Project Management

🧭 Overview

🧠 One-sentence thesis

Project management skills—planning, communication, resource management, and delivering within cost, schedule, scope, and quality constraints—are essential across diverse careers and have evolved from ancient construction projects to modern methodologies like Gantt charts, PERT, and CPM.

📌 Key points (3–5)

• Core pillars of project management: delivering a product or service within schedule, cost, scope, and quality requirements.
• Universal applicability: project management skills (planning, communication, risk management, budgeting) are used in careers ranging from business owners and educators to engineers, health care professionals, and software developers.
• Historical evolution: project management concepts enabled ancient megaprojects (pyramids, Great Wall) and formalized in the 20th century with tools like Gantt charts (1910s), PERT, and CPM (1950s).
• Common confusion: project management is not just for construction or IT—it applies to any temporary undertaking with a goal, including teaching a class, managing a restaurant, or conducting medical research.
• Modern expansion: today's project management incorporates sustainability, social responsibility, and environmental considerations alongside traditional cost/schedule/scope constraints.

🌍 Project Management Skills Across Careers

🏢 Business Owners

Business owners need planning, organizing, scoping, analyzing, communicating, budgeting, staffing, equipping, implementing, and delivering skills.

• Why it matters: successful businesses deliver products/services that meet customer needs in quality, cost, and timeliness—the same pillars as project management.
• What they do: understand finances, operations, expenses; may focus on accounting, sales, training, public relations, or logistics.
• Example: A business owner managing a storefront or travel agency applies project management principles to coordinate operations and meet customer expectations.

🍽️ Restaurant Owner/Manager

• Planning and coordination: synchronize kitchen, dining room, banquet operations, vendors, and staff schedules to satisfy customers.
• Risk management: ensure food safety, monitor kitchen delays, comply with legal standards (especially alcohol service).
• Financial tracking: analyze recipes for cost (food, labor, overhead), assign menu prices, order supplies, and manage catering events.
• Scheduling: time staff shifts, food deliveries, equipment maintenance, and cleaning during slow periods.
• Don't confuse: restaurant management is not just "cooking and serving"—it requires the same project planning, resource allocation, and quality control as any project.

🏗️ Construction Managers

• Core responsibilities: plan, direct, coordinate, and budget residential, commercial, and industrial construction projects.
• Scheduling and communication: coordinate design, construction teams, specialized trades (carpentry, plumbing, electrical), and government permit processes.
• Tools: use software like Microsoft Project, Procure, or Basecamp; rely on spreadsheets for tracking.
• Procurement and labor: acquire materials (lumber, bills of material), coordinate labor, oversee performance to ensure on-time completion.
• Modern values: incorporate sustainability, LEED certification, green energy, and energy efficiency into projects.
• Example: A construction manager divides a building project into logical steps, estimates time and budget, and ensures compliance with safety codes and quality specifications.

🎨 Graphic Artists

• Initiation and planning: determine client needs, the message the design should convey, and its appeal to the target audience.
• Communication: meet with clients, creative staff, art directors; brainstorm and research to ensure high quality and manage risks.
• Execution: use color, type, illustration, photography, animation, and layout techniques to create print and electronic media (magazines, brochures, websites, apps).
• Resource management: supervise assistants, schedule tasks, monitor costs, use computer and communications equipment efficiently.
• Don't confuse: graphic design is not just "making things look nice"—it involves cognitive, cultural, physical, and social factors similar to stakeholder analysis in project management.

👩‍🏫 Educators (Teachers)

• Planning and evaluation: plan and assign lessons, implement plans, monitor each student's progress (like a project manager monitors deliverables).
• Communication and facilitation: act as facilitators or coaches, manage students, parents, and administrators.
• Collaboration: encourage teamwork by having students work in groups to solve problems.
• Decision-making: in some schools, teachers participate in budget, personnel, textbook, and curriculum decisions.
• Cultural awareness: work with students from varied ethnic, racial, and religious backgrounds (similar to managing diverse project teams).
• Example: A teacher planning a semester's lessons, tracking student progress, and adjusting instruction is applying project management principles.

🔧 Engineers

• Functional requirements: specify what a product or service must do.
• Quality and evaluation: assess design effectiveness, cost, reliability, and safety (like a project manager reviewing customer acceptance criteria).
• Estimation: provide time and cost estimates for completing projects.
• Link science to application: apply principles of science and mathematics to develop economical solutions to technical problems.

🏥 Health Care Professionals

🩻 Radiology Technologists

• Communication: explain procedures and positioning to patients.
• Risk management: prevent unnecessary radiation exposure using lead shields and limiting X-ray beam size.
• Quality control: monitor radiographs, adjust X-ray machine settings for appropriate density, detail, and contrast.
• Compliance: track radiation exposure for self, patients, and coworkers; report to ensure regulatory compliance.
• Teamwork: coordinate with patients, doctors, and other health care providers using strong communication, quality, timeliness, and resource management.

💉 Nurses

• Care planning: establish care plans including medication schedules (IV lines, therapies, treatments).
• Communication: interact with patients, families, physicians, and clinicians in person or via telehealth (videoconferencing, Internet, telephone).
• Risk management: monitor pain, vital signs, and provide status reports to physicians; in some cases, life or death consequences.
• Specializations: infection control (track outbreaks, create prevention programs), education (develop curricula), consulting, research, or sales support.
• Example: A nurse scheduling medication administration, monitoring patient status, and coordinating with doctors is managing a "patient care project."

⚖️ Paralegal

• Planning: help lawyers prepare for closings, hearings, trials, and corporate meetings.
• Communication: prepare written reports and draft pleadings, motions, and affidavits.
• Monitoring and risk containment: track case documents, manage filing dates and court responses.
• Procurement: negotiate terms for hiring expert witnesses and acquiring services (e.g., process servers).
• Financial management: assist with tax returns, trust funds, estate planning, and office financial records.
• Note: Paralegals cannot give legal advice, set legal fees, or present court cases.

💻 Software Developers

• Requirements development: define what the software must do.
• Task tracking: identify and track product development tasks.
• Communication: coordinate within the development team and with clients.
• Quality and testing: create test cases, manage quality, schedule, and resources (staff, equipment, labs).
• Example: Developing a computer game or business application involves planning, execution, and delivery—core project management activities.

🔬 Science Technicians

• Planning and execution: set up, operate, and maintain laboratory instruments; monitor experiments; observe, calculate, and record results.
• Quality assurance: ensure correct processes, proper proportions, purity, strength, and durability.
• Specializations:
  • Agricultural and food science: test food and agricultural products, improve crop yield and quality, ensure compliance with government regulations on additives and preservatives.
  • Biological technicians: assist in medical research, pharmaceutical development, study living organisms and infectious agents, manage incubation periods.
  • Chemical technicians: collect and analyze samples in laboratories or factories, test packaging design and environmental acceptability.
• Collaboration: record and communicate results and progress toward objectives within cost, schedule, resource, and quality standards.

📜 Historical Evolution of Project Management

🏛️ Ancient Projects

• Early examples: hunting parties of prehistoric ancestors, pyramids, Great Wall of China, Stonehenge.
• Key insight: project management concepts have existed since the beginning of organized human activity, enabling leaders to plan massive projects and manage funding, materials, and labor within a time frame.

🚂 Late 19th Century: Large-Scale Government Projects

• Catalyst: large-scale U.S. government projects like the transcontinental railroad (1860s construction).
• Challenge: organizing manual labor of thousands of workers and processing unprecedented quantities of raw material.
• Outcome: business leaders developed decisions that became the basis for project management methodology.

📊 1910s: Gantt Charts

A Gantt chart is a bar chart that illustrates a project schedule, representing the phases and activities of a project so they can be understood by a wide audience.

• Developer: Henry Gantt studied the order of operations in work and developed the Gantt chart in the 1910s.
• Impact: considered revolutionary at the time; employed on major U.S. infrastructure projects (Hoover Dam, interstate highway system).
• Legacy: still accepted today as important tools in project management.

⚛️ Mid-20th Century: Manhattan Project

• Context: code name for the Allied effort to develop the first nuclear weapons during World War II.
• Scale: over 30 project sites in the U.S. and Canada, 130,000 people, nearly US$2 billion, multiple production and research sites operated in secret.
• Significance: complexity was only possible because of project management methods; succeeded in developing and detonating three nuclear weapons in 1945.
• Management approach: ad hoc basis using mostly Gantt charts and informal techniques and tools.

📐 1950s: Modern Project Management Era

🔗 PERT (Program Evaluation and Review Technique)

PERT is a method for analyzing the tasks involved in completing a project, especially the time needed to complete each task, the dependencies among tasks, and the minimum time needed to complete the total project.

• Developer: Booz-Allen and Hamilton for the U.S. Navy's Polaris missile submarine program.
• Purpose: mathematical project-scheduling model.

🛤️ CPM (Critical Path Method)

The critical path method determines the float (schedule flexibility) for each activity by calculating the earliest start date, earliest finish date, latest start date, and latest finish date for each activity.

• Developer: joint venture by DuPont Corporation and Remington Rand Corporation for managing plant maintenance projects.
• Key concept: the critical path is generally the longest full path on the project; any activity with zero float time is a critical path task.
• Benefit: helps determine how long a complex project will take and which activities are critical (must be done on time or the whole project will take longer).
• Spread: these mathematical techniques quickly spread into many private enterprises.

🏢 1960s: Organizing Work Around Projects

• Shift: industrial and business organizations began to understand the benefits of organizing work around projects.
• Recognition: critical need to communicate and integrate work across multiple departments and professions.
• Outcome: project management in its present form began to take root.

🌱 Modern Project Management Values

🌍 Sustainability and Social Responsibility

• Expanded vision: financial, environmental, and social areas are now part of project management.
• PMI Code of Ethics: project managers should include in their decisions the best interests of society, the safety of the public, and enhancement of the environment.
• Triple bottom line: in addition to cost, scope, and schedule, a project manager should ensure the project is:
  • Socially responsible
  • Environmentally sound
  • Economically viable
• Example: Construction managers incorporate sustainability, reuse, LEED-certified building, green energy, and energy efficiencies into today's projects with an eye to the future.

🔑 Core Definition and Scope

🎯 What is a Project?

• Temporary undertaking: directed at a goal (e.g., prehistoric hunting parties obtaining meat for the community).
• Universal: people have been undertaking projects since the earliest days of organized human activity.
• Range: from simple (creating a dinner) to large and complex (pyramids, Great Wall of China).
• Common usage: the term "project" is used frequently in daily conversations.

📚 What This Book Covers

• Basics of project management: the process of initiation, planning, execution, control, and closeout that all projects share.
• Purpose: provide an open source textbook covering most project management courses.
• Sources: material obtained from a variety of sources (found in the reference section at the end of each chapter).

🧭 Overview

🧠 One-sentence thesis

Project management is the disciplined application of knowledge, skills, and techniques to temporary, unique endeavors in order to meet defined objectives while balancing competing constraints like cost, scope, quality, risk, resources, and time.

📌 Key points (3–5)

• What defines a project: Projects are temporary (definite start and end), unique (never done exactly this way before), and goal-driven (completed when objectives are met or no longer viable).
• Common confusion—project vs. operation: Projects are temporary and unique; operations are ongoing, repetitive processes with no end date that keep the organization functioning.
• The competing constraints: Cost, scope, quality, risk, resources, and time all compete for attention; changing one constraint forces changes in others (the "triple constraint" or "Whac-a-mole" effect).
• Why projects fail: Poor requirements understanding and lack of project management discipline cause billions in waste; the 2009 CHAOS Report showed only 32% of projects succeeded (on time, on budget, with required features).
• What a project manager brings: Application area knowledge, understanding of the project environment (cultural, social, international, physical), general management skills, and interpersonal skills (communication, leadership, negotiation, problem solving).

🎯 What is a project?

🎯 Core definition

A project is a temporary endeavor undertaken to create a unique product, service, or result (Project Management Institute definition).

• Temporary: Projects have definite start and end dates; they are not ongoing.
• Unique: The product or service has never been created exactly this way before.
• Goal-driven: Projects end when objectives are achieved, or when it's determined they cannot be met, or when the need no longer exists.

✅ How to tell if you have a project

Ask four questions:

1. Is it unique? Does it create something new or use a new approach?
2. Does it have a limited timeframe? Is there a start and end date?
3. Is there a way to determine completion? Can you tell when the work is done?
4. Can you measure stakeholder satisfaction? Can you document and compare requirements to the finished product?

If yes to all four, you have a project.

🔄 Project vs. operation—don't confuse them

Aspect	Project	Operation
Duration	Temporary, definite end date	Ongoing, no end date
Nature	Unique, never exactly repeated	Repetitive, same processes
Purpose	Meet goals and conclude	Keep organization functioning
Output	New product/service/result	Same results repeatedly

Example: Ford designing a new SUV model is a project (unique design and marketing); assembling cars on the production line is an operation (repetitive process for most models).

📋 Example walkthrough—the kiosk project

The VP of marketing wants kiosks in grocery stores to offer insurance services and bill payment by year-end.

• Unique? Yes—kiosks don't exist in grocery stores yet; this is a new way to present services.
• Limited timeframe? Yes—start today, end by year-end.
• Completion criteria? Yes—all kiosks installed and operating.
• Stakeholder satisfaction measurable? Yes—requirements will be documented and compared to the finished product.

Result: This is a project.

⚖️ The competing constraints

⚖️ The six project constraints

Every project manager must balance six competing constraints:

1. 💰 Cost: The approved budget; must avoid both overspending and underspending (many grants have "use it or lose it" clauses).
2. 📐 Scope: What the project is trying to achieve—all work and deliverables needed to produce the outcomes.
3. ✨ Quality: Standards and criteria the product must meet to perform effectively, solve the problem, and deliver expected value; controlled through quality assurance (QA).
4. ⚠️ Risk: Potential external events with negative impact; combination of probability and impact; high-risk events need proactive management plans.
5. 🛠️ Resources: People, equipment, facilities, funding, or anything else needed to complete project tasks.
6. ⏰ Time: The schedule to complete the project; requires careful task identification, duration estimation, sequencing, and resource allocation (including vacations and holidays).

🔺 The triple constraint (traditional view)

The "triple constraint" originally consisted of time, cost, and scope—the three primary competing constraints.

• Visualized as a triangle: each side represents one constraint; changing one side forces changes in the other sides.
• Best projects: perfectly balanced triangle.
• Reality: projects are prone to change, making balance difficult.

Example dynamics:

• Scope increases → cost and time may increase disproportionately.
• Budget decreases → must reduce scope quality or extend time.
• Lack of appropriate resources → schedule extends because available resources take longer.

🎪 The "Whac-a-mole" effect

Think of constraints as the carnival game Whac-a-mole: each time you push one mole (constraint) back in the hole, another pops out.

• All constraints are dependent on each other.
• Best advice: rely on your project team to keep constraints in balance.

💥 Real-world failure—the P-36 oil platform

The Petrobras P-36 (largest floating production platform, processing 180,000 barrels/day) sank in March 2001 after two explosions, killing 11 people and costing $515 million.

Root cause: Complete failure in quality assurance; pressure for increased production led to cutting corners on safety procedures (a constraint trade-off gone wrong).

A Petrobras executive had boasted about "cost cutting" and "elimination of unnecessary straitjackets" (i.e., safety and quality checks)—a cautionary tale of sacrificing quality to meet cost constraints.

🛠️ The humorous constraint rule

"Good, Quick, Cheap: Choose two."

1. Good + Quick = not Cheap
2. Good + Cheap = not Quick
3. Quick + Cheap = not Good

This sign (seen at an automotive repair shop) accurately captures the dynamic trade-offs between constraints.

📉 Why projects fail and how to avoid it

📉 The scale of failure

• United States: Over $250 billion spent annually on IT application development in ~175,000 projects.
• 2009 CHAOS Report (Standish Group) findings:
  • 32% succeeded: delivered on time, on budget, with required features.
  • 44% challenged: late, over budget, and/or with fewer features than required.
  • 24% failed: cancelled before completion or delivered but never used.

🛡️ Root causes and solutions

Why projects fail:

• Poor understanding of business needs (requirements) early in the process.
• Lack of project management techniques applied and followed.
• Failure to monitor project activities.

How to reduce risk:

• Apply good project management discipline.
• Get the right requirements understood early.
• Use standard processes to deal with contingencies.

Important: Good project management does not eliminate all problems, risks, or surprises—but it gives you standard processes to handle them.

🧭 What is project management?

Project management is the application of knowledge, skills, tools, and techniques to project activities in order to meet project requirements.

It includes:

• Planning: Identifying requirements, setting goals everyone agrees on, understanding what everyone needs from the project.
• Executing: Putting the plan into action.
• Monitoring: Measuring progress and performance.
• Balancing: Managing the many competing constraints.

🧰 Project management expertise

🧰 Four areas of expertise required

A project manager should bring four types of expertise to the team:

1. 📚 Application area knowledge
2. 🌍 Understanding of the project environment
3. 💼 General management knowledge and skills
4. 🤝 Interpersonal skills

Important distinction: You need expertise to run the project, not necessarily deep technical expertise in the field (your team provides that). Example: managing an oil platform project doesn't require detailed engineering knowledge (your mechanical and civil engineers provide that), but understanding the type of work helps.

📚 Application area knowledge

📚 Standards vs. regulations

• Standards: Guidelines or preferred approaches (not mandatory).
• Regulations: Mandatory rules that must be followed (e.g., government-imposed laws).

📚 What are application areas?

Application areas: categories of projects with common elements, defined by industry group (pharmaceutical, financial), department (accounting, marketing), technology (software, engineering), or management specialties (procurement, R&D).

• Different industries have different concerns: government procurement rules, pharmaceutical regulations, automotive standards.
• Stay up-to-date on current trends in your industry.
• Having experience in the application area gives you an advantage, though you can call in experts.

🌍 Understanding the project environment

🌍 Four environmental factors

1. Cultural and social: People, demographics, education.
2. International and political: Different countries' cultural influences.
3. Physical: Time zones, geographic distribution.
4. (Implicit) Organizational: Policies, operations, underlying culture.

Key insight: Physical factors are easiest to understand; cultural and international factors are often misunderstood or ignored—yet they can be critical to project success.

🌍 Cultural differences—examples

Communication and formality:

• United States: Values accomplishments and individualism; informal, first-name basis even when just met.
• Europe: More formal, use surnames in business even if well-acquainted; values individualism but also history, hierarchy, loyalty.
• Japan: Indirect communication; considers self part of a group, not as individual; values hard work and success.

Product reception:

• Call-waiting (1990s telecom example): Popular feature in the West, considered impolite in some parts of Asia. Western companies failed to capture project environment requirements and involve the customer.

🌍 Simple but critical—date formats

What day and month is 2/8/2009?

• North America: February 8th
• Europe (and much of the world): 2nd August

When defining schedules and deadlines, everyone must be clear on the format used.

🌍 Website localization example

Managing a project to create a website for a company selling products worldwide:

• Language: Ensure correct translation.
• Presentation layer: Different cultures have different requirements.
  • Focus: Left side for Canadians; right side for Middle Eastern users (Arabic and Hebrew are written right to left).
  • Colors: Different meanings in different cultures (see table below).

Color	United States	China	Japan	Egypt	France
Red	Danger, stop	Happiness	Anger, danger	Death	Aristocracy
Blue	Sadness, melancholy	Heavens, clouds	Villainy	Virtue, faith, truth	Freedom, peace
Green	Novice, apprentice	Ming dynasty, heavens	Future, youth, energy	Fertility, strength	Criminality
Yellow	Cowardice	Birth, wealth	Grace, nobility	Happiness, prosperity	Temporary
White	Purity	Death, purity	Death	Joy	Neutrality

Example: White signifies purity in North America (bride's wedding dress, favored background color) but signifies death in Japan (burial shroud).

Takeaway: Project managers in multicultural projects must learn relevant customs, courtesies, and business protocols before taking responsibility; consider how cultural influences affect completion, schedule, scope, and cost.

💼 General management knowledge and skills

As project manager, you rely on:

• Project management knowledge: Ability to plan, execute, control, and conclude the project.
• General management skills: Guide the team to achieve objectives and balance constraints.

Project management is similar to running a business: risk and rewards, finance and accounting, human resources, time management, stress management, and a purpose for existence.

🤝 Interpersonal skills

🤝 Why interpersonal skills matter

You must manage personal relationships and deal with personnel issues as they arise.

Key fact: Project managers spend 90% of their time communicating—so interpersonal skills are critical.

💬 Communication

• Your job: Keep people well informed—project staff must know what is expected, what to do, when to do it, and what constraints and quality specifications apply.
• If staff don't know their tasks or how to accomplish them: the entire project grinds to a halt.
• If you don't know what staff is (or isn't) doing: you cannot monitor progress.
• If you're uncertain of customer expectations: the project won't get off the ground.

Communication summary: Know "who needs what information and when" and make sure they have it.

Communication management plan documents:

• Types of information to be communicated.
• Who will communicate and who will receive.
• Methods used (mail, email, shared website, face-to-face meetings).
• Timing and frequency.
• Method for updating the plan as the project progresses (including escalation process).
• Glossary of common terms.

