Process Groups and Knowledge Areas

To manage Projects effectively those should be divided Phases and smallest possible sub phases. This iterative process should go up to the level where further division creates chaos rather than helping the project. In database terminology we call this as “Atomic” level.    

Projects can be managed easily by Phased approach. PMBOK defined and explained processes to manage these sub atomic processes. As per PMBOK 4th edition guide there are 44 processes and grouped in to 5 major Process Groups.5 Process groups are 
  1. Initiation
  2. Planning
  3. Executing
  4. Monitoring & Control
  5. Closing. 

Certain INPUTS are given to the process. Managers use said TOOLS available for that process to produce OUTPUTS.PMBOK guide also defines Knowledge Areas for the Project Managers. Managers will use these skills (Knowledge) to work on given INPUTS using TOOLS to produce OUTPUTS. Those are

  1. Project Integration Management 
  2. Project Scope Management 
  3. Project Cost Management 
  4. Project Time Management 
  5. Project Risk Management 
  6. Project Quality Management 
  7. Project HR Management
  8. Project Communication Management 
  9. Project Procurement Management

Effective Project Management requires knowledge and skills from following 5 areas 

  1. The Project Management Body of Knowledge (5 process groups and 9 knowledge areas)
  2. Application area knowledge, standards, and regulations
  3. Understanding the project environment
  4. General management knowledge and skills
  5. Interpersonal skills.

PMBOK 4th Edition: Process Chart-

    Initiation   Planning   Executing   Monitorin and Controlling   Closing  

4.1 Develop Project Charter
4.2 Develop Project Management Plan     4.3 Direct & Manage Project Execution
4.4 Monitor & Control Project Work
4.5 Perform Integrated Change Control  
4.6 Close Project or Phase 
Scope       5.1 Collect Requirements  5.2 Define Scope
5.3 Create Work Breakdown Structure (WBS)     

    5.4 Verify Scope 
5.5 Control Scope 
Time        6.1 Define Activities
6.2 Sequence Activities6.3 Estimate Activity Resources  6.4 Estimate Activity Durations  6.5 Develop Schedule  

     6.6 Control Schedule      
Cost        7.1 Estimate Costs7.2 Determine Budget    

     7.3 Control Costs      
Quality        8.1 Plan Quality    8.2 Perform Quality Assurance    8.3 Perform Quality Control       
HR        9.1 Develop Human Resources Plan     9.2 Acquire Project Team
9.3 Develop Project Team
  9.4 Manage Project Team  
Communications    10.1 Identify Stakeholders    10.2 Plan Communications   10.3 Distribute Information  10.4 Manage Stakeholder  Expectations  

10.5 Report Performance  
Risk        11.1 Plan Risk Management11.2 Identify Risks  11.3 Perform Qualitative Risk Analysis  11.4 Perform Quantitative Risk  


11.5 Plan Risk Responses  

11.6 Monitor and Control Risks    

Procurement        12.1 Plan Procurements    12.2 Conduct Procurements   12.3 Administer Procurements    12.4 Close Procurements  


Project documents: PMBOK suggest managers to produce at-least 3 major documents for each project

  1. Project Charter
  2. Project Scope Statement
  3. Project Management Plan. (Notice, MS Project Plan is just one section of the bigger document). It has components to represent knowledge areas listed above
    1. Scope Management Plan
    2. Schedule Management Plan
    3. Cost Management Plan
    4. Quality Management Plan
    5. Staffing Management Plan
    6. Communication Management Plan
    7. Risk Management Plan
    8. Procurement Management Plan

Work Breakdown Structure

A work breakdown structure (WBS) in project management and systems engineering, is a tool used to define and group a project’s discrete work packages in a way that helps organize and define the total work scope of the project. A work breakdown structure element may be a product, data, a service, or any combination. A WBS also provides the necessary framework for detailed cost estimating and control along with providing guidance for schedule development and control. Additionally the WBS is a dynamic tool and can be revised and updated as needed by the project manager.

