Part I

Project Initiation

CHAPTERS
1 2 3 Introducing Project Management Examining the Project Life Cycle and the Organization Adapting the Project Management Processes

1
Introducing Project Management
CERTIFICATION OBJECTIVES
1.01 1.02 1.03 The PMBOK, this Book, and the PMP Exam Defining What a Project Isand Is Not Defining Project Management 1.04 Examining Related Areas of Project Management Two-Minute Drill Self Test

Q&A

Chapter 1: Introducing Project Management

our PMP Examination is based on your experience, your ability to problem solve, and a strong foundation in project management. This chapter aims to explain how both this book and PMIs Guide to the Project Management Body of Knowledge can help you grasp what you must know to pass the exam. From now on, references to PMIs Project Management Body of Knowledge will be called the PMBOK Guide Third Edition (pronounced pim-bok). Besides learning about the PMBOK and the exam, well dive into what a project is, how project management works, the process itself, and knowledge areas regarding both project management and how project offices operate. Weve lots to do, so lets go!

CERTIFICATION OBJECTIVE 1.01

The PMBOK, this Book, and the PMP Exam

If youve ever sat down to read the PMBOK, youve either obviously had lots of time on your hands, you were really curious about it, or someone told you it was required reading for passing the PMP examination. Heres the truth about the PMBOK: its boring. My apologies to all my friends at PMI, but its true. The PMBOK is, however, concise, organized, and an excellent reference manual. I use it all the time. But its not written to be a thriller. The Third Edition of the PMBOK will be referenced throughout this book. Why? Well, your PMP exam is largely based on the facts, figures, and subtleties of the PMBOK. The good news is that unlike the PMBOKfine book that it isthe book you have in your hands is written in plain language. This book, unlike the PMBOK, focuses on how to pass the PMP exam. It will also help you be a better project manager and explain some mysterious formulas and concepts, but its main goal is to get you over the hump toward those three glorious letters: PMP.

All About the PMBOK

The PMBOK is a guide, not the end-all-be-all of project management. Its based on whats generally recognized as good practice on most projects most of the time. Its not specific to IT, construction, manufacturing, or any other discipline, being applicable to any industry, any project, and any project manager.

The PMBOK, this Book, and the PMP Exam

For the most part, if you follow the PMBOK, youll increase your odds of project success. That means youll be more likely to complete the project scope, reach the cost objectives of your projects budget, and achieve those schedule commitments your project must adhere to. But theres no guarantee. The PMBOK readily admits that not everything in it should be applied to every conceivable project. That just wouldnt make sense. Consider a small project to swap out all of the workstation lights in an office building versus that of building a skyscraper. Guess which one needs more detail and will likely implement more of the practices the PMBOK defines. The skyscraper project, of course.

All About this Book

Your PMP examination is based largely on the PMBOK. As mentioned earlier, the PMBOK, is not a study guide. But this book is. The following explains what this book will do for you:
Cover all of the objectives as set by PMI for the PMP examination Focus only on exam objectives Prep you to pass the PMP exam, not just take it Encapsulate exam essentials for each exam objective Offer 725 PMP total practice questions Serve as a handy project management reference guide Not be boring

Every chapter in this book correlates to a chapter in the PMBOK. If you have a copy of the PMBOK, blow the dust off it and flip through its 12 chapters. Now flip through this book and youll see that it covers the same 12 chapters in the same order. And theres a magical Chapter 13. Okay, its not magical, but it explains in detail the one-page PMP Code of Professional Conduct which is a major exam objective. Chapter 13 will cover leadership, motivation, and how to balance stakeholder interests. Chapter 13 also introduces the concept of project priorities and dealing with cultural issues. Each chapter is full of exciting, action-packed, and riveting information. Well, thats true if you find the PMP exam exciting, action-packed, and riveting. Anyway, each chapter covers a specific topic relevant to the PMP exam. The first three chapters of this book offer a big picture view of project management, while the remaining ten chapters are the ones most specific to the PMP exam.

Chapter 1: Introducing Project Management

The questions in this book will give you some idea of what to expect on the actual PMP exam. Those contained here, though not the actual exam questions,

are similarly styled to what youll eventually run into. Focus on understanding why your answer to a question was right or wrong. The questions are part of the learning process.

In each chapter, youll find an Exam Essential sidebar. This is what I considered to be the most important message from the chapter. At the end of the chapter, youll find a quick summary, key terms, and a two-minute drill that recaps all the major points of the chapter. Then youll be given a 25-question exam thats specific to just that chapter.

All About the PMP Exam

Not everyone can take the PMP examyou have to qualify to take it. And this is good. The project management community should want the PMP exam to be tough, the application process rigorous, and the audits to be thorough. All of this will help elevate the status of the PMP and ensure it doesnt fall prey to the paper certifications other professions have seen. Here are the major details of the 2005 PMP examination:
A score of 61 percent is required to pass the exam. The exam has 200 questions,

25 of which dont actually count towards your passing score. These 25 questions are scattered throughout your exam and are used to collect stats regarding student responses to see if they should be incorporated into future examinations. So, this means youll actually have to answer 106 correct questions out of 175 live questions.
Clear and factual evidence of project management experience must be shown

in each process group. On your PMP exam application youll have to provide specifics on tasks youve completed in a process group. (See Table 1-1 for specific examples from PMI.)
Each application is given an extended review period. If your application

needs an audit, youll be notified via e-mail.

Applicants must provide contact information for supervisors on all projects

listed on their PMP exam application. In the past, applicants did not have to provide project contact information unless their application was audited. Now each applicant must give project contact information as part of the exam.