🎯 Influence

• Every organization has political alliances, differing motivations, conflicting interests, and power struggles.
• A project manager must understand the unspoken influences at work within the organization.

🚀 Leadership

Leadership: the ability to motivate and inspire individuals to work toward expected results.

• Leaders inspire vision and rally people around common goals.
• A good project manager inspires the team to see the vision and value of the project, and to find solutions to overcome perceived obstacles.

🔥 Motivation

Motivation: helps people work more efficiently and produce better results.

• It is a constant process the project manager must guide to help the team move toward completion with passion and a profound reason to complete the work.
• Accomplished through team-building techniques and exercises (getting a diverse group to work together efficiently and effectively).

Recognition and rewards:

• Formal ways of recognizing and promoting desirable behavior.
• Most effective when carried out by the management team and project manager.
• Consider individual preferences and cultural differences: some people don't like public recognition; others thrive on it.

🤝 Negotiation

• Project managers must negotiate for the good of the project.
• The project manager, sponsor, and team will negotiate with stakeholders, vendors, and customers to reach acceptable agreements.

🧩 Problem solving

Problem solving: the ability to understand the heart of a problem, look for a viable solution, and make a decision to implement it.

Starting point: Problem definition—understanding the cause and effect of the problem through root-cause analysis.

Don't confuse symptoms with causes:

• Treating only symptoms perpetuates the problem and may create greater problems.
• Example: Increasing the ampere rating of a fuse in your car because it keeps blowing does not solve the electrical short that could cause a fire.

Root-cause analysis: Looks beyond immediate symptoms to the cause, affording opportunities for real solutions.

Decision-making:

• Solutions can come from vendors, the project team, the project manager, or stakeholders.
• A viable solution considers cause and effect of the solution itself.
• Timely decision needed: the window of opportunity may pass, requiring a new decision.
• Worst thing you can do: nothing.

Guarantee: You will need all these interpersonal skills on your next project—start practicing now.

🧭 Overview

🧠 One-sentence thesis

Every project follows a four-phase life cycle—initiation, planning, implementation, and closure—that moves the project from identifying a need to delivering a solution and transferring lessons learned.

📌 Key points (3–5)

• The four phases: initiation (identify need and approve solution), planning (detail the work and prepare schedule/budget/risks), implementation (execute the plan and monitor progress), and closure (deliver final product and document lessons).
• Shared goal: the project manager and team work together to meet the project's objectives through these phases.
• Planning fundamentals: the three core components are identifying the work (scope), preparing the schedule, and estimating costs.
• Common confusion: planning vs. implementation—planning develops the detailed roadmap before work begins; implementation executes that plan and adjusts as needed, but the first action should always be to return to the original plan.
• Why phases matter: each phase has its own agenda of tasks and issues; together they represent the path from beginning to end.

🚀 Initiation Phase

🎯 Identifying the objective or need

• The initiation phase starts by identifying a project objective or need, which can be a business problem or opportunity.
• An appropriate response is documented in a business case with recommended solution options.
• A feasibility study investigates whether each option addresses the project objective, and a final recommended solution is determined.

✅ Feasibility and justification

Two key questions are addressed:

• Feasibility: "Can we do the project?"
• Justification: "Should we do the project?"

🧑‍💼 Approval and team formation

• Once the recommended solution is approved, a project is initiated and a project manager is appointed.
• The major deliverables and participating work groups are identified; the project team begins to take shape.
• The project manager then seeks approval to move to the detailed planning phase.

📋 Planning Phase

🔍 Developing the solution in detail

Planning phase: the phase where the project solution is further developed in as much detail as possible and the steps necessary to meet the project's objective are planned.

• The team identifies all of the work to be done.
• The project's tasks and resource requirements are identified, along with the strategy for producing them.
• This is also referred to as "scope management."

📅 The three fundamental components

Once these three components are complete, the planning process is fundamentally done:

Component	What it covers
Work identification	All activities and tasks to be done
Schedule preparation	Dependencies and timeframes
Cost estimation	Labour, equipment, and materials costs; used to monitor expenditures during implementation

⚠️ Risk management

• After the three fundamentals are complete, it is an excellent time to identify and deal with anything that might threaten successful completion.
• "High-threat" potential problems are identified along with actions to either:
  • Reduce the probability that the problem will occur, or
  • Reduce the impact on the project if it does occur.

📢 Communication and quality plans

• Identify all project stakeholders and establish a communication plan describing:
  • The information needed
  • The delivery method to keep stakeholders informed
• Document a quality plan with quality targets, assurance, and control measures.
• Document an acceptance plan listing the criteria to be met to gain customer acceptance.

✔️ Ready to execute

At this point, the project has been planned in detail and is ready to be executed.

🛠️ Implementation (Execution) Phase

🏗️ Putting the plan into motion

Implementation phase: the phase where the project plan is put into motion and the work of the project is performed.

• People carry out the tasks.
• Progress information is reported through regular team meetings.
• The project manager spends most of the time in this phase.

📊 Maintaining control and monitoring progress

• Progress is continuously monitored and appropriate adjustments are made and recorded as variances from the original plan.
• The project manager compares progress reports with the project plan to measure performance and take corrective action as needed.

🔄 Corrective action priority

• First course of action: always bring the project back on course (i.e., return it to the original plan).
• If that cannot happen, the team should record variations from the original plan and publish modifications to the plan.
• Don't confuse: adjustments are made when needed, but the goal is always to return to the original plan first, not to immediately rewrite it.

📣 Communication and status reports

• Project sponsors and other key stakeholders should be kept informed according to the agreed-on frequency and format.
• The plan should be updated and published on a regular basis.
• Status reports should always emphasize the anticipated end point in terms of:
  • Cost
  • Schedule
  • Quality of deliverables

✅ Quality review and acceptance

• Each project deliverable produced should be reviewed for quality and measured against the acceptance criteria.
• Once all deliverables have been produced and the customer has accepted the final solution, the project is ready for closure.

🏁 Closing Phase

📦 Releasing and handing over

Closing (or completion) phase: the phase where emphasis is on releasing the final deliverables to the customer, handing over project documentation to the business, and communicating closure to all stakeholders.

Key activities include:

• Releasing the final deliverables to the customer
• Handing over project documentation to the business
• Terminating supplier contracts
• Releasing project resources
• Communicating the closure of the project to all stakeholders

📚 Lessons-learned studies

• The last remaining step is to conduct lessons-learned studies to examine:
  • What went well
  • What didn't
• Through this analysis, the wisdom of experience is transferred back to the project organization, which will help future project teams.

🌍 Real-world example: Large multinational project

🏔️ Initiation: Building infrastructure from scratch

Example: A U.S. construction company won a contract to design and build the first copper mine in northern Argentina, where no existing infrastructure for mining or large construction existed.

• During initiation, the project manager focused on defining and finding a project leadership team with the knowledge, skills, and experience to manage a large complex project in a remote area.
• The team set up three offices:
  • One in Chile (where large mining construction infrastructure existed)
  • One in Buenos Aires (to establish relationships and Argentine expertise)
  • One in Catamarca (the largest town close to the mine site)
• The start-up team began developing procedures for getting work done, acquiring permits, and developing relationships with Chilean and Argentine partners.

📐 Planning: Coordinating design, procurement, and construction

• The project team developed an integrated project schedule that coordinated the activities of the design, procurement, and construction teams.
• The project controls team developed a detailed budget to track expenditures against expected expenses.
• The design team built on the conceptual design and developed detailed drawings for the procurement team.
• The procurement team used the drawings to:
  • Begin ordering equipment and materials
  • Develop labour projections
  • Refine the construction schedule
  • Set up the construction site
• Although planning is never-ending, the planning phase focused on developing sufficient details to allow coordination and priority decisions.

🔨 Implementation: Accomplishing the work

• The implementation phase represents the work done to meet the requirements of the scope of work and fulfill the charter.
• The team accomplished the work defined in the plan and made adjustments when project factors changed.
• Activities included:
  • Delivering equipment and materials to the work site
  • Hiring and training labour
  • Building a construction site
  • All construction activities from the arrival of the first dozer to the installation of the final light switch

🎉 Closeout: Turning over and archiving

• The closeout phase included turning over the newly constructed plant to the operations team of the client.
• A punch list of a few remaining construction items was developed and completed.
• The office in Catamarca was closed; the office in Buenos Aires archived all project documents; the Chilean office was already working on the next project.
• The accounting books were reconciled and closed, final reports written and distributed, and the project manager started on a new project.

🧭 Overview

🧠 One-sentence thesis

Project management has evolved into a professionalized discipline with standardized knowledge areas, methodologies, and organizational structures that help teams systematically plan, execute, and control complex projects.

📌 Key points (3–5)

• Two major global organizations: PMI (Project Management Institute) and IPMA (International Project Management Association) shape worldwide project management practice, with PMI's PMBOK Guide being the most widely recognized standard.
• Ten knowledge areas: PMBOK organizes project management into ten domains—integration, scope, time, cost, quality, human resources, communication, risk, procurement, and stakeholder management.
• Multiple methodologies exist: Traditional PMBOK approaches coexist with agile methods like Scrum, each suited to different project types and organizational contexts.
• Common confusion: Project management is not just about schedules and budgets—it requires balancing all ten knowledge areas simultaneously throughout the project lifecycle.
• PMO role: Many organizations establish a Project Management Office to standardize practices, provide training, and improve project success rates across the enterprise.

🏛️ Evolution and professionalization

🏛️ Historical development

• Engineers and architects have managed major projects since pre-history.
• Since approximately the 1960s, efforts began to professionalize project management as a distinct specialization.
• Ongoing debates exist about whether project management should be a regulated profession like engineering or medicine.

🤔 Key professional questions

Two active debates shape the field:

• Professional status: Should project management have legal certification requirements and professional associations that discipline members?
• Industry transferability: How much industry-specific knowledge does a project manager need? Can a PM easily transition from IT to hospitality or construction?

Don't confuse: Project management as a set of transferable skills vs. project management requiring deep domain expertise—the field continues to debate this balance.

📚 PMI and the PMBOK framework

📚 Project Management Institute origins

• Founded by five volunteers in 1969 to share experiences and discuss project management issues.
• Now a non-profit professional association and the most widely recognized organization promoting project management best practices.
• Premise: tools and techniques of project management are common across industries, from software to construction.

📖 PMBOK Guide development

A Guide to the Project Management Body of Knowledge (PMBOK Guide): the fundamental knowledge needed for managing a project, categorized into knowledge areas.

Timeline of evolution:

• First introduced in 1987
• Updated in 1996, 2000, 2004, 2009, and 2013 (fifth edition)
• More than one million copies in circulation
• Adopted by IEEE as their project management standard
• PMI accredited as an ANSI standards developer in 1999

🎓 PMP certification

• Project Management Professional (PMP) certification exam first offered in 1984.
• Now more than 590,000 individuals worldwide hold the PMP designation.
• Certification program achieved ISO 9001 recognition—first organization to do so.

🌍 Global presence

PMI has grown to:

• More than 260,000 members in over 171 countries (as of 2008)
• Headquarters in Pennsylvania, United States
• Offices in Washington DC, Canada, Mexico, China
• Regional service centers in Singapore, Brussels, New Delhi, and Mumbai

🔟 The ten PMBOK knowledge areas

🔗 Managing integration

Managing integration: developing the project charter, scope statement, and plan to direct, manage, monitor, and control project change.

• Projects have many simultaneous activities that need coordinated movement.
• Integration keeps the "whole" thing moving collectively.
• Think of it as the glue that holds all other knowledge areas together.

📐 Managing scope

Managing scope: planning, definition, WBS creation, verification, and control.

• Projects need defined parameters or boundaries.
• Work breakdown structure (WBS) breaks down scope into manageable pieces.
• Scope creep: incremental expansion of project scope without proper change management—a common threat to project success.

Example: Small increases in scope require additional resources not in the original plan; if these changes aren't recognized and managed, the project suffers.

Don't confuse: Authorized scope changes (properly managed and resourced) vs. scope creep (unmanaged incremental expansion).

⏰ Managing time/schedule

Managing time/schedule: definition, sequencing, resource and duration estimating, schedule development, and schedule control.

• Projects have definite beginning and ending dates.
• Requires managing budgeted time according to a project schedule.
• The critical path is the longest sequence of activities from beginning to end—determines minimum project duration.

💰 Managing costs

Managing costs: resource planning, cost estimating, budgeting, and control.

• Projects consume resources and must create value (benefits exceed costs).
• Tracks actual costs against budgeted costs for work performed.
• Requires analysis when costs deviate significantly from estimates.

✅ Managing quality

Managing quality: quality planning, quality assurance, and quality control.

• Focuses on deliverables that meet project objectives and performance standards.
• Not just "what" will be delivered but also the specifications and grade.

Example: A high-traffic room needs high-grade carpet, not just any carpet—quality specifications must match intended use.

👥 Managing human resources

Managing human resources: human resources planning, hiring, and developing and managing a project team.

• Finding the right people, managing outputs, keeping them on schedule.
• Projects involve both functional managers (technology experts) and process managers (project controls).
• Staffing is temporary by nature—team members join and leave at different project phases.

📢 Managing communication

Managing communication: communications planning, information distribution, performance reporting, and stakeholder management.

• Projects touch many people: end users, participants, managers, external stakeholders.
• Virtual teams: teams using electronic communication without face-to-face meetings.
• Synchronous communication: all parties interact at the same time (e.g., conference calls).
• Asynchronous communication: participants interact at different times (e.g., email).

⚠️ Managing risk

Managing risk: risk planning and identification, risk analysis (qualitative and quantitative), risk response planning, and risk monitoring and control.

Key process steps:

1. Identify potential project risks (using checklists and team discussion)
2. Analyze likelihood of risks occurring
3. Estimate potential impact on project goals
4. Develop mitigation plans to reduce likelihood or impact
5. Allocate contingency (funds set aside for unforeseen events)

Don't confuse: High-risk projects need large contingency budgets, but contingency is not a blank check—it should be allocated based on risk analysis.

🛒 Managing procurement

Managing procurement: acquisition and contracting plans, sellers' responses and selections, contract administration, and contract closure.

Three procurement approaches:

Approach	Description	Example
Commodities	Common products purchased on lowest bid	Concrete, office supplies, lab equipment
Specified products	Vendors bid to produce custom specifications	Furnace for steel mill, custom research equipment
Partners	Integrated into execution plan, share project vision	Design firm for major project component, research subcontractor

🤝 Managing stakeholders

Managing stakeholders: identifying stakeholders, their interest level, and their potential to influence the project; managing and controlling relationships and communications.

• Stakeholders can be grouped into those impacted by the project and those who can impact the project.
• Stakeholder register: document used to identify and track interactions between project and each stakeholder.
• Must be updated regularly—new stakeholders can arise anytime; needs and interest levels change.

Critical early actions:

• Identify stakeholders early in the project
• Determine what they want or need
• Assess their influence or power over the project
• Create a stakeholder management plan

🏃 Scrum development methodology

🏃 What is Scrum

Scrum: a formal project management/product development methodology, part of agile project management; term from rugby meaning a way of restarting a game.

Core philosophy:

• You cannot plan the whole project up front with certainty.
• Start, build empirical data, then re-plan and iterate.
• Uses sequential sprints (small project phases, ideally 2–4 weeks).

🔄 Sprint cycle process

Each sprint follows this pattern:

1. Take one day to plan what can be done now
2. Develop what was planned
3. Demonstrate results at end of sprint
4. Test what was demonstrated
5. Start next sprint cycle

Daily standup meeting checks:

• What was done yesterday
• What is planned for next day
• What is impeding team members

👔 Scrum roles

Role	Responsibilities
Product owner	Business owner who knows industry, market, customers, and business goals; must be intimately involved in planning and demonstration
Scrum Master	Removes barriers, teaches product owner to maximize ROI, facilitates creativity, improves productivity, runs daily standups, tracks progress
Development team	Self-organizing, empowered group; participates in planning and estimating, does development, demonstrates results; ideal size is 7 ± 2

📊 Scrum planning concepts

Product breakdown hierarchy:

• Product → Features → Stories → Tasks

Story points for effort estimation:

• Tiny = 1 SP
• Small = 2 SP
• Medium = 4 SP
• Large = 8 SP
• Big = 16+ SP
• Unknown = ? SP

User stories: descriptions of what the user can do and what happens as a result of different actions from a given starting point.

Other story types: analysis, development, QA, documentation, installation, localization, training.

⚠️ Scrum caveats

When Scrum works best:

• Committed, mature developers
• Products requiring frequent new releases or updates

What Scrum still requires:

• Major requirements definition up front or early
• Some analysis and architecture definition early
• Definition of roles and terms up front
• Commitment from company and product owner

Less effective for: Large, totally new products that will not allow frequent upgrades once released.

🏢 Project Management Office (PMO)

🏢 Purpose and structure

Project Management Office (PMO): a department created to oversee and support projects throughout the organization, attempting to reduce high numbers of failed projects.

Two common models:

• Home base: All project managers report to the PMO
• Resource center: PMO provides support to project managers who report to their line areas

🎯 Typical PMO objectives

• Help ensure projects align with organizational objectives
• Provide templates and procedures for project managers
• Provide training and mentorship
• Provide facilitation
• Stay abreast of latest trends in project management
• Serve as repository for project reports and lessons learned

⚖️ PMO sustainability challenges

• PMO existence and role tends to be fluid.
• If greater project success is not experienced, PMO risks being disbanded as cost-saving measure.
• PMO role should be to enable and enhance success, not create red tape.

For project managers: Make good use of available PMO resources.

For PMO staff: Remember your role is to enable success, not get in the way.

🧭 Overview

🧠 One-sentence thesis

Effective stakeholder management—identifying all parties with vested interests, understanding their conflicting goals, and building strong relationships through communication and political skill—is essential to project success because key stakeholders can make or break a project regardless of whether deliverables are met.

📌 Key points (3–5)

• Who stakeholders are: individuals who care about or have a vested interest in the project, including those actively involved or those who stand to gain or lose from the project outcome.
• Why they matter: key stakeholders can make or break project success even when all deliverables and objectives are satisfied.
• Common confusion: project managers often have little or no direct control over stakeholders yet must influence them like politicians rather than impose their will directly.
• Cultural dimensions: stakeholder management becomes more complex when stakeholders do not share a common culture, affecting communication, negotiation, and decision-making.
• Relationship-building is ongoing: analyzing stakeholder influence, understanding expectations, defining success differently for each, and maintaining regular communication are critical throughout the project lifecycle.

👥 Who Stakeholders Are

👥 Definition and scope

Stakeholders are individuals who either care about or have a vested interest in your project. They are the people who are actively involved with the work of the project or have something to either gain or lose as a result of the project.

• Stakeholders include both those positively and negatively affected.
• Example: highway lane expansion—motorists benefit (positive), nearby residents suffer construction noise and later increased traffic noise and pollution (negative).
• Leaving out important stakeholders until well into the project could be a "project killer."

🏢 Internal vs external stakeholders

The excerpt distinguishes two broad categories:

Category	Examples
Internal	Top management, project team members, your manager, peers, resource manager, internal customers
External	External customers, government, contractors and subcontractors, suppliers

• Project managers face more complexity than internal-only managers because they must deal with people outside the organization.
• Project managers generally have little or no direct control over any of these individuals.

🎯 Key Stakeholder Groups and How to Manage Them

🎩 Top management

• Includes president, vice-presidents, directors, division managers, corporate operating committee.
• Plus side: support makes it easier to recruit best staff, acquire resources, and enhance professional standing.
• Minus side: failure is highly visible and costly.
• How to manage:
  • Develop in-depth plans and major milestones for approval.
  • Ask for their information reporting needs and frequency.
  • Develop scheduled status reporting.
  • Keep them informed of project risks and potential impacts at all times.

👷 The project team

• Made up of people dedicated to the project or borrowed part-time.
• Challenges:
  • Team members are borrowed and don't report to you, so their priorities may be elsewhere.
  • They may juggle many projects plus full-time jobs and have difficulty meeting deadlines.
  • Personality conflicts may arise.
  • You may discover missed deadlines too late to recover.
• How to manage (requires interpersonal skills):
  • Involve team members in project planning.
  • Meet privately and informally with each member.
  • Be available to hear concerns at any time.
  • Encourage team members to help others.
  • Complete project performance reviews for team members.

👔 Your manager

• Decides the assignment and who can work with the project manager.
• Keeping your manager informed helps ensure you get necessary resources.
• How to manage:
  • Find out exactly how your performance will be measured.
  • Ask for clarification when directions are unclear.
  • Develop an acceptable reporting schedule.
  • Communicate frequently.

🤝 Peers

• People at the same organizational level; may or may not be on the project team.
• Challenges:
  • Inadequate control over peers.
  • Political maneuvering or sabotage.
  • Personality or technical conflicts.
  • Envy (peer may have wanted to lead the project).
  • Conflicting instructions from different managers.
• How to manage:
  • Get sponsor or top management support to empower you with authority.
  • Confront dysfunctional behavior directly.
  • Be explicit in asking for full support; arrange frequent review meetings.
  • Establish goals and standards of performance for all team members.

📦 Resource managers

• Control the resources project managers need to borrow.
• Good relationships = consistently acquiring the best staff and equipment.
• Poor relationships = difficulty getting good people or equipment.

