PMP Terminologies

PMP Terminologies
Here are a few terms related to the Procurement Knowledge
area.
Administrative closure vs Contract
closure


The Closure process group is having only 2 processes




Out of 42 processes. One comes under the Integration
management knowledge area and the other one in the Procurement management
knowledge area. Under the Integration, it is Close Phase or Project and under
Procurement, it is Close Procurement.
Before the Project closure the lessons learnt are to be documented and
should go to the repository or the knowledge Management system. So the
closure takes in the following order.
1 Contract/Procurement closure
2 Administrative Closure(close project or phase)
The contract closure can happen multiple times (once for
each contract) where as the administrative closure happens only once per
phase or for the complete project.
































































Different types of Contracts:

Under the Procurement as we know there are 3 different
types of contracts, Fixed, Cost Reimbursable and Time & Material. Which one
has to be used when?
From the Buyer perspective if the scope of work is clear,
go for the Fixed Price (FP). If the scope is not clear then go for Cost Reimbursable
(CR) and if the project is of short duration or to be started immediately then
go for Time and Material (T& M). In
case of FP, the seller is having more risk in terms of over running the cost
where as in case of CR, the Buyer will have more risk compare to the seller. FP
and CR can be awarded with different flavours based on the situations or
understanding with the seller. Here are a few:
Fixed Price
Incentive Fee (FPIF): This type of contract is used to motivate the seller
in terms of getting the things done faster. For example, the FP is $10,000 and
for every month early the project is finished, an additional $100 is paid to
the seller.
Fixed Price Award Fee
(FPAF): Contract cost or the FP is $10,000 and for every month performance
exceeds the planned level by more than 15%, an additional $50 is awarded to the
seller, with maximum award of $700
Fixed Price Economic
Price Adjustment (FPEPA): In case of long term projects, say 10 years,
which are under contract, in case of fixed price the seller may not be able to
survive with inflation or rise in the material cost or fluctuation in the oil
prices due to economy. In this case Buyer will go for the economic price
adjustment type. For example the FP is $10,000, but a price increase will be
allowed based on the economy or inflation in the material cost
Purchase Order:
This is used for simple purchase of commodity available in the market. For
example, contract to purchase 100 metres of iron at the rate of $100 per metre.
Cost plus Fee (CPF)
or Cost plus percentage of Costs (CPPC): Here buyer has to all cost plus
percentage of fee. Contract=Cost plus 10% of cost as Fee.
Cost plus Fixed Fee
(CPFF): The seller receives the actual cost plus a negotiated fee that is
fixed before the start the work. For example: Contract=Cost plus a fee of $1000.
Cost Plus incentive Fee
(CPIF): The Buyer pays the actual cost plus the fee that will be adjusted
based on whether the specific objectives mentioned in the contract are met.
Cost plus Award Fee
(CPAF): The buyer pays the actual cost plus an award amount or bonus
depending on the performance. For example, Contract=Cost plus $50 for every
month production exceeds 100 units or if it is delivered 5 days earlier.
Time and Material
(T&M): In this type of contract, the buyer pays based on per hour or
per item basis. For example, Contract=$100 per hour plus the material cost or
Contract= $100 per hour and $10 per metre of iron rod.

PMP Terminologies

PMP Terminologies
Here is the continuation of terminologies. In this article
we are going to discuss about key words related to framework.
Project Co-ordinator vs Project
Expediter


The Project Expediter monitors and reports on the status
of the project to senior management. This role has no authority. The Project
Expediter acts as a communication coordinator only and cannot enforce any
decisions.
The Project Coordinator
role is similar to expediter, but has some authority to make decisions.
He/she reports to the senior Management.




























































Project lifecycle vs Product
lifecycle
Project lifecycle usually comprises of phases like
requirements, Design, development, Testing, deployment and maintenance. Now
each of these phases can have the 5 process groups which are Initiating,
Planning, Execution, Monitoring & control and Closure.
Product lifecycle is also industry specific. The product
lifecycle is about conceptualisation, Manufacturing, reaching market (usage,
upgrade) and then may be obsolete. Now each of these lifecycle have have
project lifecycle like concept, design, development etc..
So a product lifecycle can have multiple project
lifecycle.


Project Management Plan vs Project
Documents
Project Management Plan is
a detailed document comprising of all the plans related to the knowledge
areas like scope management plan, cost management plan, time management plan
etc.. Each section details about how to manage each of the knowledge area.
Project documents comprises of project charter, SOW, risk
register, project meeting minutes, Stakeholder register etc..