The PMBOK, this Book, and the PMP Exam

Once the application has been approved, candidates have one year to pass

the exam. If you procrastinate in taking the exam by more than a year, youll have to start the process over.
PMP candidates are limited to three exam attempts within one year. If

they fail each time during that period, theyll have to wait one year before resubmitting their exam application. The PMP exam will test you on your experience and knowledge in six different areas, as Table 1-1 shows. Youll have to provide specifics on tasks completed in each knowledge area of your PMP examination application. The following domain specifics and their related exam percentages are taken directly from PMIs web site regarding the PMP examination.
TABLE 1-1

Exam Domain
Initiating the Project

Domain Tasks
Conduct Project Selection Methods Define Scope Document Project Risks, Assumptions, and Constraints Identify and Perform Stakeholder Analysis Develop Project Charter Obtain Project Charter Approval

Percentage of Exam
11.59 percent

PMP Candidates Must Have Experience in Each of the Six Domains to Pass the PMP Exam.

Planning the Project Define and Record Requirements, Constraints, and Assumptions Identify the Project Team and Define Roles and Responsibilities Create the WBS Develop a Change Management Plan Identify Risks and Define Risk Strategies Obtain Plan Approval Conduct Kick-off Meeting

22.7 percent

Chapter 1: Introducing Project Management

TABLE 1-1

Exam Domain
Executing the Project

Domain Tasks
Execute Tasks Defined in Project Plan Ensure Common Understanding and Set Expectations Implement the Procurement of Project Resources Manage Resource Allocation Implement a Quality Management Plan Implement Approved Changes Implement Approved Actions and Workarounds Improve Team Performance

Percentage of Exam
27.5 percent

PMP Candidates Must Have Experience in Each of the Six Domains to Pass the PMP Exam. (cont.)

Monitoring and Controlling the Project Measure Project Performance Verify and Manage Changes to the Project Ensure Project Deliverables Conform to Quality Standards Monitor All Risks Closing the Project Obtain Final Acceptance for the Project Obtain Financial, Legal, and Administrative Closure Release Project Resources Identify, Document, and Communicate Lessons Learned Create and Distribute Final Project Report Archive and Retain Project Records

21.03 percent

8.57 percent

Dening What a Project Isand Is Not

TABLE 1-1

Exam Domain

Domain Tasks
Measure Customer Satisfaction

Percentage of Exam

PMP Candidates Must Have Experience in Each of the Six Domains to Pass the PMP Exam. (cont.)

Professional and Social Responsibility Ensure Individual Integrity Contribute to the Project Management Knowledge Base Enhance Personal Professional Competence Promote Interaction Among Stakeholders TOTAL

8.61 percent

100.00 percent

CERTIFICATION OBJECTIVE 1.02

Defining What a Project Isand Is Not

Projects are endeavors. Projects are temporary. A project creates some thing, a service, or brings about a result. I know, I know, it sounds like some marriages. To define a project, you only have to think of some work that has a deadline associated with it, involves resources besides you, has a budget to satisfy the scope of the project work, and you can state what the end result of the project should be. So, projects are temporary work assignments, with a budget, that require some amount of resources, some amount of time to complete, and create a definite deliverable, service, or environment. Lets look at project characteristics in more detail.

Projects Are Temporary

Regardless of what some projects may feel like, they are usually temporary. Like a good story, projects have a beginning, middle, and an end. Projects end when the scope of the project has been metusually. Sometimes projects end when the project runs out of time, out of cash, or it becomes clear that the project wont be able to complete the scope objectives, so its scrapped.

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Chapter 1: Introducing Project Management

The goal of a project will vary based on what the projects deliverable is, but typically the end result is to create something thatll be around longer than the process it took to create it. For example, if youre managing a project to create a skyscraper, you expect the skyscraper to be around much longer than the time it took to build the skyscraper. So temporary usually means that the project is temporary, not the deliverable. Notice the word usually? You can have a project to host a giant picnic for your entire organization and its customers. The projects logistics, invitations, and coordination of chefs may take months to complete, but the picnic will only last for a few hours. However, you could argue that although the picnic event was temporary the memories and goodwill your picnic created could last a lifetime. (That better be one good picnic!) Sometimes temporary describes the market window. Weve all seen fads come and go over the past years: pet rocks, the dot.com boom, streaking, and more. Projects can often be created that capitalize on fads, which means projects have to deliver fast before the fad fades away and the next craze begins. Fads and opportunities are temporary; projects which feed off of these are temporary as well. Whens the last time you managed a project where the entire project team stuck with the project through the entire duration? It probably doesnt happen too often. Project teams are often more temporary than the project itself, but typically project teams only last as long as the project does. Once the project is complete, the team disbands and the project team members move onto other projects within the organization.

Projects Create Unique Products, Services, or Results

This one isnt tough to figure out. Projects have to create a thing, invent a service, or change an environment. The deliverable of the project, a successful project, satisfies the scope which was created way, way back when the project got moving. Projects create the following:
Things

Projects can create a thing such as a skyscraper, which is the end of the project. Or projects can create components which contribute to other projects or things, such as a project to install all of the glass windows in a skyscraper. A project creating a service could establish a new call center, an order fulfillment process, or a faster way to complete inventory. Projects can be research-driven. Consider a research and development project with a pharmaceutical company to find a cure for the common cold.

Services Results

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11

Projects are unique. This means that every project you ever do is different than all the other projects youve done in the past. Even if its the same basic approach to get to the same end result, there are unique factors within each project such as the time it takes, the stakeholders involved, the environment the project takes place in, and on and on the uniqueness goes. Basically, all projects are unique even if your company does the same type of project over and over. Lucky you.

Progressive Elaboration
All projects begin as a concept. A project concept to create a new product or service typically includes a broad vision of what the end result of the project will be. The temporary project results in the unique product or service through progressive elaboration. Progress elaboration is simply developing in steps and continuing by increments. For example, youd take the project scope, decompose it to the WBS, and then make an activity list and so on. This is just one example of progressive elaboration. As a project moves closer to completion, the identified needs that launched the project are revisited and monitored. Complete understanding of the needsand the ability to fulfill those needscomes from progressive elaboration. Progressive elaboration is an iterative process designed to correctly and completely fulfill the project objectives. This is evident in how the planning and execution processes each contribute to one another. A similar example can be seen in the process to create a Work Breakdown Structure (WBS). The WBS begins with the project vision, which is then elaborated upon to create the project scope, and then expanded again into the WBS, and so on. Consider a concept to construct a new building that would handle the manufacturing and shipping of blue jeans. It would begin broadly, with materials delivered, assembly equipment, and the outward-bound shipping bays. As the project team continues to research the needs and expectations of the project, the project vision would be refined, honed, and polished to a detailed outline of what the project would deliver. As you can see in Figure 1-1, through incremental steps, the project plan is developed and the unique project deliverables are created.

