Term
| Budget At Completion (BAC) |
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Definition
| How much the whole project budget will be once done |
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Term
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Definition
Costs budgeted for % completed.
% complete x BAC.
So if BAC is $100K, and 25% complete, EV = $25K |
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Term
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Definition
| How much was actually spent (e.g. actually spent $27K at 25% completion) |
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Term
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Definition
| How much the project should be worth at this time (e.g. at month 6 should be at 50% of BAC, or $50K) |
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Term
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Definition
How much actual vs budgeted (over budget right now?)
CV = EV – AC
($25K - $27K = - $2K; i.e. costs have been $2K more than budgeted for) |
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Term
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Definition
How far behind scheduled value are you?
SV = EV – PV
($25K - $50K = - $25K; i.e. have $25K less value than expected by now) |
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Term
| Cost Performance Index (CPI) |
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Definition
How much you get for your $1 (closer to 1 is good)
CPI = EV / AC = $25K/$27K = 0.93
(so losing 7c per dollar spent) |
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Term
| Schedule Performance Index (SPI) |
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Definition
How doing in comparison to where should be (closer to 1 is good)
SPI = EV / PV = $25K/$50K = 0.5 or only 50% of where should be |
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Term
| Estimate At Completion (EAC) |
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Definition
Forecast value of project when complete (est’d when partway thru) - over budget?
EAC = BAC/CPI = $100K / 0.93 = $107,526 (feeds into VAC to tell you that you’re $7.5K over budget) |
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Term
| Estimate To Complete (ETC) |
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Definition
How much more do you need to complete this project
ETC = EAC - AC = $107,526 - $27K = $80,526 (from today onward, we will need $80.5K to finish up) |
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Term
| To-Complete Performance Index (TCPI) |
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Definition
Variation 1 - Can the project meet the Budget At Completion? (under 1 is likely; over 1 unlikely)
TCPI = (BAC – EV) / (BAC – AC)
TCPI = ($100K - $25K) / ($100K - $27K)
TCPI = ($75K) / ($73K) = 1.027
(may not be able to meet BAC; start watching costs closely, but not big concern)
Variation 2 – Can the project meet the Estimate at Completion (under 1 is likely; over 1 unlikely)
TCPI = (BAC – EV) / (EAC – AC)
TCPI = ($100K - $25K) / ($107,526 - $27K) = ($75K) / ($80,526) = 0.93
(quite likely will be able to make EAC) |
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Term
| Variance At Completion (VAC) |
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Definition
How far above/below if things continue as-is
VAC = BAC – EAC = $100K - $107,526 = - $7.5K (how much in the hole compared to budget) |
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Term
| Magic Communications Channels Formula |
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Definition
N (N-1) / 2
10 people on project, 10(9)/2 = 45 comms channels |
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Term
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Definition
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Term
Net Present Value (NPV)
Interpretation |
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Definition
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Term
Internal Rate of Return (IRR)
Interpretation |
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Definition
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Term
| Expected Monetary Value (EMV) |
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Definition
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Term
| Functional Organization Structure |
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Definition
Functional (specialties, grouped by function, hierarchies) – little PM authority
Pluses: enduring organizational structure, clear career paths – can specialize, clear chain of command
Minuses: PMs have little to no authority, projects compete for resources, teams are loyal to functional mgr not PM |
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Term
| Matrix Organizational Structures |
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Definition
Blend of functional and projectized. Employees report to both functional mgr – find work and admin support - and PM – assign project work
Weak Matrix: closer to functional organization (functional mgr has more power/responsibility)
Balanced Matrix: functional mgr and PM balance power/responsibilities.