Work Breakdown Structure concept from the PMBOK Guide

One of the most important Work Breakdown Structure design principles is called the 100% Rule. This Rule states that the WBS includes 100% of the work defined by the project scope and captures all deliverables – internal, external, interim – in terms of the work to be completed, including project management. The 100% rule is one of the most important principles guiding the development, decomposition and evaluation of the WBS. The rule applies at all levels within the hierarchy: the sum of the work at the “child” level must equal 100% of the work represented by the “parent” and the WBS should not include any work that falls outside the actual scope of the project, that is, it cannot include more than 100% of the work. At the same time, it cannot contain only 95%. It must contain 100% of the work. It applies to the activity level. The work represented by the activities in each work package must add up to 100% of the work necessary to complete the work package.

The PMBOK Guide 4th Edition states that Create WBS is the process of subdividing project deliverables and project work into smaller, more manageable components. The work breakdown structure (WBS) is a deliverable-oriented hierarchical decomposition of the work to be executed by the project team to accomplish the project objectives and create the required deliverables, with each descending level of the WBS representing an increasingly detailed definition of the project work. The WBS organizes and defines the total scope of the project, and represents the work specified in the current approved project scope statement. The planned work is contained within the lowest level WBS components, which are called work packages. A work package can be scheduled, cost estimated, monitored, and controlled. In the context of the WBS, work refers to work products or deliverables that are the result of effort and not to the effort itself.

Project Management Certifications

In many ways, our society has gone certification crazy. We demand certifications as though they were a substitute for the ability to think. A guarantee of suitable skills and abilities to do the job. Or as if they were a guarantee that our experience was real.

But there is a place for the right types of certification — even for project managers.

So what certifications actually work for project managers? When can we trust them? What do they say about the people who have them?

Project management is both an art and a science. The science part consists of the tools and knowledge that every PM needs to perform their job. The art consists of how those tools are applied and in the management of people and resources. While the science can be taught and therefore examined for, the art can only be learned by experience. It is for this reason that any major certification for PMs requires experience as one of its qualifications.

There is currently only one qualification of project management that really matters. The Project Management Professional or PMP designation which is administered by the Project Management Institute.

The PMP qualification consists of three separate sections. In order to qualify you must have five (full time) years of project management. If you have a bachelor’s degree then the experience requirement reduces by two years. In addition, you require 35 hours of education in a PM related course. If you qualify then you are able to write an exam. Upon successful completion you are granted the PMP certification.

The PMP qualification — indeed the entire PMI line of certifications — is based on the PMBoK or Project Management Book of Knowledge. This is a major standard or framework for PM produced by the PMI.

The second major set of standards is the PRINCE2 standards. These are based on the standards originally developed for the government of the UK by BSI.

Currently the certification to PRINCE2 and the Australia equivalent is under flux as the organizations switch to a certification process similar to that of ISO (the International Organization for Standardization) in which certification is outsourced to certification bodies. This is the same structure that currently exists for quality management certifications. Although two different certifications exist, in both cases these are stepped certifications allowing the holder to progress. For example the PRINCE2 certification consists of a Foundations level and a Practicioner’s level.

In addition to these major certifications there are a number of lesser certifications of value which can be attained.

1. Certified Associate in Project Management (CAPM) from PMI is an entry level certification for PMs without the experience. This is a short-term certification and is a stepping stone towards the PMP.

2. Program Management Professional (PgMP) from PMI certifies the abilities of a manager responsible for multiple projects. A PMP is required in order to achieve this.

3. PMI Scheduling Professional (PMI-SP) and PMI Risk Management Professional (PMI-RMP) are both from PMI and unlike the CAPM are subset certifications.

4. The Master’s Degree in Project Management is available from a limited number of universities. Generally, they are a form of MBA and are intended to prove advanced education rather than experience.

5. Master’s Certificate in Project Management (MCPM) degrees are available from a number of universities and educational groups. Like the MPM/MBA-PM they are intended to be a Masters level education rather than a certification. However, unlike degrees they are not as closely regulated. The quality varies considerably and the source of the certificate must be considered.

How To Be A Great Project Manager

Below is the list of skills required for you to be the best manager in your career:

People Management Skills: Manager’s most important, and most difficult job is managing people. They need to hire, train, lead, motivate, and inspire them. Project success is all about people success. Projects don’t fail. People do. Hence, the first prerequisite is to have a solid understanding of people management if managers want to successfully manage a project.