Projects vs. Operations

Meet Jane. Jane is a project manager for her organization. Vice presidents, directors, and managers with requests to investigate or to launch potential projects approach her dailyor so it seems to Jane. Just this morning the Sales Manager met with Jane

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Chapter 1: Introducing Project Management

FIGURE 1-1

Progressive elaboration is the refinement that project components pass through to reach their final state, such as a project plan.

because he wants to implement a new direct mail campaign to all of the customers in the sales database. He wants this direct mail campaign to invite customers to visit the company web site to see the new line of products. Part of the project also requires that the company web site be updated so its in sync with the mailing. Sounds like a project, but is it really? Could this actually be just a facet of an ongoing operation? In some organizations, everything is a project. In other organizations, projects are rare exercises in change. Theres a fine line between projects and operations, and often these separate entities overlap in function. Consider the following points shared by projects and operations:
Both involve employees Both typically have limited resources: people, money, or both Both are hopefully designed, executed, and managed by someone in charge

In the preceding example, Jane has been asked to manage a direct mail campaign to all of the customers in the sales database. Could this be a project? Sureif this company has never completed a similar task and there are no internal departments that do this type of work as part of their regular activities. Often, projects are confused with general business duties: marketing, sales, manufacturing, and so on. The tell-tale sign of a project is that is has an end date and that its unique from other activities within the organization. Some examples of projects include:

Dening What a Project Isand Is Not

13

Designing a new product or service Converting from one computer application to another Building a new warehouse Moving from one building to another Organizing a political campaign Designing and building a new airplane

The end results of projects can result in operations. For example, imagine a company creating a new airplane. This new airplane will be a small personal plane (like one of those bubble cars from The Jetsons) that would allow people to fly to different destinations with the same freedom they use in driving their car. The project team will have to design an airplane from scratch thatd be similar to a car so consumers could easily adapt and fly to Sheboygan at a moments notice. The project to create a personal plane is temporary, but not necessarily short term. It may take years to go from concept to completionbut the project does have an end date. A project of this magnitude may require hundreds of prototypes before a working model is ready for the marketplace. In addition, there are countless regulations, safety issues, and quality control concerns that must be pacified before completion. Once the initial plane is designed, built, and approved, the end result of the project is business operations. As the company creates a new vehicle, it would follow through with their design by manufacturing, marketing, selling, supporting, and improving their product. The initial design of the airplane is the projectthe business of manufacturing it, supporting sold units, and marketing the product constitutes the ongoing operations part of business. Operations are the day-to-day work that goes on in the organization. A manufacturer manufactures things, scientists complete research and development, and businesses provide goods and services. Operations are the heart of organizations. Projects, on the other hand, are short-term endeavors that fall outside of the normal day-to-day operations an organization offers. Lets be realistic. In some companies, everythings a project.This is probably true if you work in an organization that completes projects for other companies. Thats fine and acceptable, however, since youre participating in management by working on the project.

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Chapter 1: Introducing Project Management

Once the project is complete, the project team moves along to other projects and activities. The people who are actually building the airplanes on the assembly line, however, have no end date in sight, and will continue to create airplanes as long as theres a demand for the product.

Projects and Strategic Planning

Customers are the most important persons in a project. Theyre the ones the project is for. Sometimes, if not always, projects are weird. I say weird because projects often dont fit into the normal day-to-day operations of an organization. Maybe weird isnt the best word after all. How about unique? Theyre unique because they dont fit into the regular operations of a company and theres been some special reason why the project has been created. Work and deliverables that dont fit into the normal day-to-day operations but still have merit for the organization are logical opportunities for a project. Consider the reasons why a project is created:
An opportunity based on market conditions Special needs within your company

Your company is growing so quickly a project is launched to create a sales- and order-fulfillment application. All of the computers are older than Moses, so a project is launched to replace all of the computers and standardize office applications. Many organizations, such as IT integrators, construction companies, architects, and dozens more, complete projects for other people. Customers drive new projects. Technology changes so quickly that there are constantly new technical projects within an organization. Laws can cause a new project to launch. Consider the recent Sarbane-Oxley requirements, for example. This new law spurred many projects to adhere to the new privacy requirements. Laws and regulations within different industries can also spur new projectsconsider pharmaceutical, insurance, health care, and on and on. Regulations are required, but standards are guidelines.

Customers

Technology Lawyers

Dening What a Project Isand Is Not

15

INSIDE THE EXAM

The PMP exam is not for rookies. The application process alone can filter out the unqualified and the merely curious. Youve purchased this book to find out more information on how to pass the exam, what the exam entails, and to prep for your exama wise decision. Now, make another wise decision: begin completing your PMP exam application. The application process can be lengthy since youll have to track down past information relating to projects youve completed. By starting sooner, rather than later, in completing your exam application, youll be focusing more on completing your exam studies than completing the exam application. In addition, response time from the Project Management Institute (PMI) to accept and approve your application can vary from a few days to weeks. Start now and youll be on your way. You will be presented with scenariobased questions that will test your project management abilities. The chapter exams and the exams on the CD have been written to be tricky, tough, and to make you think. Practice these exams over and over and theyll help you prepare to pass your PMP exam. Besides answering practice questions, youll want to focus on how the project manager should react in different scenarios. Specifically, youll need to know how the project manager works through the project processes. You should be familiar with the project management process groups, what a project deliverable is, and the requirements of a project scope. All projects are bound by the Triple Constraints of Project Management: time, cost, and scope. Quality is affected by the balance of these three components. The Triple Constraints is also known as the Iron Triangle, as shown in the illustration below. If any one angle of the triangle changes, then the other two should change as wellif not, then quality will suffer.

