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Flashcards in Deck 4 Deck (171):
1

What is source selection criteria?

Source selection criteria are often included in teh solicitation documents. How the winner will be picked. May be based on price, or other considerations, based on the complexity of the product, service or result sought.

2

What are possible selection criteria?

- Seller understanding of need, - Overall or life-cycle cost, - Technical capability, - Risk , - Management approach, - Technical approach, - Warranty, - Financial capacity of seller, - Production capacity and interest, - Business size and type, - Past performance of seller, - References, - Intellectual property rights, - Proprietary rights

3

Describe the process - Conduct Procurements

Involes obtaining responses (bids and proposals) from prospective sellers on how project needs can be met, selecting a seller, and awarding a contract. On major procurement items, the overall process of conducting procurements may be repeated, shortening the list of sellers asked to respond. This permits a more detailed evaluation with fewer sellers and less effort, spending less time on sellers who did not make the first cut.

4

What are the INPUTS of the process - Conduct Procurements?

1. Project management paln, which contains the procurement management plan, which describes how the processes will be managed from beginning to end., 2. Procurement documents, as described in the Plan Procurements process outputs, 3. Source selection criteria, as described in Plan Procurements process outputs, 4. Qualified sellers list, a listing of sellers who have been pre-screened for their qualifications and pass experience, 5. Seller proposals, received in response to a procurement document package, which will be evaluated against the selection criteria to select a seller, 6. Project documents, including risk register and risk-related contract decisions, as output from Plan Risk Responses process., 7. Make-or-buy decisions, as described in Plan Procurements process, 8. Teaming agreements, as described in Plan Procurements process, 9. Organizational process assets, including listings of prospective and previously qualified sellers, and information on relevant past experience with sellers.

5

What are the TOOLS AND TECHNIQUES of the process - Conduct Procurements?

1. Bidder conferences,, 2. Proposal evaluation techniques, 3. Independent estimates to serve as benchmark on proposed responses. Significant differences are a red flag., 4. Expert judgement , 5. Advertising, 6. Internet Search, 7. Procurement negotiations

6

What are bidder conferences?

Bidder conferences are meetings with all prospective sellers prior to preparation of a proposal. Ensures clear, common understanding of the procurement request (AKA contractor, vendor or pre-bid conferences). ALL potential sellers must remain on equal standing during the process. Electronic means are frequently used to achieve the same results as a conference.

7

What are proposal evaluation techniques?

On complex procurements, where source selection will be made based on seller responses to previously weighted criteria, a formal review process will be defined by the buyer's policies for procurement. Evaluation committee will make the selection for approval by management prior to the award.

8

How can expert judgement be used in the process Conduct Procurement?

Expert judgement may be achieved by using an evaluation team with expertise in each of the areas involved, including functional disciples such as legal, finance, contracting,accounting, engineering, design, research, development, sales and manufacturing.

9

How is advertising used in the process Conduct Procurement?

Advertising of proposals can be done in general circulation publications such as newspapers or in specialty publications such as professional journals. Some types of procurement activities require public advertising/post (e.g., governmental bodies).

10

How are Internet Searches used in the process - Conduct Procurement?

Many commodities, components, and off-the-shelf items can be procurement via Internet searches, but not high-risk, high-complexity items.

11

How are Procurement negotiations used in the process - Conduct Procurement?

Procurement negotiations are used to clarify the structure, requirements, and other terms prior to signing the contract. Final language reflects all agreements reached. Negotiation concludes with a contract document to be executed by both buyer and seller. Project manager might not be the lead negotiator.

12

What are the OUTPUTS of the process - Conduct Procurement?

1. Selected sellers, those sellers who have been judged too be in a competitive position based on the proposal evaluation, and who have negotiated a draft contract. Final approval may require senior management approval prior to award of the contract., 2. Procurement contract award, awarded to each selected seller. Could be in a number of forms, from a simple purchase order to a complex document., 3. Resource calendars showing when contract resources will be available, 4. Change requests to the project management plan, or subsidiary plans. Processed for approval through Perform Integrated Change Control Process, 5. Project management plan updates, including cost baseline, scope baseline, schedule baseline, and the procurement management, 6. Project documents updates, including requirements documentation, requirements traceability documentation, and the risk register

13

What are the components of a Contract?

- Statement of work or deliverables, - Schedule baseline, - Performance reporting, - Period of performance, - Roles and responsibilities, - Seller's place of performance, - Pricing, - Payment terms, - Place of delivery, - Inspection and acceptance criteria, - Warranty, - Product support, - Limitation of liability, - Fees and retainage, - Penalties, - Incentives, - Insurance and performance bonds, - Subordinate subcontractor approvals, - Change request handling, - Termination and dispute resolution mechanisms

14

What is the formula for a Fixed Price Incentive Fee?

Price = [Cost + Target Profit + [Sharing Ratio * (Target Cost - Cost)]] max price

15

What is the formula for Cost Plus Incentive Fee?

Price = Cost + [Target Fee + [Sharing Ratio * (Target Cost - Cost)]] Max Fee and Min Fee

16

What is the sharing formula for Fixed Price Incentive Fee (FPIF) contracts?

Given Target Cost, Ceiling Price, Target Profit and Sharing Ratio, > Target Price = Target Cost + Target Profit, > Seller pays Sharing Ratio of costs above Target Cost, > Seller receives Target Profit plus Sharing Ratio of costs below Target Cost, > Final Price never exceeds Ceiling Price (Seller pays ALL costs above Ceiling Price)

17

What is the sharing formula for Cost Plus Incentive Fee (CPIF) contracts?

Given Target Cost, Target Feel, Maximum Fee, Minimum Fee and Sharing Ratio, > Seller reimbursed 100% of costs, > Seller fee varies between Maximum and Minimum Fee, > Seller part of Sharing Ratio is smaller

18

Describe the process - Administer Procurements?

The process of managing procurement relationships, monitoring contract performance, and making changes and and corrections as needed.Both the buyer and seller administer the procurement contract for similar purposes. Each must ensure that both parties meet their contractual obligations, and that their own legal rights are protected.Team members must e aware of the legal implications int eh management of contract.sOn larger projects with multiple providers, a key aspect of contracts administration is managing the interfaces among the various providers.Due to varying organizational structures, many organizations treat contract administration as an administrative function separate from the project team. While the team may include a procurement administrator, that individual typically reports to a supervisor from a different department.This process includes applying appropriate project management processes to the contractual relationship and integration of the outputs into the overall management of the project.Administer procurements includes a financial management component involving monitoring payments to the seller. One of the principal concerns is that payments correlate to work performed.Administer procurements includes managing any early termination of the contracted work (for cause, convenience, or default) in accordance with the termination clause of the contract.May also involve contract changes in accordance with the change control terms.

19

What Project Management processes are applied to Administering Procurements?

- Direct and manage project execution, to authorize seller's work at the appropriate time.- Report performance to monitor scope, cost, schedule, and tehnical performance- Perform quality contract to inspect and verify the adequacy of the seller's product- Perform integrated change control to assure changes are approved and made known- Monitor and control risks to ensure that risks are mitigated.

20

What are the INPUTS of the process - Administer Procurements?

1. Procurement documents, including procurement contract awards and statements of work, 2. Project management plan, including the procurement management plan, 3. Contract, described in the Conduct Procurements process, 4. Performance reports related to the seller's performance, including seller-developed documentation and performance reports provided for in the contract., 5. Approve change requests, which can include modifications to the terms and conditions of the contract and statement of work, pricing, and descriptions of products, 6. Work performance information from Direct and Manage Project Execution, including quality contract results, cost incurred, invoices paid, etc.