Communication Skills: Managers need to request information; discuss problems; give instructions; interact with stakeholders both internal and external customers to complete their project. Also, they have to communicate on all levels in order to inform about the project status when managing a project. Hence communication skill is very important for a project manager. Furthermore, as the work place become more global, it is important for them to have good presentation skills are part of communication skills.

Project Management Skills: Generally, project managers typically involve from inception to all the way to closing phase. Hence, basic project management skills needed for them to get things done quickly. Also it would help them to make the most efficient use of resources and make them more organized and details.

Problem Solving & Decision making skills: Both skills are closely linked. Managers make many decisions to make the project successful. Most of the time, they gather more information about problems & issues; analyze; list out possible solution; pick up the best solution; implement and verify the solution to manage projects. Hence I would consider this skill also a required skill for them to successfully manage a project.

Listening skills: This is another area a manager needs to concentrate. This skill helps him to understand the teams’ problems which are very important to manage people. If managers improve their listening skills, they can greatly improve their people management skills.

Self-confidence: This skill inspires confidence in others. In order to work at highest potential, managers need to have a mindset that they are capable enough and have the ability to manage even stressful situation. Staying in comfort zone; fearing failures and to avoid to the extra mile to achieve better things would make bring their confidence level down.

Team player: In an organization (or in a team), everybody is a piece of puzzle that should be connected to get the whole picture. It was proven that two minds are better than one. Hence this skill also helps a manager to become a best manager in their career.

Professionalism: Corporate scandals & unethical activates are rising in today organizations. Even PMI has updated PMBOK latest version to make ethics as one of the important factor in PMP and CAPM exams. Managers should abide by the code of ethics designed by their organization, avoid unprofessional activities such as stealing company secrets, discrimination, harassment, bribery etc, and guide their team to do the same to improve their company’s reputation.

To summarize, project managers are unique and multi skilled, in that they should be able to function in almost any environment. Some managers are very successful in their career, and others feel that they are not able to manage things well. Sometime, even a manager who has a MBA from a world class University fails to manage a project. The skills highlighted here can help you to become a best manager in your career. These skills can be learnable through training, education, experience and practice. Hence prepare a plan now. If you put out a two year plan today to improve your skills, you will be marked as a best manager by your employer in 2012.

Financial Concepts For Project Managers

The decision to spend some amount of money on something precedes any project or program. Given the expectation of a return on the investment, managers need to be knowledgeable about financial strategies and techniques. Here are the three most important financial concepts.

The 3 basic concepts are Internal Rate of Return (IRR), Net Present Value (NPV), and Sunk Costs. Let’s take a look at each.

Internal rate of return (IRR)

Internal rate of return (IRR) is an average rate of return of all the cash flows resulting from a project over time. The IRR, or internal rate of return, can be illustrated by example. A rate of 10% could reflect the ROI, or return on investment, as represented by discounted cash flows over the years. In other words, the IRR for the investment is the discount rate that makes the NPV, or net present value, of the cash flows total to zero.

A project is a good potential investment if its IRR is exceeds the rate of return that could be earned by alternate investments of equal risk. Thus, the IRR should be compared to any alternate rates of return, adjsuted for risk. The challenge for any project is clearly understanding and accurately quantifying the risks.

Net Present Value (NPV)

Net present value is a similar concept, but the metric is monetary value, not a rate. Like IRR, it looks at the cash flows over time, derived from estimates of capital expenditures, costs and revenues over a period of time during which the product of the project will have an impact on operations.

Projects that have a higher NPV produce a greater positive cash flow, and thus create more value. It is important to estimate our cash flows as accurately as possible and then to monitor closely after the project has been implemented.

It is vital to note that majority of project decisions are anchored on their possible future outcome. These forward looking criteria are based on the delta cash flow resulting from the project over time.

Sunk Costs

Sunk costs, as the name implies, are gone and cannot be recovered. They represent money spent that is irretrievable. Many people either misunderstand or have an emotional attachment to money that was spent. As project managers, this is a challenge that we must recognize and learn to overcome. Here is an example.

