lecture 10-updated pmbok 5th

8/11/2019 Lecture 10-Updated Pmbok 5th

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Lecture Ten:Project Integration Management


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Integration Processes:Develop Project Charter-InitiationProcess

Develop Project Management Plan-

Planning

Direct and Manage Project Execution

Monitor and control project work

Perform Integrated change control

Close project-Closing

.


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First Process: Develop Project CharterThe process of developing a document that formally authorize a project or a phase anddocumenting initial requirements that satisfy the stake holders needs and expectation.


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First Process: Develop Project CharterProject Charter include :1-Project Title and description2-Project Manager Assigned and authority Level3-Buisness case4-Resources Pre-assigned5-Product Description6-Stakeholder requirements7-Project approval requirements8-High Level Risk9-Project Constraints10-Preliminary Budget


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Notes : Project SelectionPresent Value:The value today of future cash flow

PV = FV/(1+r) n FV=Future Value R= Interest rate N=Number of times periodAssume that you would like to put money in an account today to make sure your child hasenough money in 10 years to buy a car. If you would like to give your child $10,000 in 10years, and you know you can get 5% interest per year from a savings account during thattime, how much should you put in the account now? The present value formula tells us:

PV = 10,000/ (1 + .05) 10 = 6,139.13

Thus, $6,139.13 will be worth $10,000 in 10 years if you can earn 5% each year. In otherwords, the present value of $10,000 in this scenario is $6,139.13.
http://www.investinganswers.com/financial-dictionary/personal-finance/savings-account-892http://www.investinganswers.com/financial-dictionary/personal-finance/savings-account-892


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Notes : Project Selection

Net Present Value :It is the present value of an investment's expected cash inflows minus the costs of acquiring

the investment .NPV = (Cash inflows from investment) (cash outflows or costs of investment)Example:

Let's assume Company XYZ wants to buy Company ABCCost to purchase Company ABC today: $1,000,000Present value (PV) of cash flows from acquiring Company ABC:Year 1 : $200,000 Year 2 : $150,000 Year 3 : $100,000 Year 4 : $75,000 Year 5 : $70,000Year 6 : $55,000 Year 7 : $50,000 Year 8 : $45,000 Year 9 : $30,000 Year 10 : $10,000Total: $785,000

Net Present Value (NPV) = 785,000 - 1,000,000 = - 215,000 At this point, management for Company XYZ would use the net present value rule to decidewhether or not to pursue the acquisition of Company ABC . Because the NPV is negative , theyshould say, "No."
http://www.investinganswers.com/financial-dictionary/stock-valuation/present-value-926http://www.investinganswers.com/financial-dictionary/investing/net-present-value-rule-2944http://www.investinganswers.com/financial-dictionary/stock-valuation/acquisition-2224http://www.investinganswers.com/financial-dictionary/stock-valuation/acquisition-2224http://www.investinganswers.com/financial-dictionary/investing/net-present-value-rule-2944http://www.investinganswers.com/financial-dictionary/stock-valuation/present-value-926


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Notes : Project SelectionNet Present Value :The present value for year 1,2 etc means that company earn at each year certainamount for year ,this amount is cash inflow in the future and its translated to itspresent value

Cost of purchasing the company is at present this why we transform the cash inflow inthe future to present to substract both value to decide buy or notWhy It Matters:NPV is used to analyze an investment decision and give company management a clearway to tell if the investment will add value to the company. Typically, if an investmenthas a positive net present value , it will add value to the company and benefit companyshareholders.Net present value calculations can be used for either acquisitions (as shown in theexample above) or future capital projects. For example, if a company decides to open anew product line, they can use NPV to find out if the projected future cash inflows coverthe future costs of starting and running the project. If the project has a positive NPV, itadds value to the company and therefore should be considered .
http://www.investinganswers.com/financial-dictionary/stock-valuation/present-value-926http://www.investinganswers.com/financial-dictionary/stock-valuation/present-value-926