21

What are the Contract Change Types?

- Administrative: No effect on substantive rights, such as change of address, - Change order: Written order directing the Seller to make a change, - Contract modification: Any written change in the terms, - Undefinitized contractual action: Action that authorizes start of work prior to setting final definitive price, - Supplemental agreement: Modification accompanied by mutual action of parties, - Constructive change: Change caused by the action or inaction of personnel, or circumstances that cause Seller to perform work differently than required.

22

What are the causes of Constructive Changes?

- Defective specifications with impossibility of performance, - Erroneous interpretation of contract, - Over inspection of work, - Failure to disclose superior knowledge, - Acceleration of performance, - Late or unsuitable Buyer furnished property, - Failure to cooperate, - Improperly exercised options, - Misusing proprietary data

23

What are Warranties?

Seller assures Buyer that goods will meet industry standards for quality, reliability and performance.

24

What is an Express Warranty?

Invoked when goods do not comply with contract specifications.

25

What is an Implied Warranty?

Measured by "Merchantability" or "Fitness for a particular use."

26

What is Implied Warranty of Merchantability?

It means goods must be fit for the ordinary purposes for which such goods are used.

27

What is a Waiver?

Under the doctrine of waiver a party can relinquish rights he otherwise has under the contract. The Buyer waives his right to strict performance if he knowingly accepts defective goods, or late performance without objection.

28

What is Breach of Contract?

Either party to the contract fails to perform a contractual obligation.

29

What is a Material Breach of Contract?

The offending party is deprived of benefits and discharged from further obligation under the contract.

30

What are the TOOLS AND TECHNIQUES of the process - Administer Procurements?

1. Contract change control system, defines the process by which the procurement can be modified. Includes the paperwork, tracking systems, dispute resolution procedures, and approval levels necessary. Integrated with the integrated change control system., 2. Procurement performance reviews, a structured review of the seller's progress. Includes review of seller-prepared documentation and buyer inspections, and quality audits conducted., 3. Inspections and audits, required by the buyer and supported by the seller, as specified in the contract. Verifies compliance in the seller's work processes or deliverables, 4. Performance reporting, provides management with information about how effectively the seller is achieving contract objectives, 5. Payment systems, typically process payments to the seller by accounts payable, after certification of satisfactory work., 6. Claims Administration, 6. Record management system, used by project manager to manage contracts and procurement documentation and records. Consists of a set of processes, related control functions, and automation tools, consolidated and combined as part of the project management information system.

31

What is Claims Administration?

Claims are contested changes and potential constructive changes where the buyer and seller cannot reach agreement on compensation for the change, or even agree that a change has occurred. May be called disputes or appeals as well. Claims are documented, processed, monitored, and management throughout the contract life cycle, per the contract. this may lead to alternative dispute resolution following procedures specified int eh contract.

32

What are the OUTPUTS for the process - Administer Procurements?

1. Procurement documentation, including procurement contract with all supporting schedules, requested changes with dispositions, seller-developed technical documentation and other work performance information and performance reports, warranties, invoices and payment records, and inspection results., 2. Organization process assets updates, including correspondence, payment schedules and requests, and seller performance evaluation documentation., 3. Chang erequests for the project management plan, its subsidiary plans, and other components such as the cost baseline, schedule, and procurement management plan. Processed through the Perform Integrated Change Control Process. Includes contested changes., 4. Project management plan updates. This includes the procurement management plan and the baseline schedule.

33

Describe the process - Close Procurements.

The process of completing each project procurement. Supports the Close Project or Phase process, since it involves verification that all work and deliveables were acceptable.This process also involves administrative activities such as finalizing open claims, updating records to reflect final results, and archiving for future use. Addresses each contract in the project. Contract terms and conditions can prescribe specific procedures for contract closure.

34

What are the reasons for Early Termination?

Mutual agreement Convenience of the buyer - Elimination of requirement, - Technological advances, - Budgetary changes, - Anticipated profits not allowed. Sellers Actions - Failure to deliver on scheduled date, - Failure to make progress and endanger contract performance and terms, - Failure to perform any other contract provisions

35

What are the OUTPUTS of the process - Close Procurements?

1. Closed procurements, providing the seller with formal written notice that the contract has been completed. Requirements for closure are usually defined in terms and conditions, and included in the procurement management plan, 2. Organizational process assets, including:, - Procurement file, a complete set of indexed contract documentation., - Deliverable acceptance, a formal written notice of acceptance or rejection, - Lessons learned documentation

36

What is the goal of Project Risk Management?

To increase the probability and impact of positive events and decrease the probability and impact of negative events in the project.

37

What is risk?

1. A risk is an uncertain event or condition that, if it occurs, has an effect on at least one project objective (scope, schedule, cost, quality), 2. A risk may have one or more causes, and one or more impacts, 3. Risk originates in the uncertainty that is present in all projects, 4. Known risk are those that we can identify and analyze, and therefore manage, 5. Unknown risks cannot be managed proactively, therefore we must perhaps handle them with contingency plans, 6. A risk that has occurred is an issue.

38

Why Risk Management?

- Required for successful business activity in today's changing environment; risk versus reward, - Projects are launched in response to opportunities, - As opportunities increase, so do associated risks, - Planning tends to be based on the past, whereas risks are always in the future, - Uncertainty must be addressed proactively and consistently to improve the changes of project success

39

Describe process 11.1 Plan Risk Management

Defines how to conduct risk management activities for a project. Careful and explicit planning enhances the changes of success in the other risk management processes. It is important to ensure that:, - The level of risk management is commensurate with the risk and importance of the project, - We provide sufficient resources and time for risk management activities, - We have established an agreed-upon basis for evaluating risks.

40

What are the INPUTS of the process - Plan Risk Management?

1. Project scope statement, provides information on the project and deliverables and helps establish the significance of the risk management effort, 2. Cost management plan, defines how risk budgets, contingencies, and management reserves will be reported and accessed, 3. Schedule management plan, defines how schedule contingencies will be reported and assessed., 4. Communications management plan, defines interactions and who can provide information on risks and responses, 5. Enterprise environmental factors, including risk attitudes and tolerances, 6. Organizational process assets, including risk categories, common definitions, risk statement formats, stand templates, roles and responsibilities, authority levels, lessons learned, and stakeholder register

41

What are the TOOLS AND TECHNIQUES of the process - Plan Risk Management?

1. Planning meetings and analysis, held to develop the risk management plan. Attendees: PM, project team leaders, key stakeholders, organization risk managers, others as needed. Develop high-level plans covering:, - Risk cost elements, schedule activities, risk responsibilities, etc., - Templates for risk categories, levels of risk, probability by type of risk, impact by type of objectives, probability and impact matrix tailored to the project.

42

What are the OUTPUTS of the process - Plan Risk Management?

Risk management plan, including:, - Methodology, - Roles and responsibilities, - Budgeting for risk management resources, - Timing of risk management activities, - Risk categories, - Definition of risk probability and impact, - Probability and impact matrix, to assist in prioritizing , - Revised stakeholder tolerances, - Reporting formats for risk management process outputs, - Tracking. Documents how risk activities will be reported, monitored, and audited for the project.

43

What are some common categories of risk?

1. Technical, quality, or performance risks - such as reliance on unproven or complex technology, unrealistic performance goals, changes to the technology used or to industry standards during the project., 2. Project management risks - Such as poor allocation of time and resources, inadequate quality of the project plan, poor use of project management disciplines, 3. Organizational risks - such as cost, time, and scope objectives that are internally inconsistent, lack of prioritization of projects, inadequacy or interruption of funding, and resource conflicts with other projects., 4. External risks - such as shifting legal or regulatory environment, labor issues, subcontractors and suppliers, country risk and weather.

