Project Quality Management - Overview

This Knowledge Area includes processes and activities that determine quality policies, objectives, and responsibilities so that the project will satisfy the needs for which it was undertaken. Basically it works to ensure the project requirements are met and validated.

We will review the three process groups in this Knowledge Area that includes:

1. Plan Quality Management - identifies quality requirements and/or standard for the project and its deliverables. It documents how the project will demonstrate compliance with quality requirements and/or standards
2. Perform Quality Management - audits the quality requirements and the results from quality control measurements to ensure that appropriate quality standards and operational definitions are used
3. Control Quality - process of monitoring and recording results of executing the quality activities to assess performance and recommend necessary changes

Project Quality Management 

• Addresses the management of the project and the deliverables
• Quality measures and techniques are specific to the type of deliverable 
• Failure to meet quality requirements decrease profits, increase risk, errors and rework ($$$$) 
• Quality and grade are different
• Quality - delivered performance or result is "the degree to which a set of inherent characteristics fulfill requirements" (ISO 9000) [10]
• Grade - design intent is a category assigned to deliverables having the same functional use but different technical characteristics
• Quality level that fails to meet quality requirements is always a problem but a low grade of quality may not
• Low grade software (one with a limited number of features) is of high quality (no obvious defects, readable manual) - acceptable for use
• High grade software (one with numerous features) is of low quality (many defects, poorly organized user documentation) - not acceptable for use/ineffective
• Precision = measure of exactness
• Think of a dart board. If there were no numbers on it the level of precision of where the dart lands is not as exact. 
• International Organization for Standardization (ISO) - by being compatible with the standards in place by ISO you will have consistency of quality across projects and across the world. 
• check out their website ISO website
• use this website to see how ISO are used in the real world
• The modern quality management approaches minimize variation and deliver results that meet the defined requirements and they recognize the following as important:
• Customer satisfaction
• Prevention over inspection
• Continuos improvement
• Plan-do-check-act (PDCA) -basis for quality improvement
• Other quality improvement models
• Total Quality Management (TQM) 
• Six Sigma
• Lean Six Sigma
• Malcom Baldrige
• Organizational Project Management Maturity Model (OPM3)
• Capability Maturity Model Integrated (CMMI) 
• Management responsibility
• Cost of quality (COQ) 
• Refers to the total cost of the conformance work and the nonconformance work that should be done as a compensatory effort because on the first attempt to perform that work, the potential exists that some portion of the required work effort may be done or has been done incorrectly. ($$$$$)
• Product returns
• Warranty claims
• Recall campaigns

Source: PMBOK 5th ed. 

Project Cost Management - Earned Value Calculations Table

This chapter was a beast to get through but I am glad that PMBOK has this chart to summarize the information. Study these slides to help you understand the formulas within Cost Management.

Source: PMBOK 5th ed. 

Project Cost Management - Control Costs

Caution: This process contains a lot of formulas to use. Read through each section 2 or 3 times in order to process the information step by step. Just understand the formulas and then use sample questions to practice doing the calculations. The summary table of formulas in another blog will be helpful to review. 

This process monitors the status of the project to update the project costs and managing changes to the cost baseline.

Updating the budget requires you to know the actual costs spent to date. You need to analyze the relationship between the consumption of project funds to the physical work being accomplished for such expenditures. The key is to manage the approved cost baseline and the changes to the baseline.

Project costs include the following:

• Influencing the factors that create changes to the authorized cost baseline
• Ensuring that all change requests are acted upon timely
• Mange the changes when they happen
• Ensure the cost expenditures don't exceed the authorized funding by period, WBS component, activity and total project cost
• Monitor cost performance to identify variances from the approved cost baseline
• Monitor work performance against funds expended
• Preventing unapproved changes from being included in the reported cost
• Inform appropriate stakeholders of all approved changes and costs
• Bring expected cost overruns within acceptable limits

Lets look at the Inputs, Tools and Techniques, and Outputs of this process. 

1) Project Management Plan

• This contains the following information to help you control costs:
• Cost baseline
• Cost management plan

2) Project Funding Requirements

• This includes projected expenditures plus anticipated liabilities

3) Work Performance Data

• Contains information about project progress and the costs that have been authorized and incurred. 

4) Organizational Process Assets

• Assets that may impact controlling costs may include:
• Existing policies, procedures, and guidelines
• Cost control tools
• Monitor and reporting methods to be used

5) Earned Value Management (EVM) 

• Methodology that combines scope, schedule and resource measurements to assess project performance and progress. 
• It integrates the scope baseline with the cost baseline, along with the schedule baseline, to form the performance measurement baseline, to help the team assess and measure the performance and progress. 
• EVM monitors the following three dimensions: 
• Planned value (PV) - authorized budget assigned to scheduled work and excludes the management reserve.  It defines the physical work that should have been completed and the PV is also known as the performance measurement baseline (PMB).  Budget at completion (BAC) is the goal planned value for the project. 
• Earned value (EV) - a measure of work performed expressed in terms of the budget authorized for the work. It is the budget associated with the authorized work that has been completed. EV need to be related to the performance measurement baseline (PMB) and can't be great than the authorized planned value (PV) budget for a component. It is used to calculate the percentage of work that is completed. 
• Actual cost (AC) - the realized cost incurred for the work performed on an activity during a specific time period. Basically it's the total cost incurred in accomplishing the work that the earned value (EV) measured. The (AC) needs to relate to what was budgeted (PV) and measured in the (EV)
• Variances from the approved baseline will also be monitored and will include:
• Schedule variance (SV) -  a measure of schedule performance expressed as the difference between the earned value (EV) and the planned value (PV).  It is a useful metric that indicates when a project is falling behind or is ahead of its baseline schedule. It will become zero when the project is completed because all planned value will have been earned. 
• Equation:  SV = EV - PV
• Cost variance (CV) - the amount of budget deficit or surplus at a given point in time. It is the difference between earned value (EV) minus the actual cost (AC). It indicates the relationship of physical performance to the costs spent. 
• Equation: CV = EV - AC
• Schedule performance index (SPI) - measure of schedule efficiency expressed as the ratio of earned value to planned value. Basically how efficient is the project team using its time. It can be used with the cost performance index (CPI) to for caste final project completion estimates. 
• SPI less than 1 = less work was completed than was planned
• SPI greater than 1 = more work was completed than planned
• Equation: SPI = EV/PV
• Cost performance index (CPI) - measure of the cost efficiency of budgeted resources, expressed as a ratio of earned value to actual cost. Basically measuring the cost efficiency for the work completed. 
• CPI less than 1 = cost overrun for work completed
• CPI greater than 1 = cost under run of performance to date
• Equation: CPI = EV/AC

