pmp exam prep course · 2019-08-04 · practice the pmp exam… chapters 7-8 the pmbok® guide (5...

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Session 4

THE PMP® EXAMPREP COURSE

PMI, PMP and PMBOK are registered marks of the Project Management Institute, Inc.

Agenda

2

9:00 – 10:15 Practice the PMP Questions

10:15 – 10:30 Break

10:30 – 12:00 Human Resource Mangmnt (Pass the PMP® Exam, Ch. 7)

12:00 – 12:45 Lunch

12:45 – 2:15 Communications Mangmnt (Pass the PMP® Exam, Ch. 8)

2:15 – 2:30 Break

2:30 – 4:00 Risk Management (Pass the PMP® Exam, Ch. 9)

Practice the PMP Exam…

Chapters 7-8 the PMBOK® Guide (5 & 6 of the Pass

the PMP® Exam)

You have 50 questions

Mark each one as A, B, C, or D

You have 50 minutes to answer as many as possible –

in the exam you would have 1 hour

Good luck!

3


HUMAN RESOURCE

MANAGEMENT

Chapter 7 of Pass the PMP® Exam

Chapter 9 of the PMBOK® Guide

Overview

Difficulty Memorisation Exam Importance

Low

Medium

High

5

Human Resource Management

One of the easier and shorter chapters in the PMBOK®

Guide

Define a role for everyone on the project

Define the responsibilities for each role

Develop a high performing team

6

Human Resource Management

Initiating Planning ExecutingMonitoring &

ControllingClosing

Project Management Process GroupsKnowledge

Area

Processes

• Plan Human

Resource

Management

• Acquire

Project Team

• Develop

Project Team

• Manage

Project Team

Project

Human

Resource

Management

7

Table 3-1. Project Management Process Groups and Knowledge Area MappingA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved

8

.1 Inputs

.1 Project management plan

.2 Activity resource requirements

.3 Enterprise environmental factors

.4 Organisational process assets

.2 Tools and Techniques

.1 Organisation charts and position

descriptions

.2 Networking

.3 Organisational theory

.4 Expert judgment

.5 Meetings

.3 Outputs

.1 Human resource management plan

.1 Inputs





.1 Pre-assignment

.2 Negotiation

.3 Acquisition

.4 Virtual teams

.5 Multi-criteria decision analysis

.3 Outputs

.1 Project staff assignments

.2 Resource calendars

.3 Project management plan updates

Project Human Resource Management

9.1 Plan Human Resource Management 9.2 Acquire Project Team

.1 Inputs





.1 Interpersonal skills

.2 Training

.3 Team-building activities

.4 Ground rules

.5 Colocation

.6 Recognition and rewards

.7 Personnel assessment tools

.3 Outputs

.1 Team performance assessments

.2 Enterprise environmental factor updates

9.3 Develop Project Team

.1 Inputs



.3 Team performance assessments

.4 Issue log

.5 Work performance reports


9.4 Manage Project Team


.1 Observation and

conversation

.2 Project performance

appraisals

.3 Conflict management


.3 Outputs

.1 Change requests


.3 Project document updates


updates


updates

Figure 9-1. Project Human Resource Management OverviewA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved

Plan Human Resource Management

9

Inputs Tools and Techniques Outputs


.2 Activity resource

requirements

.3 Enterprise environmental

factors

.4 Organisational process

assets

.1 Organisation charts and

position descriptions

.2 Networking

.3 Organisational theory

.4 Expert judgment

.5 Meetings

.1 Human resource

management plan


Human Resource Planning

Same as the others – start with planning!