44

What are some common sources of risk?

- External, but unpredictable (Regulatory, Natural hazards, side effects), - External predictable, but uncertain (Market risks, Operational, Currency changes, etc), - Internal, non-technical (Schedule, Cost, Cash flow, etc)., - Technical (Technology changes, Design, Complexity), - Legal (Licenses, Patent risks, Contractual, etc).

45

Describe the process - 11.2 Identify Risks.

Risk identification determines which risks might affect the project and documents their characteristics. Potentially done by all project stakeholders., - Risk identification is an iterative process as project risks evolve during the project, - Use a consistent format for all risks, - Usually leads to the Perform Qualitative Risk Analysis process, but can lead directly to the Perform Quantitative Risk Analysis process.

46

What are the TOOLS AND TECHNIQUES of the process - Identify Risks?

1. Documentation reviews: a structured review of project documentation, including plans, assumptions, previous project files, contracts, etc. This is generally the initial step taken by the project team in identifying possible risks. The quality of the documents under review is itself an indication of project risk., 2. Information gathering techniques, including: brainstorming, the Delphi technique, interviewing, and root cause analysis. Goal is to respond to the cause of the risk, so we must determine the cause., 3. Checklist analysis: using checklists developed based on historical information. This can be quick and simple, but might act as a thinking box, so think outside the checklist., 4. Assumptions Analysis: Exploring the validity of assumptions, and consequences if the assumptions are false, 5. Diagramming techniques: Cause and effect diagrams, system or process flow charts, and influence diagrams. These techniques were covered earlier., 6. SWOT analysis, - strengths, weaknesses, opportunities, and threats, 7. Expert judgement: possibility from risk management departments within the organization.

47

What are the OUTPUTS of the process - Identify Risks?

Risk register. The results of Identify Risks are typically contained in a document called a risk register. It ultimately contains the outcomes of the other risk management processes as they are conducted. The register is often in the form of a spreadsheet, with columns containing details, - List of identified risks, with root causes, - List of potential responses

48

Describe the process - 11.3 Perform Qualitative Risk Analysis

Prioritizing the identified risks for further action by addressing and combining these probability of occurrence and impact., Assess the priority of identified risks using their probability of occurring, the impact on project objectives, factors such as time frame for response and risk tolerance of the project on constraints of cost, schedule, scope, and quality., A rapid and cost-effective means of establishing priorities for Risk Response Planning that also lays the foundation for Quantitative Risk Analysis.

49

What are the INPUTS for the process - Perform Qualitative Risk Analysis?

1. Risk register, which has the identified risks, 2. Risk management plan, particularly roles and responsibilities, budgets, schedules, risk categories, definitions of probability and impact, probability and impact matrix and risk tolerances., 2. Project scope statement to determine whether this is a normal project for us, or a new type, 3. Organizational process assets, including information on prior similar projects, risk specialty studies, and risk databases available from industry or proprietary sources.

50

What are the TOOLS AND TECHNIQUES of the process - Perform Qualitative Risk Analysis?

1. Risk probability and impact assessment, which investigates the likelihood that each specific risk will occur and the potential effects on a project objective such as time, cost, scope, or quality, including both negative effects for threats and positive effects for opportunities. Assessed in meetings, interviews, or facilitated discussions. Explanatory detail, including assumptions for the levels assigned, is recorded. Ratings are according to the levels defined in the risk management plan., 2. Probability and impact matrix. Risk probability is the likelihood that a risk will occur. Risk impact is the effect on project objectives if the risk event occurs. Using a combination of probability and impact scales, the probability and impact matrix assigns risk ratings to individual risk events. These ratings are typically qualitative in nature., 3. Risk data quality assessment, a technique used to evaluate the degree to which the data about the risk is actually useful in making risk management decisions., - The extent to which the source of the information understands the risk, - The accuracy, quality, reliability, and integrity of data regarding the risk, 4. Risk categorization by source, area of impact, or other category. Grouping by common root causes can lead to effective risk responses, 5. Risk urgency assessment, to determine how near-term the risk is to determine how soon we must deal with it., 6. Expert judgement, to assess probability and impact. Expert judgement can be secured using facilitated workshops.

51

What are the scales of probability and impact?

Probability scale - 0.0 to 1.0 (0% to 100%), or a more qualitative scale such as "very unlikely" to "almost certain" Impact scale - reflects the severity of the risk's effects on the project objectives (can be an ordinal or cardinal scale) Determines one overall rating for each risk - the risk score. The risk score helps guide risk responses.

52

What is the risk probability scale?

1. very low, 2. low, 3. medium, 4. high, 5. virtually certain

53

What is the risk impact scale?

1. very little impact on critical factors of project (time, cost, etc.), 2. minor, 3. moderate (workaround solution apparent), 4. moderate (no apparent workaround solution), 5. severe (missions critical degradation)

54

What are the OUTPUTS of the process - Perform Qualitative Risk Analysis?

Risk register updates, with:, - Relative ranking or priority list of project risks, - Risks grouped by categories to reveal common root causes, - Causes of risk or project area requiring particular attention, - List of risk requiring response in the near-term (urgent risks), - List of risks for additional analysis and response, - Watch-lists of low priority risks, - Trends in qualitative analysis results, as risk analysis is repeated on the project, a trend may appear making risk response or additional analysis more or less important.

55

Describe the process 11.4 Perform Quantitative Risk Analysis

The process numerically analyzes the effect of identified risk events on overall project objectives. It is performed on risks that have been prioritized by the Qualitative Risk Analysis process as potentially and substantially impacting the project's completing demands. Perform quantitative risk analysis may not be required on all projects, dependent on available time and budget. It should be performed again after Plan Risk Responses and during Monitor and Control Risks to determine if project risk has been satisfactorily addressed.

56

What are the INPUTS of the process - Perform Quantitative Risk Analysis?

1. Risk register, 2. Risk management plan, 3. Cost management plan, which details with cost, 4. Schedule management plan, which deals with project schedule, 5. Organization process assets, including information on prior similar completed projects, studies of similar project by risk specialists, and risk databases available from industry of proprietary sources.

57

What are the TOOLS AND TECHNIQUES of the process - Perform Quantitative Risk Analysis?

1. Data gathering and representation techniques, including:, - interviewing, including three point estimating to obtain ranges of values, - Probability distributions, such as beta distributions and triangular distributions of probability, 2. Quantitative risk analysis and modeling techniques, including:, - Sensitivity analysis to determine which risks have the most impact, - Expected monetary value analysis, which determines a value by multiplying each outcome by its probability and adding the results together. This is commonly used in decision tree analysis., - Modeling and simulation, using a model which translates the specified uncertainties into their potential impact on objectives, iterative simulations are performed using Monte Carlo technique, which is run many times using input values for project variables chosen at random from the probability distributions of the variables. Results will be probability distribution of results., 3. Expert Judgement used to identify potential cost and schedule impacts, to evaluate probability and define inputs to analysis tools. Expert judgement is also used in interpreting the results.

58

What is modeling and simulation?

Simulations uses a representation of model of a system to analyze the behavior or performance of the system., - For a cost risk analysis, a simulation may use the WBS as a model., - For a schedule risk analysis, the PDM schedule is used.

59

What is probabilistic analysis of the project?

Forecasts of potential project schedule and costs results listing the possible completion dates or project duration and costs with their associated confidence levels.