In a changing economic environment, we often find that the original justification for a project changes. In this example, original calculations might show that investing $1,000,000 in new plant facilities could annually generate an additional $250,000 in cash flow. This may have been an attractive project at the time, but maybe that anticipated increased cash flow is now only $100,000. Perhaps $600,000 has already been expended on this additional plant capability, and if we stop now, no increased cash flow will be achieved. However, if the final $400,000 is spent, the $100,000 of additional cash flow will be achieved. While a 10% return on the full $1 million might be a very marginal investment, this is irrelevant at this point, since the first $600,000 is a “sunk cost”. The real metric of interest is the expected 25% return of $100,000 on the remaining $400,000 investment. It is important to distinguish the sunk costs and to realistically really look at what can be achieved going forward.

Using Financial Metrics as a Project Manager

As project and program managers, we always need to be forward looking. In looking at something like sunk costs, we need to leave them behind and look at future costs as well as future revenues. We need to look at future cash flows. Projects and programs are always forward looking. The best time to look back into the past is to recognize what lessons have been learned along the way. We need to be disciplined enough to be forward looking and we need to have the leadership skills to articulate what sunk costs are and to differentiate between sunk costs and costs going forward. Also, unlike financial managers, project managers need to look at the future (ignoring sunk costs) project cash flows and expected returns, assess risks, and develop risk mitigation plans, should things change. Understanding all of the financial metrics is one input to executing that project management responsibility effectively.

Does PMP Make You A Better Manager?

Would you like to become a manager in your career? When asked to list the major milestones in IT professionals’ career development on a social blog, many professionals said that they were aiming for a career as a supervisor, team leader or manager. Getting PMP certification would help them to reach their career goal? Let’s discuss about it now.

The Project Management Institute (PMI) is the leader and the most widely recognized organization in promoting project management best practices. It was founded in 1969 and started offering the Project Management Professional (PMP) exam and Certified Associate in Project Management (CAPM) certifications in 1984. Any professionals with 4 years of experience or above can take up the PMP exam. Likewise, professionals with 2 to 4 years of experience can get the CAPM certification.

In my view PMP certification would help a candidate mainly during resume screening. As we all know resume screening is the first step in the candidate screening process for an employer. In general once a resume is received, it will go for an initial screening. Either the Human Resource Department or the person who needs the position will review the resume. Some factors that might be used during an initial screening are previous management experience, education, credentials and the area of interest. When I was looking for a managerial job few years ago in US, I noticed that a few managerial positions indicated that a PMP certification would be advantageous. When I was evaluating the job market few weeks ago, I noticed that a sizable number of openings that were requesting or requiring the PMP credentials are increasing. It indicates that companies are giving more preference to certified PMPs. Hence, I would say a candidate resume with PMP credentials would most likely to cross the first rejection point easily because it tells potential employers that the candidate has gone the extra mile in proving their mettle.

Also, as a certified PMP, it is reasonable to assume that you know or you have learned the life cycle of the project. The conceptual knowledge you gained to earn the certification would definitely help you manage your projects effectively. Even though “Experience is the greatest teacher”, the knowledge gained to become a certified PMP would definitely help you become a good manager. Besides, The Project Management Institute’s (PMI) latest salary survey reveals that in six major countries, PMP-certified project managers reported a $10,000 salary advantage over non-PMP-certified project managers. In summary, as most of the companies started to prefer PMPs when hiring PM positions and even the certification could help you when managing projects, why not become a certified PMP?

PMP Exam Structure

Most Project Managers had found that the PMP Certification Exam is the only step for their skills to be acknowledged. This examination comes along with a PMP training which will help them increase their knowledge about project management and enhance their abilities in solving problems and managing projects.

It is very important that you should pass this exam because employers nowadays are looking for PMP certified. Before taking the exam, you need preparation. One of those preparations we need to achieve is to familiarize the structure of the PMP Questions.

The exam is composed of 200 questions in which 25 of it are pre-test questions; this means only 175 of them are counted for the scoring. The PMI doesn’t give the same questions for the different batch of examinees. So, expect something difficult in the exam.