Sets out how you will

– Staff

– Manage

– Team build

– Assess and

– Improve the project team

10

Terms You Need to Know

Types of organisation charts

Responsibility Assignment Matrix (RAM)

– RACI (a type of RAM)

Resource Histogram

11

Types of Organisation Charts

PM

Hierarchical-type

organisation chart

Matrix-based

responsibility chart

Text-oriented

format

RAMRole

Responsibilities

Authority

12

Responsibility Assignment Matrix

(RAM)

PersonRACI Chart

Ann Ben Carlos Betty TedActivity

A R I I IDefine

I A R C CDesign

I A R C CDevelop

A I I R ITest

R = Responsible A = Accountable C = Consult I = Inform

13

Resource Histogram

0

25

50

75

100

125

150

175

200

225

250

275

300

9 16 23 30 6 13 20 27 6 13 20 27 3 10 17 24 1 8 15 22

Staff Hours

for Senior

Designers

Jan Feb Mar Apr May

14

Resource Levelling?

Human Resource Management Plan

Roles and responsibilities of team members and key

stakeholders

Organisation and resource charts

Staffing management plan

– Where staff will come from and how you will release them

– Resource calendars

– Training needs

– Health and Safety requirements

– Motivation and reward methods

15

Acquire Project Team

16


.1 Human resource

management plan


factors


.1 Pre-assignment

.2 Negotiation

.3 Acquisition

.4 Virtual teams

.5 Multi-criteria decision analysis




updates


Acquire Project Team

An executing process

Carries out the staffing management plan

Gets the right people working on the project

You may have to negotiate for your resources

Think back to types of organisations we have already covered and the challenges in getting your staff

17

Pre-Assignment

Normal for roles to be defined before resources

HOWEVER, sometimes specific resources are pre-assigned to fill a role

Can happen even before a project begins

– E.g. the Project Charter

18

Negotiation

Method to determine how scarce resources will be allocated

PM’s may have to negotiate both inside and outside the organisation

19

Acquisition

Do not confuse with ‘Acquire Project Team’

Refers to looking outside the organisation for resources i.e. advertising, recruitment, head hunting etc.

20

Types of project teams

Dedicated

– Full time, Projectised organisations, Good for the project

Part-time

– Functional or matrix organisations, focus is split

Partnership

– Team members from different organisations partnering for greater power

Virtual…

21

Virtual Teams

Group of people who may or may not see each other in person

Becoming more and more popular with evolution of technology

A good project manager must recognise the benefits and challenges of virtual teams

22

Multi-criteria decision analysis

The process of acquiring project team members can

take into account a variety of criteria to choose the right

people for the team

Criteria can include things like experience, expertise,

location, aptitude and aspirations

23

Project Staff Assignments

All team members should have a clear assignment, and

defined roles and responsibilities

24

Develop Project Team

25


.1 Human resource

management plan




.2 Training

.3 Team-building activities

.4 Ground rules

.5 Colocation

.6 Recognition and rewards

.7 Personnel assessment tools

.1 Team performance

assessments


factor updates


Develop Project Team

It is the responsibility of the project manager to lead and

develop a high performing team

Building a sense of team and improving performance

Providing all the necessary training

Get the team to establish ground rules

Should be done early and often

26

Interpersonal Skills

1. Leadership

2. Ability to build teams

3. Motivate people

4. Communication skills

5. Influencing

6. Decision making

27

7. Political & cultural awareness

8. Negotiation skills

9. Trust

10.Conflict management

11.Coaching

Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK® Guide) – Fifth Edition, Project

Management Institute Inc., 2013, Page 513.

Leadership Styles

What is your natural style of leadership?

– Directing

– Coaching

– Facilitating

– Supporting

28

Leadership Styles

Leadership

Style

Project Timeline

Autocratic

Participative

Early

Phases

Late

Phases

Directing Leader

Coaching Leader

Facilitating Leader

Supporting Leader

29

Forms of Power

You must know these!