60

What is probability of achieving the cost and time objectives?

The probability of meeting the project objectives with the current plan. It takes into consideration all previous risk analysis and quantifies the probability of the current plan (cost and schedule)

61

Describe the process - Plan Risk Responses

Plan Risk Responses is the process of developing options and determining actions to enhance opportunities and reduce threats to the project's objectives. Risk responses must be appropriate, cost effective, and realistic. Includes identification and assignment of one or more persons (the "risk response owner") to take responsibility for each agreed-to and funded risk response. Project management plan is updated as necessary to implement responses.

62

What are the INPUTS of the process - Plan Risk Responses?

1. Risk register, with all information developed so far, 2. Risk management plan, including roles and responsibilities, definitions, etc.

63

What are the TOOLS AND TECHNIQUES of the process - Plan Risk Responses?

Strategy or mix of strategies most likely to be effective should be selected for each risk. , Primary and backup strategies may be s elected., A fallback plan can be developed if the selection strategy turns out not to be effective, or if an accepted risk occurs., 1. Strategies for negative risks or threats (Avoid, Transfer, Mitigate, Accept), 2. Strategies for positive risks or opportunities (Exploit, Share, Enhance, Accept), 3. Contingent response strategies. Some responses are designed for use only if certain events occur. Involves defining actions to be executed under certain predefined conditions, if it is believed there will be sufficient warning to implement the plan. Events that trigger the contingency responses should be defined and tracked., 4. Expert judgement related ot the actions to be taken

64

Describe the negative risk strategy Avoid.

Risk avoidance is changing the project plan to eliminate the risk or condition or to protect project objectives from its impact., Although we can never eliminate all risk events, some specific risks may be avoided.

65

Describe the negative risk strategy Transfer.

Risk transfer si seeking to shift the consequence of a risk toa third party together with ownership of the response., Risk transfer does not eliminate the risk, it just transfers responsibility for its management., Insurance or an insurance-like arrangement such as bonding is often available to deal with some categories of risk., Procurement, acquiring goods an/or services from outside the immediate project organization, is often an appropriate response to some types of risk.

66

Describe the negative risk strategy Mitigate.

Mitigation seeks to reduce the probability and/or consequences of an adverse risk event to an acceptable threshold., Risk probabilities or impacts can often by reduced by changing the planned approach. The more flexibility the project team has, the more valuable mitigation is.

67

Describe the negative risk strategy Accept.

Indicates that the project management team will not modify the project management plan to deal with a risk, or is unable to come up with a viable response. Acceptance can be either passive (just wait for the risk to happen), or active (plan now for how to deal with the risk if it happens). These are what contingency reserves are used for.

68

What is Contingency Allowance?

Most common risk acceptance response is to establish a contingency allowance, or reserve, including amounts of time, money, or resources to account for known risks. The allowance should be determined by the impacts, computed at an acceptable level of risk exposure, for the risks that have been accepted.

69

What are Contingency Reserves?

A separately planned quantity used to allow for future situations which may be planned for only in part (sometimes called "known unknowns"). For example, rework is certain, the amount of rework is not. Contingency Reserves may involve cost, schedule, or both. Contingency Reserves are intended to reduce the impact of missing cost or schedule objectives. Contingency Reserves are normally included in the project's cost and schedule baseline.

70

What are Management Reserves?

A separately planned quantity used to allow for future situations which are impossible to predict (sometimes called "unknown unknowns"). Management Reserves may involve cost or schedule. Management Reserves are intended to reduce the risk of missing cost or schedule objectives. Use of Management Reserve requires a change to the project's cost baseline.

71

Describe the positive risk strategy Exploit.

Organization wishes to ensure that the opportunity is realized by eliminating the uncertainty associated with a particular upside risk by making the opportunity definitely happen. Responses such as., - Assigning more talented resources, - Provide better quality than originally planned.

72

Describe the positive risk strategy Share.

Allocating ownership to a third party who is best able to capture the opportunity for the benefit of the project. Responses such as:, - Risk-sharing partnership, - Teams, - Special-purpose companies, - JV

73

Describe the positive risk strategy Enhance.

Modify the value of an opportunity by increasing probability and/or positive impacts and identifying and maximizing key drivers of these positive-impact risks. Response such as:, - Facilitate the cause of the opportunity, - Proactively target the trigger conditions, - Proactively target the impact drivers

74

Describe the positive risk strategy Accept.

Accepting an opportunity is being willing to take advantage, but doing nothing to make it happen.

75

What are the OUTPUTS of the process - Plan Risk Responses?

1. Risk register updates, 2. Risk-related contract decisions, such as insurance, services, etc., 3. Project management plan updates, including updates to the schedule management plan, cost management plan, quality management plan, procurement management plan, human resource management plan, the WBS, and the schedule and cost baselines., 4. Project document updates, including the assumption log and technical documentation.

76

What additional components of the risk register can now be included after Plan Risk Responses?

- Identified risks, their descriptions, the area(s) of the project (e.g. WBS element) affected, their causes, and how they may affect project objectives., - Risk owners and their assigned responsibilities, - Outputs from the qualitative and quantitative risk analysis, - Agreed upon response strategies, - Specific actions to implement the chosen response strategy, - Triggers, symptoms and warning signs of risks' occurrence, - Budget and schedule activities required to implement the chosen responses, - Contingency plans and triggers, - Fallback plans, - Residual risks expected to be remaining after the strategy is implemented, - Secondary risks that arise due the response, - Contingency reserves calculated based on quantitative analysis and organization's risk thresholds.

77

What are the INPUTS of the process - Monitor and Control Risks?

1. Risk register, listing risks and other information, 2. Project management plan, including the risk management plan, 3. Work performance information, including deliverable status, schedule progress, and costs incurred, 4. Performance reports, including variance analysis, earned value data, and forecasting results.

78

What are the OUTPUTS of the process - Monitor and Control Risks?

1. Risk register updates, including outcomes of reassessments, audits, and risk reviews, along with actual outcomes of the risks and responses for historical information purposes , 2. Organizational process assets updates, to capture project risk information for future use as well as lessons learned., 3. Change requests to implement contingency plans, or to recommend corrective or preventive actions., 4. Project management plan updates, revised and reissued to reflect approved changes, 5. Project document updates, including the same documents that m ay be updated in Plan Risk Response process.

79

What is Project Communications Management?

- Includes the processes required to ensure timely and appropriate generation, collection, distribution, storage, retrieval and ultimate disposition of project information., - Project managers report that they spend 90% of their time communicating, which is not surprising since they are achieving results through the effort of others, - Communication is the glue that connects the project stakeholders

80

Describe the process 10.1 Identify Stakeholders.

- This is the process of identifying all people or organizations impacted by the project, and documenting relevant information regarding their interests, involvement, and impact on project success., - Remember that stakeholders can have either a positive or negative influence on a project; both are important to identify.

81

Why should you identify stakeholders early?

- It is critical to identify stakeholders as early as possible in the project, because each stakeholder is a potential source of project requirements, - Failure to identify a stakeholder may well lead to so-called "scope creep" that in this case is really a failure to properly identify all requirements in the beginning, - We also need a strategy for dealing with each stakeholder

82

What are the INPUTS of the process - Identify Stakeholders?

1. Project charter, which as an initial list of stakeholders, 2. Procurement documents, which indicate parties to a contract that become stakeholders, 3. Enterprise environmental factors, including organizational culture and structure, and any relevant governmental or industry standards, 4. Organizational process assets, including stakeholder register templates, and historical information, including lessons learned.