6) Forecasting

• An estimate of future conditions based on the information you know about the project to date. Since you have originally developed a budget at completion (BAC) it is important to monitor and calculate the estimate at completion (EAC) based on project performance. 
• Estimate at completion (EAC) - is based on actual costs incurred for work completed, plus and estimate to complete (ETC) the remaining work. This can be done by using the earned value method (EVM). 
• Equation: EAC = AC + bottom-up ETC
• The project manager can manually calculate the EAC and compare to the range of calculated EACs representing various risk scenarios 
• Other common methods
• Estimate at completion (EAC) forecast for estimate to complete (ETC) work performed at the budgeted rate
• This EAC method accepts the actual project performance to date (good or bad) as represented by the actual costs, and predicts that all future ETC work will be accomplished at the budgeted rate
• Equation: EAC = AC + (BAC - EV) 
• estimate at completion = actual cost + (budget at cost - earned value
• Estimate at completion (EAC) for estimate to complete (ETC) at the present cost performance index (CPI) 
• This method assumes what the project has experience to date can be expiated to continue in the future.
• Equation: EAC = BAC/ CPI
• estimate at completion = budget at completion / cost performance index
• Estimate at completion (EAC) forecast for estimate to complete (ETC) work considering both schedule performance index (SPI) and cost performance index (CPI) factor
• The estimate to complete (ETC) work will be performed at the efficiency rate that considers both the cost and schedule performance indices.
• Equation: EAC = AC + [(BAC - EV) / (CPI x SPI)]
• estimate at completion = actual cost [(budget at completion - earned value) / (cost performance index x schedule performance index)]

7) To-Complete Performance Index (TCPI) 

• A measure of the cost performance that is required to be achieved with the remaining resources in order to meet a specified management goal. This is expressed as a ratio of the cost to finish the outstanding work to the remaining budget. 
• The management goal can be the budget at completion (BAC) or the Estimate at completion (EAC). If the BAC is not viable anymore then the project manager should forecast the EAC. 
• When it goes through the approval process when you calculate the to-complete performance index (TCPI) you may use the EAC number instead of the BAC number. 
• Equation based on BAC to identify efficiency that must be maintained in order to complete on plan: TCPI = (BAC - EV) / (BAC - AC) 
• to-complete performance index = (budget at completion - earned value) / budget at completion - actual cost) 
• Equation based on EAC to identify efficiency that must be minted in order to complete the current EAC: TCIP = (BAC - EV) / (EAC - AC) 
• to-complete performance index = (budget at completion - earned value) / estimate at completion - actual cost) 

8) Performance Reviews

• Compares cost performance over time, schedule activities or work packages overrunning and under-running the budget, and estimated funds needed to complete the work in progress. 
• If you are using the earned value management (EVM) the following can be determined
• Variance analysis - is the explanation for cost, schedule, and variance at completion
• Formulas for the above are outlined below: 
• cost variance = earned value - actual cost (CV = EV - AC)
• schedule variance = earned value - planned value (SV = EV - PV) 
• variance at completion = budget at completion - estimate at completion (VAC = BAC - EAC) 
• if you are not using earned value management (EVM) you can simply compare planed activity cost against actual activity cost to identify the variances
• It's important to identify the cause and degree of the variances relative to the cost baseline to determine what kind of action you want to take
• Trend analysis - examines project performance over time to determine if performance is improving or deteriorating by using graphical analysis techniques
• Earned value performance - compares the performance measurement baseline to the actual schedule and cost performance when earned value management is used (EVM) if not then analyze the cost baseline against the actual costs for the work performed

9) Project Management Software

• used to monitor the three earned value management (EVM) dimensions to display a graphical trend and to forecast results
1. planned value (PV)
2. earned value (EV)
3. actual costs (AC) 

10) Reserve Analysis

• Used to monitor the status of contingency and management reserves for the project to determine if these reserves are still needed or if additional reserves need to be requested. 

11) Work Performance Information

• Document and communicate the calculated the following for work breakdown structure (WBS) components
• cost variance (CV) 
• schedule variance (SV)
• cost performance index (CPI) 
• schedule performance index (SPI) 
• to-complete performance index (TCPI)
• variance at completion (VAC) 

12) Cost Forecasts

• Document and communicate the calculated estimate at completion (EAC) value or the bottom-up estimate at completion (EAC) value

13) Change Requests

• Analysis of performance may elicit changes which will go through the Perform Integrated Change Control Process

14) Project Management Plan Updates

• Plans that may need to be updated include:
• Cost baseline
• Cost management plan

15) Project Document Updates

• Documents that may need to be updated include:
• Cost estimates
• Basis of estimates

16) Organizational Process Assets

• Assets that may need to be updated include:
• Causes of variances
• Corrective action chosen and the reason
• Financial databases
• Other types of lessons learned from this process

Source: PMBOK 5th ed. 

Project Cost Management - Determine Budget

This process aggregates the estimated costs of individual activities of work packages to establish an authorized cost baseline.

Lets take a look at the Inputs, Tools and Techniques and Outputs for this process.

1) Cost Management Plan

• Describes how the project costs will be managed and controlled.

2) Scope Baseline

• Contains the following information to help determine budget:
• Project Scope Statement - funding constraints
• Work breakdown structure - provides relationships between deliverables and other components
• WBS dictionary - detailed descriptions wo work required

3) Activity Cost Estimates

• Estimate costs of each activity are aggregated to get the cost estimate for the work package

4) Basis of Estimates

• The supporting detail for cost estimates should specify any basic assumptions of cost for the budget

5) Project Schedule

• The planned start and finish dates, activities, milestones, work packages and control accounts costs are aggregated to plan which costs are to be incurred.

6) Resource Calendar

• Information about resources are assigned to the project and when they are assigned gel indicate resource costs over the duration of the project. 

