Pmbok 4th edition chapter 4 - Project Integration Management

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I am Continuously seeking to improve my competencies and skills to provide first class professional Project Management training courses; and develop my scope experience in Project Management functions. I am confident that my innovative and results-focused approach would make significant contribution to the continued success of your organization. this is the first presentations uploaded to Slide Share, For more information do not hesitate to contact me. Ahmad H. Maharma - PMP Ramallah, Palestine Phone: + (972) (2) 2968644 Mobile: + (972) (599) 001155E-Mail:


<ul><li> 1. CHAPTER4PROJECTINTEGRATIONMANAGEMENT Ahmad H. MaharmaPMP</li></ul><p> 2. PM ProcessInitiating ProcessPlanning Process GroupExecuting Process Monitoring &amp; ControllingClosingGroups /Group Group Process Group ProcessKnowledge GroupArea ProcessesProject Develop Project Develop Project ManagementDirect and Manage Project Monitor and Control Project Close ProjectManagementCharter PlanExecution WorkIntegration Integrated Change ControlProject ScopeManagementDefine Scope CHAPTER4Collect requirementsVerify ScopeControl ScopeCreate WBSProject TimeDefine Activity Schedule ControlManagementSequence ActivityEstimating ResourceEstimating DurationDevelop SchedulePROJECTINTEGRATIONMANAGEMENTProject CostManagementProject QualityEstimating CostBudgeting CostQuality PlanningPerform Quality AssuranceControl CostPerform Quality ControlManagementProject HRHuman Resources PlanningAcquire Project TeamManagementDevelop Project TeamManage Project TeamProject Identify Stakeholders Plan Communications Distribute InformationPerformance ReportingCommunicationsManage stakeholdersManagement Ahmad H. Maharma expectationsProject RiskManagementPlan Risk ManagementRisk IdentificationPMP Risk Monitoring and ControlQualitative / Quantitative RiskAnalysisyRisk Response PlanningProject Plan procurementConduct procurement Administer Contract CloseProcurement procurementManagement 3. ProjectIntegrationManagement Monitoring &amp; Controlling Processes Planning Processes Enter phase/Initiating Closing Exit phase/ Start projectProcessesProcessesEnd project Executing Processes ProcessKnowledgeArea Initiating Planning Executing Monitoring &amp; ContolClosing Develop Develop Project Direct and Monitor and Control CloseProject Management Manage Project Project WorkProject ScopeCharterCh tPlanPl Execution EtiP fPerform IntegratedI tt dChange Control 4. ProjectIntegrationManagementSummary4 5. Project Integration ManagementProject integration Management includes the processes and activities needed toidentify, define, combine, unify, and coordinate the various processes and projectmanagement activities within the Project Management Process Groups the project management context, integration includes characteristics ofunification, consolidation artic lation and integrati e actions that are cr cial tonification consolidation, articulation, integrativecrucialproject completion, successfully managing stakeholder expectations, and meetingrequirements.Project integration Management entails making choices about resource allocation,making tradeoffs among competing objectives and alternatives, and managing theinterdependencies among the project management Knowledge AreasAreas. 6. Project Integration Management ProcessesThe Project integration Management processes are as follows:4.1 Develop Project CharterThe process of developing adocument that formally authorizes a project or a phase anddocumenting initial requirements that satisfy the stakeholdersstakeholder sneeds and expectations.4.2 Develop Project Management Plan The process ofdocumenting the actions necessary to define, prepare,integrate,integrate and coordinate all subsidiary plansplans.4.3Direct and Manage Project ExecutionThe process ofperforming the work defined in the project management planto achieve the projects objectives. 