83

What are the TOOLS AND TECHNIQUES of the process - Identify Stakeholders?

1. Stakeholder analysis, 2. Expert judgement

84

What are the OUTPUTS of the process - Identify Stakeholders?

1. Stakeholder register, 2. Stakeholder management strategy

85

Describe Stakeholder Analysis.

- Identify all potential stakeholders and relevant information about them, such as their roles, departments, interests, knowledge levels, expectations, and influence levels. Key stakeholders are those in decision making or management roles. Also identify other stakeholders during interviews with stakeholders., - Identify the potential project impact or support the stakeholder could provide, classifying them to help define an approach strategy. Prioritize them., - Assess how keep stakeholders are going to react or respond to various project situations and issues, to plan how to influence them to enhance their support and mitigate their negative impact.

86

Describe the Stakeholder Register

The Stakeholder Register contains all the details related to identified stakeholders, including:, - Identification, such as name, position, role, contact information, - Assessment, such as major requirements, main expectations, potential influence on the project and in what phase, - Classification, such as internal or external, attitude toward project (support, neutral, resister)

87

Describe the Stakeholder Management Strategy

The Stakeholder management strategy is the approach to be used to increase support and minimize resistance, including:, - Who can significantly impact the project, - Desired level of participation in the project, - Stakeholder groups, and their management, as groups A common format for this output is a matrix or spreadsheet outlining the stakeholder, his interest, assessment of impact, and potential strategies

88

Describe the process 10.2 Plan Communications

- Determining the information needs and communication approach of the stakeholders (Who needs what information, When they will need it, How it will be given to them, and by whom), - Identifying the informational needs of stakeholders and determining a suitable means of meeting those needs is an important factor for project success, - Tightly linked with enterprise environmental factors and organizational influences such as project's organizational structure will have a major effect on project communication requirements.

89

What are the INPUTS of the process - Plan Communications?

1. Stakeholder register, output of Identify Stakeholders process, 2. Stakeholder management strategy, output of Identify stakeholders process, 3. Enterprise environmental factors (all of them), 4. Organizational process assets, especially historical information and lessons learned.

90

What are the TOOLS AND TECHNIQUES of the process - Plan Communications?

1. Communications requirements analysis, 2. Communications technology, 3. Communication models, 4. Communication methods

91

Describe Communications Requirements Analysis

Information needs of stakeholders are analyzed, including type, format and timing needs., - Take care to avoid wasting resources on unnecessary information or inappropriate technology, - Remember to consider the number of communications channels n*(n-1)/2 to limit who will communicate with whom

92

Describe Communications Technology

Analysis to consider communication methods and technologies suited to the project. Factors to consider:- Urgency of need for information- Availability of technology- Expected project staffing- Duration of the project- Project environment

93

Describe Communication Methods

- Interactive communication, includes meetings, phone calls, video conferencing, - Push communication, when we send information to specific recipients. Includes letters, memos, reports, emails, faxes, voice mails, press releases. Without a confirming return, we cannot know this communication reached its target., - Pull communication, when the stakeholder actually has to act to retrieve communication. Includes internet sites, knowledge repositories.

94

Describe the Communication Plan

The Communications Plan, contained in, or a subsidiary of, the project management plan. Contains:, - Stakeholder communication requirements, - Language, format, content, and level of detail, - Reason for distributing the information, - Timing and frequency of distribution, - Responsibility for authorizing and communicating, - Methods of conveying information, - Resources allocated for communications activities, - Issue escalation policies and procedures, - Update method for maintaining the plan, - Glossary of common terms, - Flowcharts of information flow, - Communication constraints

95

Describe the process 10.3 Distribute Information

The process of making information available to project stakeholders as planned. Includes implementing the Communications Management Plan, as well as responding to unexpected requests for information. Spans a number of techniques, including sender-receiver models, choice of media, writing style, meeting management techniques, presentation techniques, and facilitation techniques.

96

Why does sharing information mean sharing power?

- Project personnel should communicate data honestly and thus share power., - Sharing data gives project personnel potential power, - Senior executives and the project manager are responsible for establishing the conditions that encourage honest communication and shared power.

97

What are the INPUTS of the process - Distribute Information?

1. Project management plan, including communication management plan, 2. Performance reports to distribute project performance and status information. This will include forecasts, perhaps from earned value management techniques, 3. Organization process assets, including templates, historical information and lessons learned, and policies, procedures, and guidelines regarding information distribution

98

What are the TOOLS AND TECHNIQUES of the process - Distribute Information?

1. Communication methods, such as meetings, video and audio conferences, computer chats and so forth, 2. Information distribution tools, including hard-copy documents, filing systems, press releases, shared access databases, electronic formats like e-mail, fax, voice mail, telephone, websites, and electronic tools for project management, such as web interfaces, virtual office, software portals, etc.

99

What are the OUTPUTS of the process - Distribute Information?

1. Organization process assets updates including:, - Lessons learned documentation, - Project records (includes correspondence, memos, and documents describing the project), - Project reports (formal or informal reports on project status and/or issues), - Project presentations (formal or informal presentations to project stakeholders customized based upon the needs of the audience), - Feedback from stakeholders, - Stakeholder notifications

100

Describe the process 10.4 Manage Stakeholder Expectations

- The process of communicating and working with stakeholders to meet their needs and addressing issues as they occur, - Managing expectations can help to increase the probability of project success by making sure that stakeholders understand the project benefits, risks, and issues, thereby enabling them to be active project supporters, - Managing stakeholder expectations is a project manager responsibility

101

What are the INPUTS of the process - Manage Stakeholder Expectations?

1. Stakeholder register from Identify Stakeholders process, 2. stakeholder management strategy, from Identify sTakeholders process, 3. Project management plan, which contains the communications management plan, 4. Issue log, which documents issues, assigns ownership, and sets a target data for closure, 5. Change log, documenting changes that occur in the project, 6. Organizational process assets, including issues management procedures

102

What are the TOOLS AND TECHNIQUES of the process - Manage Stakeholder Expectations?

1. Communication methods, 2. Interpersonal skills, including building trust, resolving conflict, active listening, and overcoming resistance to change, 3. Management skills, including presentation skills, negotiating, writing skills, and public speaking

103

What are the OUTPUTS of the process - Manage Stakeholder Expectations?

1. Organizational process updates, including causes of issues, reasons for corrective actions taken, lessons learned, 2. Change requests, to be process in Perform Integrated Change Control, 3. Project management plan updates, including the communication management plan, 4. Project document updates, including stakeholder management strategy, the stakeholder register, and the issue log

104

Describe the process 10.5 Report Performance

Involves collection and distribution of performance information, including status reports, progress measurements, and forecasts to stakeholders, - Can include how resources are being used to achieve project objectives, - Should provide information on scope, schedule, cost and quality, - May also require information on risk and procurement, - Reports may be prepared comprehensively or on an expectation basis

105

What are the INPUTS of the process - Report Performance?

1. Project Management Plan, which includes baselines, 2. Work performance information from Direct and Manage Project Execution, including deliverable status, schedule progress, and costs incurred, 3. Work performance measurements, to generate project activity metrics, including planned versus actual schedule, cost, and technical performance, 4. Budget forecasts from the Control Cost process, 5. Organizational process assets including report templates, policies and procedures defining the measures and indicators to use, and organizational variance tolerance

106

What are examples of Forecasting methods?

- Time series method, using history to estimate future outcomes, - Casual/econometric methods, including regression analysis, auto-regressive moving average, and econometrics, - Judgmental methods, including composite forecasts, surveys, Delphi method, scenario building, technology forecasting, and forecasting by analogy, - Other methods including simulation, probabilistic forecasting, and ensemble forecasting.