7) Risk Register

• Review the risk register to aggregate the risk response costs. 

8) Agreements

• Review the agreements as agreement information and costs will help you determine the budget.

9) Organizational Process Assets

• Assets that will may influence determine budget process include:
• Existing policies, procedures, and guidelines
• Cost budgeting tools
• Reporting methods

10) Cost Aggregation

• These are aggregated by work packages and then aggregated for the higher control accounts on the WBS. 

11) Reserve Analysis

• Establishes both the contingency reserves and the management reserves for the project.

12) Expert Judgement

• Use the experts that will help guide you in the specific Knowledge Area, discipline, industry, or similar project to help determine the budget. 

13) Historical Relationships

• Result in parametric estimates or analogous estimates involve the use of project characteristics to develop mathematical models to predict total project costs. They can be simple or complex models and are more reliable when:
• Historical information used to develop the model is accurate
• Parameters used in the model are readily quantifiable
• Models are scalable

14) Funding Limit Reconciliation

• The expenditure of funds should be reconciled with any funding limits on the commitment of funds for the project. At times you may have to reschedule work to level out the rate of expenditures. 

15) Cost Baseline

• The cost baseline is the approved version of the time-phased project budget and excludes the management reserves. As the project moves through time you will be able to see what costs are needed to be paid for at what point in the project. You can represent this on a graph so that you can see the cost baseline start low for the project then go higher the more you spend. Also the Management Reserve costs can only move into the Cost Baseline through the Change Control Process. 

16) Project Funding Requirements

• Total funding requirements and the periodic requirements are concluded from the cost baseline.

17) Project Documents Updates

• Updates may include:
• Risk register
• Activity cost estimates
• Project schedule

Source: PMBOK 5th ed. 

Project Cost Management - Estimate Costs

This process develops an approximation of the monetary resources needed to complete project activities.

Cost estimation is a prediction based on the information you have at that point. They are usually expressed in units of currency but other units like staff hours or staff days are used to compare to currency fluctuations. At the beginning of the project your accuracy will be less and it won't be until you go through later phases of the project you will become more accurate with the costs. (you just know more of the details then)

• Rough order of magnitude (ROM) - an estimation of the projects level of effort and cost to complete it. It will contain an estimate of a plus or minus and presented as a percent.
• example: Early in the project you will have a ROM of -25% to +10% and later in the project you will have a ROM of -5% to +10%  

Lets take a look at the Inputs, Tools and Techniques, and Outputs of this process.

1) Cost Management Plan

• Defines how project costs will be managed and controlled. It also includes the method used and the level of accuracy required to estimate activity cost.

2) Human Resource Management Plan

• Provides project staffing attributes, personnel rates, and related rewards/ recognition. 

3) Scope Baseline

• Includes the following to help estimate costs
• Project scope statement - product description, acceptance criteria, key deliverables, project boundaries, assumptions and constraints of the project. 
• Work Breakdown Structure (WBS) - provides relationship among all the components of the project and the project deliverables
• WBS dictionary
• Other information - contractual and legal implications

4) Project Schedule

• The type and quantity of the resources you will use and the amount of time they will use to complete the work will be determining factors in estimating costs. 

5) Risk Register

• Review the risks that could impact the cost of the project. 

6) Enterprise Environmental Factors

• Factors that may influence this process includes:
• Market conditions - describes what products, services, and results are available in the market
• Published commercial information - cost rate information from commercial databases

7) Organizational Process Assets

• Assets that may influence this process includes:
• Cost estimating policies
• Cost estimating templates
• Historical information
• Lessons learned

8) Expert Judgement

• Experts can provide cost estimate information and suggest how to reconcile differences between methods of estimating. 

9) Analogous Estimating

• Technique for estimating the duration or cost of an activity or a project using historical data from a similar activity or project. (duration, budgets, size, weather and complexity) This technique is less costly, less time consuming and less accurate. It is the most reliable when the previous activity is similar to the one in the current project. 

10) Parametric Estimating 

• Technique in which an algorithm is used to calculate cost or duration based on historical data and project parameters. This technique can produce higher levels of accuracy. 

11) Bottom-Up Estimating

• Method of estimating a component of work at the greatest level of detail and then rolled up to the higher levels for other reporting and tracking purposes

12) Three-Point Estimating

• Technique used to estimate cost or duration by applying an average of optimistic, pessimistic, and most likely estimates when there is uncertainty with the individual activity estimates. 
• It came from the program evaluation and review technique (PERT) that uses three estimates to define an approximate range for an activity's duration
• Most likely (tM) - estimate is based on 
• the duration of the activity
• given the resources likely to be assigned
• resource productivity
• realistic expectations of availability for the activity
• dependencies on other participants
• interruptions
• Optimistic (tO)- based on analysis of best-case scenario for the activity
• Pessimistic (tP) - based on analysis of the worst-case scenario for the activity
• Formulas used to calculate expected duration (tE) 
• Triangular Distribution
• tE = (tO + tM + tP) / 3
• expected duration = (Optimistic + Most likely + Pessimistic) divided by 3
• Beta Distribution
• tE = (tO + 4tM + tP) / 6
• expected duration = (Optimistic + 4 times Most likely + Pessimistic) divided by 6

13) Reserve Analysis

• Cost estimates may include contingency reserves (aka contingency allowances) which are buffers of cost scheduled into the project to allow for uncertainty. 
• Contingency reserves - budget within the cost baseline that is allocated for identified risks, which are accepted and for which contingent or mitigating responses are developed. They are to address the unknowns of the budget. 

14) Cost of Quality (COQ) 

• A method of deterring the cost incurred to ensure quality. The costs included are: 
• Prevention and appraisal cost - costs for quality planning
• Failure costs  - cost for rework

15) Project Management Software

• Tools that help you assess cost estimating faster

16) Vendor Bid Analysis

• Analysis of what the project should cost, based on the bids from qualified vendors. 