🏪 Internal customers

• Individuals within the organization who are customers for projects meeting internal demands.
• Hold the power to accept or reject your work.
• Common stumbling blocks:
  • Lack of clarity about what the customer wants.
  • Lack of documentation.
  • Lack of knowledge of the customer's organization.
  • Unrealistic deadlines, budgets, or specifications.
  • Hesitancy to sign off or accept responsibility for decisions.
  • Changes in project scope.
• How to manage:
  • Learn the client organization's buzzwords, culture, and business.
  • Clarify all requirements and specifications in a written agreement.
  • Specify a change procedure.
  • Establish the project manager as the focal point of communications.

🌐 External customers

• Customers when projects are marketed to outside customers.
• Example: if managing a project at your company for an external organization, they are your external customer.

🏛️ Government

• Relevant in heavily regulated environments (pharmaceutical, banking, military industries).
• Can include municipal, provincial, federal, or international levels.

🔧 Contractors, subcontractors, and suppliers

• Used when organizations lack in-house expertise or resources.
• Potential problems:
  • Quality of work.
  • Cost overruns.
  • Schedule slippage.
  • Late delivery, short supply, poor quality, or price increases from suppliers.
• Managing these relationships can consume more than half of the project manager's time.
• Requires sophisticated skills including managing conflicts, negotiating, and other interpersonal skills.

🎭 Politics and Conflicting Interests

🎭 Why project managers must be politicians

• Project stakeholders often have conflicting interests.
• Project managers are not inherently powerful and cannot impose their will directly.
• Like politicians, they must exercise influence effectively over others.
• They have direct control over very few things, so ability to influence is critical.
• Rule of thumb: when in doubt, resolve stakeholder conflicts in favor of the customer.

🔍 Steps for good project politics

🔍 Assess the environment

• Identify all relevant stakeholders (any could derail the project).
• Determine where the power lies.
• Ask: Who counts most? Whose actions will have the greatest impact?

🎯 Identify goals

• Determine what drives each stakeholder.
• Look for hidden agendas or goals not openly articulated.
• Pay special attention to goals of stakeholders who hold power.

🧩 Define the problem

• Isolate and closely examine the facts that constitute the problem.
• Repeatedly ask: "What is the real situation?"

🌍 Culture of Stakeholders

🌍 Three major aspects of cultural difference

When project stakeholders do not share a common culture, project management must adapt its organizations and work processes:

1. Communications
2. Negotiations
3. Decision making

💬 Communication barriers

💬 Language

• The greatest barrier to communication.
• When stakeholders don't share the same language, communication slows down and is often filtered to share only critical information.
• Can influence project execution where quick and accurate exchange of ideas is critical.

💬 Context and candor

• Interpretation of information reflects the extent that context and candor influence cultural expressions.
• In some cultures, an affirmative answer does not always mean yes.
• Can create confusion on projects with stakeholders from more than one culture.
• Example: A U.S. consultant evaluating a project in Mumbai, India, discovered critical aspects were behind schedule despite positive reports in meetings. Information flowed through a cultural expectation to provide positive information. The project was eventually canceled.

🌎 Not all cultural differences are international

• Corporate cultures and regional differences can create cultural confusion.
• Example: On a major South American project with team leaders from seven countries, the greatest cultural difficulty was between two U.S. team members—one from New Orleans and one from Brooklyn—more than between team members from Lebanon and Australia.

📊 Managing Stakeholder Complexity

📊 Factors that increase complexity

• Number of stakeholders: more stakeholders add stress and increase complexity.
• Level of investment: business or emotional investment of the stakeholder and their ability to influence outcomes.
• Degree of agreement/disagreement: the extent to which stakeholders agree or disagree influences complexity.

📊 Examples of stakeholder complexity

📊 Small commercial construction project

• Multiple stakeholders: building permitting agencies, environmental agencies, labor and safety agencies.
• Neighbors have interest in architectural appeal, noise, and building purpose.

📊 Tire plant in India

• A U.S. chemical company planned a plant to produce raw materials for truck tires.
• Built a few years after an accident involving a different U.S. chemical company that killed several Indians.
• Community backlash was so strong the project was shut down.
• Lesson: A highly involved stakeholder can significantly influence your project.

📊 Wind turbine on a college campus

• Engineering department wanted it for student demonstration.
• Facilities department had only one location that wouldn't disrupt traffic flow.
• Engineering found that location unacceptable for student maintenance.
• County had no permitting policies for wind turbines.
• Marketing wanted high visibility to promote innovation.
• Each stakeholder had legitimate interest; number multiplied by passion and lack of agreement increased complexity.

📊 Bridge project

• Department of Highways upgraded bridges crossing interstate in a large city.
• Closing bridges severely impacted traffic congestion, including a large shopping mall.
• Contract included provisions for minimizing impact on traffic and communities.
• Project leadership invested significant time and resources developing alignment among political stakeholders.

🤝 Relationship Building Tips

🤝 Initial analysis steps

• Analyze stakeholders: Conduct stakeholder analysis—an assessment of key participants and how the project will affect their problems and needs. Identify individual characteristics and interests, motivations, and provocations. Define roles and level of participation. Determine if there are conflicts of interest among groups.
• Assess influence: Measure the degree to which stakeholders can influence the project. The more influential, the more you need their support. Think "What's in it for them?" Balance support against influence—is strong support from a low-influence stakeholder more important than lukewarm support from a high-influence stakeholder?
• Understand their expectations: Nail down specific expectations. Ask for clarification to ensure complete understanding.
• Define "success": Every stakeholder may have a different idea of what project success looks like. Discovering this at the end is a formula for failure. Gather definitions up front and include them in objectives.

🤝 Ongoing engagement

• Keep stakeholders involved: Don't just report to them—ask for their input. Get to know them better through coffee, lunch, or quick meetings. Measure each stakeholder's capacity to participate and honor time constraints.
• Keep stakeholders informed: Send regular status updates. Weekly is usually about right (daily may be too much; monthly is not enough). Hold project meetings as required. Answer questions and emails promptly. Regular communication is appreciated and may soften the blow of bad news.

🤝 How to relate to different types of stakeholders

• Conduct stakeholder analysis to gather information for building strong relationships.
• Needs and wants differ (e.g., director of marketing vs. chief information officer).
• Engagement with each must be different.
• Stakeholders with financial concerns need to know potential return.
• Others support projects with sound evidence of value to operations, market share, production, or other company objectives.
• Keep each stakeholder's expectations and needs in mind throughout every communication.
• Remember: company's interests are more important than any individual's.

🤝 Universal respect factors

All stakeholders will respect the project manager who:

• Is always honest, even when telling them something they don't want to hear.
• Takes ownership of the project.
• Is predictable and reliable.
• Stands by his or her decisions.
• Takes accountability for mistakes.

🛠️ Tools to Help Stakeholder Management

🛠️ Three-step process

🛠️ Step 1: Identify stakeholders

• Just because they are important in the organization does not necessarily mean they are important to your project.
• Just because they think they are important does not mean they are.
• Just because they don't think they need to be involved does not mean they don't have to be.
• Typical suspects: your manager, your manager's manager, your client, your client's manager, any SME (subject matter expert) whose involvement you need, the board reviewing and approving your project.
• Caution: Some people think they are stakeholders. From your perspective they may not be, but be careful—they could be influential with those who have power to impact your project. Do not dismiss them out of hand.

🛠️ Step 2: Determine power and intentions

• Do they have the power to impact your project?
• Do they support or oppose you?
• What strategies do you follow with them?

🛠️ Step 3: Assess relationships among stakeholders

• Can you improve your project's chances by working with those who support you to improve the views of those who oppose you?

🛠️ Stakeholder analysis matrix

The excerpt provides a matrix based on potential for cooperation and potential for threat:

	Low threat potential	High threat potential
Low potential for cooperation	Type: Marginal<br>Strategy: Monitor	Type: Non-supportive<br>Strategy: Defend
High potential for cooperation	Type: Supportive<br>Strategy: Involve	Type: Mixed blessing<br>Strategy: Collaborative

🛠️ Stakeholder analysis template

Complete a template that helps define strategies to improve support, including:

• Stakeholder names and roles
• How important? (Low – Med – High)
• Current level of support? (Low – Med – High)
• What do you want from stakeholders?
• What is important to stakeholders?
• How could stakeholders block your efforts?
• What is your strategy for enhancing stakeholder support?

🛠️ Communications plan

A key piece of stakeholder management is constant communication. Using the information developed above, develop a communications plan that secures stakeholders' support. The excerpt references a template with fields for:

• Project scope
• Key messages
• Communication goals
• Communication teams
• Project team
• Other stakeholders
• A tracking table with columns for: communication date, deliverable, audience, message, action item or FYI, plans, and status.

🧭 Overview

🧠 One-sentence thesis

Cultural awareness and adaptation are essential for project success because corporate culture, worldviews, and diverse team dynamics fundamentally shape how stakeholders communicate, make decisions, and resolve conflicts.

📌 Key points (3–5)

• Corporate culture defines interaction: beliefs, attitudes, values, and behaviors shape how organization members see you, interact with you, and judge you.
• Adaptation is critical: project managers must adjust communication frequency, formality, and type to match the culture for productivity and satisfaction.
• Worldview differences create challenges: globally distributed teams face eco-shock, cultural barriers, and differing perspectives on time, relationships, and communication styles.
• Common confusion: conflict from diversity isn't necessarily more frequent, but how conflicts are managed and resolved differs across cultures.
• Face-to-face connection matters: especially in high-context cultures, physical meetings build trust and reveal verbal/non-verbal cues that remote communication misses.

🏢 Understanding organizational culture

🏢 What corporate culture means

Corporate culture: the beliefs, attitudes, and values that the organization's members share and the behaviors consistent with them.

• Culture sets one organization apart from another
• It dictates how members will see you, interact with you, and sometimes judge you
• Projects themselves often have specific culture, work norms, and social conventions

👀 Observable vs subtle elements

Easily observed aspects:

• Office environment (closed offices vs. shared spaces)
• How people dress and speak
• Physical workspace arrangements

Subtle components:

• Values and overarching business philosophy
• Reflected in member behaviors, symbols, and conventions
• Not readily apparent but influence all interactions

🗣️ Adapting to cultural communication

📋 Decision-making patterns

Key questions project managers must answer:

• Which stakeholders make decisions on this issue?
• How many approval layers exist?
• What criteria affect acceptance? (schedule, cost, quality priorities)

💬 Communication preferences

Aspect	What to assess
Type	Lengthy documents vs. "short and sweet" standard
Medium	Preferred channels for this situation type
Format	Vocabulary, structure, colors, design conventions

• Check files to see what others have done
• Ask others in the organization
• Example given: at one organization, all rectangles have curved corners

⚡ Impact of adaptation

• Strongly affects project members' productivity internally
• Influences satisfaction with client organization
• Essential for working with both internal and external customers

🌍 Managing globally distributed teams

🔭 Understanding worldview

Worldview: a looking glass through which people see the world; a belief system about the nature of the universe, its perceived effect on human behavior, and one's place in the universe.

Core assumptions worldview explains:

• Cultural forces
• Nature of humankind and good/evil
• Luck, fate, spirits
• Power of significant others
• Role of time
• Nature of physical and natural resources

🌊 Eco-shock challenges

• Physiological, psychological, and social reaction to a new assignment ecology
• Example scenario: A manager sent to another country to manage a team or joint venture faces hidden challenges
• Significant implications for performance and knowledge exchange
• Affects motivation and desire to continue breaking through barriers

🤝 The need for cultural guides

• No substitute for having a well-placed person from the host culture
• This person guides newcomers through cultural nuances of getting things done
• Without this intervention, effectiveness suffers
• Requires learning cultures and sharing perceptions among culturally diverse participants

🎯 Seven broad areas to consider

Project leaders need sensitivity and awareness in:

1. Identity: Individual role within project vs. family of origin and community
2. Expressiveness: Verbal and emotional expression styles
3. Relationships: Expectations about connections
4. Communication style: How information is shared
5. Language: Vocabulary and linguistic differences
6. Priorities: Personal values and beliefs
7. Time orientation: How time is perceived and managed

👥 Building diverse team effectiveness

🚀 Importance of face-to-face meetings

Globally distributed teams need physical meetings, at minimum a formal "kick-off":

Why face-to-face matters:

• Discover individual identities and cultural preferences
• Share professional knowledge and personal stories
• Observe critical verbal and non-verbal cues
• Non-verbal cues may not easily be observed online or by telephone

Especially critical for high-context cultures:

• Establishes safer climate
• Builds trust for stronger relationships
• Benefits both team members and management

🌐 Team composition challenges

Modern teams often include:

• Different ethnic cultures
• Various genders and ages
• Diverse functional capabilities
• Multiple time zones and geographic locations
• Different historical contexts
• Tight deadlines in cost-conscious organizations

Social supports needed to mitigate:

• Uncertainty
• Conflict
• Motivational challenges
• Culture shock and eco-shock
• Unfamiliar and diverse situations

⚔️ Navigating conflict in diverse teams

❓ Reframing the conflict question

• Wrong question: whether, when, or with what frequency conflict will occur
• Right question: how to navigate and resolve conflicts
• Conflict is inevitable; the approach to handling it determines outcomes

🎁 Conflict as opportunity

Positive potential:

• Conflict from diversity can assist in complex problem solving
• Different perspectives contribute to better solutions

Negative risks:

• Can create relationship strain
• May derail achievement
• Increases difficulties in communication and coordination

🧭 Cultural impact on conflict management

Aspect	How culture affects it
Frequency	Differing values don't necessarily increase number of conflicts
Management	Culture impacts how conflicts are managed
Resolution	Social and cultural values shape resolution approaches

Don't confuse: More cultural diversity ≠ more conflicts; it means different conflict management styles.

🛠️ Skills for conflict resolution

What's needed:

• Cultural awareness: understanding and appreciating others' values and behavioral norms
• Self-awareness: recognizing one's own cultural assumptions
• Skill development: learning to resolve problematic conflict from cultural differences
• Without these, foreign assignments become overwhelming challenges

Goals:

• Help team maintain good relations
• Keep team productive
• Navigate conflicts successfully rather than letting them derail work

🧭 Overview

🧠 One-sentence thesis

Project initiation establishes whether a project is worth pursuing by defining the problem or opportunity, evaluating feasibility through financial and weighted analysis, and documenting scope and objectives in a project charter that authorizes the work to begin.

📌 Key points (3–5)

• What initiation does: identifies a business problem or opportunity, defines a solution, forms a project team, and creates a business case to justify the project before any detailed planning begins.
• Financial feasibility tools: Net Present Value (NPV), Return on Investment (ROI), and payback analysis determine if a project will be profitable and when it will recoup its investment.
• Clear objectives prevent misunderstandings: vague goals (e.g., "as fast as possible") lead to wasted effort; objectives must be specific, measurable, achievable, realistic, and time-based (SMART).
• Common confusion—objective clarity: what you say vs. what you mean—ambiguous objectives are interpreted differently by different people, leading to deliverables that don't match expectations.
• Project charter formalizes the project: it documents scope, objectives, roles, authority, assumptions, constraints, and risks, serving as the reference of authority for the project's future.

🚀 Why projects start and how to define them

🎯 The business case

A business case is created to define the problem or opportunity in detail and identify a preferred solution for implementation.

• The business case includes:
  • Detailed description of the problem or opportunity (Introduction, Business Objectives, Problem/Opportunity Statement, Assumptions, Constraints)
  • List of alternative solutions
  • Analysis of benefits, costs, risks, and issues
  • Description of the preferred solution
  • Main project requirements
  • Summarized implementation plan (schedule and financial analysis)
• The project sponsor approves the business case and allocates funding for a feasibility study.
• The feasibility study may show the project is not worth pursuing, in which case the project is terminated before the planning phase begins.

🧩 Success depends on clarity

• All projects are created for a reason: someone identifies a need or opportunity and devises a project to address it.
• How well the project addresses that need defines success or failure.
• Success depends on:
  • Clarity and accuracy of the business case
  • Whether people believe they can achieve it
• Involving other people in developing the business case encourages their commitment to achieving it.
• Don't confuse: pressure to get results often pushes people to jump straight to solutions without fully understanding the need—this creates immediate activity but significant waste and mistakes if the wrong need is addressed.

🎯 Setting clear, measurable objectives

🔍 What makes an objective clear

An objective or goal lacks clarity if, when shown to five people, it is interpreted in multiple ways.

• Ideally, if an objective is clear, five people reviewing it hold a single view about its meaning.
• The best way to make an objective clear is to state it so it can be verified—build in ways to measure achievement.
• Provide quantifiable definitions to qualitative terms.

🏎️ Formula 1 example: ambiguous vs. clear objectives

The excerpt uses a Formula 1 racing example to illustrate ambiguity:

Ambiguous objective: "Finish the lap as fast as possible."

• How fast is "fast as possible"?
• Does it mean fastest lap time (time to complete one lap) or fastest speed crossing the finish line?
• By when should the driver achieve it? (Practice, qualifying, or race?)

Example of ambiguity in practice:

• Ferrari's Michael Schumacher achieved the race lap record at Circuit de Monaco (1 min 14.439 sec in 2004) on lap 23, but crashed on lap 44 and did not finish the race—he met the specific goal but not the larger goal of winning.
• Renault's Jarno Trulli achieved the fastest qualifying time (1 min 13.985 sec), gained pole position, and won the race—he met both the specific goal and the larger goal.

Clear objective: "To be able to finish the 3.340 km lap at the Circuit de Monaco at the Monaco Grand Prix in 1 min 14.902 sec or less, during qualifying on May 23, 2009."

• This was achieved by Brawn GP's Jenson Button.
• Still some ambiguity (assumes the star driver is driving the team's race car), but clarifies intent nicely.
• Important: a clear goal is not enough—it must also be achievable. Changing the goal to require finishing the lap in 30 sec or less makes it unachievable.

🤝 Objectives must be jointly determined

• To ensure objectives are achievable and realistic, they must be determined jointly by managers and those who perform the work.
• Realism is introduced because the people doing the work have a good sense of what it takes to accomplish a task.
• This process assures commitment on all sides:
  • Management expresses commitment to support the work effort
  • Workers demonstrate willingness to do the work

🎨 Office painting example: consequence of unclear objectives

The excerpt provides a second example:

Scenario: An office manager contracts a painter to paint his office. His objective is to have the office painted a pleasing blue colour.

After the job:

• Office manager: "Not only did you paint my office walls blue, but you painted the ceiling blue as well."
• Contractor: "You asked me to paint the room blue, and now you've got a blue room."
• Office manager: "But the ceiling is oppressive! Ceilings should never be the same colour as the walls. They should always be a lighter colour."
• Contractor: "You asked for a blue room. You're lucky I didn't paint the floor blue as well."

Lesson: The office manager's description meant one thing to him and another to the painter. Had his objective been more clearly defined, he probably would have had what he wanted.

🔢 Comparing options with a weighted decision matrix

🧮 What a weighted decision matrix is

A weighted decision matrix is a decision tool used by decision makers.

• It is an array presenting:
  • On one axis: a list of alternatives (also called options or solutions)
  • On the other axis: a list of criteria, which are weighted depending on their importance in the final decision
• The advantage is that subjective opinions about one alternative versus another can be made more objective.
• Another advantage: sensitivity studies can be performed (e.g., see how much your opinion would have to change for a lower-ranked alternative to outrank a competing alternative).

🛠️ How it works

Basic decision matrix:

• Establish a set of criteria for options
• Score and sum to gain a total score
• Rank the options
• Not weighted—allows a quick selection process

Weighted decision matrix:

• Operates the same way but introduces weighting the criteria in order of importance
• The more important a criterion, the higher the weighting it should be given
• Each potential option is scored, then multiplied by the weighting given to each criterion to produce a result
• Resultant scores better reflect the importance to the decision maker of the criteria involved

📊 Three-step process

A weighted decision matrix allows decision makers to:

1. Specify and prioritize their needs with a list of criteria
2. Evaluate, rate, and compare the different solutions
3. Select the best matching solution

🎮 Web development project example

The excerpt shows a weighted decision matrix comparing three options for a web development project (SJS Enterprises):

Criteria	Weight	SJS Enterprises	Game Access	DVD Link
Educational	15%	90	0	0
Sports-related	15%	90	90	90
Secure payment area	10%	90	50	50
Live Support	15%	90	0	0
Search Option	5%	50	50	30
Games for all platforms	10%	60	30	30
Longer rental periods	5%	40	20	40
Sidebar with categories	5%	50	50	20
Registered customers features	10%	50	30	30
Age/grade appropriate section	10%	70	5	0
Weighted project scores	100%	75.4	31	29

• This method is especially useful when choosing purchase alternatives and comparing them against specific desirable system requirements.

💰 Financial feasibility analysis

💵 Net Present Value (NPV)

NPV is the sum of the present values of individual cash flows—the "difference amount" between the sums of discounted cash inflows and cash outflows.

Why NPV matters:

• A dollar earned today is worth more than a dollar earned one or more years from now.
• NPV compares the present value of money today to the present value of money in the future, taking inflation and returns into account.
• It is a standard method for using the time value of money to appraise long-term projects.
• Used for capital budgeting and widely used throughout economics, finance, and accounting.

