 1.2, ETC = $ 120,000. Control Costs- Tools and Techniques www.ReadytoTrainMaterials.com 97

Control Costs- Tools and Techniques:

Control Costs- Tools and Techniques Cost Formulas Calculation Cost Performance Index (CPI) Estimate to Complete (ETC) Estimate at Completion (EAC) using new estimate Estimate at Completion (EAC) using remaining budget Estimate at Completion (EAC) using CPI To-Complete Performance Index (TCPI) based on BAC To-Complete Performance Index (TCPI) based on EAC To-Schedule Performance Index (TSPI) CPI = EV / AC ETC = BAC - EV or (BAC - EV) / CPI EAC = AC + ETC EAC = AC + BAC - EV EAC = AC + ( (BAC - EV) / CPI) or EAC = BAC / CPI TCPI = (BAC - EV) / (BAC - AC) TCPI = (BAC - EV) / (EAC - AC) (BAC - EV) / (BAC - PV) www.ReadytoTrainMaterials.com 98

Chapter 8:

Chapter 8 Project Quality Management www.ReadytoTrainMaterials.com 99

Project Quality Management:

Project Quality Management www.ReadytoTrainMaterials.com 100

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Chapter 9:

Chapter 9 Project Resource Management www.ReadytoTrainMaterials.com 102

Plan Resource Management:

Plan Resource Management Is the process of identifying and documenting project roles, responsibilities, required skills, reporting relationships, and creating a staffing management plan www.ReadytoTrainMaterials.com 103

Project Resource Management Overview:

Project Resource Management Overview 104

Plan Resource Management:

Plan Resource Management is the process of defining how to estimate, acquire, manage, and use team and physical resources. Plan Resource Management www.ReadytoTrainMaterials.com 105

Plan Resource Management: Tools and Techniques:

Plan Resource Management: Tools and Techniques Data Representation hierarchical charts Work breakdown structures (WBS). Organizational breakdown structure (OBS). un Resource breakdown structure Assignment Matrix Text-oriented formats www.ReadytoTrainMaterials.com 106

Plan Resource Management: Tools and Techniques:

Plan Resource Management: Tools and Techniques Organizational Theory Organizational theory provides information regarding the way in which people, teams, and organizational units behave. Effective use of common techniques identified in organizational theory can shorten the amount of time, cost, and effort needed to create the Plan Resource Management process outputs and improve planning efficiency. www.ReadytoTrainMaterials.com 107

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Chapter 10:

Chapter 10 Project Communications Management www.ReadytoTrainMaterials.com 109

Project Communications Management:

Project Communications Management 110

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Chapter 11:

Chapter 11 Project Risk Management www.ReadytoTrainMaterials.com 113

Project Risk Management:

Project Risk Management 114

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Chapter 12:

Chapter 12 Project Procurement Management www.ReadytoTrainMaterials.com 117

Project Procurement Management:

Project Procurement Management 118

Project Procurement Management:

Project Procurement Management Plan Procurement Management is the process of documenting project procurement decisions, specifying the approach , and identifying potential sellers . PM must be involved in the creation of the contracts. www.ReadytoTrainMaterials.com 119

Legal Contractual Relationships:

Legal Contractual Relationships Purchase Order. Fixed Price Contract-lump sum . Cost-reimbursable Contract. Time and Material (T&M) or Unit Price www.ReadytoTrainMaterials.com 120

Legal Contractual Relationships:

Contract Types: Contract is a mutually binding legal agreement that obligates the seller to provide the specified products, services or results, and obligates the buyer to compensate the seller. The contract may includes the following: An offer, Acceptance, Pricing, roles and responsibilities, penalties, warranty. Purchase Order: Contract to purchase 30 linear meters of wood at $ 40 per meter. Legal Contractual Relationships www.ReadytoTrainMaterials.com 121

Project Procurement Management– Tools & Techniques: Contract Types :