17) Group Decision Making

• Team-based approaches help improve estimate accuracy and commitment to the emerging estimates.
• Brainstorming
• Delphi - technique for gathering information and used as a way to reach a consensus of experts on a subject. Participants are anonymous through the use of a questionnaire which is then summarized and recirculated for further comment
•  Nominal group techniques - technique that enhances brainstorming with a voting process used to rank the most useful ideas for further brainstorming or for prioritization

18) Activity Cost Estimates

• Quantitative assessments of the probable costs required to complete project work. It estimates all resources that are applied to the activity cost estimate
• direct labor
• materials
• equipment
• services
• facilities
• information technology
• cost of financing (interest charges)
• exchange rates
• indirect costs

19) Basis of Estimates

• Documentation of how the cost estimate was derived that may include: 
• Basis of the estimate (how it was developed)
• All assumptions made
• Constraints
• Indication of the range of possible estimate (+_10%) 
• Confidence level of the final estimate

20) Project Documentation Updates

• Documents that you may update:
• Risk register

Source: PMBOK 5th ed. 

Project Cost Management - Plan Cost Management

The process that establishes the policies, procedures, and documentation for planning, managing, expending, and controlling project costs. This plan is a part of the project management plan.

Lets looks at the Inputs, Tools and Techniques, and Outputs of this process.

1) Project Management Plan

• Contains information used to develop the cost management plan
• Scope baseline - project scope statement and WBS details for cost estimation and management 
• Schedule baseline - defines when the costs will be incurred
• Other information - other cost, risk and communication decisions

2) Project Charter

• Provides a summary budget from which the detailed costs are developed along with the approval requirements

3) Enterprise Environmental Factors

• Factors that may influence plan cost management may include:
• Organizational culture and structure
• Market conditions describe what products, services and results are available
• Currency exchange rates
• Published commercial information (resource cost rate and cost standards for material and equipment) 
• Project management information systems - alternative management for costs

4) Organizational Process Assets

• Assets that may be of an influence:
• Financial controls procedures (time reporting, accounting codes, etc.) 
• Historical information and lessons learned knowledge bases
• Financial databases
• Existing policies, procedures, and guidelines

5) Expert Judgement

• Using experts to help you decide on whether to combine methods and how to reconcile differences between them. 

6) Analytical Techniques

• Choose strategic options to estimate and fund the project
• self-funding
• funding with equity
• funding with debt
• Ways to finance the project
• Making
• Purchasing
• Renting
• Leasing
• Organizational policies and procedures 
• Payback period
• Return on investment
• Internal rate of return
• Discounted cash flow
• Net present value

7) Meetings

• Planned meetings to develop the cost management plan with team members who are responsible for project costs

8) Cost Management Plan

• Describes how the project costs will be planned, structured, and controlled
• It can establish the following:
• Units of measure - each unit is defined for each of the resources (Staff hours, staff days, meters, liters, tons etc.)
• Level of precision - the degree to which activity costs estimates are rounded up or down
• Level of accuracy - acceptable range used in determining realistic activity cost estimates is specified and may include an amount for contingencies
• Organizational procedures links - WBS provides the framework for this process and the WBS component used for project cost accounting is the control account. Each control account is assigned a unique code that is connected to the organizations accounting system
• Control thresholds - Variance thresholds for monitoring cost performance may be specified 
• Rules of performance measurement - Earned value management (EVM) rules of performance  measurement are set.
• Reporting formats - formats and frequency for the various cost reports are defined
• Process descriptions - all are documented
• Additional details - 
• Description of strategic funding choices
• Procedure to account for fluctuations in currency exchange rates
• Procedure for project cost recording

Source: PMBOK 5th ed. 

Project Cost Management - Overview

Includes the processes involved with planning, estimating, budgeting, financing, funding, managing and controlling costs sot hat the project can be completed within the approved budget.

There are only four processes in this knowledge area:

1. Plan Cost Management - establishes the policies, procedures, and documentation for planning, managing, expending and controlling project costs
2. Estimate Costs - developing an approximation of the monetary resources needed to complete project activities 
3. Determine Budget - aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline
4. Control Costs - monitoring the status of the project to update the project costs and managing changes to the cost baseline

Estimate costs and determine budget can be viewed as one process and performed by a single person very quickly, however we will outline them as two separate processes. 

Project Cost Management:

• Consider the stakeholder requirements for managing the costs
• Primary concerned with the cost of the resources needed to complete the project work
• May address financial management techniques
• return of investment
• discounted cash flow
• investment payback period

Source: PMBOK 5th ed. 

Project Time Management - Control Schedule

This process monitors the status of project activities to update project progress and manage changes to the schedule baseline to achieve the plan. It helps recognize deviation so that you can take corrective actions to help minimize the risks.

Items to be concerned with when controlling the schedule includes:

• Determining the current status of the project schedule
• Influencing the factors that create schedule changes
• Determining if the project schedule has changed
• Managing the actual changes as they occur

Lets take a look at the Inputs, Tools and Techniques and Outputs of this process. 

1) Project Management Plan

• Contains the schedule management plan to describe how the schedule will be managed and controlled and the schedule baseline to compare with actual results to identify deviations. 

2) Project Schedule

• The most recent version with notations to indicate updates, completed activities, and started activities as of the indicated data date. 

3) Work Performance Data

• The information about project progress (what has started, their progress and what finished)

4) Project Calendars

• May have multiple calendars to allow for different work periods so that some activities can calculate the schedule forecast

5) Schedule Data

• Collection of information for describing and controlling the schedule

6) Organizational Process Assets

• Assets that may impact control schedule may include:
• Existing policies, procedures and guidelines
• Schedule control tools
• Monitoring and reporting methods to be used

7) Performance Reviews 

• They measure, compare and analyze schedule performance
• Trend analysis - examines project performance over time to determine whether performance is improving or deteriorating. 
• Critical path method - comparing the progress along the critical path can help determine the status of the schedule. 
• Critical chain method - comparing the amount of buffer remaining to the amount of buffer needed to protect the delivery date
• Earned value management - methodology that combines scope, schedule, and resource measurements to assess project performance and progress

8) Project Management Software

• Used to track planned dates versus actual dates so that you can report variances 

9) Resource Optimization Techniques

• Technique used to adjust the start and finish dates of activities that adjust planned resource use to be equal or less than resource availability
• Resource leveling - technique in which start and finish dates are adjusted based on resource constraints with the goal of balancing demand for resources with the available supply. It usually changes the critical path and increases it. 
• Resource smoothing - technique which adjusts the activities of a schedule model such that the requirement for resources on the project do not exceed certain predefined resource limits. The project's critical path is not changed and the completion date may not be delayed. 