How NPV works:

• Each cash inflow/outflow is discounted back to its present value (PV), then summed.
• The formula involves:
  • t: the time of the cash flow
  • i: the discount rate (the rate of return that could be earned on an investment in the financial markets with similar risk; the opportunity cost of capital)
  • R sub t: the net cash flow (cash inflow minus cash outflow, at time t)

Interpreting NPV:

If…	It means…	Then…
NPV > 0	The investment would add value to the firm	The project may be accepted
NPV < 0	The investment would subtract value from the firm	The project should be rejected
NPV = 0	The investment would neither gain nor lose value	We should be indifferent; decision should be based on other criteria (e.g., strategic positioning)

• NPV is an indicator of how much value an investment or project adds to the firm.
• If NPV is positive, the project is in the status of positive cash inflow at time t.
• If NPV is negative, the project is in the status of discounted cash outflow at time t.
• In financial theory, if there is a choice between two mutually exclusive alternatives, the one yielding the higher NPV should be selected.

📉 Present value table

The excerpt provides a present value table showing the decreasing value of money as the period increases from 1 to 10 years, at discount rates of 6%, 8%, 10%, 12%, and 14%.

Example: At a 12% discount rate:

• Year 1: 0.893 (meaning $1 today is worth $0.893 in one year)
• Year 2: 0.797
• Year 5: 0.567
• Year 10: 0.322

🧮 NPV calculation example

The excerpt provides an example calculating the NPV of a project at a discount rate of 12%, taking five years to complete:

• Year 0: No benefit, initial cost of $75,000, no discount rate.
• Year 1: Discount rate is 89% (meaning $1 today is worth $0.89 in one year).
• Year 2: Discount rate is 80% (meaning $1 today is worth $0.80 in two years).
• The NPV is calculated for both benefits and costs.
• Subtract the NPV of all costs from the NPV of all benefits.
• Final result: a positive value of $105,175.

📈 Return on Investment (ROI)

Return on investment (ROI) is a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments.

How to calculate ROI:

• Subtract the project's costs from the benefits, then divide by the costs.
• Example: if you invest $100 and your investment is worth $110 next year, the ROI is (110 − 100) ÷ 100 = 0.1 or a 10% return.

Using the NPV example:

• (306,425 − 201,175) ÷ 201,175 = 0.52, or a 52% return.
• That's considered a nice return on investment.

⏱️ Payback analysis

Payback analysis is important in determining the amount of time it will take for a project to recoup its investments—the point at which the benefits start to outweigh the costs.

How to perform payback analysis:

• The best way is by charting the cumulative benefits and costs.
• In the example provided, the cumulative benefits outweigh the cumulative costs in the second year.

📜 The project charter

📋 What a project charter is

A project charter, project definition, or project statement is a statement of the scope, objectives, and participants in a project.

• It provides a preliminary delineation of roles and responsibilities.
• It outlines the project objectives.
• It identifies the main stakeholders.
• It defines the authority of the project manager.
• It serves as a reference of authority for the future of the project.

🎯 Purpose of a project charter

The purpose is to:

• Provide an understanding of the project, the reason it is being conducted, and its justification.
• Establish early on in the project the general scope.
• Establish the project manager and his or her authority level.
• A note of who will review and approve the project charter must be included.

📝 Components of a project charter

🆔 Identification Section

List the project name, date of the current version, sponsor's name and authority, and project manager's name.

Example:

• Project Name: Rice University Computer Store Creation
• Project Sponsor: Jane Ungam, Facilities Manager
• Date: Jan 12, 2010
• Revision: 1
• Project Manager: Fred Rubens

🔭 Overview of the Project

Provide a simple but precise statement of the project.

Example: Rice University is planning to create a store to sell computer supplies.

🎯 Objective

State the objectives clearly and ensure they contain a measure of how to assess whether they have been achieved. The statement should be realistic and follow the SMART protocol:

• Specific (get into the details)
• Measurable (use quantitative language so you know when you are finished)
• Acceptable (to stakeholders)
• Realistic (given project constraints)
• Time based (deadlines, not durations)

Example: The objective of this project is to implement a campus store that is ready to sell computer supplies such as memory sticks, mouse pads, and cables, when class starts in August 2010, with enough inventory to last through the first two weeks of classes.

📏 Scope

Specify the scope by identifying the domain or range of requirements.

Example—what is included:

1. Determine what supplies will be sold in the store.
2. Establish competitive prices for the computer supplies.
3. Source and secure supply vendors.
4. Establish marketing, procurement, operations, and any other necessary departments, schools, centres, and institutes.

Equally important—what is not included:

• Development of any other school store departments
• Store design or construction

🏁 Major Milestones

List all major milestones needed to ensure successful project completion.

Example:

• All vendors selected
• Contracts or orders completed with all vendors
• Supplies delivered to the store
• Pricing determined

📦 Major Deliverables

List and describe the major deliverables that will result from the project.

Example:

• Supplies procured
• Operations, procurement, marketing, and other teams established
• Store supplies stocked and displayed
• Store staffing completed, including work schedules
• Store operations policies, including hours of operation, established

🤔 Assumptions

An assumption is a fact you are unsure of but can either confirm at a later time or are simply stating so that the project can proceed as if the statement were true.

Example:

• Only computer supplies will be sold in the store.
• Customers will be the Rice University student body and faculty.
• Rice University students will manage the project and be responsible for ongoing operations.
• A store sponsor from the university faculty or staff will be assigned to mentor students and provide oversight.
• Store hours of operation will be approved by the Rice University students or store sponsor.
• Supplier deliveries will be arranged or the store sponsor will pick them up with students.
• Students will be empowered to contact vendors for order placement and inquiries via telephone.

🚧 Constraints

A constraint is anything that limits the range of solutions or approaches.

Define any and all constraints on the project or those working on the project. This is an important part of the project charter.

Example:

• Student availability to meet for project planning is limited to school hours.
• Software is not available for project planning and control.

💼 Business Need or Opportunity (Benefits)

Provide a concise statement of the business need or opportunity that led to the creation of the project. Why was it created? What are the benefits? How does the project contribute to organizational objectives?

Example: The goal of this project is to provide income for the Rice Student Centre while supplying necessary items to students and faculty at competitive prices. The school store will be a convenience to students since necessary supplies will be available on campus. This will help students learn to manage their personal supplies.

💵 Preliminary Cost for the Project

Provide a statement indicating how the cost of the project will be defined and controlled.

Example: The procurement team will assemble a proposal based on expected costs for review by the Dean of Undergraduate Studies.

⚠️ Project Risks

A risk is anything uncertain that may occur that will reduce or decrease the chances of project success.

Example:

1. There is a state election coming and the new government may change the taxation rules for private university retail outlets.
2. The cloud is changing student demand for media such as flash drives in somewhat unpredictable ways. If this happens faster than we forecast, we may be building a store that students don't need.
3. Deliveries of store shelves, etc. will be delayed if a major hurricane occurs.

✅ Project Charter Acceptance

Provide the names, titles, and signature lines of the individuals who will sign off on the project charter.

👥 Project Stakeholders

Provide the key stakeholders and team members by function, name, and role.

Example:

Function	Name	Role
Project Manager	Monica Styles	Leads the project
Sponsor	Adrienne Watt	Project sponsor
etc.

🧭 Overview

🧠 One-sentence thesis

Project planning is the heart of the project life cycle, establishing detailed plans for scope, schedule, resources, and budget to guide the team from implementation through closure while ensuring delivery on time and within budget.

📌 Key points (3–5)

• When it happens: planning begins after the project is defined and the team is appointed, serving as the bridge between initiation and implementation.
• What it produces: documented plans covering time, cost, quality, changes, risk, deliverables, requirements, and schedule.
• Core planning processes: includes scope, work breakdown structure, schedule, resources, budget, procurement, risk, quality, and communication planning.
• Objective refinement: transforms qualitative user requests into quantifiable, measurable criteria using the SMART framework.
• Common confusion: objectives must be specific and measurable, not vague—"fast system" must become "screens load in under three seconds."

🎯 Purpose and positioning

🎯 What planning achieves

The planning phase serves four main purposes:

• Establish business requirements
• Establish cost, schedule, list of deliverables, and delivery dates
• Establish resource plans
• Obtain management approval to proceed to the next phase

🔄 Where it fits in the lifecycle

• Occurs after project definition and team appointment (post-initiation)
• Precedes the implementation and closure phases
• Acts as the "heart" of the project life cycle—tells everyone where you're going and how you'll get there

⚠️ Why it's challenging

The excerpt identifies planning as "often the most challenging phase for a project manager" because:

• You must make educated guesses about staff, resources, and equipment needs
• You may need to plan communications and procurement activities
• You must contract third-party suppliers
• All this happens before actual work begins, requiring foresight and estimation

📋 The nine basic planning processes

📋 Scope planning

Specifying the in-scope requirements for the project to facilitate creating the work breakdown structure.

• Defines what work is included in the project
• Sets boundaries for what the project will and won't do
• Provides the foundation for the work breakdown structure

🗂️ Work breakdown structure preparation

Spelling out the breakdown of the project into tasks and sub-tasks.

• Takes the overall project and divides it into manageable pieces
• Creates a hierarchy of tasks and sub-tasks
• Makes the project concrete and actionable

📅 Project schedule development

Listing the entire schedule of the activities and detailing their sequence of implementation.

• Documents all activities in order
• Shows which tasks come first, which follow
• Creates the timeline for the project

👥 Resource planning

Indicating who will do what work, at which time, and if any special skills are needed to accomplish the project tasks.

• Assigns people to tasks
• Identifies timing for each person's involvement
• Flags any special skills required

💰 Budget planning

Specifying the budgeted cost to be incurred at the completion of the project.

• Sets the total expected cost
• Provides the financial constraint for the project

🛒 Procurement planning

Focusing on vendors outside your company and subcontracting.

• Addresses external suppliers
• Plans for subcontracting needs
• Manages third-party relationships

⚠️ Risk management

Planning for possible risks and considering optional contingency plans and mitigation strategies.

• Identifies what could go wrong
• Develops backup plans (contingency plans)
• Creates strategies to reduce risk impact (mitigation)

✅ Quality planning

Assessing quality criteria to be used for the project.

• Defines what "quality" means for this project
• Sets standards that deliverables must meet

📢 Communication planning

Designing the communication strategy with all project stakeholders.

• Plans how information will flow
• Identifies who needs what information and when
• Ensures all stakeholders stay informed

🎯 Refining objectives into requirements

🎯 From qualitative to quantitative

The excerpt emphasizes that users often describe objectives in qualitative (subjective) language, but the project manager must convert these into quantifiable definitions:

User's qualitative request	Project manager's quantitative requirement
"A fast system"	"All screens must load in under three seconds"
Vague, subjective	Specific, measurable, testable

🔍 Why precision matters

• The act of describing something precisely improves understanding of what you're looking at
• Clear articulation forms the basis for developing requirements
• Poor articulation leads to misdirected requirements and a project that doesn't meet the true need
• Subjective evaluations are replaced by actual numeric attributes

📏 The SMART rule for objectives

Objectives should follow the SMART rule to ensure they meet quantifiable criteria needed to measure success.

SMART element	What it means	Why it matters
Specific	Get into details; use clear, concise, understandable terms	Eliminates ambiguity
Measurable	Use quantitative language	You know when the task is complete
Acceptable	Agreed with stakeholders	Ensures buy-in and alignment
Realistic	Achievable in reality	Impossible objectives waste effort
Time based	Deadlines, not durations; end dates assigned	Creates urgency and accountability

📦 Example: Holiday eggnog production

The excerpt provides a concrete example of a well-articulated objective:

"Christmas Cheer, Inc. will produce two million cases of holiday eggnog, to be shipped to our distributors by October 30, at a total cost of $1.5 million or less."

Why this works:

• Specific: holiday eggnog production
• Measurable: two million cases, $1.5 million budget
• Time-based: October 30 deadline
• Stakeholders can easily verify success: count the cases, check the ship date, review the costs

Don't confuse: an objective like "produce lots of eggnog soon" would fail the SMART test—it has no numbers, no deadline, and no way to verify completion.

🔄 How objectives become requirements

🔄 The articulation process

1. Objectives are gathered during initiation (previous phase)
2. Planning phase refines those objectives
3. Clear articulation leads to concrete, measurable terms
4. These measurable terms become requirements
5. Requirements describe what must be done to achieve the objective

🔍 Why articulation changes understanding

The excerpt notes: "Often the very act of trying to describe something precisely gives us a better understanding of what we are looking at."

• Initial understanding may be fuzzy
• Forcing precision reveals gaps or misunderstandings
• The objective itself may change as you articulate it
• This is normal and beneficial—better to discover issues during planning than during implementation

Example: A user asks for "a fast system." When you ask "how fast?" they might realize they actually need "fast enough that customers don't abandon their shopping carts"—which leads to the three-second screen load requirement.

🧭 Overview

🧠 One-sentence thesis

Scope planning defines all the work needed to meet project objectives by documenting deliverables, requirements, and breaking down tasks into manageable components before any work begins.

📌 Key points (3–5)

• Why scope planning comes first: You must know exactly what work needs to be done before starting, to give team members a clear picture of all tasks.
• What gets documented: All deliverables (tangible outcomes), requirements (characteristics and conditions the final product must meet), and the work breakdown structure.
• Six types of requirements: functional, non-functional, technical, business, user, and regulatory—each answers different questions about what the system should do and how.
• Common confusion: Requirements vs deliverables—deliverables are the outputs you produce; requirements describe the characteristics and conditions those deliverables must satisfy.
• The 100 percent rule: Each decomposed level in the work breakdown structure must represent 100% of the work in the parent level above it.

📦 Deliverables and requirements

📦 What deliverables are

Deliverables include everything that you and your team produce for the project (i.e., anything that your project will deliver).

• Deliverables are tangible outcomes, measurable results, or specific items that must be produced to consider the project or phase completed.
• They include the final products/services for the client and all intermediate documents: plans, schedules, budgets, blueprints, and project management documents.
• Must be described in sufficient detail to differentiate them from related deliverables.
• Example: "a twin engine plane versus a single engine plane" or "a daily report versus a weekly report."

📋 What requirements describe

Requirements describe the characteristics of the final deliverable, whether it is a product or a service.

• Requirements specify what the final deliverable should look like and what it should do.
• They describe required functionality or specific conditions the deliverable must meet to satisfy project objectives.
• Must be measurable, testable, related to identified business needs, and defined in enough detail for system design.
• Don't confuse: Deliverables are the "what you produce"; requirements are the "characteristics and conditions those outputs must have."

🔍 Six types of requirements

🔍 Functional requirements

• Describe characteristics in ordinary, non-technical language understandable to customers.
• Specify what you want the deliverable to do, not how it will be delivered.
• Example (vehicle): "The vehicles should be able to take up to a one ton load from a warehouse to a shop."
• Example (computer system): "The system should store all details of a customer's order."

⚙️ Non-functional requirements

• Specify criteria to judge the final product and restrictions/constraints on the deliverable and how to build it.
• Split into performance constraints (e.g., "the load area must have a height of at least 10 feet") and development constraints (time, resource, quality).
• Purpose: restrict the number of solutions that will meet the functional requirements.
• Example: "The system should be available from 9 a.m. to 5 p.m. Monday to Friday."

🔧 Technical requirements

• Answer how the problem will be solved technologically and/or procedurally.
• Specify how the system needs to be designed and implemented to provide required functionality.
• Example: the required data elements, programming language, hardware platform, telecommunication protocols.

💼 Business requirements

• The needs of the sponsoring organization from a management perspective.
• Expressed in broad outcomes satisfying business needs rather than specific system functions.
• Driven by mission goals and objectives.

👤 User requirements

• Describe what users need to do with the system or product.
• Focus on the user experience under all scenarios.
• Input for user-interface design and system test cases.

📜 Regulatory requirements

• Restrictions, licenses, and laws imposed by government.
• Can be internal or external.
• Usually non-negotiable.

🏧 ATM example of all requirement types

Requirement type	ATM example
Functional	The system will enable the user to select whether to produce a hard-copy receipt
Non-functional	All displays will be in white, 14-point Arial text on black background
Technical	The ATM system will connect seamlessly to the existing customer database
User	The system will complete a standard withdrawal in less than two minutes
Business	By providing superior service, increase service fee revenue by 10% annually
Regulatory	All ATMs will connect to standard utility power sources and have approved uninterrupted power

📊 Managing and measuring requirements

📊 Essential properties

• All requirements must be verifiable—you must be able to test whether they've been met.
• Requirements should be uniquely identified so they can be tracked throughout the software life cycle.
• Have attributes: priority rating, status value, unique identifier, description, rationale, owner, source, version, current status, date completed.

📏 Measuring requirements

The excerpt provides a table showing how to measure different requirement properties:

Property	Measure
Speed	Processed transactions/second; user/event response time; screen refresh time
Size	K Bytes; number of RAM chips
Ease of use	Training time; number of help frames
Reliability	Mean time to failure; probability of unavailability; rate of failure occurrence
Robustness	Time to restart after failure; percentage of events causing failure
Portability	Percentage of target dependent statements; number of target systems

🗺️ Requirements traceability matrix

The requirements traceability matrix is a table that links requirements to their origin and traces them throughout the project life cycle.

• Helps ensure each requirement adds business value by linking it to business and project objectives.
• Provides a means to track requirements throughout the project, ensuring approved requirements are delivered.
• Provides structure for managing changes to product scope.
• Tracks requirements to: business needs, project objectives, WBS deliverables, product design, product development, test strategy, and from high-level to detailed requirements.

🌳 Work Breakdown Structure (WBS)

🌳 What WBS is

WBS is a hierarchical decomposition of the project into phases, deliverables, and work packages.

• A deliverable-oriented decomposition of a project into smaller components.
• Breaks work down into components that can be scheduled, estimated, and easily monitored and controlled.
• A tree structure showing subdivision of effort required to achieve an objective.
• You stop breaking down when you reach a level low enough to perform accurate estimates.

🎯 Purpose of WBS

• Allow easier management of each component.
• Allow accurate estimation of time, cost, and resource requirements.
• Allow easier assignment of human resources and responsibility.
• Provide framework for detailed cost estimating and control.
• Provide guidance for schedule development and control.

🧹 Clean room example

The excerpt uses cleaning a room to illustrate WBS:

• Top level: "Clean Room"
• Second level: Mop floor, Dust, Vacuum, Pick up floor, Clean curtains
• Third level under "Vacuum": Get vacuum out, Vacuum carpet, Empty bag, Connect hose and plug
• Important: Don't worry about sequence or dependencies when creating WBS—that comes later during scheduling.

🔢 Code of accounts

• Each element at each WBS level is assigned a unique identifier (usually a number).
• Used to sum and track costs, schedules, and resources.
• Usually associated with the corporation's chart of accounts for tracking costs by category.

📦 Work packages

• The lowest level of the WBS.
• Components that can be easily assigned to one person or team with clear accountability.
• Where time estimates, cost estimates, and resource estimates are determined.

💯 The 100 percent rule

Each decomposed level (child) must represent 100 percent of the work applicable to the next higher (parent) element.

• The most important criterion in developing and evaluating WBS.
• If each level follows this rule down to activities, you can be confident 100% of activities are identified.
• When creating the budget, 100% of required costs or resources will be identified.
• Don't confuse: This is about completeness of decomposition, not about effort distribution or percentages adding up mathematically.

📋 Scope statement

📋 What it contains

A scope statement captures, in very broad terms, the product of the project.

Baseline scope statements should contain:

• Project name, charter, owner, sponsors, stakeholders
• Problem statement
• Project goals and objectives
• Project requirements and deliverables
• Project non-goals (what is out of scope)
• Milestones and cost estimates

In more project-oriented organizations, may also include:

• Scope management plan
• Approved change requests
• Project assumptions and risks
• Project acceptance criteria

🎯 Key characteristics

• Details the project deliverables and describes major objectives.
• Objectives should include measurable success criteria.
• Should include list of users and features in the resulting product.
• May take many forms depending on project type and organization nature.

🛠️ Techniques for scope planning

🛠️ Gathering requirements techniques

• Interviews
• Focus groups
• Facilitated groups (e.g., joint application development)
• Group creativity techniques: brainstorming, nominal groups, delphi, mind map, affinity diagnostics
• Prototyping
• Observation
• Questions and surveys
• Group decision-making techniques: unanimity, majority, plurality, dictatorship

💬 Project manager skills needed

• Experience: Seasoned project managers can draw on past experiences to determine realistically doable work.
• Communication and negotiation: Must educate stakeholders about project impacts of requirements.
• Stakeholder management: Adding complexity may require more staff, time, money, or impact quality—stakeholders need to know this.
• Responsibility: The project manager is responsible for ensuring requirements are documented but enlists help from all stakeholders (business analysts, requirement analysts, process owners, customers, team members).

✅ Sign-off process

• Once requirements are documented, have stakeholders sign off as confirmation of what they desire.
• Project manager reviews requirements, incorporates them into project documentation library, and uses them as input for the project plan.
• If the project manager feels document quality is questionable, their duty is to stop the development process.

