Project Integration

ManagementPMP Preparation Course

March – April 2015

Session 3

by Andrey Mikityuk

Head of Project Management Team

Credit Suisse Moscow

OverviewInitiating Planning Executing Monitoring

and

Controlling

Closing

Develop

Project

Charter

Develop

Project

Management

Plan

Direct and

Manage

Project Work

Monitor and

Control

Project Work

Perform

Integrated

Change

Control

Close Project

or Phase

Integration Management – balancing all knowledge areas with each

other

Develop Project Charter

Develop

Project

Charter

Inputs

1. Project Statement

of Work

2. Business Case

3. Agreements

4. Enterprise

Environmental

Factors

5. Organizational

Process Assets

Outputs

1. Project Charter

Tools and

Techniques

1. Expert Judgment

2. Facilitation

Techniques

• Business need

• Product Scope

Description

• Strategic Plan

• Business

need

• Cost/Benefit

Analysis

Contracts,

memorandums,

letters of intent,

verbal, email, etc.

• Government

standards

• Organizational

culture

• Marketplace

conditions

• Standards, policies,

procedures

• Templates

• Historical

information and

lessons learned

• Brainstorming

• Conflict resolution

• Problem solving

• Meeting

management

Business CaseFundamentals

every project should have a business case

project is selected only based on sound business case (no “management discretionary”

projects)

project manger should be assigned as early as feasible (prior to start of planning), and

understands the business case and reason for project selection

Business case is important – it affects decision-making

Project can be initiated as a result of:

Market demand

Organizational need (e.g., reduce costs)

Customer request

Technological advance

Legal requirement

Ecological impacts

Social need

Project Charter

Project Name and Description

Project Sponsor(s)

Business Case, Objectives and Success Criteria

Project manager and his authority

Pre-assigned resources

High-level requirements

Summary milestone schedule

High-level budget

High-level risks

Assumptions and constraints

Known stakeholders

Project approval requirements (who approves what)

Project charter

defines

project

boundaries

Project Selection

Benefit measurement models

(comparative approach)

• Murder board

• Peer review

• Scoring model

• Economic models

• Present Value (PV)

• Net Present Value (NPV)

• Internal Rate of Return

(IRR)

• Payback period

• Cost-Benefit ratio

• Economic Value Added

(EVA)

Constrained optimization

methods (mathematical approach)

• Linear programming

• Integer programming

• Dynamic programming

• Multi-objective programming

Methods

Image from John E. A. Bertram’s article “Constrained optimization in human walking: cost minimization and gait plasticity”

http://jeb.biologists.org/content/208/6/979.figures-only

IRR formal definition: rate at which

NPV = 0

Simple: rate which your project

returns if you treat it as investment

Economic ModelsYou may be asked to calculate PV and cost/benefit; for others just

understand the idea

Payback period – number of

periods (years / months) to

return invested money (also:

break-even point)Cost-Benefit ratio =

Benefit (Revenue) / Cost

Remember: revenue, not profit

Economic Value Added (EVA)

= Net Operating Profit After

Taxes – Cost of Capital

Return of Investment =

(revenue – cost) / cost (simple)

Total Cost of Ownership (TCO) –

cost including non-project costs

(operational)

Few More Economic

Concepts Opportunity Cost

Sunk Costs

Law of Diminishing Returns

Working Capital

Depreciation

◦ Straight-line depreciation

◦ Accelerated depreciation

Develop Project Management

Plan

Develop

Project

Management

Plan

Inputs

1. Project Charter

2. Outputs from other

processes

3. Enterprise

Environmental

Factors

4. Organizational

Process Assets

Outputs

1. Project

Management Plan

Tools and

Techniques

1. Expert Judgment

2. Facilitation

Techniques

• Governmental or

industry

standards

• PM practices for

the industry (e.g.

construction or

software

development)

• PMIS

• Organizational

structure, culture,

management

practices

• Infrastructure

(existing facilities

and capital

equipment)

• Staff

management

practices

(hiring/firing,

performance

reviews, etc)

• Standardized guidelines

• Project Management plan template

• Guideline for tailoring

• Project closure guidelines (validation and

acceptance criteria)

• Change control procedures

• Project files from previous projects

• Historical information and lessons learned

• Configuration management knowledge base (versions

and baselines of all standards and policies)

• Tailor the process

• Develop technical details

• Determine resources and skills

needed

• Define level of configuration

management

• Determine which projects will be

subject for change control

• Set priorities

Project Management PlanManagement Plans

Change MP

Configuration MP

Scope MP

Requirements MP

Schedule MP

Cost MP

Quality MP

Process Improvement plan

Human Resource MP

Communications MP

Risk MP

Procurement MP

Stakeholder MP

Baselines

Scope

Schedule

Cost

Other

Life Cycle of the project

Details of tailoring decisions

How integrity of project

baselines will be maintained

Knowledge Area

Integration

Scope

Schedule

Cost

Quality

Human Resource

Communications

Risk

Procurement

Stakeholder

performance

measurement

baseline

Good project plan is…

Iterative and non-contradictory

Consistent with PMO guidelines

Validated with program/portfolio managers

Impact from/to other projects incorporated

Has inputs from all internal stakeholders, including:

◦ Team members

◦ Resource managers

◦ Sponsor

Has buy-in (approved)

Realistic (everybody believe it can be met)

Don’t forget kick-off meeting which finalizes planning process!