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Notes : Project SelectionPayback Period:Payback PeriodThis term refers to the length of time it takes for the organization to recover itsinvestment in the project before it starts accumulating profit. For example:

Question There are two projects from which to choose: Project A with a payback period of six monthsor Project B with a payback period of 18 months. Which one should the organization select?Answer Project A

This method ignores profitability, time value of money

Benefit Cost Ratio:A ratio attempt to identify the relation between the cost and benefits

Benefit = Revenue.Remarque: Profit = Revenue -Expenses .Ratio greater then 1 means that benefit are greater then costRatio less then 1 means that benefit are less then cost


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Notes : Project SelectionInternal Rate of Return (IRR)To understand this concept, think of a bank account. You put money in a bank account and expect toget a return of 2 percent. You can think of a project in the same way. If a company has more than oneproject in which to invest, the company may look at the returns of the different projects and then select

the project with the highest return.

IRR does get confusing when you give it a formal definition: The rate (read it as "interest rate") at whichthe project inflows ("revenues") and project outflows ("costs") are equal. You will not have to performany IRR calculations on the exam.Simply know the higher the IRR number, the better.

Question An organization has two projects from which to choose: Project A with an IRR of 21percent or Project B with an IRR of 15 percent. Which one is a better option?Answer Project A


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Notes : Project SelectionExercise Remember, you do not have to be an accountant to pass this exam.Its just provided as conceptual questions: For each row on the following chart, enter the letter of the project you would select if the following

information was. provided .


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Notes : Project SelectionOpportunity Cost :This term refers to the opportunity given up by selecting project over anotherEX Project A NPV = 45000 Project B NPV= 85000Selection project B mean that opportunity cost A

Sunk Cost :A cost already incurred and thus cant be recovered .Sunk cost are independent of any eventcould occur in the future or any calculation when deciding to continue the project.Project A with initial budget 100,000 now we are in the middle of the project where2,000,000 to decide to continue the over 100,000 is already spend ,cant be taken incalculation

Working Capital :A measure of both company effienciy and its short term financial healthWorking capital = Current assets- Currents liabilities( =Company debts or obligation to pay)Positive working capital means that the company is able to pay off its current liabilities


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Second Process: Develop Project Management PlanManagement plan are the strategy for managing project and the processes ineach knowledge area


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Second Process: Develop Project Management PlanKickoff MeetingBefore the Develop Project Management Plan process can really be completedand project executing can begin, a kickoff meeting should be held. This is a meeting ofthe key parties involved in the project (e.g., customers, sellers, the project team, seniormanagement, functional management, the sponsor). The purpose of this meeting is toannounce the start of the project and to ensure everyone is familiar with its details andwith the people working on it.


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Second Process: Develop Project Management Plan


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Output: Project Management Plan

The project Management Plan::It integrates and consolidates all of thesubsidiary management plans and baselineLike scope management plan,time,cost,risketc


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Output: Project Management PlanAnother subsidiary plan could be included in the project management plan

Change Management Plan:It describes how changes will be managed and controlled it may include:1-Change control procedures .

2-The approval level for authorizing changes3-The creation of change control board to approve changes4-Who should attend meetings regarding changes

Change Control system: Its a part of organization process assets .Thissystem includes standardized forms,reports,processes,procedures andsoftware to track and control changes


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Output: Project Management PlanAnother subsidiary plan could be included in the project management plan

Configuration Management system:It defines how manage changes to deliverables and updating the resultingdocumentation to be distributed to project team

One of tools is Project information system.


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Remark:

Projects Documents :Likes project charter, statement of work, risk register, stake holder register, issue log theyare considered as documents not a parts of project management plan.


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Third Process: Direct and Manage Project executionDirect and Manage Project Work is the process of leading and performing the work definedin the project management plan and implementing approved changes to achieve theprojects objectives. The key benefit of this process is that it provides overall managementof the project work..