🧭 Overview

🧠 One-sentence thesis

Project schedule planning transforms the work breakdown structure into a sequenced, time-bound plan by defining activities, establishing their order and dependencies, and visualizing the schedule through tools like Gantt charts and network diagrams to identify the critical path.

📌 Key points (3–5)

• Activity definition breaks down work packages: activities are the individual units of work needed to fulfill deliverables, not the deliverables themselves.
• Sequencing requires understanding predecessors: finish-to-start (FS), start-to-start (SS), and finish-to-finish (FF) relationships determine the order of work.
• Visualization tools serve different purposes: Gantt charts show duration and timing; network diagrams reveal task interdependencies and the critical path.
• Common confusion—WBS vs. schedule: the WBS is not a schedule; it is the basis for creating one through activity definition and sequencing.
• The critical path determines minimum project duration: it is the longest sequence of dependent tasks, and delays on this path delay the entire project.

📋 From work packages to activities

📦 What activity definition means

Activity definition: the process of breaking down work package elements of the WBS into specific activities needed to fulfill the deliverables.

• Activities are not the deliverables themselves; they are the individual units of work that must be completed to produce deliverables.
• The process uses everything already known about the project to divide work into estimable activities.
• Example: for a wedding, "Invitations" is a work package; activities under it include "Create guest list," "Print the invitations," "Mail the invitations," and "Wait for RSVPs."

🧠 Expert judgment and rolling-wave planning

• Expert judgment: project team members with prior experience or domain experts help define activities, especially in unfamiliar domains.
• Rolling-wave planning: plan and schedule only the portion you know enough about; use placeholders for unknown portions until more information is available.
• Don't confuse: activity definition is not guessing—it relies on lessons learned, expert input, and iterative refinement.

📝 Activity list and attributes

• The activity list includes everything that needs to be done to complete the project, covering all activities for each work package.
• Activity attributes describe each activity in detail: predecessors, successors, constraints, resource needs, and time estimates.
• These attributes are essential for figuring out the order of work.

🔗 Understanding task relationships

🔗 Predecessor types

The three main kinds of predecessors determine how tasks relate:

Predecessor type	Meaning	Example
Finish-to-start (FS)	One task must finish before another can start	Print invitations before addressing them
Start-to-start (SS)	Activities begin at the same time	Coordinate simultaneous starts
Finish-to-finish (FF)	Activities finish at the same time	Coordinate simultaneous completions

• Finish-to-start is the most common: one thing must end before the next begins.
• Start-to-finish (SF) is rare: a successor task cannot finish until another task starts (e.g., musicians cannot finish playing until guests start leaving).

🔍 Special predecessor categories

🌐 External predecessors

• Dependencies on things outside the project work.
• Example: decorating the reception hall depends on the previous wedding party leaving on time.

🎯 Discretionary predecessors

• Process-driven or best-practice preferences based on past experience, not strict necessity.
• Example: bridesmaids arriving at the reception before the couple—a preference, not a requirement.

⚠️ Mandatory predecessors

• Dependencies that exist because of the nature of the work itself.
• Example: you cannot address an invitation that hasn't been printed yet.

⏱️ Leads and lags

Lag time: a purposeful delay between the predecessor task and the successor.

• Example: when the bride and her father dance, others wait awhile before joining them.

Lead time: allowing a successor task to start before the predecessor finishes.

• Example: the caterer begins preparing dessert an hour before everyone finishes eating dinner.
• Don't confuse: lag adds waiting time; lead allows overlap.

🏁 Milestones

• Important checkpoints tracked throughout the project.
• Some may be contractual requirements; others are significant points to monitor.
• Example milestones for a wedding: "Invitations sent," "Menu finalized," "Location booked," "Bridesmaids' dresses fitted."

📊 Visualizing the schedule with Gantt charts

📊 What a Gantt chart shows

Gantt chart: a type of bar chart that illustrates a project schedule, showing the start and finish dates of activities as bars on a time scale.

• Developed by Henry Gantt; easy to read and commonly used.
• Displays terminal elements and summary elements of the WBS.
• Time scale runs across the top; key stages are placed in sequence from top left to bottom right.
• Some Gantt charts also show dependency relationships between activities.

🔧 Slack and float

• Slack: when an activity can start later than its earliest possible start without delaying dependent tasks.
• Float: when an activity can finish later than its earliest possible finish without delaying the project.
• Example: if key stage K (Organize distribution) starts at week 23 but could start as early as week 17, it has slack.
• Float and slack show flexibility in the schedule, useful for gaining time during execution.

➕ Additional information on Gantt charts

• Milestones can be indicated with symbols (diamond, triangle).
• Project meetings and reviews can use other symbols (circle, square).
• Software packages offer flexibility for "what if" scenarios, showing impacts of delays or speedups.

🕸️ Network diagrams and task interdependencies

🕸️ What network diagrams provide

Network diagram: a graphical view of tasks and how they relate to one another, visualizing the interrelationships of project activities.

• Tasks in the network are the work packages of the WBS; all WBS tasks must be included.
• Leaving out even one task could change overall schedule duration, costs, and resource commitments.
• The WBS is not a schedule; the network diagram is a schedule used to identify key scheduling information.

🔲 Activity-on-node (AON) diagrams

• Also called precedence diagramming method (PDM).
• Activities are shown in rectangles (nodes); relationships are shown as arrows.
• Example: for wedding invitations, "Create guest list" → "Print invitations" → "Mail invitations" → "Wait for RSVPs."
• AON is more commonly used and supported by all project management software.

🔵 Activity-on-arrow (AOA) diagrams

• Also called PERT (the best-known AOA-type diagram).
• Circles represent the beginning and ending points (nodes); arrows represent activities or tasks.
• Three major disadvantages:
  1. Can only show finish-to-start relationships; cannot easily show lead and lag.
  2. May require dummy activities (activities showing dependency for non-technical reasons, with no duration).
  3. Not as widely used; not all project management software supports AOA networks.

📌 Key information from network diagrams

• How tasks are related.
• Risk points in the schedule.
• How long the project will take as currently planned.
• When each task needs to begin and end.

🛤️ The critical path

🛤️ What the critical path is

Critical path: the sequence of tasks that would enable the project to be completed in the shortest possible time; the longest path through the network.

• Based on the idea that some tasks must be completed before others can begin.
• The critical path's duration is the minimum time needed to complete the project.
• All key stages on the critical path must be completed on time for the project to finish on schedule.

🧮 Identifying the critical path

1. Estimate the length of time for each key stage.
2. Line up stages to produce a network diagram showing all possible paths from start to finish.
3. Trace each possible path, taking dependencies into account.
4. The route with the longest duration is the critical path.

Example from the excerpt:

• Critical path: A–B–C–D–E–F–I–L
• Earliest completion: 28 weeks (sum of estimated times for all stages on the critical path).

⚠️ Why the critical path matters

• Identifies activities that need the closest monitoring.
• If the projected total time is much longer than the sponsor's expectations, renegotiation of the time scale is needed.
• Delays on the critical path delay the entire project.
• Don't confuse: tasks not on the critical path may have slack or float, but critical path tasks have zero slack.

🔄 Handling changes and scope adjustments

🔄 When scope needs to change

• As you define and sequence activities, you may realize the scope needs adjustment.
• Create a change request and send it through the change control system.
• Example changes from the wedding case study:
  • Programs came back from the printer wrong.
  • The quartet cancelled.
  • Concerns about a singer's performance.
  • Reconsidering a pan flute player.
  • Holding off on printing invitations until details are finalized.

✅ Approved changes become part of the plan

• Example: when the wedding planner realized an additional limo was needed for bridesmaids, she put the change through change control (including approval from the sponsor) and it was approved.
• Approved changes are integrated into the activity list, attributes, and schedule.

🧭 Overview

🧠 One-sentence thesis

Resource planning ensures that every project activity has the right people, equipment, and materials assigned at the right time, which is essential for building an accurate schedule and achieving project success.

📌 Key points (3–5)

• What resources include: people, equipment, place, money, or anything else needed to complete planned activities.
• Two-step estimation process: first estimate what resources each activity needs, then estimate how long each activity will take with those resources.
• Duration vs. effort distinction: duration is calendar time an activity takes; effort is total person-hours expended (e.g., 6 hours with 2 people = 6-hour duration but 12 person-hours effort).
• Critical path importance: the longest sequence of dependent activities determines project completion time; delays on the critical path delay the entire project.
• Common confusion: resource availability vs. resource assignment—you must know when resources are available and any constraints before you can assign them to activities.

🔧 Resource Estimation Fundamentals

🎯 What resources are

Resources are people, equipment, place, money, or anything else that you need in order to do all of the activities that you planned for.

• Every activity in your activity list needs resources assigned to it.
• Before assigning resources, you need resource availability information: what resources you can use, when they're available, and conditions of their availability.
• Some resources (consultants, training rooms) must be scheduled in advance and may only be available at certain times—these are resource constraints.
• Example: planning a June wedding is harder than December because wedding venues are booked up in advance.

🛠️ Five tools for estimating activity resources

Tool	What it means	When to use it
Expert judgment	Bringing in experts who have done similar work before and getting their opinions	When specialized knowledge is needed
Alternative analysis	Considering several different options for resource assignments (varying number and kind)	When multiple approaches could work
Published estimating data	Using articles, books, journals that collect data from other people's projects	When industry standards are available
Project management software	Using tools like Microsoft Project to help estimate needs and find best assignments	For complex resource allocation
Bottom-up estimating	Breaking complex activities into pieces and working out resource assignments for each piece	When high accuracy is needed and time permits

📊 Bottom-up estimating details

• Process: estimate individual activity resource needs, then add them together for a total estimate.
• Advantage: very accurate when activity-level estimates are accurate.
• Disadvantage: takes considerable time because every activity must be assessed; the smaller and more detailed the activity, the greater the accuracy but also the greater the cost.
• Don't confuse with: top-down estimating, which starts with overall project estimates and breaks them down.

⏱️ Activity Duration Estimation

🕐 What duration estimation involves

Activity duration estimates are an estimate of how long each activity in the activity list will take—a quantitative measure usually expressed in hours, weeks, days, or months.

• You start with information about the activity and its assigned resources, then work with the project team to come up with an estimate.
• Most of the time you'll start with a rough estimate and refine it to make it more accurate.
• Different work periods are fine for different jobs: small jobs (booking a DJ) may take just a few hours; bigger jobs (catering from menu planning through service) could take days.

🔍 Duration vs. effort—a critical distinction

• Duration: the amount of time that an activity takes (calendar time).
• Effort: the total number of person-hours that are expended.
• Example: if it takes two people six hours to carve an ice sculpture, the duration is six hours, but the effort is 12 person-hours (2 people × 6 hours).
• This distinction matters for resource planning and cost estimation.

🧰 Five tools for estimating duration

1. Expert judgment: getting opinions from project team members familiar with the work—without this, there's huge risk that estimates will be wrong.
2. Analogous estimating: looking at similar activities from previous projects and how long they took (only works if activities and resources are similar).
3. Parametric estimating: plugging project data into a formula, spreadsheet, database, or computer program based on actual durations from past projects.
4. Three-point estimating: coming up with three numbers—realistic (most likely), optimistic (best-case), and pessimistic (worst-case)—then calculating a weighted average.
5. Reserve analysis: adding extra time to the schedule (called a contingency reserve or buffer) to account for extra risk.

📝 Learning while estimating

• You'll learn more about specific activities while estimating them—this always happens.
• You have to really think through all aspects of a task to estimate it.
• Remember to update the activity attributes as you learn more.
• The complete resource picture only emerges when you finish building the schedule.

📅 Project Schedule and Critical Path

🗓️ Schedule approval and baseline

• The project schedule should be approved and signed off by stakeholders and functional managers.
• This ensures they understand dates and resource commitments and will cooperate.
• You need confirmation that resources will be available as outlined.
• Once approved, the schedule becomes your baseline for the remainder of the project.
• Project progress and task completion will be monitored and tracked against this baseline.

🛤️ What the critical path is

The critical path is the string of activities that, if you add up all of the durations, is longer than any other path through the network.

• It usually starts with the first activity in the network and usually ends with the last one.
• Why it's critical: every single activity on the path must finish on time for the project to come in on time.
• A delay in any one critical path activity will cause the entire project to be delayed.
• Example: in a wedding project, if invitations can't be sent until the guest list is complete, and the guest list can't be finalized until venue capacity is known, these form a critical path—delay anywhere delays everything.

🔢 Finding the critical path (four steps)

Step 1: Start with a network diagram showing all activities and dependencies.

Step 2: Find all the paths in the diagram (any string of activities from start to finish).

• Example paths: Start → A → B → Finish; Start → A → C → Finish; Start → D → E → Finish

Step 3: Find the duration of each path by adding up activity durations.

• Path 1: 4 + 7 = 11
• Path 2: 4 + 2 = 6
• Path 3: 3 + 5 = 8

Step 4: The longest path is the critical path.

• In this example, Path 1 (duration 11) is the critical path.

💡 Why knowing the critical path matters

• Freedom with non-critical activities: if you know an activity is not on the critical path, a delay in that activity may not necessarily delay the project.
• Emergency handling: helps you handle emergency situations by knowing where delays matter most.
• Schedule compression: if you need to bring the project in earlier, adding resources to the critical path is much more effective than adding them elsewhere.
• On large projects with dozens or hundreds of tasks, software like Microsoft Project finds the critical path using these same steps.

👥 Human Resource Planning

🌟 Why people are the most important resource

• Projects require specific expertise at specific moments in the schedule.
• An organization can host several strategic projects concurrently, meaning employees may work on more than one project at a time.
• An employee may be seconded away from their role to join a project team because of particular expertise.
• Projects often require talent that can only be acquired via contract work and third-party vendors.
• Procuring and coordinating these human resources, in tandem with managing time, is critical to overall success.

🎯 Managing the team

• Important to have a high-performing team with members who are both technically skilled and motivated.
• Project manager responsibilities include:
  • Enhancing each team member's ability to contribute
  • Fostering individual growth and accomplishment
  • Encouraging individuals to share ideas and work toward a common goal

📋 Performance evaluation elements

Employee performance includes:

• Quality and quantity of outputs
• Work behaviour (such as punctuality)
• Job-related attributes (such as cooperation and initiative)

After conducting reviews, project managers should:

• Provide feedback on how well employees performed on established goals
• Provide feedback on areas where they are weak or could do better
• Take corrective action for employees performing at or below minimum expectations
• Reward superior performers to encourage continued excellence

⚖️ Resource Leveling Techniques

🎚️ What resource leveling is

Resource leveling is used to examine unbalanced use of resources (usually people or equipment) over time and for resolving over-allocations or conflicts.

• Goal: achieve 100% utilization (though this is very unlikely when weighted by important metrics and subject to constraints).
• Aims at smoothing the stock of resources on hand, reducing both excess inventories and shortages.

🔧 How resource leveling works

• When planning, the manager attempts to schedule certain tasks simultaneously.
• When more resources are needed than are available, or a specific person is needed in both tasks, tasks must be rescheduled sequentially to manage the constraint.
• During project planning: the process of resolving these conflicts.
• Can also balance: the workload of primary resources over the course of the project, usually at the expense of one of the traditional triple constraints (time, cost, scope).

⚠️ Resource leveling trade-offs

• Using project software, leveling typically means resolving conflicts by allowing the software to calculate delays and update tasks automatically.
• Requires delaying tasks until resources are available.
• In complex environments, resources could be allocated across multiple concurrent projects, requiring company-level resource leveling.
• Important: leveling could result in a later project finish date if the affected tasks are in the critical path.

🧠 Working with Individuals

💭 Emotional intelligence

Emotional intelligence includes self-awareness, self-regulation, empathy, and relationship management.

• Emotions are both a mental and physiological response to environmental and internal stimuli.
• Leaders need to understand and value their emotions to appropriately respond to the client, project team, and project environment.
• Emotions are important for generating energy around a concept, building commitment to goals, and developing high-performing teams.
• Critical for project managers; the more complex the project profile, the more important emotional intelligence becomes to project success.

🧩 Personality types—Myers-Briggs

Personality types refer to differences among people in what motivates them, how they process information, how they handle conflict, etc.

The Myers-Briggs Type Indicator (MBTI) identifies 16 personality types based on four preference pairs:

• Extroversion (E) - Introversion (I): focusing on outer or inner world
• Sensing (S) - Intuition (N): approaching and internalizing information
• Thinking (T) - Feeling (F): making decisions
• Judging (J) - Perceiving (P): planning

Why it matters:

• There is no "best" type.
• Understanding differences helps build the project team, develop common goals, and communicate with stakeholders.
• Example: extroverts prefer face-to-face meetings; introverts prefer written communication.
• Sensing types focus on facts; intuitive types want the big picture.

🎭 DISC method (alternative personality framework)

Rates people's personalities by testing preferences in four areas:

• Dominance/Drive: relates to control, power, and assertiveness
• Inducement/Influence: relates to social situations and communication
• Submission/Steadiness: relates to patience, persistence, and thoughtfulness
• Compliance/Conscientiousness: relates to structure and organization

🎖️ Leadership styles

• Leadership style is a function of both personal characteristics and the environment.
• Various researchers have described leaders differently:
  • Autocratic vs. democratic (Tannenbaum & Schmidt)
  • Pathfinders (visionaries), problem solvers (analytical), or implementers (team oriented) (Leavitt)
  • Transactional (focused on actions) or transformational (focused on long-term needs) (Burns)
• Fiedler's contingency theory: the ability of leaders to adapt their leadership approach to the environment.

🔄 Matching leadership to project needs

• No particular leadership approach is specifically appropriate for all projects.
• The successful leadership approach depends on the project's complexity profile.
• Example: a command-and-control approach may work on a small software project with clear tasks, but not on a larger, more complex project with a diverse team.
• Each project phase may require a different leadership approach.
• Don't confuse: leadership style (personal preference) with leadership approach (adapted to situation).

🤝 Working with Groups and Teams

🏗️ Trust as foundation

Trust is the foundation for all relationships within a project.

• Without minimum trust, communication breaks down, and eventually costs increase and schedules slip.
• Trust is the filter through which we screen information we share and receive.
• More trust = easier information flow; less trust = stronger filters and information deprivation.

📜 Contracts vs. trust relationships

• Contract: a legal agreement with penalties for behaviour or results not achieved; based on an adversarial paradigm; not conducive to creating trust.
• Relationship of mutual trust: less formal but vitally important; each person's reputation and self-respect are the drivers; commitment to open and honest relationship.
• Smaller, less complex projects can operate within legal contract boundaries.
• Larger, more complex projects must develop a relationship of mutual trust to be successful.

🔐 Four kinds of trust (Lindskold)

1. Objective credibility: truthfulness that can be checked against observable facts.
2. Attribution of benevolence: trust built on examining a person's motives and concluding they are not hostile.
3. Non-manipulative trust: trust that correlates to a person's self-interest and the predictability of their behaviour in acting consistent with that self-interest.
4. High cost of lying: trust that emerges when persons in authority raise the cost of lying so high that people will not lie because the penalty will be too high.

🌱 Creating trust on projects

• Building trust begins with the project manager.
• On complex projects, assigning a project manager with a high trust reputation can help establish needed trust levels.
• The project manager can establish the cost of lying in a way that communicates an expectation and value for trust.
• Ensure official goals (stated goals) and operational goals (goals that are reinforced) are aligned.
• Create an atmosphere where informal communication is expected and reinforced.
• Allot time during project start-up meetings for team members to develop personal relationships.

🗣️ Essential Communication Skills

👂 Active listening

Active listening is placing oneself in the speaker's position as much as possible, understanding the communication from the speaker's point of view, listening to body language and other environmental cues, and striving not just to hear, but to understand.

Techniques for active listening:

• Listen intently to words and observe body language
• Nod and express interest without forming rebuttals
• Provide feedback and ask for clarity while repeating a summary back to the speaker
• Express understanding and empathy

Why it matters:

• Takes focus and practice to become effective.
• Enables a project manager to go beyond basic information and develop a more complete understanding.
• Example: A project manager noticed a client's tense body language after a board meeting. Through active listening, the manager discovered budget cuts and increased pressure, leading to a successful revised plan.

🤝 Negotiation

Negotiation is a process for developing a mutually acceptable outcome when the desired outcome for each party conflicts.

Four principles of negotiation:

1. Separate people from the problem: frame discussions in terms of desired outcomes.
2. Focus on common interests: avoid focusing on differences; both parties are more open to finding solutions.
3. Generate options that advance shared interests: discard solutions that don't match either party's interests; explore solutions that may serve both.
4. Develop results based on standard criteria: the standard criterion is the success of the project.

Keys to successful negotiation:

• Seek to understand the other party's position first.
• Understand what outcomes are acceptable to the project (typically more than one).
• Understand market value for products or services (from past projects or expert opinions).
• Develop as many options as possible to increase the possibility of mutually beneficial outcomes.
• Goal: achieve greatest value for the project, not just lowest costs.
• A fair negotiation process creates positive relationships that may benefit the project later.

⚔️ Conflict resolution

Conflict on a project is to be expected because of stress, lack of information during early phases, personal differences, role conflicts, and limited resources.