– Reward

– Expert

– Legitimate

– Referent

– Punishment

30

Forms of Power

Reward: The ability to give rewards and recognition

Expert: Increased credibility because of subject matter

expertise

These are considered the two most effective forms of

power according to the PMBOK® Guide

31

Forms of Power

Legitimate: Power based on position

Referent: Based on personal power of individual or

alignment with a more powerful individual

Punishment: Also known as coercive; the ability to

punish an employee. Considered by the PMBOK® Guide

to be the least effective form of power

32

Recognition and Rewards:

Theories of Motivation

Maslow’s Hierarchy of Needs

– Humans will want to fulfil the bottom needs first and

cannot fulfil higher needs until lower ones are fulfilled

Self-actualisation

Esteem

Acceptance

Security

Physiological

33

Self-fulfilment, growth, learning

Accomplishment, respect, appreciation

Love, affection, approval, association

Security, stability, safe

Need for air, water, food,

shelter, clothing

More on Maslow

The current need will always be the strongest motivator

Self-actualisation

Esteem

Acceptance

Security

Physiological

34

McGregor Theory X and Y

Assumes Managers see employees as either:

THEORY X

– Need constant supervision

– Don’t want to work

– Selfish

Tip to remember the difference: X has a cross face, Y has a happy face

THEORY Y

– Naturally motivated to do good

work

– Need little external motivation

– Trustworthy

35

Ouchi Theory Z

Focuses on increasing employee loyalty to the company

by providing a job for life with a strong focus on the well-

being of the employee, both on and off the job.

Theory Z management tends to promote stable

employment, high productivity, and high employee

morale and satisfaction

36

Fiedler’s Contingency Theory

Leader’s effectiveness contingent on two sets of factors

– Whether he or she is task-oriented or relationship-

oriented

– Whether the environment is stressful or calm

A task-oriented leader is more effective in stressful

situations

A relationship-oriented leader is more effective in calm

situations

37

Herzberg's Motivation-Hygiene Theory

Similar to Maslow

Hygiene Factors will not motivate, but their absence will

make staff unsatisfied

– E.g. Company policy, supervision, working conditions

Motivation Factors will motivate, but only if Hygiene

Factors are in place

– E.g. Achievement, work, responsibility, advancement

38

Vroom’s Expectancy Theory

The expectation of receiving a reward for a certain

accomplishment will motivate people to work harder

Only works if the accomplishment is perceived to be

achievable

39

McClelland's Human Motivation,

Achievement or Three Needs Theory

People need three things:

– Achievement

– Power

– Affiliation

Use these three needs to motivate employees

40

Tuckman 5 Stage Model of Team

Development

41

Time

Performance

Performing

Norming

Storming

Forming

Adjourning

Morris and Sashkin 6 step

decision making model

Did you read Appendix X3 of the PMBOK® Guide?

1. Problem definition

2. Problem solution generation

3. Ideas to action

4. Solution action planning

5. Solution evaluation planning

6. Evaluations of the outcome and process

NB: This slide is also here to show you we can’t cover

every possible topic but we do try.

42

Co-location rules!

If possible always put people within sight of each other.

Virtual teams challenge this

A war room is an example of co-location

43

Manage Project Team

44


.1 Human resource

management plan


.3 Team performance

assessments

.4 Issue log



assets

.1 Observation and

conversation

.2 Project performance

appraisals

.3 Conflict management


.1 Change requests


updates



factors updates


assets updates


Manage Project Team

Executing process

Uses the Staffing Management Plan

Compares planned vs. actual

Proactively controls change

45

Observation & Conversation

What better way to manage the project team than by

observing them individually and as a team, and by

talking with them about how it is going?

46

Project Performance Appraisals

Give team members regular feedback about individual,

team and project performance.

47

Conflict Management

At least one exam question requires you to know these:

