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Laura continues to provide exceptional content across project management, business analysis and six sigma.  Please let us know what topics in those areas would help you the most!  We’re well over 200 postings now.

I’ve thoroughly enjoyed sharing about the Exercise – Brain Connection.  It does pay dividends on your work performance and certification exam success!  As I’ve dug deeper it’s made sense to separate that into a different blog.  So please check out http://www.coachdavek.com .  Today I shared about a weak area for me – core and pillar strength.  Please follow that blog as well!

I will be continuing a practice oriented thread on consulting tips and techniques.  Look forward to those and again, please share your opinions!

David Kohrell

Expected Monetary Value

When dealing with risk, probabilities of different scenarios and the associated financial loss or gain can be calculated mathematically. An example of analyzing Expected Monetary Values is the decision tree, which is part of the PMBOK®’s Perform Quantitative Risk Analysis process. This can be applied to wide variety of project situations. For example, Carl is trying to decide whether or not to take a former client to court. Christopher, his lawyer, tells him that if he takes the client to court, there is about a 25% chance that the jury will side with him and award him what will amount to $50,000 after paying legal fees. However, there is a 75% chance that the jury will not side with him, and he’ll have to pay $10,000 for legal fees. If he takes the $5000 settlement that the former client is offering, it’s certain that he won’t lose any money. Carl calculates the EMV for going to court by taking the probability multiplied by the amount of money for both the winning outcome and the losing outcome and then combining them together. So, for winning in court,  .25 * $50,000 = $12,500. For losing in court,  .75 * $10,000 = -$7,500. Combining the two outcomes for going to court is $12,500 – $7,500 = $5,000. This just happens to be the same amount that is guaranteed if he takes the $5,000 settlement. So in this case, the EMV is the same for the two choices, so the decision must be made on other criteria, such as risk tolerance,  for which EVM does not take into consideration, or the time involved and effects of negative publicity.

Checklist Analysis and Assumptions Analysis for Risk

Checklist Analysis and Assumptions Analysis are tools and techniques of the PMBOK®’s Identify Risk process. A Checklist Analysis can provide ideas for risks on a current project. These lists of risks can be from previous, similar projects; the lowest level of the Risk Breakdown Structure; or other sources. Care should be taken to also explore risks that are not on the checklist, because even highly similar projects will have their own, unique risks. For example, Katy will be baking a batch of cookies to enter at the state fair. She finds her list of risks from last year’s cookie competition which includes: missing an ingredient, under-baking, burning, and a stale ingredient. Although this checklist gives her a good beginning, she has some new risks with this project, such as the state fair rules specifically place some restrictions on ingredients and cookie size that will disqualify her entry if she does not follow them.

Although sometimes it is obvious that one is making an assumption, often assumptions are so subtle that they are not even recognized as such. Assumptions Analysis examines and challenges the project’s assumptions. For example, Katy assumes that she’ll be able to drive her car to the state fair and enter her cookies, but her car could break down. She assumes her grocery store will have the ingredients she needs in stock, but they could be sold out of an ingredient she needs. Also, she assumes she will have electricity for her stove, but her power could go out. The point here is to examine which of these assumptions warrant being listed as risks for further analysis and monitoring.

Communication Methods and Models

Communication Methods is a tool of the Plan Communications, Distribute Information, Report Performance, and Manage Stakeholders Expectations processes. (Which means that Communication Methods is a tool for all Communications processes except for the Identify Stakeholders process). Communication Methods fall into three broad categories: Interactive, Push, and Pull. Interactive Communication is the most effective form of communication. The people involved are able to exchange information through sharing and receiving information. Examples include phone calls, videoconferencing, and meetings. Push Communication sends information to people, but it is unknown if they have actually received it. Examples include emails, voicemails, and letters. Pull Communication is information that can be accessed by people, such as through intranet sites and filing cabinets.

Communication Models is a tool of the Plan Communications process. A simple model includes: Encode, Message/Feedback-Message, Medium, Noise, and Decode. Encoding puts thoughts and ideas into a language that can be understood by someone else. The Message is the output of encoding that represents these thoughts and ideas. Medium is the method used to transmit the message. Noise is something that interferes with the understanding of the message. Decode is the process of understanding the thoughts and ideas represented by the message. For example, Carl imagines that the car he is restoring would look better if it were painted green, so he calls the client and says “May I go ahead and make your car green? It would be a huge improvement.” The client, an environmentally conscious man, understands “make your car green” as improving its gas mileage, so he agrees. In this scenario, the Encoding is Carl’s thoughts of a green car translated into English. The Message is what he actually said to his client. The Medium is the telephone. The Noise was the dual meaning of the word “green,” and the Decoding was the client’s misunderstanding of the message.

Histogram

The histogram is graphical representation of data. It is a tool of the PMBOK®’s Perform Quality Control process, but can be used in any field where this type of data is to be displayed. The example here is from Carl’s Car Restoration business. For marketing purposes, he wanted to see what ages his customers were. His customers ranged from age 39 to 55. There were no customers ages 40, 53, or 54. The mode (most common) age was 46, with 5 customers being that age. Note that the bars are touching each other because of the continuous nature of the age variable. For example, someone 42 years old could be almost 43, and actually be closer in age to those who just turned 43 than they are to the 42-year-olds in their own category. By having the bars touch in a histogram, this continuous nature is displayed. If the x-axis were composed of a set of categories, there would be spaces between the bars and it would be called a Bar Chart.