Five responses to conflict (Whetton & Cameron):

• Avoiding
• Forcing
• Collaborating
• Compromising
• Accommodating

Understanding conflict resolution:

• Each approach can be effective depending on the situation.
• Most project managers have a default approach that is comfortable.
• Example: some use forcing ("Do it because I said to") for quick resolution when investment in the decision is low.
• Effectiveness depends on the situation: forcing works when quick resolution is needed and investment is low; more complex situations need approaches that increase likelihood of mutually acceptable solutions.

Steps for resolving complex conflicts:

1. Evaluate the situation (gather data)
2. Develop a common understanding of the problem (restate, paraphrase, reframe)
3. Develop alternative solutions (creative process)
4. Mutually select a solution

📤 Delegation

Delegating responsibility and work to others is a critical project management skill.

The delegation challenge:

• Delegating too little authority causes delays due to lack of timely decisions or action.
• Delegating too much authority to those without knowledge, skills, or information causes problems that result in delay or increased cost.
• Finding the right balance is critical.

Factors affecting delegation:

• Team members with more knowledge, skills, abilities, and experience typically cost more.
• On smaller, less complex projects, the project manager can provide daily guidance and be consulted on all major decisions.
• On larger, more complex projects, too many important decisions are made daily for the project manager to be involved at the same level; project team leaders are delegated decision-making authority.
• Larger, more complex projects typically pay more because of the need for knowledge and experience.

Delegation as organizational skill:

• The art of creating a project organizational structure with work organized into manageable units.
• The process of understanding knowledge, skills, and abilities needed to manage work and matching team members with the right skills to that work.
• Project managers often want team members they have worked with before because they know the skill level and can make assignments quickly with less supervision.

🔄 Adjusting leadership styles

• Personality traits reflect preferences, not limitations.
• Individuals can still function in situations for which they are not best suited.
• You can change your leadership style according to the needs of your team and the project's attributes and scope.
• Example: a project leader who is more thinking (T) than feeling (F) would need to work harder to be considerate of how team members who are more feeling (F) might react to being singled out in a meeting.
• Individual goals: examine which conflict resolution styles you are least comfortable with and work to improve those styles so they can be used when more appropriate than your default style.

👥 Team Types and Meetings

🎯 When to use teams vs. individuals

Teams are effective when:

• No one person has the knowledge, skills, and abilities to understand or solve the problem
• Commitment to the solution is needed by large portions of the project team
• The problem and solution cross project functions
• Innovation is required

Individuals are most appropriate when:

• Speed is important
• One person has the knowledge, skills, and resources to solve the problem
• The activities involved are very detailed
• The actual document needs to be written (teams can provide input, but writing is a solitary task)

🔧 Three types of teams

1. Functional teams: team approach related to project functions (engineering team, procurement team, project controls team); work well on projects with low complexity, low technological challenges, good team member experience, and clear scope.

2. Cross-functional teams: address issues and work processes that include two or more functional teams; members bring their functional expertise to addressing project opportunities.

   • Example: A cross-functional team coordinated script drafting, equipment procurement, and project controls for educational videos, saving three weeks and several thousand dollars by hosting off-site.

3. Problem-solving teams: assigned to address specific issues that arise during the project; include members with expertise to address the problem; chartered to address the problem then disband.

📊 Three types of meetings

Action item meetings:

• Purpose: develop common understanding of short-term priorities (usually less than a week), individual roles, and expectations.
• Style: fact-based, information-oriented, left-brain focus; very little dialogue except clarification questions.
• Duration: short.
• Leadership approach: focuses on data, actions, and commitments; if issues arise between people, address them in another forum.
• Best for: team members who favour thinking over feeling and judging over perceiving.

Management meetings:

• Purpose: planning—developing plans, tracking progress, making adjustments; focus on mid-term goals (monthly or quarterly for large projects, weekly for smaller projects).
• Style: combination of left-brain (fact-based) and right-brain (creative and innovative) thinking; focused discussion on generating common understanding of progress.
• Duration: longer than action item meetings.
• Leadership approach: facilitative; encourages management team to contribute ideas and builds consensus on goals; focuses on developing goals, tracking progress, identifying barriers, and making adjustments.
• Best for: includes contributions from both thinking/judging types and feeling/perceiving types.

Leadership meetings:

• Purpose: reflect on the project, explore larger issues, back away from day-to-day problem solving; focus on people issues (relationship with client, vendors, project team), perceptions, and entire project impact.
• Style: right-brained, creative; less data-oriented; safe environment for sharing thoughts and evaluations.
• Duration: longer; held less frequently.
• Time frame: entire length and impact of the project.
• Best for: team members who favour feeling, perceiving, and intuition often contribute valuable insights.

🎨 Project Culture

A project culture represents the shared norms, beliefs, values, and assumptions of the project team.

Three levels of organizational culture (Schein):

1. Artifacts and behaviours: visible elements that can be recognized by people not part of the culture.
2. Espoused values: the organization's stated values and rules of behaviour.
3. Shared basic assumptions: deeply embedded, taken-for-granted behaviours that are usually unconscious but constitute the essence of culture.

Culture is developed through communication of:

• The priority
• The given status
• The alignment of official and operational rules

Official vs. operational rules:

• Official rules: the rules that are stated.
• Operational rules: the rules that are enforced.
• Project managers who align official and operational rules are more effective in developing a clear and strong project culture.
• Example: If an official rule requires weekly backups but the operational rule is that only one person does backups, team members learn that official rules can be ignored if difficult to obey—creating problems when that person is unavailable.

Tools for communicating culture:

• Symbols
• Storytelling
• Rituals
• Rewards or punishments
• Taboos

Why culture matters:

• Guides behaviour and communicates what is important.
• Useful for establishing priorities.
• On projects with a strong culture of trust, team members feel free to challenge anyone who breaks a confidence, even managers.

💡 Innovation on projects

• The requirement for innovation is influenced by the nature of the project.
• Some projects are chartered to develop a solution to a problem, making innovation central to success.
• Innovation is also important for developing methods of lowering costs or shortening schedules.
• Traditional project management provides a trade-off between cost, quality, and schedule; innovative solutions can sometimes lower costs while saving time and maintaining quality.

Innovation requires both fun and focus:

• Stress at appropriate levels can make the work environment interesting and challenging.
• When stress level is too high, blood flow increases to emotional parts of the brain and decreases to creative parts, making creative problem solving more difficult.
• Fun reduces stress on the project.
• Project managers must balance stress level with the need to create an atmosphere that enables creative thought.

📈 Qualitative assessment tools

The Humm Factor:

• A survey tool to capture the thoughts of project participants.
• Named after a project manager who claimed he could tell more by listening to the "hum" of the project than reading reports.
• Asks questions like "Do you feel the project is doing the things it needs to do to stay on schedule?" and "Is the project team focused on project goals?"
• Distributed weekly or less frequently depending on project complexity.
• Qualitative responses are converted to quantitative scores (1 to 10).
• Responses tracked by individuals and total project, resulting in qualitative comparisons over time.
• The project team reviews ratings regularly, looking for trends that indicate emerging issues.

Why qualitative assessment matters:

• Project managers have many tools for quantitative information (schedules, budgets, risk analysis).
• Qualitative information—judgments made by expert team members that go beyond quantitative data—is equally important.
• Sometimes called "gut feeling" or intuition of experienced project managers.
• Example: A Humm Survey showed increasing worry about schedule when reports indicated everything was on plan; investigation revealed a supplier was experiencing financial problems, allowing the project manager to develop a plan to help the supplier and keep the project on schedule.

🧭 Overview

🧠 One-sentence thesis

Budget planning combines detailed cost estimation methods with earned value analysis to track spending against the plan and predict final project costs throughout the project lifecycle.

📌 Key points (3–5)

• Estimation methods scale with project phase: rough order-of-magnitude estimates during selection become detailed bottom-up estimates during execution.
• Three main estimation approaches: analogous (based on similar past projects), parametric (using measurable parameters), and bottom-up (summing all detailed costs).
• Earned value management (EVM) tracks performance: compares planned value (PV), earned value (EV), and actual cost (AC) to calculate schedule and cost variances.
• Common confusion—variance vs. index: variance shows the dollar difference (SV, CV), while performance indexes show the ratio (SPI, CPI); both are needed to understand project health.
• Reserve types differ in purpose: contingency reserves cover statistically predictable overruns within scope; management reserves handle scope changes and require discretion.

💰 Cost Estimation Methods

🔍 Analogous Estimate

An estimate based on other project estimates, adjusted for size and complexity differences.

• Relies on expert judgment from managers with experience on similar projects.
• Faster and uses fewer resources than detailed methods—appropriate for early project selection phase.
• The Darnall-Preston Complexity Index (DPCI) helps identify similar past projects by comparing 11 attributes across four categories: internal, external, technological, and environmental complexity.
• Example: John's friend moved from a similar apartment over a similar distance for $575, so John estimates under $700 for his move.

Don't confuse with: parametric estimates, which use formulas rather than whole-project comparisons.

📏 Parametric Estimate

Estimates calculated by multiplying measured parameters by cost-per-unit values.

• Uses average costs per standard unit (e.g., cost per square foot, cost per bedroom).
• Parameters are measurable factors like size, location, quality level, or distance.
• Common for activities that appear in many projects with established industry averages.
• Example: A truck rental company uses "number of bedrooms" as the parameter to determine truck size; John's one-bedroom apartment indicates a 14-foot truck, then distance and days determine rental cost.

🧱 Bottom-Up Estimating

Identifying the cost of each item at the lowest level of detail, then summing upward through the hierarchy.

• Most accurate and time-consuming method.
• Requires a detailed project schedule broken into activities.
• Each activity lists specific items with quantity, unit price, and total cost.
• Costs can be "rolled up" (subtotaled) by category or activity for reporting.
• Example: John itemizes every packing supply (10 small boxes at $1.70 each, 15 medium boxes at $2.35 each, etc.) plus truck rental and gas, totaling $661.25.

Method	When to Use	Accuracy	Effort Required
Analogous	Project selection, early phases	Lower	Low
Parametric	Standard activities with known unit costs	Medium	Medium
Bottom-Up	Detailed planning and execution	Highest	High

📊 Earned Value Management (EVM)

📐 Core EVM Measures

Budgeted Cost of Work Scheduled (BCWS): detailed cost estimates for each activity.

Planned Value (PV): the sum of budgeted costs for work that should have been done by a specific date.

Budgeted Cost of Work Performed (BCWP): the budgeted cost of work that has actually been done.

Earned Value (EV): the sum of BCWP up to a point in the project schedule.

Actual Cost (AC): the sum of amounts actually spent.

Example: By day six, John's move should have spent $261.65 (PV). The work actually completed was worth $162.10 by the original estimates (EV), but the actual spending was $154.50 (AC).

📉 Variance Calculations

Schedule Variance (SV): difference between earned value and planned value.

• Formula: SV = EV − PV
• Negative SV means the project is behind schedule.
• Example: SV = $162.10 − $261.65 = −$99.55 (behind schedule)

Cost Variance (CV): difference between earned value and actual cost.

• Formula: CV = EV − AC
• Positive CV means the project is under budget.
• Example: CV = $162.10 − $154.50 = $7.60 (under budget)

📈 Performance Indexes

Schedule Performance Index (SPI): ratio showing how much of the project is completed.

• Formula: SPI = EV ÷ PV
• SPI < 1 indicates behind schedule; SPI > 1 indicates ahead of schedule.
• Example: SPI = $162.10 ÷ $261.65 = 0.62 (only 62% of planned work completed)

Cost Performance Index (CPI): ratio of value earned to money spent.

• Formula: CPI = EV ÷ AC
• CPI > 1 indicates under budget; CPI < 1 indicates over budget.
• Example: CPI = $162.10 ÷ $154.50 = 1.05 (getting 5% more value than money spent)

Don't confuse: Variance tells you how many dollars you're off; index tells you the ratio of performance. Both are needed—variance shows magnitude, index shows efficiency.

🔮 Forecasting Project Completion

💵 Estimate to Complete (ETC)

The amount of money needed to finish the remaining unfinished activities.

If cost variance is atypical (caused by one-time factors that won't continue):

• Formula: ETC = BAC − EV
• Budget at Completion (BAC) is the original total project budget.
• Example: John's discounts and lunch savings are atypical, so ETC = $1,534 − $162.10 = $1,371.90

If cost variance is typical (will affect remaining activities):

• Formula: ETC = (BAC − EV) ÷ CPI
• Adjusts the remaining budget by the cost performance observed so far.
• Example: If labour costs show CPI = 0.94 consistently, ETC = ($800,000 − $80,000) ÷ 0.94 = $766,000

🎯 Estimate at Completion (EAC)

The revised estimate of total project cost.

• Formula: EAC = AC + ETC
• Combines money already spent with the revised estimate to complete.
• Example: EAC = $154.50 + $1,371.90 = $1,526.40 for John's move

🛡️ Budget Reserves and Cash Flow

💼 Two Types of Reserves

Contingency Reserves:

• Funds for unplanned but statistically predictable cost increases.
• Part of the project budget baseline because they are likely to be spent.
• Cover risks within the current project scope.

Management Reserves:

• Funds for scope changes (opportunities or challenges requiring scope adjustment).
• Available at manager's discretion before scope change is negotiated.
• Not part of the budget baseline because they are not likely to be spent.

Don't confuse: Contingency is for "we know some activities will overrun, just not which ones." Management reserve is for "something outside our current scope might happen."

💸 Cash Flow Management

Reconciliation: matching the schedule of fund transfers with the schedule of activity payments.

• Financial departments prefer to transfer money just before it's needed (to avoid idle funds or interest charges).
• Project managers prefer having cash available for unexpected needs.
• Transfers are timed so money arrives before activities start, without excessive advance funding.
• Example: Funds transferred four times during a project, with spending closely tracking available funds—but at activity 6, all available funds were spent, leaving no margin for error.

📅 Budget Timeline and Aggregation

🗂️ Cost Aggregation

The process of subtotaling costs by category or activity.

• After breaking the project into activities with individual cost estimates, sum them to get total project cost.
• Costs can be grouped by activity code, category, or time period.
• Computer software (spreadsheets for simple projects, specialized tools for complex ones) makes roll-up and subtotaling easier.

⏰ Timing Considerations

• Each activity has a start date and duration, so you can calculate cumulative spending by any date.
• A budget timeline shows when money will be needed throughout the project.
• Contractual partial payments to vendors should align with the same units used for cost budgeting (e.g., pay after 25% of deliverables are complete).
• Proper timeline planning prevents activity delays due to lack of funds and minimizes opportunity cost of early transfers.

🧭 Overview

🧠 One-sentence thesis

Procurement management follows a logical sequence—from planning what to contract, through selecting vendors and signing contracts, to monitoring performance and closing out—where contract type determines who bears risk and how costs are managed.

📌 Key points (3–5)

• The procurement sequence: plan what to contract → plan how to contract → solicit bids → select vendor → sign contract → monitor work → close contract.
• Make-or-buy decision: decide whether to contract work out or do it in-house based on cost, scope, schedule, and available resources.
• Three major contract types: fixed-price (client pays same regardless of effort), cost-reimbursable/cost-plus (client pays costs plus a fee), and time-and-materials (client pays hourly rate plus materials).
• Common confusion—risk allocation: fixed-price contracts transfer most risk to the contractor (so changes are expensive for the client); cost-reimbursable and T&M contracts leave most risk with the project/client.
• Why it matters: choosing the right contract type and managing it well affects project cost predictability, schedule, and contractor motivation.

📋 Procurement planning essentials

📋 The procurement management plan

The procurement management plan details how the procurement process will be managed.

The plan includes:

• Types of contracts and performance metrics for contractors.
• Planned delivery dates for contracted work or products.
• Standard company documents to use.
• Number of vendors/contractors and how they will be managed.
• How purchasing affects project constraints and assumptions.
• Coordination of purchasing lead times with the project schedule.
• Identification of prequalified sellers (if known).

Why it matters: This plan becomes a subsidiary of the overall project management plan and ensures procurement activities align with project goals and schedule.

🔍 Make-or-buy analysis

Make-or-buy analysis: figuring out whether to contract the work or do it yourself, or whether to build a solution or buy one that already exists.

Key questions to answer:

• How much does it cost to build vs. buy?
• How will this decision affect scope, schedule, and commitments?
• Do you have time to do the work in-house and still meet deadlines?
• For resources like heavy equipment: should you buy, rent, or lease?

Example: An organization needs specialized software—make-or-buy analysis weighs the cost and time of developing it internally against purchasing an existing solution.

Don't confuse: This is not just about cost; schedule impact and available expertise are equally important factors.

🔖 Contract types and risk allocation

🔖 Fixed-price contracts

Fixed-price contract: a legal agreement to provide goods or services at an agreed-on price, regardless of the actual cost to the contractor.

How it works:

• The contractor bears the risk of cost overruns.
• The client pays the same amount no matter how much effort the contractor applies.
• As the contractor's effort increases, their profit margin decreases (see Figure 13.1 in the excerpt).

When to use:

• The scope of work is very clear and unlikely to change.
• At least two qualified suppliers are available.
• You need predictable project costs.

Variations:

Type	Description	When to use
Fixed-total-cost	Contractor includes all costs and profit in one price	Scope is well-defined; contractor assumes all cost risk
Fixed-unit-price	Price per unit is fixed, but total units may vary	Amount needed is uncertain but measurable in standard units
Fixed-price with incentive fee	Includes bonus for meeting milestones or performance targets	You want to motivate above-baseline performance
Fixed-price with price adjustment	Price adjusts based on inflation or commodity price changes	Long-duration projects in volatile economic conditions

Risk trade-off: The contractor adds contingency to cover risk, so changes requested by the client are very expensive—even when change pricing is in the original contract.

Example: A graphic designer contracts to deliver a set number of textbook illustrations for a fixed total price; if the project scope changes and more illustrations are needed, the cost of that change will be high.

💰 Cost-reimbursable (cost-plus) contracts

Cost-reimbursable contract: the organization pays the contractor for the cost of performing the work plus an additional fee or rate.

How it works:

• The client bears most of the cost risk.
• As costs increase, the client's total payment increases, but the contractor's fee structure varies by contract type.
• The contractor has less motivation to reduce costs unless incentives are built in.

When to use:

• The scope of work or costs are not well known.
• You want to avoid inflated bids that include large contingencies for uncertainty.

Variations:

Type	Fee structure	Contractor motivation
CR with fixed fee	Fee is set at the start and does not change	Low motivation to reduce costs
CR with percentage fee	Fee is a percentage of total allowable costs (e.g., 5%)	Low motivation; fee grows with costs
CR with incentive fee	Fee increases if contractor meets cost-reduction or performance goals	High motivation to meet targets
CR with award fee	Fee based on subjective performance criteria judged by the project team	High motivation for excellent performance

Key requirement: Good documentation of costs is essential to ensure the contractor is paid correctly and the client is not overcharged.

Example: A project needs custom curriculum development with unclear scope; a cost-reimbursable contract with incentive fee motivates the contractor to control costs while delivering quality work.

⏱️ Time-and-materials (T&M) contracts

Time-and-materials contract: the client pays an hourly rate for labor plus the cost of materials plus a percentage fee.

How it works:

• The contractor submits time sheets and receipts.
• The project reimburses actual time (at agreed hourly rates) and actual material costs.
• The fee is typically a percentage of total costs.
• As effort increases, both the client's costs and the contractor's profit increase (see Figure 13.3 in the excerpt).

When to use:

• Small-scope work with high uncertainty or risk.
• You want lower total cost than a fixed-price contract (which would include large contingency).

Risk mitigation: Contracts often include a "not-to-exceed" amount to cap the client's exposure.

Example: A small repair task with unknown complexity is contracted on a T&M basis; the contractor tracks hours and materials, and the project adjusts as more information becomes available.

Don't confuse: T&M contracts place all risk on the project/client, unlike fixed-price contracts where the contractor bears the risk.

📊 Comparing contract types

Contract type	Known scope	Who bears risk	Cost predictability	Incentive for milestones
Fixed-total-cost	Very high	Contractor	Very high	Low
Fixed-unit-price	High	Mostly project	High	Low
Fixed-price with incentive	High	Mostly project	Medium-high	High
CR with fixed fee	Medium	Mostly project	Medium-high	Low
CR with incentive fee	Medium	Mostly project	Medium	High
CR with award fee	Medium	Mostly project	Medium	High
Time-and-materials	Low	All project	Low	Low

Key insight: As scope clarity decreases, contracts shift from fixed-price (contractor risk) to cost-reimbursable and T&M (project risk).

🔄 The procurement process

🔄 Procurement cycle overview

The procurement cycle includes:

1. Plan what to contract (procurement management plan).
2. Plan each individual contract (contract planning).
3. Select contract approach and type.
4. Solicit bids (RFQ or RFP).
5. Evaluate bids.
6. Award and sign contracts.
7. Manage contractor performance.
8. Close contracts.

Timing matters: Each step can take hours to weeks depending on project complexity, and procurement activities are included in the project master schedule.

📝 Soliciting bids

Request for Quote (RFQ):

RFQ focuses on price for well-defined materials or services that can be obtained from several sources.