1. Problem Solving/Collaborate

2. Compromise/Reconcile

3. Force/Direct

4. Smoothing/Accommodate

5. Withdrawal/Avoiding

48

Problem Solving/Collaboration

Solve the actual problem

Incorporating multiple viewpoints if necessary

Best method according to the PMBOK® Guide

Confront the PROBLEM, not the PERSON

49

Compromise/Reconcile

Getting participants to search for solutions

Can be win-win

Can also be lose-lose

50

Force/Direct

Pushing one viewpoint on others

Worst method according to the PMBOK® Guide

Doesn’t help underlying problems; reduces team morale

51

Smooth/Accommodate

Minimises problem to ease tensions and reduce conflict

Doesn’t solve problems

52

Withdrawal/Avoid

Avoids problem altogether

Not effective

53

Types of Team Roles

Constructive

Destructive

54

Constructive Team Roles

Clarifiers

Harmonisers

Summarisers

Gate keepers

Initiators

Information seekers

Information givers

Encouragers

55

Destructive Team Roles

Topic jumpers

Dominators

Devil’s Advocates

Aggressors

Blockers

Withdrawers

Recognition seekers

56

Practice Questions

Pass the PMP® Exam p. 214

57


COMMUNICATIONS MANAGEMENT



Overview


Low

Medium

High

59

Communications Management

Project Management is all about

communication, communication,

communication!

It is the project manager’s most important skill

60

Communication

90% of a project manager’s time is spent

communicating

50% of that time is spent communicating with

the team

61

Communication

Project manager should not be in control of

every communication

Project manager should control the

communication process

62

Communications Management


ControllingClosing


Area

Processes

• Plan

communications

management

• Manage

communications

• Control

communicationsProject

Communications

Management

63


64

Project Communications Management

.1 Inputs


.2 Stakeholder register




.1 Communication requirements analysis

.2 Communication technology

.3 Communication models

.4 Communication methods

.5 Meetings

.3 Outputs

.1 Communications management plan


10.1 Plan Communications Management

.1 Inputs

.1 Communications management plan








.4 Information management systems

.5 Performance reporting

.3 Outputs

.1 Project communications


.3 Project documents updates

.4 Organisational process assets updates

10.2 Manage Communications

.1 Inputs



.3 Issues log

.3 Work performance data




.2 Expert judgment

.3 Meetings

.3 Outputs

.1 Work performance information

.2 Change requests




10.3 Control Communications

Figure 10-1. Project Communications Management OverviewA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved

Plan Communication Management

65





factors


.1 Communication requirements

analysis




.5 Meetings

.1 Communications

management plan



Plan Communications

All about creating the communications management

plan

– How often and in what format communications will be

distributed and updated

– What information will be included

– Which stakeholders will receive them

66

Tools and techniques

.1 Communication requirements analysis

– Creating the communications register which guides all communications


– Making appropriate choices to maximize the efficiency of communications


– Being aware of how communications works


– Choosing the best method

67


Communications technology

The particular type of communication technology you

choose to use to facilitate project communication is an

important consideration because each stakeholder will

respond differently to the technology chosen.

Remember that what works well for one stakeholder

may not work for another stakeholder.

68

Communications Channels

𝑛(𝑛 − 1)

2

4(4-1)/2

= 4*3/2

= 12/2

= 6

1

4 2

3

5 6

5(5-1)/2

= 5*4/2

= 20/2

= 10

21

5 3

4

6

8

7

9

10

69

Another Formula to Know

Number of communication channels

= 𝑛(𝑛−1)

2

i.e. 12 people (including yourself)

= 12(12−1)

2= 12(11)

2= 132

2= 66

There will be exam questions on this!

70

71


.1 Communications

management plan



factors


assets




.4 Information management

systems




updates



assets updates

Manage Communications


Manage Communications

Execution of the communications management plan

Process where the bulk of the project communications

takes place

Updates stakeholders on project progress

72

Tools and techniques






73

A Model for Communication

Encode

Decode

Sender

Message

Medium

Feedback - Message

Noise

Noise

Decode

Encode

Receiver

74

Terms to Know

Active Listening: taking active steps to ensure the

message was understood. Provides feedback to

indicate whether or not the message has been

understood

Effective Listening: similar to active listening, also

includes monitoring non-verbal and physical

communication

75

Terms to Know

Non-verbal: body language, posture, etc. Most

communication is non-verbal

Paralingual: vocal but not verbal, includes tone of voice,

pitch and volume – how the words are said rather than

what words are said

76

Methods of Communication

Informal vs. formal

Written vs. verbal

Push vs. Pull vs. Interactive

77

Methods of Communication

Method Examples

Informal written Emails, memoranda

Formal written Contracts, legal notices, project

documents

Informal verbal Meetings, discussions, phone calls,

conversations

Formal verbal Speeches, mass communications,

presentations

78

Other forms of communication

Effective meetings

Kick-off meeting

Wherever possible, face-to-face meetings are the best

choice for communicating with stakeholders

79

Performance reporting

Reports to the stakeholders how the project is

progressing against the plan

Uses a variety of methods and formats – must be

appropriate!