In fact, the PMI made this exam not just for you to earn certification but normally to test if you are knowledgeable and capable enough to handle projects. However, they will not posting the detailed reason why you pass or fail in order to protect and respect the privacy of both parties.

The PMP questions are divided into these following sets:

Initiating: 11%
Planning: 23%

Executing: 27%
Monitoring and Controlling: 21%
Closing: 9%
Professional and Social Responsibility: 9%

In preparing for the exam, you will need to have a large amount of money to pay for the test fees, meeting requirements, education, materials and resources used for study, leadership experience and the project management trainings. To prevent too much spending, you could take these tips:

– The most recommended book and the primary basis for the PMP Certification Exam is the PMBOK Manual Guide. This manual gives you the detailed information on what would come out on the exam. Also, this book is made and recommended by the PMI, so this is recognized globally.

– You can use materials for your PMP study such as video tutorial courses, online trainings, sample pmp questions and study guides that helps you understand project management more. Also, PMP simulation software will guide you to study more efficiently and focus your mind in developing your project management skills.

Now that you know the structure, find the best procedure you can make in memorizing the things you’ve learned. Practice analyzing questions and situations faster than what you used to be, for you are only given a limit of 4 hours to finish the exam. I suggest that you take down notes if you want and reading it repeatedly will help you in memorizing. Keep in the mind the key points about project management so that you won’t have a tendency to get mental blocked.

But, whatever may be the structure of the PMP Certification Exam, better make sure that you would pass the exam. Passing at least 61% of the exam might not be enough. It would be better if you pass 80% the most. We may not know what the contents of this examination are but, at least, we are ready and confident that whatever it may be, we would be able to pass.

7 Essential PMP Study Tips

The Project Management Institute (PMI) has defined a set of criteria enabling the corporate across the globe to recognize the Project Management Professionals (PMPs). The rigorous process of PMI certification involves three to five recorded years of project management work experience, 35 hours of training in the arena and the clearing of the multiple-choice PMP Exam. There are seven easy and proven ways to get through the PMI certification.

1. PMP Credential Handbook available online for free presents an overview of the PMI certification program and exam procedures. A thorough reading of the book will get through the process of examination with ease.

2. PMP examination material is quite vast and last minute cramming will never help you. Accommodate 2-3 hours a day over 10-12 weeks for preparations.

3. Right from the beginning of the preparation, proceed with a solid study plan and work schedule broken in bits allotted for each day. Be sincere to complete the set target as you proceed and take as many practice tests as possible.

4. The syllabus for the PMP examinations is fully based on the PMBOK Guide, 4th Edition specifically covering areas including communication, human resources, cost management, risk, scope, quality, integration, procurement, and time management. During the course of preparation, understand the topics in relation to the others.

5. There are a number of Self Study Courses available online that will help busy professionals to go through the course within a short time. However, you need to make an informed decision in choosing the right ones by consulting those who had made success already. PMP podcasts and video casts also will be useful.

6. Popular PMP Exam Prep Books or study guides will be of immense help to understand the dry concepts with illustrations. Visit a shop to choose the right one to help you out.

7. There are a number of sources over the net that will give you hundreds of sample questions meant for PMP examination. To access as many questions as possible, you can subscribe to PMP Exam Simulator that will make your search easy.

While preparing for the PMP certification examination, you need to make yourself complacent and do a comprehensive review. There are a number of ways in which you can further enhance your knowledge of the subject including attending PMP workshops, project management training courses, seminars and other related PMP course options. Besides concentrating on the technical aspects of the course, you need to carefully gather valuable tips available from the examination which will be useful to you later to deal with highly challenging and stressful situations occurring in your profession.

PMP Framework (Fundamentals)

  1. Definitions of Project and Project Management
    1. Definite Start date and End date
    2. Produces a unique product or a service. Called as “Product of the Project”
  2. How project is different from operations or maintenance
  3. (PMI Definition) Project management is the application of knowledge, skills, tools, and techniques to project activities to meet the project requirements. Project management is accomplished through the appropriate application and integration of the 42 logically grouped project management processes comprising the 5 Process Groups.