• Used for commodity items.
• The lowest price that meets quality and schedule requirements usually wins.

Request for Proposal (RFP):

RFP accounts for price but focuses on meeting project quality or schedule requirements.

• Used when technical approach and quality matter more than price alone.
• Developing a proposal is expensive for bidders, so only eligible companies should receive RFPs.

Qualifying bidders:

• Potential bidders must demonstrate ability to perform the work (quality and schedule) and financial stability.
• Credit checks or financial reports (e.g., from Dun & Bradstreet) verify financial status.
• Eligible bidders are placed on a bidders list.

Example: A project needs custom software; an RFP is issued to qualified vendors who propose different technical approaches, and the project team evaluates both technical merit and price.

🏆 Evaluating and awarding contracts

Evaluating RFQ responses:

• Heavily graded on price.
• Total price includes goods/services, shipping, warranties, and added value.

Evaluating RFP responses:

• More complex: includes price and technical approach.
• Separate teams may evaluate administrative and technical aspects, then combine scores.
• Requires team members with expertise to assess technical proposals.

Awarding the contract:

• Validate all bid and contract conditions with the selected bidder.
• Simple contracts: read and sign to ensure understanding.
• Complex contracts: detailed discussion of goals, barriers, schedule, conflict resolution, and process improvement.

📦 Managing contracts and logistics

Managing contractor performance:

• Track performance against contract criteria and project requirements.
• Most contractors meet expectations; a few may underperform.
• Two approaches for non-performing contractors:
  • Refer to the contract and enforce penalties.
  • Explore creative ways to improve performance collaboratively.
• The project team must assess which method is most likely to work in each situation.

Progress payments:

Progress payments: payments made before the end of the project, based on completion of defined work or milestones.

• Contractors incur significant costs during the project and want early payment.
• Payment schedule is tied to milestones (e.g., design complete, development complete, final acceptance).

Change management:

• Changes to the project often require changes to the contractor's scope of work.
• The contract should document how changes will be managed.
• A change order (a formal change to the contract) captures what changed and the impact.
• Effective change management minimizes conflict and project delays.

Logistics:

Logistics: the area of expertise covering transportation, inventory, warehousing, and security of purchased equipment and materials.

• Can be managed by the project team, included in RFP/RFQ, or contracted to logistics specialists.
• On international projects, may include customs processes.

Long-lead items:

Long-lead items: items that take a long time to acquire (e.g., custom equipment, specialized curriculum, customized bioreactors).

• Identified early to begin procurement as soon as possible.
• May require weeks, months, or years to develop.
• Failure to procure through the normal cycle can delay the project.

Expediting:

• When critical items are scheduled for late delivery, the procurement team works with the contractor to expedite manufacturing or transportation.
• Example: A project in Argentina flew critical equipment from Sweden instead of shipping by sea to save several weeks, accepting higher logistics costs for greater overall project value.

⚙️ Selecting the right contract approach

⚙️ Key questions for contract selection

The project management team answers:

• Is the work a commodity, customized product/service, or unique skill/relationship?
• What type of relationship is needed: supplier, vendor, or partnership?
• How should they be approached: RFQ, RFP, or personal contact?
• How well known is the scope of work?
• What are the risks, and which party should assume which types?
• Does procurement affect activities on the project's critical path, and how much float is available?
• How important is cost certainty in advance?

Risk allocation is key: The team determines which risks the project will manage and which will be transferred to the contractor.

Trade-off: The project typically wants to manage risk, but contractors with more expertise or control may be better positioned to manage certain risks.

Example: If a contractor specializes in a technology with known failure modes, they may be better equipped to manage technical risk than the project team.

🧭 Overview

🧠 One-sentence thesis

Quality planning ensures that a project delivers the right product by setting measurable standards, designing processes to meet those standards, and preventing defects rather than merely reacting to problems.

📌 Key points (3–5)

• Quality vs. grade: Quality measures how well a product meets the requirements of its grade; even low-grade products should be high quality (meet their grade requirements).
• Three pillars of quality: customer satisfaction (meeting stated and implied needs), fitness to use (best design for the purpose), and conformance to requirements (building what you said you would).
• Statistics and control limits: Normal distributions and standard deviations help determine whether repetitive processes stay within acceptable variation ranges.
• Common confusion: Tolerance vs. standard deviation—tolerance is the range between control limits set by management; standard deviation measures actual variation in samples.
• Prevention over reaction: Quality planning focuses on designing processes and tests upfront to avoid defects, rather than fixing problems after they occur.

🎯 Core quality concepts

🎯 What quality means in project management

Quality: "the degree to which a set of inherent characteristics fulfill requirements" (ISO definition).

• Quality is not just "good value" in everyday terms; it is about meeting specifications and requirements.
• It is measured and managed like scope, cost, and schedule—by setting goals and taking measurements.
• Quality must satisfy both stated requirements (written specifications) and implied requirements (common sense, safety, regulatory standards).

🏆 Customer satisfaction

• Making sure the people paying for the product are happy with what they receive.
• Requirements gathering captures what customers want; some needs are explicit, others are implied (e.g., products must not be toxic).
• Example: A product that is beautifully designed but does not do what the customer needs fails on customer satisfaction.

🔧 Fitness to use

• Ensuring the product has the best design to fit the customer's actual needs.
• A product can be well-constructed but still fail if it does not serve its intended purpose.
• Example: You could pound a nail with a screwdriver, but a hammer is a better fit for the job—fitness to use prioritizes function over form.

✅ Conformance to requirements

• The core measure: does the product do what the requirements document says it should?
• Requirements should capture both customer satisfaction and fitness to use.
• In the end, quality is judged by whether you built what you said you would build.

🏅 Quality vs. grade

🏅 Distinguishing quality from grade

Concept	Definition	Example
Grade	A category or rank based on requirements (e.g., octane rating, professional vs. amateur service)	87 octane gasoline vs. 93 octane gasoline
Quality	How well the product meets the requirements of its grade	87 octane fuel free of contaminants = high quality; 93 octane fuel contaminated = low quality

• Don't confuse: High grade does not automatically mean high quality. A low-grade product can be high quality if it meets its grade requirements.
• Example (gasoline): Low-grade 87 octane fuel that is clean and performs as rated is high quality; high-grade 93 octane fuel contaminated with dirt is low quality.
• Example (furniture packing): Hiring professional movers (high grade) to pack antiques with no damage = high quality; using inexperienced friends (low grade) to pack cheap dishes with a few breakages = acceptable quality for that grade.

📊 Statistics and control limits

📊 Control limits and tolerance

Control limits: the upper and lower extremes of allowable variation in a product or process.

• Management designs processes to produce products within control limits.
• Tolerance: the size of the range between control limits, often written as mean ± tolerance.
• Example: A refinery sets control limits for 87 octane gasoline at 86 and 88 octane; tolerance is 87 ± 1.
• Tighter tolerances generally cost more to achieve and measure.

📈 Sampling and normal distribution

• Samples: randomly selected subsets from the total population, measured to check quality.
• When random factors affect a process, measurements tend to cluster around a central value (the mean, μ) in a bell-shaped curve called a normal distribution.
• Central limit theorem: random factors tend to offset each other, so most measurements fall near the middle of the range.
• Example: A refinery measures many samples of 87 octane gasoline; most measurements cluster around 87, with fewer at the extremes—this forms a normal distribution.

📏 Standard deviation (σ)

Standard deviation: a measure of how much measurements differ from the mean (average difference).

• Calculation steps: subtract each measurement from the mean, square the differences, sum them, divide by (number of values − 1), then take the square root.
• For a normal distribution, the 68-95-99.7 rule applies:
  • ~68.3% of measurements fall within ±1 standard deviation of the mean
  • ~95.4% fall within ±2 standard deviations
  • ~99.7% fall within ±3 standard deviations
• Example: If average adult male height in the U.S. is 178 cm with a standard deviation of 8 cm, then 68% of men are between 170 cm and 186 cm tall.

🎯 Six Sigma and process control

• A five-sigma or six-sigma process means the mean is five or six standard deviations away from each control limit.
• Six sigma implies extremely low likelihood of defects (2 in 1,000,000,000 from random variation).
• Example: A refinery improves its process so the standard deviation drops from 0.3 to 0.2 octane, achieving a five-sigma system (mean of 87, control limits at 86 and 88, so five standard deviations between mean and each limit).

🔍 Don't confuse: tolerance vs. standard deviation

• Tolerance: the range management sets as acceptable (control limits).
• Standard deviation: the actual variation observed in sample measurements.
• A process can have wide tolerance but small standard deviation (good control) or narrow tolerance but large standard deviation (poor control).

🛠️ Quality planning tools and techniques

🛠️ Cost-benefit analysis

• Compare the cost of quality activities (effort, resources) to the benefits (less rework, higher productivity, customer satisfaction).
• Benefits are harder to measure than costs but are essential for justifying quality efforts.

📐 Benchmarking

• Use quality results from past projects to set goals for the current project.
• Example: If the last project had 20% fewer defects than the previous one, learn from their practices and apply similar improvements.

🧪 Design of experiments

• A list of all tests and test procedures planned for the product.
• In software, this is called test planning.
• Helps ensure comprehensive coverage of quality checks.

💰 Cost of quality (COQ)

• The total cost of all prevention, inspection, and correction activities.
• Includes writing standards, reviewing documents, root cause analysis, testing, and reworking defects.
• Useful metric to compare across projects; helps determine if spending is appropriate.
• Trade-off: Tighter tolerances and more testing cost more; if COQ exceeds the value of defect prevention, it may be too high.
• Example: If evaluating every screen in an online tutorial costs more than delivering the product and fixing issues later, the instructional designer may tolerate more defects.

📉 Control charts

• Used to monitor repetitive processes and identify trends.
• Define acceptable limits; if measurements fall outside limits, investigate assignable causes.
• Part of planning is deciding control limits and sampling methods.

🐟 Cause-and-effect (fishbone) diagrams

• Facilitate discussions to identify possible causes of defects when control charts show variation.
• Organize potential causes into categories (e.g., materials, equipment, training, environment).
• Example: A manufacturing firm identifies six possible causes of variation (low-quality materials, power fluctuation, temperature, absenteeism, poor training, old equipment) and organizes them into a fishbone diagram. Each branch can be expanded (e.g., power fluctuation broken into utility reliability, overloaded circuits, lighting).

📊 Check sheets, histograms, and Pareto charts

• Check sheet: a form to record each occurrence of a problem (or automated data collection).
• Histogram: a frequency distribution chart showing how often each problem occurs (column chart with height proportional to frequency).
• Pareto chart: a histogram with columns in decreasing order and a cumulative total line; shows which problems are most frequent and their fraction of the total.
• Use these tools to prioritize which quality problems to address first.

🎯 Defining and meeting client expectations

🎯 Specifications vs. expectations

• Clients provide written specifications, but also have unwritten expectations.
• Example: One client wants invitations to every meeting (then selects which to attend); another wants invitations only to relevant meetings. Inviting the second client to every meeting causes frustration.
• Listening and understanding implicit expectations is key to meeting them.

📋 Project surveys

• Capture how the client perceives project performance.
• Provide data to identify areas where the client is not pleased, allowing the team to explore reasons and develop recovery plans.
• Also highlight what is going well.

🔍 Quality assurance

🔍 Purpose of quality assurance

• Build confidence that the quality plan and controls are working properly.
• Done by reviewing the original plan and comparing it to actual operations.
• Can be an internal review or an external audit.

🔄 Process analysis

• Compare flowcharts of planned quality processes to actual processes.
• If the plan was not followed, analyze why and take corrective action:
  • Educate people on following the plan, or
  • Revise the plan if it is not practical.
• Check that sampling and measurement methods are statistically valid and have adequate precision.

📚 Learning and improvement

• Even in short projects, the quality manager should capture lessons learned for future projects.
• Example: A technical college training employees in plant safety evaluates its instructor selection process at the end. Students suggest that instructors need more training experience or certification. The college decides to retain the master's degree requirement but add a certification requirement.

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Key takeaway: Quality planning is proactive—set standards, design processes, plan tests, and monitor continuously to prevent defects rather than react to them. Use statistics to understand variation, tools to identify causes, and client feedback to meet both stated and implied expectations.

🧭 Overview

🧠 One-sentence thesis

Effective communications planning ensures that stakeholders receive the right information at the right time through appropriate channels, which is critical because 90% of a project manager's job involves communication.

📌 Key points (3–5)

• What communications planning covers: defining what information to deliver, who receives it, the format, and the timing of distribution.
• Communications requirements analysis: figuring out what stakeholders need to make good decisions without overwhelming them with too much information.
• Synchronous vs asynchronous: synchronous means all parties communicate at the same time (e.g., live meetings, video calls); asynchronous means communication happens at different times (e.g., email, blogs).
• Common confusion: more information is not always better—the goal is to provide valuable information (good or bad news) that supports decision-making, not to bury stakeholders in data.
• Technology and context matter: choice of communication method depends on timing needs, available technology, staff experience, project duration, and whether the team is co-located or virtual.

📋 What is communications planning

📋 Core purpose

Communications management is about keeping everybody in the loop.

• The process defines:
  • Types of information to deliver
  • Who will receive it
  • Format for communicating
  • Timing of release and distribution
• The excerpt emphasizes that 90% of a project manager's job is communication, so planning is essential.

🎯 Communications requirements analysis

Communications requirements analysis: defining the types of information stakeholders need from the project so they can make good decisions.

• Projects produce a lot of information; the challenge is filtering what is valuable.
• Don't confuse quantity with quality: you don't want to overwhelm stakeholders, but you do want to give them enough to be informed.
• Communicating valuable information includes both good news and bad news—the point is relevance, not positivity.

📦 What gets communicated

The excerpt lists typical information types:

• Project status
• Project scope statements and updates
• Project baseline information
• Risks
• Action items
• Performance measures
• Project acceptance

Why early planning matters: Determine stakeholder information needs early in the planning phase so you know who should receive planning documents and how to deliver them.

🛠️ Choosing communication methods

🛠️ Factors to consider

The excerpt identifies several factors that influence method selection:

Factor	What to consider
Timing	Do you need real-time updates or periodic reports?
Technology availability	Do you need to procure new systems, or can you use existing ones?
Staff experience	Are team members experienced with the technology, or will training be needed?
Project duration	Will the technology work throughout the project life, or will it need upgrades?
Team environment	Are team members co-located or spread across multiple locations?

• The answers to these questions should be documented in the communication plan.
• Example: A virtual team spread across campuses will need different methods than a co-located team.

📝 Methods available

The excerpt mentions many forms:

• Written reports
• Conversations
• Email
• Formal status reports
• Meetings
• Online databases
• Online schedules
• Project websites

🔄 Types of communication

⏱️ Synchronous communications

Synchronous communication: all parties take part in the exchange at the same time.

Examples from the excerpt:

• Live meeting: team members gather at the same location
• Conference call: telephone call with several participants
• Audio conference: like a conference call but conducted online (e.g., Skype)
• Computer-assisted conference: audio conference with shared document or spreadsheet that both parties can edit
• Video conference: audio conference with live video of participants (some laptops have built-in cameras)
• IM (instant messaging): exchange of text or voice messages using pop-up windows
• Texting: exchange of text messages between mobile phones, pagers, or PDAs

Why it matters for virtual teams: Modern technologies make it possible to assemble project teams from anywhere in the world, but synchronous meetings can be difficult across time zones.

Advantage of time zones: If something must be done by the start of business tomorrow, team members in Asia can work during their normal hours while North American team members sleep.

🕐 Time zone considerations

The excerpt provides detailed guidance on time zones:

• Time zones are calculated in reference to Greenwich, England (GMT or UTC).
• Time zones advance eastward from Greenwich.
• At the international dateline (midpoint around the world from Greenwich), you subtract the time zone from GMT.
• Times are often given using a 24-hour clock to prevent a.m./p.m. confusion (e.g., midnight = 00:00, noon = 12:00, 1 p.m. = 13:00).

Example from the excerpt: A project manager in Toronto (UTC–5) wants to contact a team member in Paris (UTC+1). There is a six-hour difference. If the manager waits until after lunch (1 p.m. in Toronto), it will be too late in Paris (7 p.m.).

Don't confuse: South America is not directly south of North America; South American countries can be up to five time zones east of North America.

📨 Asynchronous communications

Asynchronous communication: communication where parties do not need to be present at the same time.

Why it's useful: Getting a team together at the same time can be challenging, especially across time zones.

📬 Mail and package delivery

• Many companies prefer personally signed contracts by authorized representatives.
• If several signatures are required, postal service can take weeks.
• Overnight delivery services can minimize transfer time if the process is holding up the project start.

📠 Fax

• Fax machines have been around a long time and enjoy high trust for accurate document transmission.
• Don't dismiss as archaic: in many countries, a fax of a signed contract is legal, but a computer-scanned image is not.

📧 Email

Email has several valuable characteristics for project management:

• Information can be sent to a list of team members
• Messages can be saved to document the process (useful in case of misunderstanding or miscommunication)
• Files can be attached and distributed

📓 Project blog

Blog: an online journal that can be private, shared by invitation, or made available to the world.

• Some project managers keep a journal summarizing the day's challenges, triumphs, and decisions.
• They return to this journal later to review their decision-making process after results are known.
• Purpose: learn from mistakes and develop decision-making skills.
• Many project management decisions are made with incomplete knowledge, so reflection is important for growth.

📡 Really Simple Syndication (RSS)

• Some projects are directly affected by external factors: political elections, economic trends, corporate mergers, technological/scientific breakthroughs, or weather.
• RSS allows users to subscribe to online news sources.
• Web pages with RSS feeds have labeled links; clicking the link sends news automatically to a news reader (e.g., Google Reader).
• The news reader can filter news for keywords to limit stories to those relevant to the project.

🆕 Assessing new communication technologies

The excerpt warns that using unfamiliar new technology increases complexity, which can cause delays and increase costs.

Questions to answer before adopting new technology:

• Does the new technology provide a competitive advantage by reducing cost, saving time, or preventing mistakes?
• Does the project team have the expertise to learn the new technology quickly?
• Does the company offer support (help desk, equipment service) for the new technology?
• What is the cost of training and implementation in terms of time and money?

📋 Creating a communication plan

📋 Seven-step process

The excerpt provides a step-by-step template:

1. Identify your stakeholders (to whom)
2. Identify stakeholder expectations (why)
3. Identify communication necessary to satisfy stakeholder expectations and keep them informed (what)
4. Identify time-frame and/or frequency of communication messages (when)
5. Identify how the message will be communicated (the stakeholder's preferred method) (how)
6. Identify who will communicate each message (who)
7. Document items: templates, formats, or documents the project must use for communicating

📊 Communication plan template

The excerpt references a communication plan template (Figure 15.2) that organizes these elements.

What the plan documents:

• Types of information needs stakeholders have
• When the information should be distributed
• How the information will be delivered

Key principle: All projects require a sound communication plan, but not all projects will have the same types of communication or the same distribution methods.

🧭 Overview

🧠 One-sentence thesis

Risk management planning enables project teams to systematically identify, evaluate, and mitigate uncertain events that could affect the project, reducing potential negative impacts through avoidance, mitigation, transfer, or acceptance strategies.

📌 Key points (3–5)

• What a risk is: any uncertain event or condition that might affect your project—not all risks are negative; some are opportunities.
• Four ways to handle risk: avoid (prevent it), mitigate (reduce damage), transfer (pay someone else to accept it, e.g., insurance), or accept (acknowledge and plan for it).
• Risk assessment process: identify potential risks, evaluate their likelihood and impact, then develop mitigation plans for the critical few high-probability, high-impact risks.
• Common confusion—timing matters: risk profiles change across project phases; early phases often have more unknowns, while later phases may have equipment or political risks.
• Why formal planning matters: proactive risk management reduces costs, prevents delays, and helps allocate contingency funds appropriately; reactive approaches leave teams unprepared.

🎯 What is a risk and why manage it

🎯 Definition and nature of risk

A risk is any uncertain event or condition that might affect your project.

• Risks are not yet happened—they are possibilities, not certainties.
• Risks can be events (e.g., a snowstorm) or conditions (e.g., an important part being unavailable).
• Not all risks are negative: some events or conditions can help your project (called opportunities), but they are still handled like risks.
• Example: finding an easier way to do an activity, or lower prices for materials.

🧗 The cliff analogy

• If your project requires standing on the edge of a cliff, there's a risk you could fall.
• Likelihood increases with conditions like wind or slippery ground.
• This illustrates that risk has two dimensions: the event itself and the factors that make it more or less likely.

⏰ Why plan for risk early

• By the time a risk actually occurs, it's too late to do anything about it.
• You need to plan for risks from the beginning and keep revisiting risk planning throughout the project.
• Even the most carefully planned project can encounter unexpected problems (team members quit, resources unavailable, weather disruptions).

🛡️ Four strategies to handle risk

🛡️ Avoid

• Best option: prevent the risk from happening at all.
• If you can avoid it, it definitely won't hurt your project.
• Example: walk away from the cliff (though that may not be an option on the project).
• Risk avoidance often involves using proven technologies instead of new ones, or choosing vendors with proven track records over new vendors offering lower prices.
• Example: a project team may require drug testing for team members to avoid damage done by someone under the influence.