Includes text based, numerical, RAG, graphical, or

Gantt charts etc.

80

Control Communications

81




.3 Issues log



.1 Information management

systems

.2 Expert judgment

.3 Meetings


.2 Change requests


updates



updates



Is a monitoring and controlling process

82


Work performance data: covers practically all aspects of

the project

Work performance information: variances and indices

(CV, SV, CPI, CPIC, and SPI) from last week

Budget forecasts: EAC or ETC from last week

83

Practice Questions

Pass the PMP® Exam, p. 231

84


RISK MANAGEMENT



Overview


Low

Medium

High

86

Risk Management

Can be tough to get your head around

Will feature on the exam in a few different ways

All about planning and being proactive

Give this section extra attention

87

Some Tips

There are bad risks that negatively affect a project

There are good risks that positively affect the project

Risk is related to uncertainty

88

Risk Management

89


ControllingClosing


Area

Processes

• Plan Risk

Management

• Identify Risks

• Perform

Qualitative

Risk Analysis

• Perform

Quantitative

Risk Analysis

• Plan Risk

Responses

• Control Risks

Project Risk

Management


90

Project Risk Management

.1 Inputs


.2 Project charter





.1 Analytical techniques

.2 Expert judgment

.3 Meetings

.3 Outputs

.1 Risk management plan

11.1 Plan Risk Management

.1 Inputs


.2 Cost management plan

.3 Schedule management plan

.4 Quality management plan


.6 Scope baseline

.7 Activity cost estimates

.8 Activity duration estimates


.10 Project documents

.11 Procurement documents




.1 Documentation reviews

.2 Information gathering techniques

.3 Checklist analysis

.4 Assumptions analysis

.5 Diagramming techniques

.6 SWOT analysis

.7 Expert judgment

.3 Outputs

.1 Risk register

11.2 Identify Risks

.1 Inputs


.2 Scope baseline

.3 Risk register




.1 Risk probability and impact assessment

.2 Probability and impact matrix

.3 Risk data quality assessment

.4 Risk categorization

.5 Risk urgency assessment

.6 Expert judgment

.3 Outputs


11.3 Perform Qualitative Risk Analysis

.1 Inputs


.2 Risk register




.1 Risk reassessment

.2 Risk audits

.3 Variance and trend analysis

.4 Technical performance measurement

.5 Reserve analysis

.6 Meetings

.3 Outputs


.2 Change requests




11.6 Control Risks

.1 Inputs


.2 Risk register


.1 Strategies for negative risks or threats

.2 Strategies for positive risks or opportunities

.3 Contingent response strategies

.4 Expert judgment

.3 Outputs



11.5 Plan Risk Responses

.1 Inputs




.4 Risk register




.1 Data gathering and representation techniques

.2 Quantitative risk analysis and modeling

techniques

.3 Expert judgment

.3 Outputs


11.4 Perform Quantitative Risk Analysis

Figure 11-1. Project Risk Management

OverviewA Guide to the Project Management Body of Knowledge

(PMBOK® Guide) – Fifth Edition. ©2013 Project Management

Institute, Inc. All rights reserved

91


.1 Project management

plan

.2 Project charter



factors


assets

.1 Analytical techniques

.2 Expert judgment

.3 Meetings


Plan Risk Management

Figure 11-1. Project Risk Management OverviewA Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Fifth Edition. ©2013 Project Management Institute, Inc. All rights reserved

Plan Risk Management

Creation of risk management plan: the sole output

Output from here becomes input into the next processes

92

Risk Management Plan

May include a Risk Breakdown Structure (RBS)