10) Modeling Techniques

• Used to review various scenarios guided by risk monitoring to bring schedule into allignment 
• What-If Scenario Analysis 
• the process of evaluating scenarios in order to predict their effects, positively or negatively on the objectives of the project
• Scenarios include delaying a major component or introducing external factors
• The outcome of the analysis helps prepare contingency and response plans
• Simulation
• Involves calculating multiple project durations with different sets of activity assumptions, usually using probability distributions constructed from the three-point estimates to account for uncertainty 
• Monte Carlo analysis is the most commonly used - distribution of possible activity durations are defined for each activity and used to calculate a distribution of possible outcomes for the total project

11) Leads and Lags

• Adjusting finds ways to bring project activities that are behind into alignment with the plan
• Lead is the amount of time whereby a successor activity can be advanced with respect to a predecessor activity. 
• Lag is the amount of time whereby a successor activity will be delayed with respect to a predecessor activity. 

12) Schedule Compression

• Used to find ways to bring project activities back into allignment 
• Used to shorten the schedule duration without reducing the project scope
• Crashing - technique used to shorten the schedule duration for the least incremental cost by adding resources and may result in increase risk or cost
• Fast tracking - technique in which activities or phases normally done in sequence are preformed in parallel for at least a portion of their duration resulting in rework and increased risk

13) Scheduling tool 

• Tools that contain the schedule model and generate start and finish dates based on the inputs of activities, network diagrams, resources and activity durations. They need to be updated. 

14) Work Performance Information

• Calculated schedule variance (SV) and schedule performing index (SPI) time indicators for WBS components are documented and communicated to stakeholders

15) Schedule Forecasts

• Estimations of conditions and events in the project's future 
• Forecasts are updated and reissued

16) Change Requests

• Changes that you may encounter can include:
• Progress reports
• Results of performance measures
• Modifications to the project scope
• Modifications to the project schedule
• They go through the Perform Integrated Change Control Process

17) Project Management Plan Updates

• Updates to the following plans may include:
• Schedule baseline
• Schedule management plan
• Cost baseline

18) Project Document Updates

• Updates to the following documents may include:
• Schedule data
• Project schedule
• Risk register

19) Organizational Process Assets Updates

• Updates to the following may include:
• Causes of variances
• Corrective action chosen and the reasons
• Other types of lessons learned

Source: PMBOK 5th ed. 

Project Time Management - Develop Schedule

This process analysis activity sequences, durations, resource requirements and schedule constraints to create the project schedule model. This schedule model will have the planned dates and planned milestones for completing project activities listed. As the work is in motion you will have to update the project schedule model to keep it accurate for analysis.

Lets take a look at the Inputs, Tools and Techniques, and Outputs of this process.

1) Schedule Management Plan

• Identifies the scheduling method and tool used to create the schedule and how the schedule is to be calculated

2) Activity List

• Identifies the activities that will be included in the schedule model

3) Activity Attributes

• Provide the details used to build the schedule model

4) Project Schedule Network Diagrams

• Contains logical relationships of predecessors and successors that will be used to calculate the schedule

5) Activity Resource Requirements

• Identify the types and quants of resources required for each activity to create the schedule model

6) Resource Calendars

• Contains information on the availability of resources 

7) Activity Duration Estimates

• Contains the quantitative assessments of the likely number of work periods that will be required to complete an activity that will be used to calculate the schedule.

8) Project Scope Statement

• Contains assumptions and constraints that can impact the development of the schedule

9) Risk Register

• Provides details of all identified risks and their characteristics 

10) Project Staff Assignments

• Specifies which resource is assigned to which activity

11) Resource Breakdown Structure

• Provides the details by which resource analysis and organizational reporting can be done

12) Enterprise Environmental Factors

• Factors may include:
• Standards
• Communication channels
• Scheduling tool to be used

13) Organizational Process Assets

• Factors may include:
• Scheduling methodology
• Project calendars

14) Schedule Network Analysis

• A technique to generate the schedule model by using various analytical techniques. 
• Critical path method (CPM) - used to estimate the minimum project duration and determine the amount of scheduling flexibility on the logical network paths within the schedule model
• Critical chain method - Schedule method that allows the project team to place buffers on any project schedule path to account for limited resources and project uncertainties
• What-if analysis -Process of evaluating scenarios in order to predict their effect on project objectives
• Resource optimization techniques - technique used to adjust the start and finish dates of activities that adjust planned resource use to be equal or less than resource availability

15) Critical Path Method

• Technique used to estimate the minimum project duration and determine the amount of scheduling flexibility on the logical network paths within the schedule model. 
• This schedule analysis calculates the early start, early finish, late start and late finish dates for all activities without regards to limitations
• The path indicates the time periods which the activity can be executed
• Total float - the amount of time that a schedule activity can be delayed or extended from its early start date without delaying the project finish date or violating a schedule constraint.
• Free float - the amount of time that a schedule activity can be delayed without delaying the early start date or any successor or violating a schedule constraint

16) Critical Chain Method (CCM) 

• Is a schedule method that allows the project team to place buffers on any project schedule path to account for limited resources and project uncertainties
• It is developed from the Critical Path Method and considers the following:
• effects of resource allocation
• resource optimization
• resource leveling
• activity duration uncertainty on the critical path
• Also known as resource-constrained critical path
• Feeding buffers are placed at each point where a chain of dependent activities, that are not on the critical chain, feeds into the critical chain protecting from slippage 

17) Resource Optimization Techniques

• Technique used to adjust the start and finish dates of activities that adjust planned resource use to be equal or less than resource availability
• Resource leveling - technique in which start and finish dates are adjusted based on resource constraints with the goal of balancing demand for resources with the available supply. It usually changes the critical path and increases it. 
• Resource smoothing - technique which adjusts the activities of a schedule model such that the requirement for resources on the project do not exceed certain predefined resource limits. The project's critical path is not changed and the completion date may not be delayed. 