Subproject vs Subnetwork
In order to complete a job, project management might break
the larger job into a series of smaller tasks called subprojects. When project
management creates a work breakdown structure, the subprojects are likely to be
included in it, but they might be referred to as projects and treated as such.
This means that even though they are pieces of the overall task to be
completed, these subprojects can be considered projects on their own since they
are able to be managed and bought from a seller.
These smaller units also appear on project schedule network diagrams. There,
those in project management will refer to them as subnetworks. It is the same
piece of the larger overall assignment for the company which is seen as a
subproject in the work breakdown schedule

Tool vs Technique
Tools are devices, objects, or programs used to aid the
design process.
Technique though is the personal way in which each person
uses a tool to aid them in the design process.

PMPTerminologies

PMP Terminologies
In continuation of the terminology discussion we are going
to capture about Time Management knowledge area. Here are a few.
Duration vs Effort
When we are
estimating the time required to complete an activity, we use the words effort,
duration etc… Is duration and effort same? NO.
Effort is the actual amount of time spent
to carry out an activity. This can be expressed in terms of person hours, man
days or man months. It shows the total number of hours/days/months that each
person spent working on each of the activities.
Duration is the amount of time taken to carry
out an activity. That is the start time and end time which is nothing but the
time elapsed to complete the activity. Duration is measured in hours/days etc..
This doesn’t count the number of people working on the activity.
For example:
An activity takes 4 hours to work by one person. The person who is carrying out this activity
contributes one hour per day. So the total days taken will be 4 days. Here the
effort is 4 hours where as the duration is 4 days.


Resource


Effort(Hours)


Duration(Everyday effort)


Total duration(Days)




Day1


Day2


Day3


Day4




a


4


1


1


1


1


4




b


2





1


1





2




c


3


1





1


1


3



Crashing vs Fast tracking
After the
arrival of total duration of the project by estimation technique, the project
manager presents the schedule to the PMO/Sponsor/Customer. But the Customer says that the duration has
to be reduced without comprising on the scope of the work. Now what is the left
out option for Project Manager, either he/she has to add resources or has to
run the activities in parallel.
Crashing is nothing but adding resources. Of
course when the crashing happens, the cost increases, because you are adding
extra resources.


















Fast tracking represents the activities to be
carried out in parallel instead of series. Here the disadvantage is that, it
increases the risk in the area of may be quality as the activities are
performed parallel.


Forward Pass vs Backward Pass
After the
arrival of critical path in the given network diagram, we need to track closely
the activities which are coming under the critical path. And for the activities
which are not in the critical path the tracking can be the normal way. But when
we say normal, need to know what is the degree of level. This can be determined
by the parameter called float or slack. To find the float or the slack
we have to perform the Forward pass and Backward pass.
Forward pass is moving through the network
diagram from start to finish and covering all the paths.
Backward
pass is moving through the network diagram in the reverse way or from Finish to
start of the network diagram and covering all the paths.
When we do
the forward and backward pass, will end up with values of Late Start (LS), Late
Finish (LF), Early Start (ES) and Early Finish (EF).
Float is the
difference of LS and ES or LF and EF, i.e. LS-ES
or LF-EF.
Free float vs Total float
Free float is an
amount of time that a schedule activity can be delayed without delaying the
early start of any immediately following schedule activities.
Total float is
the total amount of time that a schedule activity may be delayed from its early
start date without delaying the project finish date, or intermediary milestone.
In the given example below the total float for activity 3 is
5 and the free float is also 5(ES of activity 5-EF of activity 3). Similarly
the free float for activity 2 is 0.


Lead vs Lag
Lead is advancing an activity in terms of
schedule to overcome the risk if anything that may happens to the project.
For example:
You need an equipment 20 days from now and you are importing from outside.
Assume that it takes 15 days from the day of order. Instead of waiting for 5
more days from now, order now itself so that you can avoid the possible delay.
That is advancing the order day by 5 days.
Lag is deliberately delaying the successor activity.
For Example:
There are two activities. The first one is painting and second one is framing.
After painting will give some time so that the paint will dry and then only
will start framing. Deliberate delay in the successor activity is called Lag.

PMP Terminologies

PMP Terminologies
Here is the continuation of Time Management knowledge area.
Precedence vs logical relationship
While developing the relationship between the work packages
or the activities, the Project Manager or the Project team members determine
the activities what should come first and what next. This is developed by the
method called the Precedence Diagramming Method or PDM. PDM graphically
represents the activities using boxes.
The boxes which are representing the activities are linked
based on the dependency. This is called logical relationship. There are four
types of dependencies. Finish to Start, Start to finish, Start to Start and
Finish to Finish.

