The PMP certification is all about answering questions based on the Project management body of Knowledge. Not based on what we do in our office. That is where the true value is. So, set your mind to understand things as defined in PMBOK without any mental blocks. The objective is to learn first without any judgment. The following are the basic definitions of project management covered in Chapter 1 of PMBOK.
Projects, Programs and Operations
What is a Project?
- Temporary endeavor, undertaken to produce a unique product, service or result.
- Projects have definite start and end dates
- After the completion of the project, the team is dismantled
- Projects drive change. Projects support organizational initiatives which drive organizational change. You are constructing a new plant in the factory, which will in turn increase production and profits. By constructing a new metro rail, you are changing the way citizens travel. So, is the case with every project.
- Projects enable business value creation. The previous examples holds good for this as well. We have a digital marketing program, which creates value to the business.
- Projects are managed by Project managers
- For better efficiency, projects may be sub-divided into sub-projects
Programs are collections of inter-related projects, which when done together gives us more value than doing them one after the other. Integrated rapid transport system is a program comprising of water transport, metro rail, roads, cycling tracks, taxi services, car-pooling etc. If these projects are done together, then the end result will be better than doing them one after the other. Programs are managed by Program managers. Project managers of the projects which are part of the program reports to the program manager.
Is a collection of Projects, Programs, Subsidiary portfolios and Operations and other work carefully selected and executed to meet the strategic business goals of the organization. Anything that is linked to achievement of the strategic business goals can be easily classified as a portfolio.
Managers of the constituent programs, projects and other work report to the portfolio managers.
- Operations are ongoing in nature
- Operations produces standard output (Designing a new car is a project where as manufacturing a particular model of a car, shift after shift is operation. Most of the manufacturing comes under operations)
- Operations are also constrained by the limited resources of time, cost and quantity.
- Choose the best projects, programs and other work that supports the organization’s strategy to meet their business goals
- Organizational strategies and goals can change due to changes in the business environment. When such things happen, the portfolio also must be re-aligned to the changing business environment.
- Ensure that the components of the portfolio delivers the benefits for which they were initiated.
- Portfolio management is performed by portfolio managers
Project life cycle
Projects progress through a series of phases like;
- Kick starting the project
- Organizing and preparing for the project
- Execution of work
- Formal closure of the project / phases
These phases are collectively known as project life cycle.
Development life cycle
The phases within the project life cycle, which are associated with building the product (design, construction, testing) are called development life cycles. Development life cycles can be Adaptive or Predictive.
- In adaptive life cycles project’s master plan is delivered through iterations of shorter duration. They are also known as rolling wave planning or moving window planning. The projects have high level milestones and road maps which are divided into smaller iterations which are planned in detail and executed. Agile frameworks are classic examples of adaptive life cycles. Adaptive life cycles are very useful for projects where requirements do change rapidly (Software, Engineering design, Research and development projects, new technology product development etc)
- In predictive life cycles, projects are planned in detail from start to finish and executed. Projects where the engineering discipline does not allow for change are good candidates for such projects. Civil construction projects is a good example.
For effective management, projects can be sub divided into different phases like Phase#1, Phase#2 etc.
Projects are never funded in one go. At the end of every phase, senior management reviews are conducted to evaluate the progress made. If found satisfactory, projects get the green signal to proceed to the subsequent phases. If not satisfactory, projects will not be allowed to move to the subsequent phases. These senior management reviews are known as stage gates, phase gates or kill points.
Project management process groups
The Project Management Body of Knowledge comprises of 49 processes grouped into five process groups and ten knowledge areas. The mind map below depicts the five process groups.
- Monitoring & Controlling
Project management knowledge areas
The ten knowledge areas comprises of;
- Project integration management
- Project scope management
- Project schedule management
- Project cost management
- Project quality management
- Project resource management
- Project communications management
- Project risk management
- Project procurement management
- Project stakeholder management
It is not mandatory to follow every process in every project. Based on the need of the project the project manager can tailor the processes he wants to use in the project.
Project management business documents
- Project business case – Documented economic feasibility study of the project , generally owned by the project sponsor
- Why are we doing this project?
- Key stakeholders affected
- High level scope of the project
- Analysis of the situation
- Recommended solutions / alternatives analysis
- Milestone list
- Project benefits management plan – Processes for creating, maximizing and sustaining the benefits provided by a project. Project manager provides inputs for maintaining these.
- Benefit milestones and dates , Benefit owner
- Alignment of the benefits to the organizational business strategy
- Benefit measuring logic, systems
- Assumptions and risks
Project success measures
- Establishing the project success criteria with the involvement of all the key stakeholders upfront in a project increases the probability of success.
- Must be documented and can include;
- Definition of success for the project
- Success measuring parameters
- Critical success factors
- Adherence to the project business management plan
- Meeting the agreed upon financial ratios used while justifying the project selection;
- Net Present Value (NPV) = (Sum of the present value of all future cash flows – initial investment)
- Return On Investment (ROI)
- Internal Rate of Return (IRR)
- Pay Back Period (PBP) – The year in which we can take recover the initial investment from the project
- Benefit Cost Ratio (BCR) = (Sum of the present value of all future cash flows) / Initial investment