18) Modeling Techniques

• What-If Scenario Analysis 
• the process of evaluating scenarios in order to predict their effects, positively or negatively on the objectives of the project
• Scenarios include delaying a major component or introducing external factors
• The outcome of the analysis helps prepare contingency and response plans
• Simulation
• Involves calculating multiple project durations with different sets of activity assumptions, usually using probability distributions constructed from the three-point estimates to account for uncertainty 
• Monte Carlo analysis is the most commonly used - distribution of possible activity durations are defined for each activity and used to calculate a distribution of possible outcomes for the total project

19) Leads and Lags

• Lead is the amount of time whereby a successor activity can be advanced with respect to a predecessor activity. 
• Lag is the amount of time whereby a successor activity will be delayed with respect to a predecessor activity. 

20) Schedule Compression

• Used to shorten the schedule duration without reducing the project scope
• Crashing - technique used to shorten the schedule duration for the least incremental cost by adding resources and may result in increase risk or cost
• Fast tracking - technique in which activities or phases normally done in sequence are preformed in parallel for at least a portion of their duration resulting in rework and increased risk

21) Scheduling tool 

• Tools that contain the schedule model and generate start and finish dates based on the inputs of activities, network diagrams, resources and activity durations. 

22) Schedule baseline

• This is the approved version of the schedule model and is used as a basis for comparison to actual start and finish dates results. 

23) Project Schedule

• presents linked activities with planned dates, durations, milestones and resources
• planned start and end date for each activity
• also known as the master schedule or milestone schedule
• presented in a graphical form
• Bar charts - known as Gantt charts which plots out all the activities with their durations and planned start and end dates
• Milestone charts - similar to Gantt charts but only shows the milestones
• Project schedule network diagram - A graphical representation of the logical relationships among the project schedule activities. It can be created manually or using project management software. A summary narrative and any unusual activity sequence may be included with this diagram.

24) Schedule Data

• Collection of information for describing and controlling the schedule and includes the following:
• Schedule milestones
• Schedule activities
• Activity attributes
• documentation of all identified assumptions and constraints

25) Project calendars

• Identifies working days and shifts that are available for scheduled activities

26) Project Management Plan Updates

• Plans that may get updated include:
• Schedule baseline
• Schedule management plan

27) Project Document Updates

• Documents that may get updated include:
• Activity resource requirements
• Activity attributes
• Calendars
• Risk register

Source: PMBOK 5th ed. 

Project Time Management - Estimate Activity Durations

This process estimates the number of work periods (amount of time) needed to complete individual activities with estimated resources.

Lets take a look at the Inputs, Tools and Techniques, and Outputs of this process.

1) Schedule Management Plan

• Defines the method used and the level of accuracy along with other criteria required 

2) Activity List

• Identifies the activities that will need duration estimates

3) Activity Attributes

• Provides the primary data input for use in estimating durations required for each activity in the activity list

4) Activity Resource Requirements

• This will impact on the duration of the activity depending on the level to which the resources are assigned to the activity

5) Resource Calendars

• Depending on the availability of the resources, type of resources and resources with specific attributes will impact the duration of schedule activities

6) Project Scope Statement

• You will use the assumptions and constraints in the project scope statement to help with activity durations.
• Assumptions - existing conditions, availability of information, and length of reporting periods. 
• Constraints - Available skilled resources, and contract terms and requirements. 

7) Risk Register

• Provides a list of risks along with the results of risk analysis and risk response planning. 

8) Resource Breakdown Structure

• Provides a hierarchical structure of the identified resources by resource category and resource type

9) Enterprise Environmental Factors

• Factors may include:
• Duration estimating databases
• Productivity metrics
• Published commercial information
• Location of team members

10) Organizational Process Assets

• Factors may include:
• Historical duration information
• Project calendars
• Scheduling methodology
• Lessons learned

11) Expert Judgement

• Experts can provide duration estimate information and suggest how to reconcile differences between methods of estimating. 

12) Analogous Estimating

• Technique for estimating the duration or cost of an activity or a project using historical data from a similar activity or project. (duration, budgets, size, weather and complexity) This technique is less costly, less time consuming and less accurate. It is the most reliable when the previous activity is similar to the one in the current project. 

13) Parametric Estimating 

• Technique in which an algorithm is used to calculate cost or duration based on historical data and project parameters. This technique can produce higher levels of accuracy. 

14) Three-Point Estimating

• Technique used to estimate cost or duration by applying an average of optimistic, pessimistic, and most likely estimates when there is uncertainty with the individual activity estimates. 
• It came from the program evaluation and review technique (PERT) that uses three estimates to define an approximate range for an activity's duration
• Most likely (tM) - estimate is based on 
• the duration of the activity
• given the resources likely to be assigned
• resource productivity
• realistic expectations of availability for the activity
• dependencies on other participants
• interruptions
• Optimistic (tO)- based on analysis of best-case scenario for the activity
• Pessimistic (tP) - based on analysis of the worst-case scenario for the activity
• Formulas used to calculate expected duration (tE) 
• Triangular Distribution
• tE = (tO + tM + tP) / 3
• expected duration = (Optimistic + Most likely + Pessimistic) divided by 3
• Beta Distribution
• tE = (tO + 4tM + tP) / 6
• expected duration = (Optimistic + 4 times Most likely + Pessimistic) divided by 6

15) Group Decision Making

• Team-based approaches help improve estimate accuracy and commitment to the emerging estimates.
• Brainstorming
• Delphi - technique for gathering information and used as a way to reach a consensus of experts on a subject. Participants are anonymous through the use of a questionnaire which is then summarized and recirculated for further comment
•  Nominal group techniques - technique that enhances brainstorming with a voting process used to rank the most useful ideas for further brainstorming or for prioritization

16) Reserve Analysis

• Duration estimates may include contingency reserves which are buffers of time scheduled into the project to allow for uncertainty. They can be developed by:
• Percentage of estimated activity duration
• Fixed number of work periods
• Monte Carlo simulation - process which generates hundreds or thousands of probable performance outcomes based on probability distributions for cost and schedule on individual tasks. The outcomes are then used to generate a probability distribution for the project as a whole. 
• Management reserves - amount of time reserved for management of the project and are used to address the unknown- unknowns that affect the project

17) Activity Duration Estimates

• These are quantitative assessments of the likely number of time periods that are required to complete an activity. 
• 2 weeks + or - 2 days (least 8 days and no more than 12 days) 

18) Project Documents Updates

• Documents that you may update includes:
• Activity attributes
• Assumptions made (skill level, availability, estimate durations) 

Source: PMBOK 5th ed. 

