Chapter 4 - Integration Management Flashcards
Primary role of PM
Perform integration management
Integration management
Pulling all the pieces of a project, i.e., knowledge areas, together into a cohesive whole
Why is it important to know a project’s history in order to manage it effectively, and achieve aspired results?
- The reason a project is selected and the value it is expected to bring indicate its signifcance to the company
- The PM needs to know if the project was selected because it will establish a new area of business, if it’s being implemented to meet compliance requirements, least expensive, etc.
- The reason a project was selected can impact which constraints are most flexible, and knowing this info will influence how the PM plans and manages the project
Benefit measurement methods
Comparative project selection approach. Examples include:
- Murder board (panel of people who try to shoot down a new project idea)
- Peer review
- Scoring models
- Economic measures
Constrained optimization methods
Mathematical project selection approach. Examples include:
- Linear programming
- Integer programming
- Dynamic programming
- Multiobjective programming
Return On Investment (ROI)
Calculation of benefits received in relation to the cost
Present Value (PV) definition
- The value today of future cash flows
- Do NOT confuse with Planned Value (PV)
- If the question is discussing how the project was evluated for selection/funding, PV represents present value
Present Value (PV) Formula
PV = FV / (1+r)<em>n</em>
- FV = Future Value
- r = interest rate
- n = number of time periods
Net Present Value (NPV) Definition
- Present value of the total benefits (income or revenue) minus the costs over many time periods
NPV > 1: should we invest?
Investment is a good choice because NPV is greater than 1
NPV < 1: should we invest?
Investment is a bad choice because NPV is less than 1
Given more than one NPV choice, how do you know which project to select?
Choose the NPV with the highest value
Internal Rate of Return (IRR) Definition
- The percent return the company will receive for a given project
- The interest rateat which the projectrevenuesandcostsareequal
Given more than one IRR choice, how do you know which project to select?
Choose the project with the highest IRR
Payback period
The length of time it takes for the organization to recover its investment in a project before it starts accumulating profit
Given more than one payback period choice, how do you know which project to select?
Generally speaking, go with the shorter payback period
Cost-benefit analysis
- Analysis that compares the expected costs to the potential beenfits (revenue)
- The analysis results in a benefit-cost ratio, which can be expressed as a decimal or a ratio
- The ratio defined means that the benefits the project brings to the organization is X.X times the cost of the initiatives
- Also used to determine the best solution aporoach once a project is selected
Economic Value Added (EVA)
- Concerned with whether the project returns to the company more value than the initiative costs
- Do NOT confuse with Earned Value Analysis (EVA), which appears frequently
- Economic Value Added rarely appears on the exam
Opportunity cost
- The opportunity given up by selecting one project over another
- The opportunity cost is the value of the project not selected
Sunk costs
Expended costs, i.e. costs that have already been incurred
When should sunk costs be considered?
NEVER!
Law of diminishing returns
After a certain point, adding more input will NOT produce a proportional increase in productivity
Working capital
An organization’s current asses minus its current liabilities, i.e., the amount of money the company has available to invest
Depreciation
Large assets, such as equipment, lose value over time
Straight line depreciation
The same amount of depreciation is taken each year
Accelerated depreciation
- Depreciation that occurs faster than straight line
Two types:
- Double declining
- Sum of the years
What is the first part of integration management?
Developing a project charter
Business documents
Business documents provide critical info to the PM and team, and include information such as:
- Why the project was undertaken
- A summary of the realtionship between project objectives and strategic goals of the organization
Business case
- Describes the business need (justification), the proposed solution, and the expected value of the change
- Includes both tangible and intangible costs and benefits of the proposed solution
What is the thing you need in order to select a project?
A business case
Benefits management plan
- A document that captures the organization’s desired benefits from a project, whether economic or intangible, and explains how those benefits will be maximized/sustained
- Also defines metrics and processes for measuring a project’s benefits
Constraints
Factors that limit the team’s options
Where are assumptions and constraints initially documented?
As part of the business case, and highlighted in the project charter
Assumptions
Things that are assumed to be true, but may not be true
What must occur if constraints change or assumptions are proven wrong?
The PMP must be altered
Who creates a project charter?
- Both the buyer and the seller
- Both charters would have different reasons for working on the project
What does the project charter do for the PM?
- Clarifies/encourages understanding of project deliverables and milestones
- Defines the key roles and responsibilities
- Formally authorizes existence of the project
- Gives PM authority to spend money
- Gives PM authority to commit resources to the project
- Provides the objectives, high-level requirements, and success criteria for the project
- Process of creating the charter uncovers assumptions about the project
- Project charter links the project to the ongoing work of the organization
Regardless of the size of the project, developing the project charter requires what actions?