Master schedule vs Milestone schedule
Summary level schedule which highlights the principal
activities and their estimated duration is called Master schedule. This
schedule helps in early communication among stakeholders in particular senior
management. The schedule is also useful for facilitating team brainstorming
during the initial phrases of the project to work out logistics.

Master schedule
A milestone is a significant event in the project usually
marked by the completion of a major deliverable. The milestone schedule is used
for reporting status reports to top level management and external
stakeholders. And also the milestone
schedule allows the project team leader to review and identify all of the
significant and major project related milestones that may come during the
course of a project.

Progressive elaboration vs Rolling
wave planning
At the beginning of the project, near term deliverables are
decomposed into individual components and defined at the greatest level of
detail while the deliverables that comes later will be defined at a higher
level.
For example a project having 4 phases, may be phase 1 and 2
are decomposed in detailed and while the activities are in progress that is
during execution phase, the details of phase 3 and phase 4 deliverables are
defined. This type of project management
approach is particularly useful when the availability of information needed to
plan future work packages in detail is predicated on the successful completion
of previous project phases. This is called Rolling Wave Planning.
Progressive elaboration is used in which the plan for the
particular and designated project is being continuously and constantly
modified, detailed, and improved as newer and more sets of information becomes
available to the project management team.
Progressive elaboration is a form of Rolling Wave Planning.


Project Buffer vs Feeding buffer
A project buffer is inserted at the end of the project
network between the last task and the completion date. Any delays on the
longest chain of dependant tasks will consume some of the buffer but will leave
the completion date unchanged and so protect the project.
Delays on paths of tasks feeding into the longest chain can
impact the project by delaying a subsequent task on the Critical Chain. To
protect against this, feeding buffers are inserted between the last task on a
feeding path and the Critical Chain

Resource Loading vs Resource
Levelling
Resource loading is assigning activities to resource/man
power. In resource loading, each employee is assigned a task or a percentage of
a project. With resource loading, a project manager can predict an employee's
hours for the year and see how tasks can be assigned. This also allows the
project manager to decide whether or not additional employees or contractors
are needed to complete the scheduled projects.

Resource Loading
Resource leveling deals with both time (starting and ending
date) and resources, including manpower and budget. Resource leveling tries to
balance the conflicting interests of projects with the available resources. Resource
levelling generally breaks things down into two categories: time and available
resources. Some projects need to be finished within a certain timeframe. These
projects will use all the available resources (money and manpower) to complete
the project by a certain date.
􀂄Advantages
– Less day day-to to-day manipulation
– Better morale, fewer problems/costs
– Levels costs, simplifies budgeting and funding

Resource levelling
Work Performance Information vs Work
Performance Measurement
Work performance Information is the output of execution like
status of deliverables, schedule progress, cost incurred, implementation of the
corrective/changed requests, risk status, seller’s information in terms of
procurement etc…
Work Performance Information
Work Performance Measurement is the output of Monitoring and
control. They are used to generate graph or metrics like Cost Variance (CV),
Schedule Variance (SV), forecasts like ETC, EAC

Accountability vs Responsibility

PMP Terminologies
Let’s speak about some of the terminologies related to Human
Resource Knowledge area. In HR we come across a few terminologies which look
similar, but there is difference in terms of definition.
Accountability vs Responsibility
Accountability is taking ownership of the out come/result of
a project, and who is answerable. Responsibility is the duty or the activities
to be performed. Simple example is in a group of team headed by project
Manager, the team executing the job are responsible and the PM is accountable.
For a given activity, there can be only one accountable and multiple people who
will be responsible.
RACI vs RAM
The accountability and responsibility can be represented by
the RACI model.
R-Responsibility, A-Accountability, C-Consult and I-Inform.
RACI model provides the picture of roles and responsibility
of a particular activity or set of activities. It is represented in the form of
Matrix.
The matrix which is explaining the roles and responsibility
of the people who are working on an activity or a set of activities is called Responsibility Assignment Matrix or
RAM.
Role vs Responsibility
Role can be individual or group or the function/department.
Responsibility is the activities that are carried out by the individual or
group of people or the function/department.
For example: Project Manager is the role and the
responsibility is to carry out the activities like planning, execution,
monitoring & control, closure etc…

Authority vs Power
Power is ability to impose the will where as Authority is
right to apply those power.
For example right to apply or use project resources,
spending funds, making decisions or give approvals.