At this stage, RBS does not identify specific risks! It

identifies categories of risks that will be evaluated

93

94

Project

Technical

Requirements

Technology

Complexity and

interfaces

Performances

and reliability

Quality

External

Subcontractors

and suppliers

Regulatory

Market

Customer

Weather

Organisational

Project

dependencies

Resources

Funding

Prioritisation

Project

Management

Estimating

Planning

Controlling

Communication

Risk Breakdown Structure

Risk Breakdown Structure

Lists the categories and sub-categories of potential risks

At this stage, may include references to specific

identified risks

Functions as a reminder of the many sources from

which risks may arise

Don't confuse this with the other RBS – the Resource

Breakdown Structure

95

Identify Risks

96





.4 Quality management plan

.5 Human resource management

plan

.6 Scope baseline

.7 Activity cost estimates

.8 Activity duration estimates


.10 Project documents

.11 Procurement documents


factors


assets

.1 Documentation reviews

.2 Information gathering

techniques

.3 Checklist analysis

.4 Assumptions analysis

.5 Diagramming techniques

.6 SWOT analysis

.7 Expert judgment

.1 Risk register


Identify Risks

Identifying the risks that could impact the project

Identifying the nature and consequence of these risks

Just the one output – the risk register

Updates to the risk register feature as outputs for the

next three processes

97

The Watch List

The watch list is used for low order risks

If things change they may escalate to the risk register

98

Information Gathering Techniques

Diagramming techniques

– Ishikawa/fishbone/

cause-and-effect

– Influence diagrams

Show how one set

of factors may

influence another

– Flow charts

SWOT analysis

Delphi

Brainstorming

Expert interviews

Root cause identification

99

Perform Qualitative Risk Analysis

100



.2 Scope baseline

.3 Risk register


factors


assets

.1 Risk probability and impact

assessment

.2 Probability and impact matrix

.3 Risk data quality assessment

.4 Risk categorization

.5 Risk urgency assessment

.6 Expert judgment



Perform Qualitative Risk Analysis

Usually done rapidly on the project in order to determine

which risks are the highest priority

Takes each risk from the risk register and analyses

Probability (P) and Impact (I)

The risks with the highest combination of probability and

impact are the most important ones

101

Standardizing Qualitative

Assessments

102

Very low or 1 Low or 2 Moderate or 3 High or 4 Very High or 5

ScopeNo noticeable

change to scope

Minor changes to scope

Significant change to scope

Changes to scope

unacceptable to sponsor or

client

Changes the complete purpose

of the project

Time No noticeable change to time

Less than 10% increase in

time

10-20% increase in time

20-30% increase in

time

Great than 30% increase in time

Cost No noticeable change to cost

Less than 10% increase in

cost

10-20% increase in cost

20-30% increase in

cost

Great than 30% increase in cost

Probability and Impact Matrix

Shows the impact (ratio scale) on an objective (e.g.

cost, time, scope, quality)

Each risk is rated on probability and impact

Risk is scored as high, moderate or low according to

organisation's thresholds

103

Probability and Impact Matrix

104

0.90

0.70

0.50

0.30

0.10

0.045

0.035

0.025

0.015

0.005

0.05

0.09

0.07

0.05

0.03

0.01

0.10

0.18

.014

0.10

0.06

0.02

0.20

0.36

0.28

0.20

0.12

0.04

0.40

0.72

0.56

0.40

0.24

0.08

0.80

0.72

0.56

0.40

0.24

0.08

0.80

0.36

0.28

0.20

0.12

0.04

0.40

0.18

0.14

0.10

0.06

0.02

0.20

0.09

0.07

0.05

0.03

0.01

0.10

0.045

0.035

0.025

0.015

0.005

0.05Impact

Probability

Threats Opportunities

Some Other Tools & Techniques

Risk Data Quality Assessment: how accurate is your data?

Risk Urgency Assessment: how urgent is this risk?

105

Perform Quantitative Risk Analysis

106





.4 Risk register


factors


assets

.1 Data gathering and

representation techniques

.2 Quantitative risk analysis and

modeling techniques

.3 Expert judgment



Perform Quantitative Risk Analysis

Make sure you know the difference!