Strong Matrix: closer to projectized (PM has more power/responsibility) |
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Term
| Projectized Organizational Structure |
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Definition
Projectized (focus around project, PM have authority and generally report directly to CEO) – high PM authority
Pros: PMs have most/all authority, team mbrs are loyal to project
Cons: team members may be out of work once project is done, may have inefficient resource allocation |
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Term
| Triple Constraints of Project Management |
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Definition
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Term
| Constrained Optimization Methods |
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Definition
When choosing between several projects, have to compare tangible benefits
Constrained Optimization Methods are Mathematical selection models
Egs:
-Linear
-Dynamic
-Integer
-Nonlinear
-Multi-objective programming |
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Term
| Benefit selection models (or decision models) |
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Definition
A benefit selection model for choosing between several projects
oCost-benefit analysis
oScoring models
oCash Flow Analysis (payback period, discounted cash flows - future and present values)
oNet Present Value (NPV)
oInternal Rate of Return (IRR) |
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Term
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Definition
FV = PV (1+i)^n
Brings today’s dollars into future dollars |
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Term
| Net Present Value (NPV) Interpretation |
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Definition
-If NPV is positive (more than 0), accept project. If negative (less than 0), reject the project.
-Higher NPV is good |
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Term
Internal Rate of Return (IRR)
Interpretation |
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Definition
discount rate when present value of cash inflows = original investment.
-Choose highest IRR value
-IRR is the discount rate when NPV = 0
-IRR assumes that cash inflows are reinvested at the IRR value |
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Term
| Project Management Plan subsidiary plans |
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Definition
•Requirements mgt plan
•Scope baseline
•Resource calendar
•Schedule baseline
•Schedule mgt plan
•Cost mgt plan
•Cost baseline
•Quality mgt plan
•Comms mgt plan
•Risk mgt plan
•Risk register
•Procurement mgt plan
*•Milestone list |
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Term
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Definition
| WBS work package should take at least 8 hours and not more than 80 hours to create. |
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Term
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Definition
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Term
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Definition
oWBS (the chart)
oWBS dictionary (the meat - component work: what is it, who responsible, milestones, costs, activities, resources, quality reqs, tech references, contract info)
oScope baseline - made up of project charter, WBS, WBS dictionary
oProject document updates – IDs what has to be updated (eg PM Plan) |
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Term
| What Process Group costs the most? |
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Definition
| The “Executing” Process Group, since most of the time and resources are used during this process |
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Term
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Definition
•QA is orgAnization-wide (Six-Sigma) – focused on prevention
•QC is projeCt-wide (peer reviews) – based on inspection |
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Term
Costs of Quality
-Conformance
-Nonconformance |
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Definition
Cost of conformance to requirements (cost of quality)
oSafety measures, team devt/training, proper materials
Cost of non-conformance to requirements (cost of poor quality)
oLoss of life or limb, unsatisfied customers, poor team morale, gold plating |
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Term
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Definition
•Quality improvements helps org and community
Improve quality > costs down > productivity up > capture market > stay in business > provide more jobs |
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Term
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Definition
•Quality – fulfilling requirements (project or product scope, needs)
•Grade – category or rank (oak vs plywood, 1st class vs coach). If you agree on a grade (plywood) that’s cool – unless there are quality issues (bad plywood).
•Low quality is always a problem; low grade may not be |
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Term
| Herzberg’s Theory of Motivation |
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Definition
•Motivating agents (promote performance) – opportunity, responsibility, appreciation, recognition, education
•Expected hygiene agents (required, but don’t promote performance) – job security, paycheck, acceptable working conditions, relationships |
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Term
| McGregor’s Theory of X and Y |
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Definition
•2 kinds of management outlooks (and/ or kinds of people that you need to manage)
•X People – can’t be trusted (need to micromanage, no trust, lazy, avoid work)
•Y people – trust people (self-led, motivated, capable) |
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Term
| McClelland’s Theory of Needs |
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Definition
| •Acquired needs theory •Individuals needs are acquired over time •Shaped by life experiences (achievement or wanting to excel, affiliation or wanting to have good social, power or wanting to have influence) •Thematic Apperception Test (TAT) – helps you figure out what need is driving you or team members at this time |
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Term
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Definition
•Japanese management style; family environment, project teams involved in decisions
•Lifelong employment |
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Term
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Definition
| People behave based on what they expect that their behavior will bring them (act differently around Grandma b/c can get candy from whining, or sit still for teacher b/c get praise for that) |
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Term
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Definition
| •False belief based on a person’s experiences (just because someone worked on a kind of project doesn’t mean that she would want to be a PM of that kind of project, or even want to continue to work on that kind of project) |
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Term
| Parts of a Communications Management Plan |
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Definition
oOrg charts
oProject structure
oStakeholder responsibility relationships (who provides what to what)
oDepartments and disciplines
oLocale of team and stakeholders
oInternal and external information needs
oStakeholder information (directory with contact info) |
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Term
| Procurement Make or Buy decision process |
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Definition
Make or Buy decision: figure out difference for the actual product (between build vs buy), including monthly fees. Divide product difference/monthly difference to see how many months until see the difference.