  4. Project Management is simply managing various constraints to accomplish objectives.

  5. Project organizations need to have a structure to deliver undertaken project. Understand following hierarchical structures


    1. Portfolio

    2. Program

    3. Project

    4. Sub Project

    5. PMO (Support Organization)

  6. A portfolio refers to a collection of projects or programs and other work that are grouped together to facilitate effective management of that work to meet strategic business objectives

  7. A program is defined as a group of related projects managed in a coordinated way to obtain benefits and control not available from managing them individually. A project may or may not be part of a program but a program will always have projects.

  8. A project management office (PMO) is an organizational body or entity assigned various responsibilities related to the centralized and coordinated management of those projects under its domain. The responsibilities of a PMO can range from providing project management support functions to actually being responsible for the direct management of a project

  9. Organizational Structures: Projectized, Matrix and Functional are different types of Organizational structures. Matrix organizations are further sub divided into weak Matrix (Leaning towards functional) or Strong Matrix (leaning towards projects) or Balanced Matrix.

  10. Project stakeholders are individuals or units those are directly or indirectly affected by Project outcomes. Sponsors, customers, users, performing organizations, project team members and influencers are stakeholders. Stakeholders can be 2 categories: Positive stakeholders and negative stakeholders.  
  11. At the end of each project phase, reviews against a set of metrics are performed. If the Phase fails to meet these metrics, the project may not be allowed to continue. These phase end reviews are called Stage gates or Phase exits. 
  12. Project Management process is iterative and cyclic. 4 steps in the process are “Plan”, “Do”, “Check”, Act”. 
  13.    Projects or Subprojects can be divided into discrete Phases to provide better management control or to assign  specific skilled groups. 
  14.   Environment Factors and Organizational cultures will impact projects too. 
  15.    During initiation phases of the Project, Costs are low and Risks are High.
  16.  Cost and staffing levels are low at the start, peak as the work is carried out, and drop rapidly as the project draws to a close.
  17.   Several categories of documents are produced during the lifetime of the project. They can be broadly categorized into 2 types:
    1. Project Plans: All management plans and 3 Baselines are called Project Plans.
    2. Project Documents: Any document that is not called as a plan is called as Project document.  
  18. Project Management Plan
    (Notice, MS Project Plan is just one section of the bigger document)

Advantages Of PMP Certification

In business today, there are a variety of accreditations that you can receive to give you new skills and opportunities. One of these in the area of project administration is known as the Project Management Professional Certification or the PMP Certification.

This is a program you could be involved with that helps you manage tasks and get them done more effectively. The purpose of this certificate would be to somewhat standardize the way that assignments are planned out, organized, and completed throughout a variety of sectors whether business or part of government. There are near to 500,000 individuals who have received this certification with a few thousand getting it on a monthly basis.

What are the benefits of a PMP Certification?

In this tough and competing economy, it may set a person apart making it simpler to obtain your next job. This bit of additional training can help you out a great deal. You will get knowledge that will help supplement your total experience. These kinds of abilities can help you do better at your job. You have the potential to get yourself a higher salary either at your present company or by getting a better paying job.

You’ll perform at your job far better with better effectiveness and improved administration skills. This can get more work carried out and assist you to deal with your team in better ways.

What will you learn when earning your PMP Certification?

You will discover a variety of abilities like setting agendas, evaluating costs, quality assurance and control, human resource plans, enhanced inner communication, performance reports, closing out projects, and more.

The PMP Certification examination is administered by PMI (Project Management Institute). PMI is the leader in project management procedures and may be the most widely acknowledged agency and certification in the field. PMI strives to help keep and promote criteria and ethics within this field and supplies guides, education, seminars, chapters, special interest groups, and schools to further the project management field.

Exactly what are the PMP Certification requirements?

To obtain this certification, you have to initially satisfy the eligibility prerequisites. If you’ve got a bachelor’s degree, you need 36 months of project management experience before applying. If you have an associate’s degree, you must have five full years of experience. These years of expertise must be more frequent than some thing you did many years ago.

You also should have about thirty-five hours or higher of education in project management to be eligible. Next, you can complete the application form and get ready for the examination that you need to take to get certified.