Know that the project moves through phases to reach completion. The project manager oversees the project work as it moves through phases, but the project customer must approve the work. Specifically, the results of phases must pass through scope verification, which is the formal acceptance of the project work.

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Chapter 1: Introducing Project Management

CERTIFICATION OBJECTIVE 1.03

Defining Project Management

Project management is the supervision and control of the work required to complete the project vision. The project team carries out the work needed to complete the project, while the project manager schedules, monitors, and controls the various project tasks. Projects, being the temporary and unique things that they are, require the project manager to be actively involved with the project implementation. They are not self-propelled. Project management is comprised of the following nine knowledge areas. Chapters 4 through 12 will explore these knowledge sections in detail.
Project Integration Management

This knowledge area focuses on creating the project charter, the project scope statement, and a viable project plan. Once the project is in motion, then Project Integration Management is all about monitoring and controlling the work. If changes happen, and we know they will, then you have to determine how that change may affect all of the other knowledge areas. This knowledge area deals with the planning, creation, protection, and fulfillment of the project scope. One of the most important activities in all of project management happens in this knowledge area: creation of the Work Breakdown Structure. Oh, joy! Time management is crucial to project success. This knowledge area covers activities, their characteristics, and how they fit into the project schedule. This is where you and the project team will define the activities, plot out their sequence, and calculate how long the project duration will actually take. Cost is always a constraint in project management. This knowledge area is concerned with the planning, estimating, budgeting, and control of costs. Cost management is tied to time and quality management screw either of these up and the project costs will increase. What good is a project thats done on time if the scope isnt complete, or the work is faulty, or the deliverable is horrible? Well, none. This knowledge area centers on quality planning, assurance, and control.

Project Scope Management

Project Time Management

Project Cost Management

Project Quality Management

Dening Project Management

17

Project Human Resource Management

This knowledge area focuses on organizational planning, staff acquisition, and team development. You have to somehow acquire your project team, develop this team, and then lead them to the project results. 90 percent of a project managers time is spent communicating. This knowledge area details how communication happens, outlines stakeholder management, and shows how to plan for communications within any project. Every project has risks. This knowledge area focuses on risk planning, analysis, monitoring, and control. Youll have to complete qualitative analysis and then quantitative analysis in order to adequately prepare for project risks. Once the project moves forward, youll need to monitor and react to identified risks as planned. Projects often need things and services in order to reach closing. This knowledge area covers all the business of project procurement, the processes to acquire and select vendors, and contract negotiation. The contract between the vendor and the project managers organization will guide all interaction between the project manager and the vendor.
Project Procurement Management

Project Communications Management

Project Risk Management

You will learn about each of these knowledge areas in detail throughout the book. What happens in one knowledge area affects what happens in other knowledge areas. Project integration management is the coordination of these events.

Project Management Application Areas

Project management application areas just means that projects fit into different disciplines, but the approach to project management is similar. For example, an application area is construction. Another application area is information technology management. Another is manufacturing. Each application has specific approaches, disciplines, and characteristics that are totally different from any other application in the world. Now, within each application area you have a project management approach. In terms of the PMP exam, the project management approach is basically the same. The project work itself, however, is totally unique. In other words, and these are good words, you wont have to know much at all about application areas to pass your PMP exam. You will, however, need to know all about project management to pass the exam.

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Chapter 1: Introducing Project Management

The following are some examples of application areas:

Sales, law, manufacturing, marketing, and any other functional disciplines

youd find in just about any company

Technical disciplines such as mechanical engineering, architectural design,

software development, and tons more

Management categories such as consulting, research and development, and

community development

Management by Projects
In todays competitive, tight-margin business world, organizations have to move and respond quickly to opportunity. Many companies have moved from a functional environmentthat is, organization by functionto an organization, or management, by projects. A company that organizes itself by job activity, such as sales, accounting, information technology, and other departmental entities is a functional environment. A company that manages itself by projects may be called a projectized company. An organization that uses projects to move the company forward is using the Management by Projects approach. These project-centric entities could manage any level of their work as a project. These organizations, however, apply general business skills to each project to determine their value, efficiency, and, ultimately, their return on investment. As you can imagine, some projects are more valuable, more efficient, or more profitable than others. There are many examples of organizations that use this approach. Consider any business that completes projects for their clients, such as architectural, graphic design, consulting, or other service industries. These service-oriented businesses typically complete projects as their business. The following are some other examples of management by projects:
Training employees for a new application or business method Marketing campaigns The entire sales cycle from product or service introduction, proposal, and

sales close
Work completed for a client outside of the organization Work completed internally for an organization

Dening Project Management

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Understanding the Project Environment

The project environment is more than where the project work will take placethough that should also be considered. The project environment is a term to describe the impact the project will have, good or bad, on the cultural, political, and physical environment. The project manager must examine the project environment and consider the influence of each environment on the projects successand vice versa. Consider the influence and impact of each of the following:
Physical environment

Before a project begins, the project manager should ensure that project team members or consultants evaluate the effect of the project on the physical environment where the project will take placeand how the physical environment will affect the projects success. The ecology, geographical makeup, and the health of the environment must be considered as part of the project planning processes. This one isnt pleasant. Every project manager should examine how the project might affect the cultural and social environment, and how the cultural and social environment might affect the project. Consider a technical project that will move all of an organizations computer operating systems (OSes) to a standard OS. What if the majority of the employees dont like the OS thats been selected? Therell be complaints, work slowdown, a decline in morale, and challenges throughout the project implementation. In addition, the project manager (PM) must understand the autonomy a PM has within an organization and the affect the level of power will have on the projects success. Projects that span multiple countries require knowledge of the laws and customs of each environment the project influences. Project managers must also consider the political consideration of international projects. Finally, the environment also includes time zone differences, holidays, travel logistics, face-to-face and teleconference meetings, currency exchanges, and language barriers.