Personal Power vs Positional Power
We understood what is the meaning of power? Power is referred by more than one name.
There are five forms of powers which a Project Manager can posses.
Legitimate: The power derived from position and also called formal power.
Reward: The power of rewarding directly or indirectly to the
team. The reward can be by appreciation, motivation, monetary, salary
etc.. If nothing can be done, just say Thank you! You can read 101 ways to
reward Team members by Kevin Aquanno.
Referent: The power derived from personality.
Expert: The power
derived out of the expertise may in the technical aspects.
Penalty: Penalizing the team members directly or indirectly.
This is also called coercive or
punishment.
Positional powers are derived
from the position of the Project Manager. Legitimate, Reward and Penalty are
derived from positional powers.
Personal powers are derived from
the Project Manager himself/herself. For
example when the Project Manager is technically expert, the team members will
follow him. Expert and Referent are derived from Personal power.
If you generalise, among the
above, Expert is the best form of power. Will you agree?

PMP Terminologies

PMP Terminologies
When we study PMP, we come across different terminologies. And
many terminologies when we read, it looks similar. But there are differences.
And these differences give the clear picture of concepts as well helpful for
the examination to crack.
Let us list one by one with series of articles.
1 Accuracy vs Precision
Accuracy is defined
as, "The ability of a measurement to match the actual value of the
quantity being measured".
Precision is defined
as, "(1) The ability of a measurement to be consistently reproduced"
and "(2) The number of significant digits to which a value has been
reliably measured".
Simple example is
measurement of temperature using Thermometer. If the room temperature is 22,
and the thermometer is showing the values, 22, 22.1, 22.2, 22.3, 22.4, 22.5, 21.5,21.6,
21.7, 21.8, 21.9, then we can say that it is accurate, but not precise. Because
the range is very high and no tendancy towards a particular value. But they are
very close to the expected temperature.

2 Grade vs Quality
Grade is nothing but number of Features in a given product.
Quality is how those features are performing.
Let’s take an example:
There are 2 products.
One is product A having five features and none of them are working as
per the requirement and lot of defects. The second one is product B having two
features and both of them are working perfectly without any defects. Now which
product is having high grade and high quality or which product is having low
grade and low quality? Yes, you answered correctly. The product A is having
high grade and low quality. Where as product B is of low grade but high
quality.
The better one to choose is high quality products. Here in
this case it is B.

PMP Terminologies

PMP Terminologies
When the Project Manager is in the Planning process group,
most of his/her time will go in thinking
in the line of estimating the resources, time
required to complete the project and the cost that is going to incur and
of course other than this, risk planning, procurement planning etc… The
estimation can be done using different techniques like analogous, parametric,
three point estimation, expert judgement, etc. Let’s consider the difference
between Analogous estimation and Parametric Estimation.
Analogous estimation Vs Parametric
Estimation
Analogy means similar or equivalent. Analogous estimation is
done based on the time or cost taken by similar projects which were done during
earlier days. So this is based on the historical or the experience of the team
who have done similar projects in the past. One of the disadvantages of this
technique is estimation may not be accurate.
For example: For the cost of development of an online
booking application took about 1 month and you are going to develop the similar
application for another client, then we can take 1 month as the estimation to
develop it.


















Parametric estimation is done on the per unit basis and uses
the relation between variables to arrive at the cost or the duration. This
estimation is more accurate compared to the analogous estimation. But the measurement must be scalable in order
to achieve the accuracy.
For example: It takes 1 day to produce 10 pieces of work.
Then to produce 100 pieces how many days it takes? Simple, 10 days.

Parametric

Above, we discussed
about types of estimation. Now what is estimation? Estimation is the likelihood
of the duration or the cost in terms of quantitative numbers to complete the
project. But can we achieve the project with estimation? The answer is may not
be. So this ambiguity leads to adding the buffer which we call it as reserves
to the estimate and approve the same. This final figure becomes budget.
Estimate Vs Budget
Estimate is an approximate figure to arrive at the duration,
cost, effort, resources to complete the project.

Budget is approved estimate after the addition of reserve.

For example: After the estimation if the cost is coming to
about $1M, then will add about 5% considering the reserve. So the budget will
become $1.05M.
Just now we spoke about reserve. Now in PMP there are two types
of reserves one is the Contingency reserve and the other is Management reserve.
Let’s see the difference between them.
Contingency reserve vs Management reserve
Contingency reserve is the amount of duration or the cost
added based on the unknown but potential identified risk. And this will be
added usually by the Project Manager after the estimation and becomes Cost or
time baseline.
Management Reserve is the amount of duration or the cost
added based on the unknown risk and which are not visible. This will be added
by the Sponsor or the PMO office. To use this reserve by the Project Manager it
calls for approval from sponsor/PMO.
Contingency reserve is called “known unknown” and Management
reserve is called “unknown unknown”.
The technique of using the Management Reserve and
Contingency reserve is called the Reserve
Analysis.