oMake at $25K, monthly fee $2.5K
oBuy at $17K, monthly fee $2.7K
oDiff: product $8K, monthly fee $200
oMonths of support to pay for in-house solution: 8000/200 = 40 months. So buy if the software will be replaced within 40 months. Make if software will not be replaced within 40 months. |
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Term
| Probability Impact Matrix |
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Definition
| Shows risks, probability, impact to the projex, and then Expected Monetary Value (prob x impact). Add up for contingency reserve. |
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Term
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Definition
-Within the Probability-Impact matrix
-Probability x Impact |
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Term
| Rules of Thumb for Ethical Conduct |
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Definition
oFirst, always follow laws, regs, country where doing project management
oSecond, follow company policies (not accepting bribes even if country standards)
oThird, follow customs of country
oFourth, follow ethics of country
oFifth, follow “What would an angel do” [I swear they said this!] if you’re still not sure |
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Term
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Definition
| Language you speak affects how you think. If you learn that country’s language, can help you understand thought patterns |
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Term
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Definition
| A quality control histogram that shows categories of failure (e.g. equipment failure, software errors, human errors, drive conflicts) |
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Term
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Definition
| A scheduling tool that shows project activities across a timeline or calendar. |
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Term
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Definition
| Shows the flow of activities. |
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Term
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Definition
"cause-and-effect diagram" or “fishbone” diagram
Reveals potential problems that contribute to effects. |
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Term
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Definition
| Work will expand to fill the amount of time allotted to it. |
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Term
| The law of diminishing returns |
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Definition
| states that increased labor doesn't always guarantee an increase in the yield, and can even diminish an organization's overall profit. |
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Term
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Definition
| is the 80/20 law; for example, 80 percent of your business comes from 20 percent of your customers. |
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Term
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Definition
| is time allotted for schedule slippage |
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Term
| Single-source vs sole-source |
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Definition
Single-source – you prefer one specific company
Sole-source – there is only one company that does what you want |
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Term
| SPI – Schedule Performance Index |
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Definition
| , how close to being on schedule. SPI of 0.8 means behind schedule. SPI of 1 is on schedule. |
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Term
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Definition
| – the longest a project can take (circle graph with arrows from step to step) |
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Term
| Form, Storm, Norm, Perform |
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Definition
Forming - when the team first meets
Storming - when the project team moves through power struggles over who's in charge of the project.
Norming - once the project team settles into their roles
Performing – once the project team focuses on getting the project work completed |
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Term
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Definition
| an organization’s willingness to accept risk |
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Term
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Definition
| The "i" in time value of money calculations. It's the rate of return that could be earned on an investment in the financial markets with similar risk. |
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Term
| NPV formula and explanation |
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Definition
NPV = Rn / [(1+i)n)]
All it is is the sum of all the Present Values of all the years (including cost of project). So long as you don’t lose money (in today dollars), can accept project – choose the project with the best return. |
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Term
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Definition
“Variance” means EV – something
Cost Variance = EV – AC (25 – 27 = 2)
Schedule variance = EV – PV (25 – 50 = -50) |
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Term
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Definition
“Index” means EV / something
Cost Perf Index = EV / AC (25/27 = .93)
Schedule Perf Index = EV / PV (25/50 = .5) |
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Term
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Definition
the meat - component work:
-What is it
-Who responsible
-Milestones
-Costs
-Activities
-Resources
-Quality reqs
-Tech references
-Contract info |
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