Configuration Management

It can be assumed that there will be some changes, however minor, made to a project’s original plans. The PMBOK®’s Perform Integrated Change Control process handles change requests throughout a project. The Configuration Management System is a set of formal procedures that is indirectly an input into this process, but listed as a tool in the PMBOK®’s glossary. There are three configuration management activities to understand: Configuration Identification, Configuration Status Accounting, and Configuration Verification and Audit.

Configuration Identification identifies the attributes of the product and creates a baseline. Any desired changes to this baseline necessitate formal configuration control processes.

Configuration Status Accounting records information about the baseline for a configuration item and reports information about it such as its status on proposed changes.

Configuration Verification and Audit checks that the performance of the configuration item is correct and the requirements have been correctly implemented.

Phase-to-Phase Relationships

A large project may be broken into specific phases, with each of these phases having specific deliverables. At the end of a phase, a Phase-End Review may occur, which formally concludes that phase, and if the project is deemed worthwhile to continue, authorizes the next phase to begin. There are three major phase-to-phase relationships described in the PMBOK®: Sequential Relationship, Overlapping Relationship, and Iterative Relationship.

In a Sequential Relationship, when one phase is complete, the next phase may begin. In an Overlapping Relationship, the next phase may begin before the previous phase is completely finished. In an Iterative Relationship, which is useful for largely undefined projects, the planning for the next phase occurs during the current phase. Note that a project may have more than one of these relationships. For example, the early phases may have been performed sequentially, but due to falling behind schedule, later phases will be overlapped.

Project Life Cycle

Although projects vary dramatically, according to the PMBOK®, all projects go through the same life cycle structure. Accordingly, this is a very broad, big-picture view of a project life cycle. There are four components to this structure—Starting the Project, Organizing and Preparing, Carrying out the Project Work, and Closing the Project. The Starting the Project component ends when the Project Charter is created. The Organizing and Preparing component ends when the Project Management Plan is created. Carrying out the Project Work ends when the deliverables have been accepted, and Closing the Project ends when the project documents are archived. Note that these components correspond closely to the project management process groups of Initiating, Planning, Executing, and Closing, with the Monitoring and Control process group overseeing all of them.

There are three characteristics to remember that are associated with the project life cycle. All three of these should be fairly intuitive. Imagine that Katy the project manager will be making cookies with her family.

1. Cost and Staffing are low at the beginning, highest as the work is carried out, and drop dramatically as the project nears the end. At the beginning, Katy is looking through recipes by herself. As she actually starts baking with her children, the number of people and the costs of materials she is using increases. Once the cookies are made, she is again by herself putting away her cookbook and writing a few notes on potential changes to the recipe she used.

 2. Stakeholder influence and risks are greatest at the beginning and slowly decrease throughout the project. Before starting to mix the ingredients, stakeholder influences, such as her husband hinting that he would prefer oatmeal raisin cookies are at their greatest. By the time the cookies are in the oven, her husband has little influence over the final product.

3. The ability to influence the project’s product is easiest at the beginning and more difficult as time goes on. With every successful step, certain risks go away. Once the cookie dough is mixed, the risk of not having the ingredients is over. Once the cookies are safely out of the oven, the risk of burning them is over.

What is the PMBOK®, PMI®, and PMP®?

PMI® (Project Management Institute) describes itself as the world’s leading non-profit project management association with over half a million members. PMI awards several certifications relating to project management, with the PMP® (Project Management Professional) certification for project managers being the most common. Those who contribute to projects, but do not lead them, may earn their CAPM® (Certified Associate in Project Management), and those who manage multiple projects simultaneously in the form of programs may earn their PgMP ® (Program Management Professional). There are also two project specialty certifications awarded by PMI—the PMI-SP® (Project Management Institute Scheduling Professional) and the PMI-RMP® (Project Management Institute Risk Management Professional).

The PMBOK® (Project Management Body of Knowledge) is the book produced by PMI that is the recognized standard for the profession of project management and the foundation for PMI’s certifications. Currently in its fourth edition, the PMBOK describes 42 processes that are “generally recognized as good practice” in the field of project management.

Process Group and Knowledge Area Descriptions

The PMBOK® describes 42 processes, with each process belonging to one of the nine knowledge areas (Integration, Scope, Time, Cost, Quality, Human Resource, Communications, Risk or Procurement) and one of the five process groups (Initiating, Planning, Executing, Monitoring & Controlling, and Closing). Here is a description of each of these knowledge areas and process groups.

 

Integration (6 processes) – Coordinating processes and activities

Scope (5 processes) – Ensuring that the project includes all the work required, and only that work required

Time (6 processes) –Ensuring timely completion of project

Cost (3 processes) – Estimating, budgeting, and controlling costs

Quality (3 processes) – Determining quality policies, objectives, and responsibilities and then implementing a quality management system

Human Resource (4 processes) – Organizing, managing, and leading the project team

Communications (5 processes) – Communicating in a timely and appropriate manner

Risk (6 processes) – Increasing the probability and impact of positive risks while decreasing the probability and impact of negative risks

Procurement (4 processes) – Purchasing and acquiring goods, services, and results

 

Initiating (2 processes) – Gaining authorization and defining a new project or phase

Planning (20 processes) – Defining the scope, adding detail to the objectives, and planning what needs to be done to meet objectives

Executing (8 processes) – Actually doing the project work

Monitoring & Controlling (10 processes) – Tracking, reviewing, and regulating the project

Closing – (2 processes) Finalizing all activities