7. Project Integration Management Processes4.4 Monitor and Control Project WorkThe process of tracking, reviewing, and regulating the progress to meet the performance objectives defined in the project management plan.4.5Perform Integrated Change ControlThe process ofreviewing all change requests, approving changes, andmanaging changes to the deliverables organizational processdeliverables,assets, project documents, and the project managementplan.4.6 Close Project or PhaseThe process of finalizing all activities across all of the Project Management Process Groups to formally complete the project or phase. 8. Project Integration ManagementThe integrative nature of projects and project management can beunderstood by thinking of other types of activities performed whilecompleting a project.Examples of some activities performed b the project management team lffd by hare: Analyze and understand the scope. This includes the project and productrequirements, criteria, assumptions, constraints, and other influencesrelated to a project, and how each will be managed or addressed withinthe project.p j Understand how to take the identified information and then brainstorm itinto a project management plan using a structured approach. Perform activities to produce project deliverablesdeliverables. Measure and monitor all aspects of the projects progress and takeappropriate action to meet project objectives. 9. ProjectSelectionMethodsSystem Description Analyzethepredictedvalueofthecompletedprojectsindifferent ways. y Maypresentthevalueintermsof:BenefitMeasurementBenefitCostRatio(BCR)Models(Economic ReturnonInvestment(ROI)Models) PresentValue(PV)&amp;NetPresentValue(NPV)PV l (PV) &amp; N PV l (NPV)InternalRateofReturn(IRR)OpportunityCost Usesdifferenttypesofmathematicalformulasandalgorithmsto Uses different types of mathematical formulas and algorithms to determinetheoptimalcourseofaction.LinearprogrammingMathematicalModels(Constrained NonlinearprogrammingOptimization)O ti i ti ) DynamicprogrammingDynamic programmingIntegerProgrammingMultiobjectiveprogramming 10. BenefitMeasurementModels(EconomicModels)AccountingConceptDescriptionKeysforProjectSelectionNotesValuetodayoffuturecashPresentvalue(PV) ThehigherthePV,thebetter. PV=FV/(1+r)nflows.Presentvalueofcashinflow AnegativeNPVisAccountsfordifferentprojectNetpresentvalue(NPV) (benefits)minuspresentunfavorable.Thehigherthedurations.valueofcashoutflow(costs). NPV,thebetter.TheinterestratethatmakesThehighertheIRR,theg ,Thereturnthatacompanywouldp yInternalrateofreturn(IRR) thI tl t f t(IRR) thenetpresentvalueofall t t lf llbetter. earnifitinvestsintheproject.cashflowequalzero.ThenumberoftimeperiodsThelowerthepaybackPaybackperiodneededtohitthebreakevenperiod,thebetter.point.AratioidentifyingtheABCRlessthan1isrelationshipbetweentheBenefitcostratio(BCR)unfavorable.ThehigherthecostandbenefitsofaBCR,thebetter.proposedproject.ThedifferenceinreturnbetweenachosenbhOpportunitycostinvestmentandonethatispassedup.Acostthathasbeenincurred ThisshouldnotbeafactorinSunkcostsandcannotbereversed.projectdecisions. 11. PresentValue(PV)and(NPV) PresentValue(PV) PresentValueoffutureCashflows.Higherthebetter.Present Value (PV) Present Value of future Cash flows. Higher the better. NOTE:presentvalueandNPVareonlymentiononceortwiceontheexam Youwillnothavetocalculateit,norknowformula,justunderstandtheconcept Amountofmoneyisalwaysmorevaluablesoonerthanlater,asthisenablestotakeadvantageofinvestmentopportunities. HigherPVmorepreferableproject.Apotentialinvestmentprojectisselected,ifvalueofNPVis&gt;=ZERO PV=FV/(1+i)n Example: ProjectXisexpectedtomake$50,000intwoyears.ProjectYisexpectedtomaketo $80,000 in threeyears.Ifthecostofcapitalis 5percent,whichprojecttochoose? UsingPVformula,PV=FV/(1+i)n , PVforProjectXis$69,107andProjectYis$45,351. ProjectY willreturnthehighestinvestmenttothecompanyandshouldbechosenoverProjectX. 