🔧 Mitigate

• If you can't avoid the risk, take action to reduce its damage as much as possible.
• Risk reduction is an investment of funds or effort to lower the risk.
• Examples:
  • Hire an expert to review technical plans or cost estimates.
  • Assign highly skilled personnel to manage high-risk activities.
  • Purchase currency rate guarantees on international projects to reduce exchange rate fluctuation risk.
  • Forbid key executives or technology experts from riding on the same airplane.

🤝 Transfer

• Pay someone else to accept the risk for you.
• The most common method is to buy insurance.
• Risk transfer shifts the risk from the project to another party.
• Examples:
  • A construction project in the Caribbean may purchase hurricane insurance.
  • Insurance is usually for events outside the project team's control: weather, political unrest, labour strikes.
• Risk sharing is a related strategy: partner with another company to share responsibility for risky activities (e.g., joint ventures on international projects).

✅ Accept

• When you can't avoid, mitigate, or transfer a risk, you must accept it.
• Even when accepting, you've looked at alternatives and know what will happen if the risk occurs.
• Accepting is your only choice when there's nothing you can do to reduce the risk's impact.

📋 Risk management process

📋 The risk management plan

• The plan documents how you'll assess risk, who is responsible, and how often you'll do risk planning.
• It includes guidelines to figure out impact (how much damage the risk would cause) and probability (how likely the risk is to occur).
• Many projects classify impact on a scale from minimal to severe, or very low to very high.

🔍 Risk identification

• Creative process: brainstorming sessions where the team lists everything that could go wrong; all ideas are welcome.
• Disciplined process: use checklists of potential risks based on past projects, company experience, or industry experts.
• Categories for risk sources:
  • Technical, Cost, Schedule, Client, Contractual, Weather, Financial, Political, Environmental, People.
• Risk Breakdown Structure (RBS): organizes identified risks into categories with increasing levels of detail (similar to a Work Breakdown Structure).
• Example: People risks can be subdivided into "not finding people with needed skills" or "sudden unavailability of key people."

📊 Risk evaluation

• After identifying risks, evaluate each based on probability of occurrence and potential loss.
• Not all risks are equal: some are more likely, and some have greater cost.
• High-impact risks: those that could increase project costs by a certain threshold (e.g., 5% of conceptual budget or 2% of detailed budget).
• Focus on the critical few risks with high probability and high impact.
• Positive correlation: project risk increases with project complexity (e.g., new and emerging technology = high complexity = high risk).

Factor	Rating scale	Purpose
Likelihood	High / Medium / Low	How probable is the risk event?
Impact	High / Medium / Low	How much damage would it cause?
Priority	Critical few	Focus mitigation on high-likelihood + high-impact

🎲 Statistical models for complex projects

• On highly complex projects, too many risk combinations exist to calculate one at a time.
• Monte Carlo simulation: simulates a range of outcomes by trying many different combinations of risks based on their likelihood.
• Output: probability of an event occurring within a range, and for combinations of events.
• Example: a 10% chance that one of three important pieces of equipment will be late and the weather will be unusually bad.

🛠️ Risk mitigation techniques

🛠️ Risk mitigation plan

• A plan to reduce the impact of an unexpected event.
• Captures the mitigation approach for each identified risk and the actions the team will take.

🚫 Risk avoidance (detailed)

• Develop an alternative strategy with higher probability of success (usually at higher cost).
• Use proven and existing technologies rather than new techniques.
• Choose vendors with proven track records over new vendors with price incentives.

🤝 Risk sharing (detailed)

• Partner with others to share responsibility for risky activities.
• Common on international projects: develop a joint venture with a local company to reduce political, legal, and labour risks.
• Advantage: the partner has expertise and experience the project team lacks.
• If a risk event occurs, the partnering company absorbs some or all of the negative impact; they also share profit or benefit.

🔧 Risk reduction (detailed)

• Investment of funds to reduce risk.
• Examples already covered: currency guarantees, hiring experts, assigning highly skilled personnel, forbidding key people from riding the same airplane.

🏦 Risk transfer (detailed)

• Shifts risk from the project to another party via insurance.
• Typically for areas outside the project team's control.

📦 Contingency plans

• Alternative methods for accomplishing a project goal when a risk event may frustrate that goal.
• Example: if there's a risk of a truck drivers' strike, the contingency plan uses a train to transport equipment.
• If critical equipment is late, mitigate schedule impact by making changes to accommodate late delivery.

💰 Contingency funds

• Funds set aside to address unforeseen events that increase project costs.
• High-risk projects typically have a large contingency budget.
• Two approaches:
  1. Manage contingency as one line item in the project budget (most common, especially on complex projects; requires project manager approval before use).
  2. Allocate contingency to specific high-risk budget items (tracks use against the risk plan, but may increase use of contingency funds instead of finding cheaper solutions).

🔄 Risk across project phases

🔄 Why risk changes by phase

• Risk is associated with unknowns.
• More things are unknown at the beginning; risk must be weighed against potential benefit to decide if the project should be chosen.
• As the project progresses and activities are performed without loss, total risk typically reduces.
• Risk is not allocated evenly: high-tech projects may have most risk early; large equipment budgets may have risk during procurement; global projects may have political risk toward the end.

🚀 Initiation phase

• Identify risks that could affect the whole project.
• Rate likelihood (low/medium/high) and impact.
• Consider mitigation for each risk.
• Example (John's move): risks include job offer being rescinded (low likelihood), current tenants not moving out on time (medium), movers losing furniture (low), movers being late (medium), accident during drive (low).
• Mitigation examples: keep relationships with alternate employers cordial, research extended-stay motels, take digital photos of possessions, plan to spend one night on the road.

📐 Planning phase

• Once the project is approved, identify risks with each major group of activities.
• Use a Risk Breakdown Structure (RBS) for increasing levels of detailed risk analysis.
• Example (John's move—packing phase): risks include cuts from sharp knives (buy small boxes—risk reduction), damage to antique furniture (supervise personally + require mover's insurance—risk reduction + transfer), lose parts while disassembling furniture (buy freezer bags with marker—risk reduction), damage to house plants (ask friend to care for them in exchange for half—risk sharing).

🏗️ Implementation phase

• Update the risk plan with new information.
• Check off risks related to completed activities.
• Contingency budget management: as risks decrease, unused contingency funds can be released back to the organization (if the risk profile is lower).
• If additional risks are uncovered, develop a new mitigation plan (possibly adding contingency funds).
• Understanding where risks occur helps manage contingency and cash reserves.

🏁 Closeout phase

• Conclude agreements for risk sharing and risk transfer.
• Examine the risk breakdown structure to ensure all risk events have been avoided or mitigated.
• Make a final estimate of loss due to risk and record it in project documentation.
• If a Monte Carlo simulation was done, compare the actual result to the predicted result.
• Example (John's move closeout): checklist to confirm all numbered boxes are present and sealed, supervise unloading and inspect antique furniture, confirm house plants are healthy and friend brought about half.

🧠 Factors influencing risk management practice

🧠 Formal vs informal approaches

• Not all project managers conduct a formal risk assessment.
• Low-complexity projects: project manager may informally track risk items.
• More complex projects: develop a list of higher-risk items and track them during project reviews.
• Even greater complexity: formal risk assessment meetings throughout the project life; may include outside experts; risk assessment plan takes a prominent place in the implementation plan.

🧑‍💼 Barriers and personality

• Barriers to formal risk management:
  • Low understanding of the tools and benefits of structured risk analysis.
  • Lack of formal risk management tools.
• Project manager personality and style:
  • Proactive managers: develop elaborate risk management programs.
  • Reactive managers: confident in their ability to handle unexpected events when they occur.
  • Risk-averse managers: prefer to be optimistic and avoid considering or taking risks whenever possible.

🌍 Risk sources by category

• Technical: complexity, new technology.
• External: market changes, weather.
• People: not finding skilled people, sudden unavailability of key people.
• Contractual, financial, political, environmental: each has its own set of potential risk events.

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Don't confuse:

• Risk identification vs risk evaluation: identification is listing what could go wrong; evaluation is rating likelihood and impact to find the critical few.
• Risk mitigation vs contingency plans: mitigation is the overall strategy (avoid/mitigate/transfer/accept); contingency plans are specific alternative methods for accomplishing goals when a risk event occurs.
• Contingency funds as one line item vs allocated to high-risk items: one line item (project-level approval) vs allocated to specific budget items (line manager responsibility); the excerpt notes most project managers use the one-line-item approach on complex projects.

🧭 Overview

🧠 One-sentence thesis

The implementation phase transforms the project plan into actual deliverables through coordinated execution, careful monitoring, and controlled change management to ensure the final results meet customer acceptance criteria.

📌 Key points (3–5)

• What implementation means: putting the project plan into action by directing resources and activities to produce deliverables (products, services, or documents for the client).
• Monitoring is essential: tracking performance and quality control data regularly to identify problems and determine whether changes are needed.
• Change control process: not all changes can be made freely—changes that affect the triple constraint (time, cost, scope) must go through formal change request and approval procedures.
• Schedule compression techniques: crashing (adding resources to critical path tasks) and fast tracking (doing sequential activities concurrently) can address schedule delays but carry cost or risk trade-offs.
• Common confusion: implementation is not just "doing the work"—it also includes monitoring performance, managing changes, and ensuring deliverables meet acceptance criteria.

🚀 What happens during implementation

🚀 Core activities

• The project manager coordinates and directs project resources to meet the objectives laid out in the project plan.
• The team performs the actual work to produce deliverables.
• Activities vary by project type:
  • Engineering/telecommunications: using equipment, resources, and materials to construct deliverables.
  • Software: developing and implementing code routines.
• All required activities are specified in the project requirements document and project plan.

📦 What deliverables include

Deliverable: anything your project delivers.

• All products or services performed for the client, customer, or sponsor.
• All project management documents produced during the project.
• The project manager's job is to direct the work and track how well the team performs.

📊 Monitoring and control

📊 Why monitoring matters

• Implementation keeps the project plan on track through careful monitoring and control processes.
• The goal is to ensure the final deliverable meets the acceptance criteria set by the customer.
• Routine performance and quality control measurements should be evaluated regularly throughout this phase.

🔍 How to identify problems

• Look at performance and quality control data.
• Gather reports on measurements to determine where problems exist.
• Use this information to recommend changes to fix issues.

💰 Cost and schedule characteristics

• Implementation uses the most project time and resources.
• Costs are usually highest during this phase.
• Project managers experience the greatest conflicts over schedules in this phase.
• You may find that actual work time is longer than planned time.

🔄 Change control process

🔄 When change control is needed

• You cannot just make a change when you find a problem—it may be too expensive or take too long.
• You must evaluate how the change affects the triple constraint (time, cost, scope) and project quality.
• Then determine if the change is worth making.

Exception: If a change will not impact the project triple constraint, you can make it without going through change control.

Change control: a set of procedures that lets you make changes in an organized way.

📝 Change request procedure

1. Document the change: Start with a change request (a document you or the requester must complete).
2. Submit for review: The change request goes to a change control board (a group of people who consider changes for approval), or to the project sponsor or management.
3. Evaluate impact: Putting recommended changes through change control helps evaluate the impact and update all necessary documents.
4. Decision: Not all changes are approved.
5. Implementation: If approved, send the changes back to the team to put them in place.

⚠️ Why formal change control matters

• Any change to your project must be documented so you can figure out what needs to be done, by when, and by whom.
• This ensures all stakeholders understand the implications and all project documents remain up to date.

⏱️ Schedule compression techniques

⚱️ Crashing

Crashing: adding resources or moving them around to bring the project back into line with the schedule.

• Used when you absolutely must meet the date and are running behind.
• Involves adding more resources to critical path tasks to do activities more quickly.
• Trade-offs:
  • Crashing always costs more.
  • Doesn't always work.
  • If the budget is fixed with no extra money, you cannot use this technique.
• Managing schedule changes means keeping all schedule documents up to date so you always compare results to the correct plan.

🏃 Fast tracking

Fast tracking: doing two activities planned to occur in sequence at the same time.

• Example: On a software project, you might do user acceptance testing (UAT) and functional testing simultaneously.
• Trade-offs:
  • This is risky.
  • There's a good chance you might need to redo some of the work done concurrently.

🔧 Both are schedule compression tools

Technique	What it does	Cost impact	Risk
Crashing	Add resources to critical path tasks	Always increases cost	May not work; requires budget flexibility
Fast tracking	Do sequential activities concurrently	Variable	High chance of rework

Don't confuse: Both techniques address schedule delays, but crashing focuses on resources while fast tracking focuses on activity sequencing.

✅ Phase completion

✅ Deliverable acceptance

• After deliverables have been physically constructed, they must be accepted by the customer.
• Approved changes identified during monitoring are implemented in this phase.

✅ Phase review

• A phase review is carried out to determine whether the project is complete and ready for closure.
• This review checks that all deliverables meet acceptance criteria before moving to the project completion phase.

🧭 Overview

🧠 One-sentence thesis

Project completion formalizes acceptance of deliverables, closes contracts, captures lessons learned, and archives documentation to ensure all stakeholders are satisfied and future projects benefit from the experience.

📌 Key points (3–5)

• What completion involves: gathering up-to-date project records, obtaining formal acceptance, closing contracts, and releasing the team.
• Why it's often neglected: teams rush to the next project without properly documenting outcomes, updating records, or capturing lessons learned.
• Contract closure specifics: formal written notice to vendors, punch lists for remaining work, and final payments that motivate completion.
• Common confusion: completion is not just delivering the product—it includes formal acceptance, post-project evaluation, and archiving, not just moving files into a drawer.
• Lessons-learned purpose: not to assign blame but to identify what went well, what didn't, and how processes can improve for future projects.

📋 Core completion activities

📋 Gathering and updating project records

• The project manager must review all project documents to ensure they are current.
• Why this matters: scope changes, resource assignments, and product characteristics may have evolved during the project.
• Example: if a scope change request altered the final product's specifications, the documentation must reflect those changes.
• Don't confuse: this is not just filing old documents—it's actively verifying that records match the final delivered state.

✅ Requesting formal acceptance

• Once outcomes are documented, the project manager requests formal acceptance from stakeholders or the customer.
• What stakeholders want to know: whether the product or service meets the objectives the project set out to accomplish.
• Up-to-date documentation allows you to share project results with stakeholders efficiently.

📝 Contract closure process

📝 What contract closure determines

Contract closure: the process of completing and settling the terms of contracts, determining if the work was completed accurately and satisfactorily.

• Not all projects require this—only those performed under contract.
• The process updates project records with final results and ensures all contract terms and conditions are met.

🔨 The punch list mechanism

Punch list: a list of all the items found by the client, team, or manager that still remain to be done.

• Minor items needing repair or completion are placed on the punch list before formal acceptance.
• The project team builds a small schedule to complete remaining work.
• Best practice: discuss problems with vendors as the project progresses, not all at once at the end—this allows correction when problems occur.
• If the punch list is too large, the project continues; as it shrinks, the project manager begins closing down, maintaining only enough staff and equipment to support the remaining work.

📄 Formal written notice

• If the product or service meets expectations, formal written notice to the seller is required, indicating the contract is complete.
• This is the formal acceptance and closure of the contract.
• The project manager documents the formal acceptance; provisions for this are often spelled out in the contract itself.
• If a procurement department handles contract administration, they follow formal procedures, but the project manager still notes contract completion in project records.

💰 Final payments and team release

💰 Why final payments are larger

• The final payment is usually more than a simple percentage of remaining work.
• Reason: completing the project might involve fixing the most difficult problems that are disproportionately expensive to solve.
• The final payment should be large enough to motivate the vendor to give the project high priority for on-time completion.
• Once the supplier meets all contractual obligations (including punch list items), the project team signs off and submits to accounting for final payment.
• The supplier receives notice that the last payment is final and completes the contractual agreement.

👥 Releasing the project team

• Not an official process, but team members are released at project conclusion to return to functional managers or be assigned to new projects.
• Best practice: inform other managers a few months ahead of time about the schedule and when employees will be available.
• This gives other managers the ability to start planning activities and scheduling activity dates.

🔍 Post-project evaluations

🔍 The lessons-learned meeting

Lessons-learned meeting or document: a review conducted to capture lessons from the project before the team is dissolved.

• The team explores what went well and captures processes to understand why.
• The team asks if successful processes are transferable to other projects.
• The team also explores what did not go well and what people learned from the experience.
• Critical principle: the process is not to find blame, but to learn.

🔄 Quality management and continual improvement

• Quality management is a process of continual improvement that includes learning from past projects and making changes to improve the next project.
• This process is documented as evidence that quality management practices are in use.
• Organizations may have formal processes for changing work processes and integrating lessons learned, or less formal approaches where individuals share informally.

📊 Evaluation elements

🤝 Trust and alignment effectiveness

• Project leadership reviews the effect of trust (or lack of trust) on the project.
• The team determines which problems might have been foreseen and mitigated versus those that could not have been reasonably predicted.
• Key questions: What cues did the team miss that indicated an emerging problem? What could the team have done to better predict and prevent trust issues?

📅 Schedule and budget management

• Schedule review: compare the original schedule of activities and network diagram to the actual schedule of events.
• Review events that caused schedule changes to see how contingency reserves and float mitigated disruption.
• Review original estimates of contingency time for adequacy and accuracy of duration and float estimates.
• Purpose: develop expertise in estimating schedule elements in future projects—not to place blame.
• Budget review: compare budget estimates for the cost of work scheduled to actual costs.
• If estimates frequently differ from actual costs, review the choice of estimating method.

⚠️ Risk mitigation

• Compare estimates of risk to events that actually took place.
• Key questions: Did unforeseen events occur? What cues existed that may have allowed the team to predict these events? Was project contingency sufficient to cover unforeseen risks?
• Don't confuse: even if nothing went wrong, it's not proof that risk mitigation was a waste of money—compare the cost of avoiding risk versus the cost of unexpected events to understand the cost of avoiding risk.

🤝 Procurement contracts

• Review the performance of suppliers and vendors to determine if they should remain on the list of qualified suppliers or vendors.
• Review the choice of contract for each to determine if the decision to share risk was justified and if the choice of incentives worked.

😊 Customer satisfaction

• Review relationships with the client and decisions about including the client in project decisions and alignment meetings.
• The client is given the opportunity to express satisfaction and identify areas where project communication and other factors could be improved.
• Often a senior manager from the organization interviews the client to develop feedback on project team performance.

📑 Reporting and archiving

📑 General stakeholder report

• Provides an overview of the project for stakeholders.
• Contents: original goals and objectives, statements showing how the project met those goals and objectives, performance on schedule and budget, and assessment of client satisfaction.
• A version of this report can be provided to the client as a stakeholder and as another means for deriving feedback.

📑 Senior management report

• Contains all the information provided to stakeholders in a short executive summary.
• Identifies practices and processes that could be improved or lessons that were learned that could be useful on future projects.

🗄️ Archiving of documents

• Documents associated with the project must be stored in a safe location where they can be retrieved for future reference.
• Signed contracts or other documents that might be used in tax reviews or lawsuits must be stored.
• Organizations have legal document storage and retrieval policies that apply to project documents and must be followed.

🗄️ Storage best practices

• Electronic storage: use standard naming conventions so documents can be sorted and grouped by name.
• Paper storage: determine the expiration date of documents so they can be destroyed at some point in the future.
• Care should be taken to store documents in a form that can be recovered easily.

🗄️ Documents typically archived

Document type	Purpose
Charter documents	Original project authorization and objectives
Scope statement	Defined project boundaries and deliverables
Original budget	Baseline cost estimates
Change documents	Record of approved changes
DPCI ratings	Performance metrics (specific to some methodologies)
Manager's summary—lessons learned	Captured insights for future projects
Final DPCI rating	Final performance assessment

🧭 Overview

🧠 One-sentence thesis

Project teams should formally celebrate their accomplishments to recognize effort, bring closure, and help members reflect on lessons learned for future projects.

📌 Key points (3–5)

• Why celebrate: helps team members formally recognize the project's end and brings closure to their work.
• Manager's role: the project manager should officially recognize efforts, thank participants, and officially close the project.
• Learning benefit: encourages team members to remember what they've learned and think about how experiences will benefit them and the organization.
• Timing: celebration happens after the project work is complete, marking the transition point.

🎉 Purpose of celebration

🎉 Formal recognition and closure

• A celebration serves as an official marker that the project has ended.
• It provides a clear boundary between project work and what comes next.
• Team members need this formal recognition to mentally and emotionally close out their involvement.

🙏 Acknowledging contributions

• The project manager has a specific responsibility to officially recognize team members' efforts.
• Thanking participants for their contributions is an explicit part of the celebration process.
• This recognition validates the work people have done throughout the project.

📚 Learning and future benefits

📚 Reflection on lessons learned

• Celebration encourages team members to remember what they've learned during the project.
• It creates a moment to consciously think about experiences and knowledge gained.

🔄 Organizational continuity

• The celebration helps team members start thinking about how their experiences will benefit future work.
• Benefits extend both to individual team members and to the organization as a whole.
• This forward-looking aspect connects the completed project to "the next project."
• Example: A team might discuss during celebration how a problem-solving technique they developed could be applied to upcoming work.