Project Time Management - Estimate Activity Resources

This process estimates the type and quantities of material, human resources, equipment, or supplies required to perform each activity. This allows for more accurate cost and duration estimates.

This process is coordinated with the Estimate Costs process as you may have to hire a consultant to get knowledge about what is needed for the project activities. This consultant will be an additional cost to the project.

Lets take a look at Inputs, Tools and Techniques, and Outputs of this process.

1) Schedule Management Plan

• identifies the level of accuracy and the units of measure for the resources to be estimated

2) Activity list

• Identifies the activities which will need resources

3) Activity Attributes

• Provides the primary data input for use in estimating those resources required for each activity in the activity list

4) Resource Calendars

• A calendar that identifies the working days and shifts that resources (humans, equipment, and material) are available. It also includes the information about resource experience or skill level as well as their location (time zones). 

5) Risk Register

• Risk events may impact resource selection and availability. 

6) Activity Cost Estimates

• Cost of resources may impact the selection of resources

7) Enterprise Environmental Factors

• May include the resource location, availability and skills.

8) Organizational Process Assets

• Factors that may impact estimate activity resources may include:
• Policies and procedures regarding staffing
• Policies and procedures regarding rental and purchase of supplies and equipment
• Historical information of resources used on other projects

9) Expert Judgment

• People with the specialized knowledge in resource planning and estimating can be used

10) Alternative Analysis

• conduct an analysis for alternatives to schedule activities such as various levels of resource skill, rent or buy decisions, or different size or types of machines used. 

11) Published Estimating Data

• Organizations will publish production rates and unit costs of resources for different countries or locations to get an array of labor trades, material and equipment. 

12) Bottom-up Estimating

• method of estimating the project duration or cost by aggregating the estimates of the lower-level components of the WBS. 

13) Project Management Software

• Software like a scheduling tool helps plan, organize and manage resource pools and develop resource estimates. Other items that can be track in the software include:
• Resource breakdown structures
• Resource availability
• Resource rates

14) Activity Resource Requirements 

• Identify the types and quantities of resources required for each activity in a work package. 

15) Resource Breakdown Structure

• A hierarchical representation of resources by category and type that is useful for organizing and reporting project schedule information with resource utilization information. 
• Category -labor, material, equipment, and supplies
• Types - skill level and grade level

16) Project Document Updates

• Documents that you may update include:
• Activity list
• Activity attributes
• Resource calendars

Source: PMBOK 5th ed. 

Project Time Management - Sequence Activities

This process identifies and documents relationships among the project activities to define the logical sequence of work to obtain the greatest efficiency.

Each activity and milestone should be connected to something before (predecessor) and something after (successor) it. The relationship of these activities can be connected with the following:

• Finish-to-start (FS)  - an activity that is finished will start another one at the same time
• Start-to-start  (SS)- an activity that starts will start another one at the same time
• Start-to-finish (SF) - an activity that starts will finish another one at the same time
• Finish-to-finish  (FF) - an activity that ends will ends another one at the same time

Lets take a look at the Inputs, Tools and Techniques, and Outputs of this process.

1) Schedule Management Plan

• Identifies the scheduling method and tool to be used for the projects to guide the sequence of activities

2) Activity List

• Contains all schedule activities required on the project with their dependencies and constraints.

3) Activity Attributes

• Describes a necessary sequence of events
• Defines predecessor or successor relationships

4) Milestone List

• Contains scheduled dates for specific milestones

5) Project Scope Statement

• Information in the scope statement that can influence sequence activities may include:
• Product scope description
• Product characteristics (physical layout of a plant or subsystems interfaces on software project) 
• Project deliverables
• Project constraints 
• Project assumptions

6) Enterprise Environmental factors

• Factors that may influence Sequence Activities may include:
• Government or industry standards
• Project Management Information Systems (PMIS) 
• Scheduling tool
• Company work authorization systems

7) Organizational Process Assets

Factors that may influence Sequence Activities may include:

• Project files from corporate knowledge base
• Existing policies, procedures and guidelines
• Templates

8) Precedence Diagramming Method (PDM)

• Technique used for constructing a schedule model where activities are graphically linked by one or more logical relationships to show the sequence of activities to be performed.
• Activity-on-node (AON) - method that represents a precedence diagram  

9) Dependency Determination

• There are four different types of dependencies and two can be applicable at the same time (mandatory internal dependencies, discretional external dependencies, etc.) 
• Mandatory dependencies - legally or contractually required. They are also known as hard logic or hard dependencies. They are assigned by the project team and shouldn't be confused with assigning schedule constraints in the scheduling tool. 
• Discretionary dependencies - established based on knowledge of best practices where a specific sequence is desired. They have to be documented as they cause arbitrary total float values and can limit scheduling options later. They are also known as preferred logic, preferential logic or soft logic. 
• External dependencies - involves relationships between project activities and non-project activities that are outside of the teams control. An example is that you need some hardware equipment from an outside vendor before you can add software to it. The team must determine what dependencies are external and process those sequence of activities. 
• Internal dependencies - have a precedence (something more important) relationship between project activities and are inside the teams control. 

10) Leads and Lags

• Lead is the amount of time whereby a successor activity can be advanced with respect to a predecessor activity. 
• Lag is the amount of time whereby a successor activity will be delayed with respect to a predecessor activity. 

11) Project Schedule Network Diagrams

• A graphical representation of the logical relationships among the project schedule activities. It can be created manually or using project management software. A summary narrative and any unusual activity sequence may be included with this diagram. 

12) Project Document Updates

• Documents that you may update can include:
• Activity lists
• Activity attributes
• Milestone list
• Risk register

Source: PMBOK 5th ed. 

Project Time Management - Define Activities

This process identifies and documents the specific actions to be performed to produce the project deliverables. By breaking down the work packages into activities it will provide the basis for estimating, scheduling, executing, monitoring, and controlling the project work. Work packages are decomposed into smaller components that are called activities.

Let's look at the Inputs, Tools and Techniques, and Outputs of this process:

1) Schedule Management Plan

• Establishes the criteria and activities for developing, monitoring and controlling the schedule.  

2) Scope Baseline

• By using the documented baselines of the project WBS, deliverables, constraints and assumptions will help define activities. 