Direct and Manage Project

Work

Direct and

Manage

Project Work

Inputs

1. Project

Management Plan

2. Approved Change

Requests

3. Enterprise

Environmental

Factors

4. Organizational

Process Assets

Outputs

1. Deliverables

2. Work performance

data

3. Change requests

4. Project

management plan

updates

5. Project documents

updatesTools and

Techniques

1. Expert Judgment

2. Project

Management

Information

System (PMIS)

3. Meetings

• Organizational,

company or

customer culture

• Infrastructure

(existing

facilities and

capital

equipment)

• Staff

administration

• Stakeholder risk

tolerances

• PMIS

• Standardized guidelines and work

instructions

• Communication requirements (allowed

communication media, record retention and

security requirements)

• Issue and defect management procedures

• Process measurement database

• Project files from previous project

• Issue and defect management databases

• Corrective actions

• Preventive

actions

• Defect repairs

• Information exchange

• Brainstorming, options

evaluation or design

• Decision making

Examples: requirements,

project logs, risk register,

stakeholder register

Monitor and Control Project

Work

Monitor and

Control

Project Work

Inputs

1. Project Management

Plan

2. Schedule forecasts

3. Cost forecasts

4. Validated changes

5. Work performance

information

6. Enterprise

Environmental Factors

7. Organizational

Process Assets

Outputs

1. Change requests

2. Work performance

reports

3. Project

management plan

updates

4. Project documents

updates

Tools and

Techniques

1. Expert judgment

2. Analytical

techniques

3. Project

management

information system

4. Meetings

• SV (schedule

variance),

• SPI (schedule

performance

index)

• Regression analysis

• Grouping methods

• Causal analysis

• Root cause analysis

• Forecasting methods

• Failure mode and effect analysis

(FMEA)

• Fault tree analysis (FTA)

• Reserve analysis

• Trend analysis

• Earned value management

• Variance analysis

Status reports, memos,

justifications, information

notes, recommendations

and updates

• CV (cost

variance),

• CPI (cost

performance

index)

• Governmental

or industry

standards

• Work

authorization

system

• Stakeholder

risk tolerance

• PMIS • Organizational communication

requirements

• Financial control procedures (time

reporting, expenditure reviews, etc.)

• Issue and defect management

procedures

• Change control procedures

• Risk control procedures

• Process measurement database

• Lessons learned database

• Corrective actions

• Preventive

actions

• Defect repairs

Actions in Monitor and Control

project Work Compare actual performance against the project

management plan

Assess performance to determine if any corrective or preventive actions are needed

Identify new risks and track existing

Maintain an accurate, timely information base concerning the project’s products

Provide information to support status reporting

Provide forecasts to update current cost/schedule information

Monitor implementation of approved changes

Provide appropriate reporting of project status to program management

Change requests

Preventive actions

(prevent anticipated

problem)

Corrective actions

(problem already

occurred)

Defect Repairs

(defect in deliverable)

All changes should pass change control process before implementation.

Good project manager:

• Has realistic and up-to-date plans and baselines

• Creates metrics which cover all aspects of the project

• Continuously tracks project performance against baselines

• Systematic, not randomly focused on different areas

• Proactively looks out for problems

• Looks for a root cause of a problem before proposing action

• Evaluates effectiveness of proposed actions

Perform Integrated Change

Control

Perform

Integrated

Change

Control

Inputs

1. Project

Management Plan

2. Work performance

Reports

3. Change requests

4. Enterprise

Environmental

Factors

5. Organizational

Process Assets

Outputs

1. Approved change

requests

2. Change log

3. Project

management plan

updates

4. Project documents

updates

Tools and

Techniques

1. Expert Judgment

2. Meetings

3. Change control

tools

• PMIS

• Change control procedures

• Process measurement documents

• Project documents

• Configuration management knowledge base

• Change

management plan

• Baselines (scope,

schedule, cost)

Change control meetings

• Resource

availability

• Schedule and

cost data

• EVM reports

• Burnup or

burndown

charts

Change life cycleDirect and

Manage

Project

Work

Monitor and

Control

Project Work

Perform

Integrated

Change

Control

New

Status of the

change

Created

Create formal

change

request

Approved

RejectedUpdate the

change log

Update the

change log

Update PM plan

and project

documents

1. Assess the change

• against Project Charter (is it part of the project at

all?)

• against Risk log (check if it change is a result of

materialized risk, and has reserves for it already)

2. Assess impact

• within knowledge area

• on all other project constraints

3. Identify options

4. Approve/Reject the change (as defined in

Change MP)

• Project manager

• Change Control Board (CCB)

• Customer (if needed)

As part of Integrated Change Control you also should:

• Prevent the root cause of changes

• Manage stakeholders’ expectations by communicating statuses of changes

Configuration management

Configuration Management (CM) is another part of Perform

Integrated Change Control process

What is that all about?

• Problem occurred

because “wrong

version of something”

have been used

• Team members don’t

know where to look

for actual versions of

documents

• Lack of control for

changes

Step 1. Configuration identification

Which deliverables needs to be versioned /

controlled?

Step 2. Configuration status accounting

What are the current versions of all

deliverables?

What are the open change requests?

Step 3. Configuration verification and

audit

Independent review to establish compliance

Close Project or Phase

Close

Project or

Phase

Inputs

1. Project

Management Plan

2. Accepted

deliverables

3. Organizational

Process Assets

Outputs

1. Final product,

service or result

transition

2. Organizational

process assets

updates

Tools and

Techniques

1. Expert Judgment

2. Analytical

techniques

3. Meetings

• Closure

guidelines or

requirements

• Historical

information and

lessons learned

• Regression analysis

• Trend analysis

Can include partial

or interim

deliverables for

phased or

cancelled projects

• Project files

• Project or phase

closure documents

• Historical information

Actions during project closureConfirm work is done to requirements

Complete procurements closure (another knowledge area!)

Gain final acceptance of the product

Complete financial closure

Hand off completed product

Solicit feedback from the customer about the project

Complete final performance reporting

Index and archive records

Gather final lessons learned and update knowledge base