107

How are Performance Reports used?

Performance reports organize and summarize the information gathered and present the results:, - Information should include status, progress, and issues, - Format can be bar charts, S-curves, histograms, and tables, - Variance analysis, earned value analysis, and forecast data are often included

108

What are some samples of information in Performance Reports?

- Analysis of past performance, - Current status of issues and risks, - Work completed in period just ended, - Work to be completed in period coming up, - Summary of changes approved in period, - Results of any variance analysis, - Forecasted project completion (time and cost), - Other relevant information

109

What is Project Human Resource Management?

- The processes that organize, manage, and lead the project team., - The team is comprised of the people with assigned roles and responsibilities for completing the project., - The involvement of project team members in planning processes can be beneficial, both adding their expertise, and fostering their commitment to the project.

110

Describe the process 9.1 Develop Human Resource Plan

- Identifying and documenting project roles, responsibilities, required skills, and reporting relationships, as well as creating a Staffing Management Plan.

111

What are the INPUTS of the process - Develop Human Resource Plan?

1. Activity resource requirements, for human resources from the Estimated Activity Resources process, 2. Enterprise Environmental Factors, including organizational culture and structure, existing human resources, personnel administration policies, and marketplace conditions., 3. Organizational Process Assets, including standard processes, policies, and role descriptions, templates and checklists, and historical information.

112

What are the OUTPUTS of the process - Develop Human Resource Plan?

1. Human Resource Plan

113

Describe the Enterprise Environmental Factors that are inputs to developing the Human Resource Plan?

- Organizational culture and structure interactions, - Influenced by political factors, Four environmental areas:, - Organization (Different Organizational Units), - Technical (Different Technical Disciplines), - Logistical (Different Locations), - Interpersonal (Different Individuals)

114

What Organizational Process Assets are inputs to developing the Human Resource Plan?

Templates , - Organizational charts, - Position descriptions, - Project performance appraisals, - Etc., Usually available from HR department or previous projects Checklists, - Project roles and responsibilities, - Team ground rules, - Health, safety, and Environmental, - Compliance

115

Describe the tools and technique - organization charts and position descriptions.

Format chosen is appropriate to the project and organization practice. Objective is to ensure that each work package has an unambiguous owner and that all team members have a clear understanding of their roles and responsibilities. Formats can be hierarchical, matrix, or text., - Hierarchical, like a traditional organization chart showing reporting relationships, - Matrix, particularly a responsibility assignment matrix showing the connection between work packages and team members, - Text - based to describe detailed responsibilities of team members. an example would be a position description

116

Describe the Responsibility Assignment Matrix - RACI Format

The RAM establishes assignments for each WBS element/task. RACI shows level of responsibility for groups and/or individuals. It graphically links the work to be done to those doing it., R - Responsible, A - Accountable, C - Contributing, I - Informed

117

Describe the tools and technique - networking

Networking, formal and informal interactions with others in the organization, industry, or profession. It is a constructive way to understand political and interpersonal factors that will impact the effectiveness of staffing management options. HR networking activities include correspondence, lunches, meetings, etc.

118

Describe the output - Human Resource Plan

The Human Resource Plan is part of the project management plan and guides the definition, staffing, management, control, and eventual release of people in the project team. It includes three main components:, - Roles and responsibilities, including role, authority, responsibility, and competency, - Project organization charts, showing the reporting relationships in the team, - Staff management plan, describes when and how people requirements will be met.

119

Describe the Staff Management Plan

A Staffing Management Plan describes when and how human resource requirements will be met. It will be as formal as the situation requires. It will direct ongoing team member acquisition and development actions. It is part of the human resources plan, which in turn is part of the project management plan., Considers:, - Staff acquisition, - Resource calendars (availability), - Staff release plan, - Training needs, - Recognition and rewards, - Compliance with regulations, union contracts, policies, - Safety (AKA Health, Safety, and Environmental)

120

Describe the process 9.2 Acquire Project Team

Obtaining the human resources (team) needed to complete the project, - The project management team may or may not have control over team member selection, for various resources., - Important to consider that:, -- PM team must negotiate effectively with others to get team, -- Failure to get the necessary team will likely affect project achievement of objectives, -- If the resources are not available due to constraints, then other alternatives may have to be considered, which may increase risk, training needs, etc.

121

What are the INPUTS of the process - Acquire Project Team?

1. Project management plan, which contains the roles and responsibilities, organization charts, and the staffing management plan., 2. Enterprise environmental factors, including , - Existing information for human resources such as who is available, competency, prior experience, cost, and their interest in the project, - Personnel administration policies (e.g. outsourcing), - Organization structure, - Locations, 3. Organization process assets, including standard policies, processes, and procedures

122

What are the TOOLS AND TECHNIQUES of the process - Acquire Project Team?

1. Pre-assignment, when team members are selected in advance., 2. Negotiation: staff assignments are negotiated on many projects, perhaps with functional managers, or with other project teams to share scarce or specialized staff, or with external organizations. The ability to influence others and politics play a role in this effort., 3. Acquisition, when resources must be brought in from outside sources., 4. Virtual teams, are groups of people with shared goal, who fulfill their roles with little or no time spent meeting face to face.

123

What are the OUTPUTS of the process - Acquire Project Team?

1. Project staff assignments, 2. Resource calendars, documenting when each team member can work on the project, 3. Project management plan updates, including the human resources plan

124

Describe the tools and technique - virtual teams.

It is possible to:, - Form teams from same company located in widespread geographical areas, - Add special expertise from other geographical areas, - Incorporate employees who work from home offices, - Incorporate workers from different shifts, - Include those with mobility limitations or disabilities, - Perform projects that would not have been feasible if they had to bear travel expenses Virtual teams require special attention to planning for communications. While electronic means help, they also suffer some limitations that can be important. Remember, face-to-face is best

125

Describe the output - Project staff assignments

The project is staffed when the appropriate people have been assigned through the previously described methods. The documentation of these assignments can include a project team directory, memos to the team members, and names inserted into other parts of the project management plan such as organization charts and schedules.

126

Describe the process - 9.3 Develop Project Team

Improves the competencies and interaction of team members to enhance project performance. Project managers should create an environment that facilitates teamwork, and provides motivation for the team through challenges and opportunities, timely feedback, reward and recognition, and other support as needed. This requires the use of open and effective communication, developing trust among team members, managing conflict constructively, and encouraging collaborative problem-solving and decision making. Project management in one sense is the management of people to complete a project, and people skills are paramount.

127

What are the objectives of team development?

- Seek to improve knowledge and skills of team members, to increase their ability to effectively complete project deliverables, - Foster feelings of trust and agreement among team members to maintain team morale and productivity, - Create a positive team culture to improve both individual and team performance, spirit, and cooperation A good team can achieve amazing results in spite of tremendous challenges. A bad team is defeated by the challenges.

128

What should you always remember when it comes to building the project team and softening interfaces?

When surrounded by - and trying to integrate - RAM, WBS, network diagrams, Gantt charts, effort distributions, and budgets, remember that PROJECTS ARE ULTIMATELY FOR AND ABOUT PEOPLE! Success, i.e., meeting objectives, depends ultimately on the cooperation of all the interested parties and on the hard work of project personnel. Integrating the numbers and people is the height of professional project management.

129

What are the INPUTS of the process - Develop Project Team?

1. Project staff assignments, with the list of team members, 2. Project management plan, including the human resource plan, 3. Resource calendars, identifying time when team members can participate in team development activities.