12. NetPresentValueExamplepNote thatoe atotals areequal, butNPVs arenot becauseof the timevalue ofmoney y 13. InternalRateofReturn(IRR) Thisisjustanotherwayofinterpretingthebenefitfromtheproject.This is just another way of interpreting the benefit from the project.Itlooksatthecostoftheprojectasthecapitalinvestmentandtranslatestheprofitintotheinterestrateoverthelifeofthatinvestment. CalculationsforIRRarenotpartofthiscertification.ItisenoughifyouunderstandthatthegreaterthevalueforIRR,themorebeneficialthe Example: Youhavetwoprojectstochoosefrom:ProjectAwithanIRRof21%,orprojectBwithanIRRof15%,whichonceyouprefer? Answer:ProjectA. 14. BenefitCostRatio Thisisthevalueobtainedbydividingthebenefitbythecost. Thegreaterthevalue,themoreattractivetheprojectThe greater the value, the more attractive the project Abenefitcostration&gt;1meansthebenefitaregraterthanthecost Abenefitcostration Depreciation for 2015 is $ , p $1,168 to keep book value same aspsalvage value.--&gt; $21,168 - $20,000 = $1,168 (At this point, depreciation stops.) 26. SumoftheyearsdigitsmethodDepreciationexpense=(Cost Salvagevalue)xFractionFractionforthefirstyear=n/(1+2+3+...+n)Fractionforthesecondyear=(n1)/(1+2+3+...+n)Fractionforthethirdyear=(n2)/(1+2+3+...+n) ...Fractionforthelastyear 1 / (1+2+3+ + n)Fraction for the last year =1/(1+2+3+...+n) nrepresentsthenumberofyearsforusefullife.[Example,Sumoftheyearsdigitsmethod] CompanyApurchasedthefollowingassetonJanuary1,2011. CA h d th f ll it J1 2011 WhatistheamountofdepreciationexpensefortheyearendedDecember31,2011? Acquisitioncostoftheasset&gt;$100,000 Usefullifeoftheasset&gt;5years Residualvalue(orsalvagevalue)attheendofusefullife&gt;$10,000 Depreciationmethod&gt;sumoftheyearsdigits method Calculationofdepreciationexpense Sumoftheyearsdigits=1+2+3+4+5=15 Depreciationfor2011=($100,000 $10,000)x5/15=$30,000 Depreciationfor2012=($100,000 $10,000)x4/15=$24,000 Depreciationfor2013=($100,000 $10,000)x3/15=$18,000 Depreciationfor2014=($100,000 $10,000)x2/15=$12,000 Depreciationfor2015=($100,000 $10,000)x1/15=$6,000 Sumoftheyearsdigitsfornyears =1+2+3+......+(n1)+n=(n+1)x(n/2) Sumoftheyearsdigitsfor500years =1+2+3+......+499+500 =(500+1)x(500/2)=(501x500)/2=125,250 27. Projectselectionmethods exerciseAccountingConceptProjectAProjectB AnswerNetpresentvalue(NPV)1,000,000 $75,000$ AInternalrateofreturn(IRR) 13%17% BPaybackperiod 16months18monthsABenefitcostratio(BCR) 2.27 1.3A 28. StrategicPlanning&amp;ProjectSelection Strategicplanning involvesdetermininglongtermobjectives,predictingfuturetrends,andprojectingtheneedfornewproductsandservices OrganizationsoftenperformaSWOTanalysis A l i St AnalyzingStrengths,Weaknesses,Opportunities,andThreats th W k Ot itid Th t VeryimportanttohavemanagersfromoutsidetheITdeptassistinthe planningprocessastheycanhelptounderstandorganizational strategiesandidentifythebusinessareasthatsupportthemi d id if h b ihh Aspartofstrategicplanning,organizations: Identify potential projects Identifypotentialprojects Userealisticmethodstoselectwhichprojectstoworkon Formalizeprojectinitiationbyissuingaprojectcharter 29 29. Develop Project CharterProjects are authorized by someone external to the project such as a sponsor,PM0, or portfolio steering committee.The project initiator or sponsor should be at a level that is appropriate tofunding the project.They will either create the project charter or delegate that duty to the projectmanager.The initiators signature on the charter authorizes the project.ProjectsP j t are authorized d t i tth i d due to internal b i l business needs or external i fl d tl influences.This usually triggers the creation of a needs analysis, business case, ordescription of the situation the project will address.Chartering a project links the project to the strategy and ongoing work of theorganization. 30. 