Project Procurement Management– Tools & Techniques: Contract Types Fixed Price Contract-lump sum: setting a total fixed price for a defined product or services Firm Fixed Price Contracts (FFP ): Under this type of contract the buyer must precisely specify the product or services to be procured, and any changes to the procurement specification can increase the costs to the buyer. www.ReadytoTrainMaterials.com 122

Project Procurement Management– Tools & Techniques: Contract Types :

Project Procurement Management– Tools & Techniques: Contract Types Fixed Price Contract-lump sum: setting a total fixed price for a defined product or services Fixed Price Incentive Fee Contracts (FPIF): some flexibility in deviation from performance with financial incentives with price ceiling, Contract =1,100,000. For every month early the project is finished, an additional 10,000 is paid to the seller. Fixed Price Economic Price Adjustment (FPEPA): It is a fixed-price contract, but with a special provision allowing for pre defined final adjustments to the contract price due to changed conditions, such as inflation changes, or cost increases (or decreases) for specific commodities. www.ReadytoTrainMaterials.com 123

Examples:

Examples PO: $1K per 1 metric ton. FP: Contract = $1M . FPIF: contract= $ 1M + for every month added $1000 . www.ReadytoTrainMaterials.com 124

Project Procurement Management– Tools & Techniques :

Cost-reimbursable Contract: The seller's cost are reimbursed, plus an additional amount.(seller profit). Project Procurement Management– Tools & Techniques www.ReadytoTrainMaterials.com 125

Project Procurement Management– Tools & Techniques :

Cost plus Fixed Fee (CPFF): In this type, the buyer pays all costs, but the fee (or profit) is fixed at a specific amount. Contract = Cost + Fee of 200,000; fee is not changing due to seller performance. Cost Plus Incentive Fee (CPIF): the seller is reimbursed for all costs and receives a predetermined incentive fee based on achieving certain performance objectives set in advance in the contract. Project Procurement Management– Tools & Techniques www.ReadytoTrainMaterials.com 126

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Exercise: Contract Calculation:

Exercise: Contract Calculation In this cost incentive fee contract, the cost is estimated at $210,000 and the fee at $ 25,000. the project is over and the buyer has agreed that the costs were, in fact, $ 200,000. because the seller’s costs came in lower than the estimated costs, the seller shares in the savings: 80 percent to the buyer and 20 percent to the seller. Calculate the final fee and final price. Target cost 210,000 Target fee 25,000 Target price 235,000 Sharing ratio 80/20 Actual cost 200,000 Final fee 201,000-200,000=10,000 10,000 x 20%=2,000 25,000 (target fee) +2,000=27,000 Final price 200,000+27,000=227,000 www.ReadytoTrainMaterials.com 128

Slide130:

Chapter 13 Project Stakeholder Management www.ReadytoTrainMaterials.com 130

Project Stakeholder Management:

Project Stakeholder Management www.ReadytoTrainMaterials.com 131

Identify Stakeholders :

Identify Stakeholders Identify Stakeholders is the process of identifying project stakeholders regularly and analyzing and documenting relevant information regarding their interests, involvement, interdependencies, influence, and potential impact on project success. It is critical for project success to identify the stakeholders early in the project or phase and to analyze their levels of interest, their individual expectations, as well as their importance and influence. www.ReadytoTrainMaterials.com 132

Identify Stakeholders: Tools and Techniques:

Identify Stakeholders: Tools and Techniques Stakeholder Analysis: is a technique of systematically gathering and analyzing quantitative and qualitative information to determine whose interests should be taken into account throughout the project. Stakeholders ’ stakes elements Interest Rights (legal or moral rights). Ownership. Knowledge . Contribution www.ReadytoTrainMaterials.com 133

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Chapter 14 Professional Responsibility www.ReadytoTrainMaterials.com 136

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Exercise - Quiz:

Exercise - Quiz www.ReadytoTrainMaterials.com 138

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