Cultural and social environment

International and political environment

A nice way to term a cultural issue is to call it cultural achievability. Its a way to describe that unhappiness and unrest that often accompanies an unpopular or unpleasant project. It means its difficult to gain consensus and buy-in on the projects value in an organization.

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Chapter 1: Introducing Project Management

Relying on General Management Skills

You cannot be an effective project manager without some abilities as a manager. Makes sense, right? Get this: management is focused on results. So, to get your project team, vendors, and stakeholders to create project results, you should rely on the following:
Planning for project strategy, tactics to achieve objectives, and operational

planning
Accounting and cash flow management Sales and marketing (within your organization and to stakeholders outside of

the project)
Procurement processes, including contracting procedures Logistics for travel, schedule, supply chain, and order fulfillment Human resource practices and procedures, including working within

organizational structures, managing team personnel, compensation, benefits, and helping project team members reach their career goals
Industry-specific health and safety practices Working with information technology

Relying on Interpersonal Skills

Having interpersonal skills doesnt mean youre the nice guy everyone takes advantage of. Interpersonal skills are your abilities as a project manager to get along with stakeholders, be somewhat likeable, and work with others to reach an outcome on disagreements, problems, and challenges within the project. Interpersonal skills include the following:
Problem solving Motivating

Part of being a good project manager is the ability to problem solve. Even the PMP exam is a good example of problem solving. You need to have the ability to motivate your project team to move forward with the project, their work, and energize your project team to excel. Communication is a huge part of the project managers job, so youll have to be able to communicate effectively with your project team and stakeholders.

Communicating

Examining Related Areas of Project Management

21

Influencing the organization

You know there are undercurrents of politics, procedures, and other influences that affect your projects ability to move forward. The ability to influence the organization is how you operate within stated and implied confines to get things done. A good project manager is a good leader. Leadership involves motivating and inspiring the project team and stakeholders to move forward. Its not unusual for conflicts to arise within a project. The project manager must be able to negotiate, solve conflicts, and keep the project moving forward.

Leadership

Negotiations

CERTIFICATION OBJECTIVE 1.04

Examining Related Areas of Project Management

Project management is the administration of activities to change the current state of an organization into a desired future state. It is a complex organization of decisionmaking, planning, implementation, control, and documentation of the experience from start to finish. In addition to traditional project management, there are related areas you may encounter, have encountered, or are actively participating in. These related aspects often are superior to individual project management, are part of project management, or equate to less than the management of any given project. In this section, well dissect the related areas of project management and see how they tie together to change a current state to a desired future state.

Program Management
Program management is the management of multiple projects all working in unison toward a common goal. Consider all of the work that goes into building a skyscraper. Within the overall work, there may potentially be several projects that lead to the end result, as demonstrated in Figure 1-2. You could have a project for the planning and design of the building. Another project could manage the legal, regulatory, and project inspections that would be required for the work to continue. Another project could be the physical construction of the building, while others might entail electrical wiring, elevators, plumbing, interior design, and more. Could one project manager effectively manage all of these areas of expertise? Possibly, but probably not.

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Chapter 1: Introducing Project Management

FIGURE 1-2

Programs consist of multiple projects working together toward a common goal.

A better solution could be to create a program that is comprised of multiple projects. Project managers would manage each of the projects within the program and report to the Program Manager. The Program Manager would ensure that all of the integrated projects worked together on schedule, on budget, and ultimately towards the completion of the program. In other instances, the program is an ongoing effort that really does not have an end in sight. Consider the publication of a newspaper, newsletter, web site, or magazine. Essentially, the workers of these publications do the same activities for each issue, but each issue is unique and different than the last. Another example is NASAs space program. Its an organization developed to explore space, and is comprised of individual projects within that program. Each project under the program has its own goals, initiatives, and objectives that are in alignment with the overall mission of the space program. Programs are a collection of individual projects working in alignment towards a common end.

Project Portfolio Management

Often projects are lumped into a portfolio rather than a program. A program is a collection of projects that work together for a common cause. For example, a program could be a collection of projects to build a skyscraper. Portfolio projects could be interdependent, but they dont have to be. A portfolio is not the same as a program, but it is a collection of projects. The projects in a portfolio could be within one line of business, or based on the strategies within an organization, or follow the guidance of one director within an organization.

Examining Related Areas of Project Management

23

Project selections may pass through a project selection committee where these executives will look at the return on investment, the value of the project, risks associated with taking on the project, and other attributes of the project. This is all part of project portfolio management.

Subproject Implementation
Subprojects are an alternative to programs. Some projects may not be wieldy enough to require the creation of a full-blown program, yet still be large enough that some of the work can be delegated to a subproject. A subproject exists under the parent project, but follows its own schedule to completion. Subprojects may be outsourced, assigned to other project managers, or managed by the parent project manager but with a different project team. The following illustration shows a project containing multiple subprojects.

Subprojects are often areas of a project that are outsourced to vendors. For example, if you were managing a project to create a new sound system for home theaters, a subproject could be the development of the user manual included with the sound system. You would thus hire writers and graphic designers to work with your project team. The writers and designers would learn all about the sound system and then retreat to their own space to create the user manual according to their project methodology. The deliverable of their subproject would be included in your overall project plan, but the actual work done to complete the manual would not be in your plan. Youd simply allot the funds and time required by the writers and graphic designers to create the manual. Subprojects do, however, follow the same quality guidelines and expectations of the overall project. The project manager has to work with the subproject team regarding scheduling, value, and cost to ensure the deliverables and activities of the subproject integrate smoothly with the master project.