130

What are the TOOLS AND TECHNIQUES of the process - Develop Project Team?

1. Interpersonal skills, or "soft skills". Understand the sentiments of the team, anticipate their actions, acknowledge their concerns, follow up on their issues., 2. Training, to address any deficit in technical or soft skills., 3. Team-building activities, which can take m any forms. The objective is to get team members to work together effectively., 4. Ground rules, which explicitly communicate acceptable behavior. This can help head off unpleasant incidents and conflict., 5. Co-location, which takes advantage of the full bandwidth of face-to-face communication, and also leads to much more communication than might happen otherwise. This can include strategies like team "war rooms". Builds the "tight matrix", 6. Recognition and rewards

131

What are the OUTPUTS of the process - Develop Project Team?

1. Team performance assessments, which should indicate improved team performance reflected in meeting project objectives. If team performance assessments do not show that we are meeting our performance goals, we might need to do additional training, coaching, mentoring, assistance, or other changes to improve team results., 2. Enterprise environmental factors updates, including personnel administration for employee training records and skill assessments.

132

In what ways can project team training be focused?

Team focused - Enhancing the ability of the team to function as a team Individual focused - Enhancing the ability of stakeholders to contribute as individuals.

133

What are the stages of Team Development?

1. Forming - Team members are polite, guarded, and businesslike; Leaders should emphasize directive behavior., 2. Storming - Team members confront each other, struggle for control and either become entrenched or opt out. Leaders should display directive and supportive behavior., 3. Norming - Team members confront issues instead of people, establish procedures collectively and become team oriented. Leaders must provide high support and low direction., 4. Performing - Team members settle down to opt and productive effort. Leaders must be willing to delegate and provide low direction and low support., 5. adjourning - Team completes the work and moves on. These stages reflect the team's "maturity"

134

What are examples of team building exercises?

- Team milestone races, - Social events, like ice-cream cones in the conference room, bowling night, or anything that gives the team a chance to interact socially, - Virtual teams can make it necessary to these activities in ways that permit remote interaction (Chats, twitter, etc), - The big party at the project's end!

135

Describe the tools and technique - Recognition and Reward.

Recognition and Rewards: Award decisions made during the process of managing the team through performance appraisals. To be effective, such systems must make the link between behavior and reward clear, explicit, and achievable. Only desirable behaviors should be rewarded. Remember, we want the TEAM to succeed, so reward the TEAM.

136

Define an effective project team.

- Shares a common goal - each member is necessary to achieve the goal, - Strives to get a common job done, - Enjoys working together and helping on another, - Has commitment to achieve organization's goals and objectives by accomplishing their portion of the project, - Has diverse backgrounds and skills yet concentrates on a common effort, - Has great loyalty to the project, - Attains team spirit and high moral.

137

What are some constructive team roles?

- Initiators - "Let's do this...", - Information Seekers - "Do we have better information?", - Information Givers ' "My experience is...", - Encouragers - "That helped us a...", - Clarifiers - "I think we are saying...", - Harmonizers - "I think we are all saying the same thinkg.", - Summarizers - "I think we all agree that...", - Gate Keeper - helps others participate. "We haven't heard from...", - Devils Advocate - Brings up alternate viewpoints - Can be constructive or destructive.

138

What are some destructive team roles?

May be a version 3 item. Didn't find in version 4.- The Aggressor - Criticizes and deflates status of others, - The Blocker - Rejects the views of others, - The Withdrawer - Holds back and will not participate, - Recognition Seeker - Seeks attention by monopolizing discussions., - Topic Jumper - Continually changes the subject., - Dominator - Tries to take over discussion, - Devil's Advocate Brings up alternate viewpoints - can be constructive or destructive

139

Describe the process - 9.4 Manage Project Team

Involves:, - Tracking team member performance, - Providing feedback, - Resolving issues, - Managing changes to optimize project performance PM Team observes team behavior, manages conflict, resolves issues, and appraises team member performance.Complicated when team members are accountable to both a functional manager and the project manager within a matrix organization - Effective management of this dual reporting relationship is often a critical success factor for the project, and is generally the responsibility of the project manager.

140

What are the INPUTS of the process - Manage Project Team?

1. Project staff assignments, 2. Project management plan, including the human resource plan, 3. Team performance assessments, 4. Performance reports, from the Report Performance process, to document current status., 5. Organizational process assets, including certificates of appreciation, newsletters, websites, bonus structures, corporate apparel, and other organizational perks

141

What are the TOOLS AND TECHNIQUES of the process - Manage Project Team?

1. Observation and conversation - Used to stay in touch with the work and attitudes of project team members. "Management by walking around", 2. Project performance appraisals of individual team members, 3. Conflict management, 4. Issue log, to track issues and document responsibilities for resolving specific issues by a target date, 5 Interpersonal skills

142

What are the OUTPUTS of the process - Manage Project Team?

1. Enterprise environmental factors updates, including input to organizational performance appraisals, and personnel skill updates, 2. Organizational process assets updates, including historical information and lessons learned, templates, and organizational standard processes., 3. Change requests (to Perform Integrated Change Control) to i implement staffing changes and reflect the effort on baselines, 4. Project management plan updates including the staffing management plan.

143

What Interpersonal skills are useful for managing the project team?

- Leadership, - Influencing, particularly when the project manager's authority over team members is limited., - Effective decision making, including negotiation and influencing the organization:, -- Focus on goals to be served, -- Follow a process, -- Study the environmental factors, -- Develop personal qualities of the team members, -- Stimulate team creativity, -- Manage opportunity and risk

144

What does Project Quality Management include?

Includes all activities of the performing organization that determine quality policies, objectives, and responsibilities so that the project will satisfy the needs for which it was undertaken.

145

Describe 8.1 Plan Quality

Identify quality requirements and standards for the project and product, and document how the project will demonstrate compliance. Plan quality is performed in parallel with other project planning processes, because it may require changes to other parts of the project plan.

146

What is Quality?

- Quality is defined by the customer, - Quality requires an organization-wide commitment, - Plan-Do-Check-Act, known as the Deming Cycle, - The PMBOK Guide and PMI are compatible with the International Standards Organization (ISO) 9000 series of standards

147

Why worry about quality?

- Failure to meet quality standards in project management or the product of the project can have serious negative consequences: Safety, Liability, Re-work, Scrap, etc., - The cost of preventing mistakes is always much less than the cost of correcting them., - Customer satisfaction is both conformance to requirements and fitness for use.

148

Define Quality

The degree in which a set of inherent characteristics fulfill requirements., - Stated or implied needs are inputs to developing project requirements., - Conformance to requirements or specifications

149

Why is Quality not synonymous with "grade"?

- Grade is a category or rank given to entities having the same functional use but different technical characteristics.", - Example: Grades of steel, eggs, tires, etc., - The PM team is responsible for determining and delivering the required levels of both quality and grade.

150

Why is Precision and Accuracy not equivalent?

- Precision: Consistency, i.e. that repeated measurements have the same value with little scatter., - Accuracy: Correctness, i.e. that the measurement is very close to the true value.

151

What are the INPUTS to the process - Plan Quality?