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Third Process: Direct and Manage ProjectexecutionThe Project manager is responsible to integrate all the executing processes into onecoordinated effort to accomplish the project management plan and produce deliverables


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Third Process: Direct and Manage ProjectexecutionTool: Project Information System:Its a part of enterprise environmental factors provides access to an automated tool,such as scheduling software tool, web interface, information collection and distributionsystem

Output: Changes requestCorrective action: It's any action taken to bring expected future performance in linewith project management plan, It involves implementing actions to deal with actual

deviation..Any corrective actions required a formal change request to be reviewed and approved orrejected as part of the integrated change control


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Output: Changes requestPreventive action: It deals with anticipated or possible deviations from the performance base lineExample:

Arrange for one of the team member in certain specialized area to be a backup of anexpert one in this field .Changing resource as he does not meet the acceptance criteria in certain work package

Defect Repair:This is mean rework, the output didnt meet specification.


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Fourth Process: Monitor and Controlproject work:Monitor and control project work isthe process of tracking ,reviewingand regulating the process to meetthe performance objectives defined

into the project management plan.Its concern to:Comparing actual projectperformance against the projectmanagement planAssessing performance to determinewhether any corrective or

preventative is requiredMaintaining an accurate ,timelyinformation base concerning projectproductProviding forecast to update currentcost and current scheduleinformation


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Fourth Process: Monitor and Control project work



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The Monitor and Control Project Work process is concerned with:1- Comparing actual project performance against the project

management plan;2- Assessing performance to determine whether any corrective or

preventive actions are indicated, and then recommending thoseactions as necessary;

3- Identifying new risks and analyzing, tracking, and monitoring existingproject risks to make sure the risks are identified, their status isreported, and that appropriate risk response plans are being

executed;4- Maintaining an accurate, timely information base concerning the

projects product(s) and their associated documentation throughproject completion;

5- Providing information to support status reporting, progressmeasurement, and forecasting;

6- Providing forecasts to update current cost and current schedule

information;7- Monitoring implementation of approved changes as they occur; and8- Providing appropriate reporting on project progress and status to

program management when the project is part of an overall program.


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Fifth Process: Perform integrated changecontrol

Perform Integrated Change Control is the process ofreviewing all change requests; approving changes andmanaging changes to deliverables , organizationalprocess assets, project documents, and the projectmanagement plan; and communicating theirdisposition. It reviews all requests for changes ormodifications to project documents,deliverables,baselines, or the project management plan andapproves or rejects the changes. The key benefit of

this process is that it allows for documented changeswithin the project to be considered in an integratedfashionwhile reducing project risk, which often arises fromchanges made without consideration to the overallproject objectives or plans.


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Fifth Process: Perform integrated changecontrol


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Fifth Process: Perform integrated change control Detailed Process for making changes1-Identify changes2-Look at the impact of changes3-Create change request

4 Perform integrated change control:

A-Asses the change does the change fall within project charterB-Look for an optionC-Change request is approved or RejectedD-Update the status of the change in change control system

5-Adjust the project management plan, project document and baseline6-Manage stakeholders expectation by communicating the change to stakeholdrsaffected by the change


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Fifth Process: Perform integrated change control Change Control meetings:

A change control board is responsible for meeting and reviewing the changes requestand approving or rejecting those changes requests.

The roles and responsibilities of these boards are clearly defined and are agreed uponby appropriate stakeholders.

All change control board decisions are documented and communicated to the stakeholders for information and follow up activities


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Sixth Process: Close project or phaseThe process of finalizing all activities across all of the project management processgroups or formally complete the projectIt includes:1-Actions and activities necessary to satisfy completion or exit criteria for the phase orproject

2-Actions and activities necessary to transfer the project products, services .3-Activitiies needed to collect project or phase records ,audit project success or failure4-Gather lesson learned and archive future information for future use by theorganization


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Sixth Process: Close project or phase


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Question Review Youve just received a change request This means: A. The project charter is complete, but the work cannot begin yet because you need tomake a change to the scope baselineB. You are in the Direct and Manage Execution process, and you can implement thechange nowC . The change needs to be approved before it can be implementedD. There is a defect in a deliverable that must be repaired