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Chapter 1: Introducing Project Management

Working with a Project Management Ofce

A Project Management Office (PMO) organizes and manages control over all projects within an organization. PMOs are also known as a program management office, project office, or simply the program office. (And Im sure some project managers have other names for them that wont be on the PMP exam.) PMOs usually coordinate all aspects, methodology, and nomenclature for project processes, templates, software, and resource assignment. Ideally, a PMO creates a uniform approach within an organization so that all projects, regardless of their discipline, technology, or purpose, are managed with the same approach. Besides creating a uniform approach to project management within an organization, a PMO provides support to the project managers. The support they give will vary, of course, from organization to organization. Typically, project managers that act within a PMO can expect training, software, templates, standardized project management approaches, and mentoring for project managers. PMOs have an advantage over decentralized project management: risk and communication centralization. All projects have risks, and a PMO can centrally track and monitor all risks within all projects and take advantage and prepare for risks that may, or may not, come into fruition. Thus, a PMO can create a risk database to track pending and past risks and plan accordingly. On the communications front, a PMO can centralize communication among project managers, project sponsors, managers, and other stakeholders. A centralized communication center can alleviate the demand on project managers to communicate with stakeholders as all communications can flow through the PMO rather than the individual project manager.

CERTIFICATION SUMMARY
This chapter covered the fundamentals of project management and the expectations for the PMP examination. The PMBOK is an excellent book which documents the ideal processes and procedures for project management. The PMP exam is based on the PMBOK, and this book (the one youre reading now) will focus on the key exam essentials to help you pass your PMP exam. We discussed what a project is and is not. Projects are temporary endeavors to create a unique thing, product, or service. An operation, on the other hand, is a series of activities that go on and on, like manufacturing a car, writing a newspaper column, or running a business. Many businesses complete projects for other people or organizations and those are their operations.

Examining Related Areas of Project Management

25

The PMP exam will focus on the function of the project manager which covers the nine knowledge areas of project management: integration management, time, cost, scope, quality, human resources, communications, risk, and procurement. Each of these knowledge areas will be discussed in detail in Chapter 4 through 12 in this book. Well also cover the PMP Code of Professional Conduct. Finally, we discussed how projects may exist within large entities called programs and PMOs. Recall that programs are a collection of projects working toward a common goal, whereas a PMO coordinates projects within an organization. Programs are led by a Program Manager that the project manager reports to. PMOs may be led by a Chief Project Officer.

KEY TERMS
To pass the PMP exam, you will need to memorize the following terms and their definitions. For maximum value, create your own flashcards based on these definitions and review them daily. These definitions can be found within this chapter and in the glossary.
application areas management by projects PMP project project human resource management project manager project procurement management project scope management triple constraints of project management deliverable operations programs project communications management project integration management project office project quality management project time management work breakdown structure iron triangle PMBOK guide progressive elaboration project cost management project management project portfolio management project risk management subprojects

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Chapter 1: Introducing Project Management

TWO-MINUTE DRILL
Exploring Project Attributes
Projects are temporary, unique, and create a product or service. Projects move from concept to completion through progressive elaboration. Not all projects get selected. The decisions to choose one project over

another may vary from organization to organization. The process, however, may be called Project Portfolio Management.
Project Management Offices standardize the project management approach

within an organization

The Project Management Framework

Within the project management framework are nine knowledge areas, which

span the project management life cycle.

The focus of Project Integration Management is on managing all of the

moving parts of a project.

The focus of Project Scope Management is on protecting, fulfilling, and

delivering the project scope.

The focus of Project Time Management is on scheduling activities, monitoring

the project schedule, and working with the project team and stakeholders to ensure the project completes on time.
The focus of Project Cost Management is on estimating and maintaining

project costs.
The focus of Project Quality Management is on setting the quality expectations

and then delivering the project product with the expected level of quality.
The focus of Project Human Resources Management is on developing the

project team to work together to deliver the project as expected.

The focus of Project Communications Management is on delivering needed

information to the correct parties at the correct time.

The focus of Project Risk Management is on identifying, mitigating, and

managing project risks.

The focus of Project Procurement Management is soliciting, selecting, and

managing vendors to complete project work or supply project materials.

Two-Minute Drill

27

Identifying Project Manager Characteristics

A project manager must have multiple skills to be successful, including

the ability to communicate, manage a budget, be organized, negotiate, and provide leadership for the project.
Project managers in different sectors of business and non-profit entities will

encounter situations unique only to their area of expertise. For example, a project manager of a construction project will have different issues and concerns than a project manager of a manufacturing project.
Project managers require organization.

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Chapter 1: Introducing Project Management

SELF TEST
1. Which one of the following is not an attribute of a project? A. B. C. D. Definite starting date Has no definite end date Creates a product, service, or results Requires resources

2. You are a project manager for Johnson Keyboards Inc. Your organization has adapted the PMBOK as a standard tool for how projects should operate and you are involved in shaping the standardization for all future projects. In light of this information, what is the recommended course of action for the processes and procedures in the PMBOK? A. Not all processes and procedures in the PMBOK are actually required on all projects. B. All processes and procedures are to be followed as defined in the PMBOK. C. Not all processes and procedures are needed unless the PMBOK states the process or procedure is a requirement for the project type. D. All processes and procedures are to be followed as identified in the PMBOK, otherwise the PMP is in violation of the PMP Code of Professional Conduct. 3. Nancy is the project manager of the INCORP1 Project. She and the stakeholders created a scope two months ago, but since then the scope has evolved and now provides much more detail about the project. The process of the scope evolving is also known as which one of the following terms? A. B. C. D. Decomposition Scope verification Scope creep Progress elaboration

4. You are explaining to a junior engineer the difference between a project and operations. Which one of the following is true only of operations? A. B. C. D. They are performed by people. They are constrained by limited resources. They are ongoing. They are planned, executed, and controlled.