1. Scope baseline, including the scope statement, WBS, and WBS dictionary. These documents should contain information about the products and the acceptance criteria, along with technical details useful for planning quality., 2. Stakeholder register, which will indicate stakeholders who have an interest in or impact on quality. We should discuss quality requirements with appropriate stakeholders., 3. Cost performance baseline, which documents the accepted time phase for measuring cost performance. The "how much", 4. Schedule baseline, which documents accepted schedule performance. The "when", 5. Risk register, containing information on threats and opportunities related to or impacting quality, 6. Enterprise environmental factors, including regulations, rules, standards, and guidelines specific to the application area., 7. Organizational process assets, including quality policies, procedures, and guidelines, historical databases, and lessons learned. Also includes the quality policy as endorsed by senior management, setting organizational direction with regards to quality. this will guide us in making trade-off decisions. If no policy exists, the project management team should create on for the project.

152

What are the TOOLS AND TECHNIQUES of the process - Plan Quality?

1. Cost-benefit analysis, 2. Cost of quality, 3. Control charts, 4. Benchmarking, 5. Design of experiments, 6. Statistical sampling, 7. Flowcharting, 8. Proprietary quality management methodologies, 9. Additional quality planning tools

153

Describe Cost-Benefit Analysis

Making trade-offs based on expense vs. value. The primary benefits of meeting quality requirements are less rework, higher productivity, lower costs, and increased stakeholder satisfaction. The primary cost is the expense associated with project quality management activities. Each quality activity is justified through this "business case" for including the activity.

154

Describe Cost of Quality

This is the total cost of ALL efforts to achieve product/service quality, including all work to ensure conformance to requirements, and all rework resulting from non-conformance. These are three types of cost involved:, - Prevention, - Appraisal, - Failure, both internal costs and external costs:, -- Internal costs include rework and scrap, -- External costs include liabilities, warranty costs, and lost business (frequently the most important cost!)

155

Describe Control Charts

Graphical displays of results, over time, of a process:, - Also use statistical probability, - Used to determine if a process is "in control", - Focus is on preventing defects, not on detection or elimination, - Used to verify the impact on a process when changes are made The idea is that if the process is in control, then the product of the process will be good.

156

What are the causes of variations on control charts?

Note: I didn't find this in PMBOK version 4.- Random (common) cause:, - Inherent in the system, - Accounts for 85% of variation, - Is management's responsibility to correct, by changing the process to be more "robust", - Requires investigation and process change Assignable (special) cause:, - Traceable to specific source, Accounts for 15% of variation. Is management's responsibility to eliminate. Can, and generally should be, corrected quickly

157

What are the Control Chart Concepts?

- Upper control limit = UCL, - Lower control limit = LCL, - UCL and LCL usually set at +/- 3 sigma, - Mean = x ("x bar"), - Process is In Control or process is Out of Control, - Over controlling (Also called Type I error), refers to adjusting the process when nothing out of the ordinary has occurred., - Under controlling (Also called a Type II error), refers to the failure to adjust the process when something out of the ordinary has occurred.

158

Describe Benchmarking

Benchmarking is comparing the process and the product of the project to similar situations either within the organization or to similar organizations. Benchmarking is used for process and product improvement, to determine:, - Which products or services to offer and which features should be included?, - What processes are other groups using to achieve customer satisfaction?, - What metrics or goals are used to measure the processes or products that achieve customer satisfaction?

159

Describe Design of Experiments

Design of Experiments is a statistical method that helps identify which factors may influence specific variables of a product or process under development or in production., 1. Change the variables to assess different outcomes to determine an optimal solution, 2. Applied to products of a project, 3. Assess impacts on cost and schedule With design of experiments, you can determine:, 1. Which variable has the greatest effect, 2. The relationship between each variable and the quality (customer-focused) specifications, 3. The best value for each variable to optimize quality or value.

160

Describe Statistical sampling

Statistical Sampling is choosing part of the population of results for inspection. An example would be to check every tenth product. Then we use the result to predict the quality of the total population. It's based on probability, - Small sample from a group can project what the total group will be like., - Reduce cost of quality control while maintaining high degree of confidence Sampling is a tool that is used to indicate how much data to collect and how often it should be collected. This tool defines the samples to take to quantify a system, process, issue, or problem.

161

What are the advantages and disadvantages of Statistical Sampling?

Advantages, - Smaller inspection staff, - Less product damage, - Quicker decisions, - Fewer inspection errors, - Rejects dramatize problems, Disadvantages, - Sampling risks, - Less information

162

Describe Flowcharting

Flowcharting, in which a graphical presentation represents a process, showing the relationship between the process steps. While there are lots of styles of these, they all show activities, decision points, and order of processing.

166

What are quality metrics?

Quality Metrics are operational definitions that define key attributes of project result, and metrics to be applied to those attributes, along with performance characteristics and how the attributes will be assessed. Operational Definition Elements:, - Criterion - the standard against which to evaluate, - Test - A specific procedure or process for measuring a characteristic, - Decision - the determination as to whether the test results show that the characteristic meets the specified criteria. Tolerance defines allowable variance in the metric.

193

- Reduce cost through quality improvement, - Measure quality: loss must be measured as a system-wide cost on a life cycle basis (i.e., loss to society), not as just the internal costs of non-conformance or defect detection at the time of shipment., - Optimize internal and external costs to minimize loss to society., - Measure quality as deviations from target value, not specification limits or tolerances., - Realize that quality decreases continuously as a quadratic function as process output varies from target, versus the step function mentality that implies that all parts within specification are equally as good., - Communicate quality loss in terms of monetary units., - Design quality into products and services

- Design products and processes to be insensitive to uncontrolled variation (robustness) at the lowest possible cost., - Focus on improving the desired product characteristic (signal), regardless of the level of uncontrolled variation (noise), to guide design., - Use statistical methods throughout the product life cycle for quality improvement, especially early in the design process when the leverage is the greatest., - Lower barriers that inhibit the use of statistical methods by providing simplified techniques that can be quickly taught and applied., - Combine engineering methods with statistical methods as part of providing simplified techniques that can be quickly taught and easily applied by all.

194

Describe ISO 9000

ISO 9000 is primarily concerned with "Quality Management". In the everyday context, like "beauty", everyone may have his or her idea of what "quality" is. But, in the ISO 9000 context, the standardized definition of quality refers to all those features of a product (or service) which are required by the customer., - "Quality management" means what the organization does to ensure that its products or services satisfy the customer's quality requirements and comply with any regulations applicable to those products or services.

195

What are known as the Seven Basic Tools of Quality?

1. Cause and Effect Diagram, 2. Control Charts, 3. Flowcharting, 4. Histogram, 5. Pareto Chart, 6. Run Chart, 7. Scatter Diagram

196

What are the KAIZEN 10 Forms of Muda (Waste)?

1. Waste of over producing (Making more just because the material is available, a machine is available as we have an operator), 2. Waste of time (Waiting, batch and queue mentality), 3. Waste from transporting (Moving materials with a forklift numerous times), 4. Waste of over processing (Too complex process or a process that has to be done several times to be correct)., 5. Waste of inventory (WIP), 6. Waste from excess motion of operators and workers (Lack of good ergonomics), 7. Waste from scrap and rework. (Rework negates any possibility of profit on most reworked items), 8. Human under-utilization, 9. Improper use of computers, 10. Working to the wrong metrics

197

What is MTBF?

Mean Time Between Failures (MTBF) = 1/(sum of all the part failure rates)

198

What is MTTF?

Mean Time To Failure (MTTF) is the mean time expected until the first failure of a piece of equipment

199

What is MTTR?

Mean Time To Repair (MTTR) is the total amount of time spent performing all corrective maintenance repairs divided by the total number of those repairs.

200

What is Failure Rate?

Failure Rate is the number of failures experienced or expected for a device divided by the total equipment operating time. For constant failure rate items, i.e., exponentially distributed failures, the failure rate is the numerical inverse of the mean time between failures (MTBF).