. What is the output of Direct and Manage Execution?A. Approved change requestsB. Project management processesC . Deliverables

D. Forecasts


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Question Review Youre managing a graphic design project. One of your team members reports that there is a seriousproblem, and you realize that it will cause a delay that could harm the business of the stakeholders.Even worse, it will take another two days for you to fully assess the impact until then, you wont havethe whole story. What is the BEST way to handle this situation?A. Create a change request document and submit it to the change control meetingB. Pull out the project charter and show them that you have authority to make decisionsC . Meet with the stakeholders and tell them that theres a problem, but you need two more days to getthem the information they need

D. Update the lessons learned and add it to your organizational process assets

. Youre a project manager on a construction project. The electrician has started laying out the wiring, when the client comes to you with a change request. He needs additional outlets, and youthink that will increase the cost of the electrical work. What is the first thing you do?A. Refuse to make the change because it will increase the cost of the project and blow yourbudgetB. Refer to the project management plan to see how the change should be handledC. Consult the contract to see if there is a clauseD. Make the change, since the client requested it


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Question Review The work authorization system:A. Ensures that every work package is performed at the right time and in the proper sequenceB. Authorizes the project manager to spend money on workC. Is a set of processes and tools that aids project manager in effectively guiding the project tocompletionD. Is a formalized, written description of how to carry out an activity

NB:Work Authorization. A permission and direction, typically written, to begin work on a specific scheduleactivity or work package or control account .

Work Authorization System. A subsystem of the overall project management system. It is a collection offormal documented procedures that defines how project work will be authorized (committed) to ensurethat the work is done by the identified organization, at the right time, and in the proper sequence. Itincludes the steps, documents, tracking system, and defined approval levels needed to issue work

authorizations.


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Question Review

. Youre on the project selection committee. Youre reviewing a document that describes the strategic value of a potential project and its benefits to the company. Whats this document called?A. Project CharterB . Business CaseC. Benefit measurement method

D. Contract

. Which of the following is included in a project charter?A. A risk management strategyB. Work package estimatesC. Detailed resource estimatesD . The business case for the project


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Question Review

. You are the project manager for a software project, when the sponsor pulls the plug and cancelsthe project. What do you do?A. Give the team the day off to recuperate from the bad newsB. Create a budget summary for the remaining unspent budgetC . Follow project closure procedures to close the project and update lessons learnedD. Find new assignments for any people previously assigned to your project

. You are managing a software project, when you find out that a programming team who you weresupposed to have access to has been reassigned to another project. What is the first thing that youshould do?A. Figure out the impact that this will have on your projectB. Bring a copy of your projects charter to the other manager, and explain that you need that team for your own project

C. Go to your sponsor and demand the teamD. Figure out a way to compress the project schedule so that you can work with the team if theybecome available


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Question Review. All of the following occur during the Close Project or Phase process EXCEPT:A. Creating lessons learned.B. Formal acceptance.C. Performance reporting.D. Performing cost benefit analysis.

. You are asked to prepare a budget for completing a project that was started last year and thenshelved for six months. All the following would be included in the project budget EXCEPT:A. Fixed costs.B. Sunk costs.C. Direct costs.D. Variable costs.

. You are assigned as the project manager in the middle of the project. The project is within the

baselines, but the customer is not happy with the performance of the project. What is the FIRSTthing you should do?A. Discuss it with the project team.B. Recalculate baselines.C. Renegotiate the contract.D . Meet with the customer.


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Question Review- All technical work is completed on the project. Which of the following remains to be done?

A. Validate ScopeB. Plan Risk ResponsesC. Create a staffing management planD . Complete lessons learnedNB: We are here in closing phase as works are completed, validate scope is in control and monitor

. Integration is done by the:A. Project manager.B. Team.C. Sponsor.D. Stakeholders.


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Good Luck