Self Test

29

5. You are the project manager for your company, Mark Manufacturers. Your company has a large client that has requested a special component be created for one of their test engines. Your organization agrees, creates a standard contract with the customer, and your manager assigns you to manage this project. The project was launched because of which one of the following? A. B. C. D. A. B. C. D. A customer request A change in the technology your customer is creating A legal requirement (contractual) An organizational need Identifying the project requirements Selecting the projects to be initiated Balancing demands for time, cost, scope, and quality Establishing clear and achievable project objectives

6. Project managers are not responsible for which one of the following in most organizations?

7. You and William, a project stakeholder, are discussing risks within your project. Which one of the following best describes risk? A. B. C. D. Any event which can cause your project to fail Any event which may have a positive or negative effect on your projects project team An uncertain event which may have a positive or negative effect on your project An event which will cause time and cost constraints to be broken

8. You are the project manager for a large software development project. You have concerns that one of the components of the Iron Triangle is slipping. Your project sponsor, Jim Bob, is not familiar with the Iron Triangle so you explain the concept to him. What will be affected if any angle of the Iron Triangle is not kept in balance? A. B. C. D. A. B. C. D. Cost Quality Time Scope Project Scope Management Project Cost Management Project Integration Management Project Communications Management

9. Which knowledge area includes the creation of the project charter?

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Chapter 1: Introducing Project Management

10. You and your project team are located in Des Moines, Iowa, but your project execution will take place in Mexico. You have valid concerns about the interactions with the stakeholders, time zone differences, language barriers, the different laws that could affect your project, and the logistics of travel, face-to-face meetings, and even teleconferencing. Which of the following project environments are you concerned with most? A. B. C. D. A. B. C. D. Cultural and social International and political Physical Organizational structure Motivating the project team Purchasing and procurement Sales and marketing Contracts and commercial law

11. Which one of the following is not a general management skill?

12. Smith Construction has won a contract to build a 77-story condominium building in downtown Chicago. The building will have 650 condos, a parking garage, an indoor and outdoor pool, two floors for retail, two floors of offices, and several shared community rooms. Mary Anne Kedzie has elected to create a program for the creation of the building. Which one of the following best describes a program? A. A standardized approach to project management within an organization B. A standardized approach to project management with multiple projects coordinated together C. A collection of related projects managed in coordination to gain control that would not necessarily be available if the projects were managed independently D. A collection of related projects all contributing to one deliverable 13. You are the project manager for an architectural design company. Your company consistently completes projects for other companies. Within your organization the project managers have the highest level of authority on a project. You are likely operating within what type of company? A. B. C. D. A company using a functional structure A company using a matrix structure A company using management by projects A company using an ISO 9000 program

Self Test

31

14. Who is usually responsible for portfolio management within an organization? A. B. C. D. Project managers Project sponsors Stakeholders Senior management

15. You are the project manager of a large project to install 1,900 kiosks through college campuses in North America. The kiosk will collect applications for credit cards, phone services, and other services marketable to college students. The bulk of your project is focused on the information technology integration, the WAN connections from each kiosk, security of the data transferred, and the database of the information gathered. For ease of management you have hired local contractors to install the kiosks that you will ship to each campus. The contractors on each campus will be responsible for the WAN connection, electrical connection, the security of the kiosk, and all testing. The local contracted work could be called what? A. B. C. D. A. B. C. D. A. B. C. D. A. B. C. D. Risk mitigation Operations Subprojects Management by Projects A Project Management Office With the stakeholders Human Resources The project budget Providing electricity to a community Designing an electrical grid for a new community Building a new dam as a source for electricity Informing the public about changes at the electrical company The creation of the project plan The interaction between project teams The execution of the project plan The documentation of changes to the project plan

16. Where can a project manager expect software, templates, and standardized policies?

17. Which of the following is likely to be part of an operation?

18. Of the following, which one is not part of Project Integration Management?

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Chapter 1: Introducing Project Management

19. Which one of the follow describes the physical environment for a construction project? A. B. C. D. The terrain where the construction will take place The approval of the blueprints for the building The demographics of the community where the construction will take place The laws that govern where the building may take place

20. Which document will guide the interaction between the project manager and a selected vendor on a project? A. B. C. D. A. B. C. D. A. B. C. D. The project plan The SOW The procurement management plan The contract Standards and regulations are the same. Standards are regulated by specific industries; regulations are laws. Standards are optional; regulations are required. Standards are required; regulations are laws. Communications Budget management Project organization Management of team negotiations

21. What is the difference between a standard and a regulation?

22. The project manager typically devotes the most amount of time to which of the following tasks?

23. You have an excellent idea for a new project that can increase productivity by 20 percent in your organization. Management, however, declines to approve the proposed project because too many resources are already devoted to other projects. You have just experienced what? A. B. C. D. Parametric modeling Management by exception Project Portfolio Management Management Reserve

24. Which one of the following is an interpersonal skill a project manager must have to be successful? A. Sales and marketing B. Leadership

Self Test

33

C. Health and safety practices D. Information technology experience 25. Of the following, which is the most important stakeholder involved with a project? A. B. C. D. The project manager The project sponsor The CEO The customer

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Chapter 1: Introducing Project Management

SELF TEST ANSWERS

B. A project does have a definite end date, operations do not. 1. A, C, and D are all incorrect choices because projects do have a definite starting date, they do create a unique product, service, or changes to an environment, and all projects require resources. For more information, see section 1.2 in the PMBOK. A. Not all information in the PMBOK should be applied uniformly to all projects. It is the 2. responsibility of the project management team to determine what practices are appropriate for each project. B, C, and D are all false statements regarding the implementation of the PMBOK. For more information, see section 1.1 in the PMBOK. D. Progress elaboration is a term used to describe the development that happens in 3. incremental steps. The project scope is the most common example of progress elaboration, but the WBS, product description, and even the project plan can pass through progressive elaboration. A is incorrect as decomposition is the term used to describe the creation of the work breakdown structure. B, scope verification, is incorrect as this term describes the process to verify that the deliverable matches what the scope promised to create. C, scope creep, is a term to describe small, unauthorized changes to the project scope. For more information, see section 1.2.3 in the PMBOK. C. Projects are temporary and they do not go on forever. 4. A, B, and D, are all incorrect as project and operation are performed by people, are constrained by limited resources, and are planned, executed, and controlled. For more information, see section 1.2.2 in the PMBOK. A. This project was launched because the customer requested the new component. 5. B is incorrect because the project is not a response to a change in technology, but a customer request. C, a legal requirement, is not correct because this actually refers to a law or mandated regulation that has been created. D, an organizational need, typically refers to a project to behoove the performance of the organization. For more information, see section 1.2.3 in the PMBOK. B. Project managers typically do not select which projects are to be initiated. The project 6. selection committee, customers, or project sponsors are typically responsible for this. A, C, and D are all incorrect choices because the project manager is responsible for these activities. For more information, see section 1.3 in the PMBOK.