4.1.1DevelopProjectCharter:lnputs.1 Project Statement of Work: 1.The statement of work (SOW) is a narrative description ofproducts or services to be delivered by the project.For internal projects, the project initiator or sponsor provides p j , p j ppthe statement of work based on business needs, product, orservice requirements.For external projects, the statement of work can be receivedfrom the customer as part of a bid document, for example,request for proposal, request for information, request for bid, oras part of a contract. 31. 4.1.1DevelopProjectCharter:lnputsThe SOW references: Business need: An organizations business need may be based on aorganization smarket demand, technological advance, legal requirement, orgovernment regulation. Product scope description: This documents the characteristics ofthe product that the project will be undertaken to create. Strategic plan: AII projects should support the organizationsstrategic goals. The strategic plan of the performing organizationshould be considered as a factor when making project selectiondecisions and prioritizationprioritization. 32. 4.1.1DevelopProjectCharter:lnputsThe business case is created as a result of one or more of the following: Market demand (e.g., a car company authorizing a project to build more fuel-efficient cars in response to gasoline shortages), Organizational need (e.g., a training company authorizing a project to create a newcourse to increase its revenues), Customer request (e.g., an electric utility authorizing a project to build a newsubstation to serve a new industrial park) park), Technological advance (e.g,, an electronics firm authorizing a new project to developa faster cheaper and smaller laptop after ad ances in comp ter memor and faster, cheaper, advancescomputer memoryelectronics technology), 33. 4.1.1DevelopProjectCharter:lnputs Legal requirement (e g a paint manufacturer authorizing a project t0 establish (e.g.,guidelines for handling toxic materials), Ecological impacts (e.g., a company undertakes a project to lessen its environmentalimpact),or Social need (e.g., a non-governmental organization in a developing countryauthorizing a project to provide potable water systems to communities suffering fromhigh rates of cholera).g) 34. 4.1.1DevelopProjectCharter:lnputs.3 Contract: A contract is an input if the project is being done for an external customercustomer..4 Enterprise Environmental Factors: p The enterprise environmental factors that can influence the Develop Project Charter process include, but are not limited to: Governmental or industry standards, 0rganization infrastructure andinfrastructure, Marketplace conditions 35. 4.1.1DevelopProjectCharter:lnputs.5 Organizational Process Assets: 5 The organizational process assets that can influence the Develop Project Charter process include, but are not limited to: organizational standard processes, policies, and standardized process definitions for use in the organization; Templates (e.g., project charter template); and Historical information and lessons learned knowledge base. 36. 4.1.2DevelopProjectCharter:ToolsandTechniques.1 Expert Judgment: 1 Expert judgment is often used to assess the inputs used to develop theproject charter.Such judgment and expertise is applied to any technical and management details during this process.Such expertise is available from many sources, including: Other units within the organization, Consultants, , Stakeholders, including customers or sponsors, Professional and technical associations, industry groupsgroups, Subject matter experts, and Project management office (PM0). 37. 4.1.3DevelopProjectCharter:OutputsThe project charter documents the business needs current needs,understanding of the customers needs, and the new product, service,or result that it is intended to satisfy, such as: Project purpose or justification, Measurable project objectives and related success criteria, Highlevel requirements, Highlevel project description,...</p>


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