3) Enterprise environmental factors

• Factors that may influence defining activities may include:
• Organizational cultures and structures
• Published commercial information from commercial databases
• Project Management Information Systems (PMIS) 

4) Organizational Process Assets

• Factors that may influence defining activities may include:
• Lessons learned knowledge base
• Standardized processes
• Templates that contain standards
• Existing planning related polices, procedures and guidelines

5) Decomposition

• Technique used to divide and subdivide the project scope and deliverables into manageable chunks. Activities are the effort needed to complete the work package and this process defines the final outputs as activities. 

6) Rolling Wave Planning

• Technique in which the work to be done in the near term is planned in detail while the work in the future is planned at a high-level. Work can be decomposed into activities. 

7) Expert Judgement

• Meet with the experts that can help you define the activities.

8) Activity List

• Includes all schedule activities required
• Includes the activity identifier
• Detailed scope description for each activity 
• Activity titles that describes its place in the schedule

9) Activity Attributes

• Extends the description of the activity over time to include:
• Activity identifier (ID)
• WBS ID
• Activity label or name
• Activity codes
• Activity description
• Predecessor activities
• Successor activities
• Logical relationships
• Leads and Lags
• Resource requirements
• Imposed dates
• Constraints
• Assumptions

10) Milestone List

• A significant point or event in a project is called a milestone. 
• A milestone list identifies all the milestones and indicates if it's mandatory, required by contract, or optional. 

Source: PMBOK 5th ed. 

Project Time Management - Plan Schedule Management

This is the process of establishing the policies, procedures, and documentation for planning, developing, managing, executing, and controlling the project schedule.

•  It is a component of the Project Management plan. 
• It can be formal or informal 
• Highly detailed or broadly framed
• Includes appropriate control thresholds
• Defines how schedule contingencies will be reported and assessed 

Let's take a look at the Inputs, Tools and Techniques, and Outputs of this process. 

1) Project Management Plan

• Information used to develop the schedule management plan would include:
• Scope baseline - includes the project scope statement and the WBS details used to define activities, durations and schedule management 
• Other information - other scheduling relating to cost, risk and communications decisions 

2) Project Charter

• defines the summary milestone schedule and project approval requirements that will influence the management of the project schedule

3) Enterprise Environmental Factors

• Factors that will influence the Plan Schedule Management will include: 
• Organizational culture and structure
• Resource availability and skills
• Project management software provides alternatives to managing schedule
• Published commercial information (resource productivity information) 
• Organizational work authorization systems

4) Organizational Process Assets

• Process assets that influence this process may include:
• Monitoring and reporting tools
• Historical information 
• Schedule control tools
• Existing policies, procedures and guidelines
• Templates
• Project closure guidelines
• Change control procedures
• Risk control procedures

5) Expert Judgement

• Using experts to help you decide on whether to combine methods and how to reconcile differences between them. 

6) Analytical Techniques

• Choose strategic options to estimate and schedule the project
• Scheduling methodology
• Scheduling tools and techniques
• Estimating approaches
• Formats
• Project management software
• Organizational policies and procedures 
• Rolling wave planning - iterative planning technique in which the work to be accomplished in the near term is planned in detail, while the work in the future is planned at a higher level
• Leads and lags 
• Lead - amount of time whereby a successor activity can be advanced with respect to a predecessor activity
• Lag - amount of time whereby a successor activity is required to be delayed with respect to a predecessor activity
• Alternatives analysis - technique used to evaluate identified option in oder to select which options or approaches to use to executer and perform the work of the project
• Methods for reviewing schedule performance

7) Meetings

• Planned meetings to develop the schedule management plan with project teams. 

8) Schedule Management Plan

• It establishes the criteria and activities for developing, monitoring, and controlling the schedule. It can be made up of the following:
• Project schedule model development - Scheduling methodology and the scheduling tool to be used in the development of the schedule model are specified
• Level of accuracy - acceptable range used in determining realistic activity duration estimates
• Units of measure - Each is defined for each resource 
• staff hours
• staff days
• meters
• liters
• tons
• cubic yards for quantity measures
• Organizational procedures links - The work breakdown structure (WBS) provides this framework 
• Project schedule model maintenance - update the status and record progress of the project in the schedule model is defined
• Control thresholds - Variance thresholds will be specified to indicate the degree of variance allowed before some action needs to be taken. 
• Rules of performance measurement - Earned value management (EVM) rules or other physical measurement rules.
• Rules for establishing percent complete
• Control accounts for management of progress and schedule to be measured
• Earned value measurements techniques (Baselines, fixed formulas, etc.) 
• Schedule performance measurements (schedule variances (SV) and Schedule performance index (SPI))
• Reporting formats - formats and frequency that are defined
• Process descriptions - documented description of each of the schedule management processes 

Source: PMBOK 5th ed. 

Project Time Management - Overview

This is the process that helps you manage the timely completion of the project. It covers the following seven processes.

1. Plan Schedule Management - establish the policies, procedures, and documentation for planning, developing, managing, executing, and controlling the project schedule
2. Define Activities - identifying and documenting the specific actions to be performed to produce the project deliverables
3. Sequence Activities - identifying and documenting relationships among the project activities
4. Estimate Activity Resources - estimating the type and quantities of material, human resources, equipment, or supplies required to perform each activity
5. Estimate Activity Durations - estimating the number of work periods needed to complete individual activities with estimated resources
6. Develop Schedule - analyzing activity sequences, durations, resource requirements, and schedule constraints to create the project schedule model
7. Control Schedule - monitoring the status of project activities to update project progress and manage changes to the schedule baseline to achieve the plan

This process is documented in the Schedule Management Plan of the Project Management Plan. This plan identifies a scheduling method and scheduling tool. It also sets the format and establishes the criteria for developing and controlling the project schedule. The scheduling method defines the framework and algorithms used in the scheduling tool. 

• Critical path method (CPM) - method used to estimate the minimum project duration and determine the amount of scheduling flexibility on the logical network paths within the schedule module
• Critical chain method (CCM) - method that allows the project team to place buffers on any project schedule path to account for limited resources and project uncertainties 

Outputs from other processes are used to define the schedule development along with a scheduling tool to produce the schedule model. The finalized and approved schedule will be the baseline used in the Control Schedule Process. 

Source: PMBOK 5th ed.