- Identify stakeholders
- Meet with key stakeholders to confirm high-level requirements, project scope, risks, assumptions, and issues
- Defining product scope
- Defining project objectives, constraints, and success criteria
- Documenting risks
Assumption log
A list of all assumptions and constraints
Management plans
- Management plans document the strategy and approach for managing the project and processes related to the knowledge areas
- This means there’s a management plan for each knowledge area!
Main points to know about management plans
- Management plans look forward in time
- Management plans exist for all of the knowledge areas
Project Management Plan (PMP)
- The PMP integrates all the individual management plans into a cohesive whole, creating a centralized document to describe what is involved in the project
- Also includes the baselines for the project
Key components of the PMP
- Project life cycle
- Development approach
- Management reviews
- Project management processes that will be used
- Knolwedge area management plans
- Baselines
- Requirements management plan
- Change management plan
- Change control system
- Configuration management plan
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Configuration management system
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Project life cycle
The project life cycle describes the phases of work on a project required to produce the deliverables
Performance measurement basline
Records of what the project had planned, scheduled, and budgeted for, and are used to compare the project’s actual performance against planned performance
Elements included in the scope baseline
- The project scope statement
- WBS
- WBS dictionary
Elements included in the schedule baseline
- Agreed-upon schedule (stop and start dates for each activity)
- Scheduled milestones
Elements included in the cost baseline
- Time-phased cost budget (spending plan indicating how much money is approved for the project, and when the funds are required/will be available)
What are project deviations often attributed to?sk
Incomplete risk identification and risk management
Requirements management plan
Defines how requirements will be gathered, analyzed, prioritized, evaluated, and documented, as well as how the requirements will be managed and controlled throughout the project
Change management plan
Describes how changes will be managed and controlled, i.e., who’s involved, who has authority to approve changes, how the changes will be stored and updated, outcomes of changes, etc.
Change control system
Standardized forms, reports, processes, procedures, and software used to track and control changes
Configuration management plan
- A plan that informs the team what version of the scope, schedule, and other components of the PMP is the latest
- Defines the naming conventions, version control system, and document storage/retrival system, and details how you will manage the changes to the documentation
Project documents
Any project-related documents that are not part of the PMP
Examples
- Assumption logs
- Cost and duration estimates
- Lessons learned register
- Project schedule
- Resource calendars
- Quality reports
- Resource requirements
- Requirements documentation
Project Management Information System (PMIS)
Used to help PM keep track of aspects of the project, and includes automated tools like:
- Scheduling software
- Configuration management system
- Shared workspaces for file storage or distribution
- Work authorization software
- Time tracking software
- Procurement management software
- Repositories for historical information
What is the purpose of a work authorization system?
To make sure work is only started when a formal authorization is given
Outputs of the Direct and Manage Project Work process
- New change requests
- Deliverables
- WPD
- Issue logs
- Implemented previously approved changes, preventive actions, and defect repairs
- PMP updates
Explicit knowledge
Fact-based, and can be easily communicated through words and symbols
Tacit knowledge
- Includes emotions, experience, and ability, which are more difficult to communicate clearly
- Lessons learned fall under this category
Lesson learned category: technical aspects
What was right and wrong about how we completed the work to produce the product?
Lesson learned category: project management
How did we do with WBS creation, risk planning, etc.? What can be used in the future?
Lesson learned category: management
How did I do with comms and leadership as a PM?
What to do if a project activity takes longer than estimated?
- Request corrective action to make up for delay
- Do NOT ask for more time!
Corrective action
- Any action taken to bring expected future project performance in line with the PMP based on actual, current deviations
Preventive action
Dealing with anticipated or possible deviations from the PMP
Defect repair
- Another way to say “rework”
- May be requested when a component of the project does not meet specifications
Key focus of integrated change control
- Look at impact of each change on all project constraints
- This helps to reduce risk of not fulfilling project objectives!
What’s necessary to have when evaluating impacts of a change?
- A realistic PMP to measure against
- A complete product and project scope
When should you implement changes? When is it costlier to implement changes?
- Should implement changes as early as possible
- Much costlier to implement changes later in the project
What type of project does NOT have a change control board?
Change-driven projects
Steps to answer questions that ask about process for making changes
- Evaluate the impact
- Identify options
- Get the change request approved internally
- Get customer buy-in (if required)
Detailed process for making changes
- Prevent the root cause of the changes
- Identify the need for a change
- Evaluate the impact of a change within a knowledge area
- Create a change request
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Perform ICC by:
- Assessing the change
- Identifying options
- Approving, rejecting, or derring the request
- Updating the status of the change in the change log
- Adjust the PMP, project docs, and baselines as necessary
- Manage stakeholders’ expectations by communicating chanegs to them
- Manage the project to the revised PMP and project docs