Self Test Answers

35

C. Risk is an uncertain event, which can have positive or negative effects on your project. 7. A, B, and D may be characteristics of risk, but the best choice is C because risk is uncertain and may have a positive or negative effect on the project. For more information, see sections 1.3, Module 11 in the PMBOK, and Chapter 11 in this book. B. If any angle of the Iron Triangle is changed, then the quality of the project will suffer. 8. A, C, and D are incorrect choices as these are the three sides of the Iron Triangle. These three sides must be kept in balance or quality will suffer. For more information, see section 1.3 in the PMBOK. C. Project Integration Management, which focuses on the coordination of all components 9. of project management, includes the development of the project charter. A is incorrect as Project Scope Management focuses on the creation and control of the project scope. B, Cost Management, is incorrect as its role is to manage, control, and respond to the financial concerns within the project. D, Project Communications Management, focuses on who needs what information, when is it needed, and in what modality. For more information, see section 1.4.3 in the PMBOK. B. All of the concerns listed fall into the international and political environment. 10. Cultural and social, choice A, describes the demographic, educational, and ethical environment. C, Physical, is concerned with the ecology and geography affected by the project, or the ecology and geography that the project may affect. D, organizational structure, is not a project environment. For more information, see section 1.5.3 in the PMBOK. A. Motivation is actually an interpersonal skill that the project manager must have to 11. inspire and energize the project team. B, C, and D are all incorrect choices as these are general management skills the project manager must have in order to successfully manage a project. For more information, see sections 1.5.4 and 1.5.5 in the PMBOK. C. A program is a collection of related projects managed and coordinated to gain a higher 12. level of control. A, B, and D do not accurately describe a program. For more information, see section 1.6.1 in the PMBOK. C. Your company is likely using Management by Projects. Management by Projects may 13. also be called a projectized organization. A is incorrect since functional describes an organization that is arranged by function, such as sales, marketing, finance, and IT. B is incorrect because a matrix-structured organization uses resources from around the organization and the project manager has a very low level of authority. D is incorrect because ISO programs describes a certified method of completing work the same exact way over and over. For more information, see sections 1.3 and 2.3 in the PMBOK.

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Chapter 1: Introducing Project Management

D. Senior management is responsible for portfolio management. 14. Project managers are responsible for a projects success, but not the portfolio. B, project sponsors, authorize projects. C, stakeholders, is an incorrect choice as stakeholders is too vague of an answer to be acceptable. For more information, see section 1.6.2 in the PMBOK. C is the best choice because work that is subcontracted out for ease of management, as in 15. this situation, becomes subprojects. A is incorrect as risk mitigation describes when a project manager takes measures to reduce or eliminate risks. The scenario did not give enough information to determine what risks would have been mitigated. B, operations, is incorrect since it does not describe this scenario at all. D, Management by Projects, is incorrect as this term describes a company that operates through projects. There is no indication that this is true with the scenario presented. For more information, see section 1.6.3 in the PMBOK. A. The Project Management Office (PMO) supports the project manager through 16. templates, standardized policies, and software. B, C, and D do not fully answer the question, so these answers are incorrect. For more information, see section 1.6.4 in the PMBOK. A. An electrical companys primary operation is to provide electricity. 17. B and C are projects. While D, providing information, could potentially be part of an ongoing operation, choice A is still the best answer presented. For more information, see section 1.2.2 in the PMBOK. B. Project Integration Management focuses on the project plan and its implementation. 18. While B could, in some instances, be considered accurate if the project plan had some interaction with other project teams, the assumption cannot be made in this instance. A, C, and D are all part of Project Integration Management, so they are not valid answers. For more information, see section 1.4.3 in the PMBOK. A. The physical environment describes the effects on and by the ecology and geography of 19. the area where the project will take place. B describes the requirements and technical documents for the project plan. C describes the cultural and social environment of the project. D describes the international and political environment of where the project will take place. For more information, see section 1.5.3 in the PMBOK. D. The contract between the organization and the vendor supercedes all other work-related 20. documents. The project plan will guide the project manager and the project team to completion, but it will not supercede contracts. The SOW (statement of work), while needed and necessary, is not as important as a contract. The Procurement Management Plan explains how project procurement takes place. For more information, see sections 1.4.3, 1.5.4, and 12.5 in the PMBOK.

Self Test Answers

37

C. Standards are optional and may sometimes be called guidelines. Regulations are not 21. optional and are typically enforced by laws. A, B, and D are all incorrect because they do not accurately describe standards and regulations. For more information, see section 1.5.2 in the PMBOK. A. Its been said that project managers spend 90 percent of their time communicating. 22. B, C, and D are all incorrect because these do not accurately describe a project managers time. For more information, see sections 1.4.3, 1.5.5, and 10.1 in the PMBOK. C. Project Portfolio Management is the process of choosing and prioritizing projects within 23. an organization. An excellent project idea can still be denied if there arent enough resources to complete the project work. A is incorrect as it is a model to estimate costs, such as cost per ton, or cost per hour. B is incorrect because this is a management theory to manage people and problems. D is incorrect as it is an amount of time and money reserved for projects running late or over budget. For more information, see section 1.6.2 in the PMBOK. B. Leadership is the only interpersonal skill listed. 24. A, C, and D are incorrect as these are general management skills and not interpersonal skills. For more information, see section 1.5.5 in the PMBOK. D. Customers, internal or external, are the most important stakeholders in a project. 25. A is incorrect because the project manager manages the project for the customer. B is incorrect since the project sponsor authorizes the project. C is incorrect because the CEO may not even know about the projectand even then he would be interested in the success of the project for the customer. For more information, see section 1.3 in the PMBOK.