Qualitative ranks them

Quantitative assigns a value (quantity) to them using

mathematical modelling and statistics

– Requires the prioritised list of risks from Qualitative,

so must be done second

107

Data Gathering & Representation

Interviewing: structured format for soliciting information

from experts

Expert Judgement: any form of input from experts

108

Quantitative Risk Analysis &

ModellingSensitivity Analysis: how sensitive is the project to risk?

Tornado Diagrams: which area of the project is most

sensitive to a given factor?

109

Quantitative Risk Analysis &

Modeling

Expected Monetary Value analysis: cost of event X

likelihood of event

– Often calculated with Decision Trees

Make sure you understand

how the diagrams on slide 126

and p.254 of the Pass the

PMP® Exam!

110

Decision Tree

Shows how to make a decision between alternative

strategies (decision nodes) when the environment

(chance nodes) is not known with certainty

You must understand the logic behind decision trees!

111

Example Decision Tree

112

Decision Definition

Decision to be made

Net Path Value

Computed:

(Payoffs minus Costs)

along Path

Decision Node

Input: Cost of each option

Output: Decision made (True, False)

Chance Node

Input: Scenario probability, reward if it occurs

Output: Expected monetary value (EMV)

Build or upgrade?

Build new plant

Upgrade

existing plant

EMV of the Decision Node

$49M

Strong demand

Weak demand

EMV of the Chance Node

$41.5M

Strong demand

Weak demand

EMV of the Chance Node

$49.0M

False

-$120

True

-$50

$10M

$70M

-$30M

$80M65%

$200

35%

$90

65%

$120

35%

$60

The organization chooses to upgrade the existing plant because that alternative has an Expected

Monetary Value (EMV) of $49M vs. the EMV of the build new plant option of $41.5M

Example Decision Tree

113

Build or upgrade?

Build new plant

-$120m

Upgrade

existing plant

-$50m

Strong demand

$200m

Weak demand

$90m

Strong demand

$120m

Weak demand

$60m

$200 - $120 = $80m65%

65%

35%

35%

$80m x 0.65 = $52m

$90 - $120 = -$30m

-$30m x 0.35 = -$10.5m

EMV = $52m + -$10.5m = $41.5m

EMV = $45.5m + $3.5m = $49m

$120 - $50 = $70M

$70m x 0.65 = $45.5m

$60 - $50 = $10M

$10m x 0.35 = $3.5m

The organization chooses to upgrade the existing plant because that alternative has an

Expected Monetary Value (EMV) of $49M vs. the EMV of the build new plant option of $41.5M

Decision Definition

Decision to be made

Net Path Value

Computed:

(Payoffs minus Costs)

along Path

Decision Node

Input: Cost of each option

Output: Decision made (True, False)

Chance Node

Input: Scenario probability, reward if it occurs

Output: Expected monetary value (EMV)

Last, but not Least!

Monte Carlo analysis: what-if analysis

– Performed by computers

114

Plan Risk Responses

115



.2 Risk register

.1 Strategies for negative risks

or threats

.2 Strategies for positive risks or

opportunities

.3 Contingent response

strategies

.4 Expert judgment


updates



Plan Risk Responses

You have identified the risks, prioritised them, and

assigned a value to them

What do you do next logically?

116

Plan Risk Responses

You have identified the risks, prioritised them, and

assigned a value to them

What do you do next logically?

Proactively plan your response to each one

REMEMBER: Work to be done as part of risk responses

must be added to your project scope!

117

Risk Strategies

For Positive Risks

– Exploit

– Share

– Enhance

– Accept

For Negative Risks

– Avoid

– Transfer

– Mitigate

– Accept

Know the differences and when to use which

one

118

Strategies for Negative Risks

Avoid:

– Don't engage in the activity that could lead to the risk

– Avoidance is bad in communications, but not

necessarily in risk management

– Avoid risk of traffic on motorway by taking back roads

119


Transfer:

– Make the risk someone else's problem

– Insurance!

120


Mitigate:

– Lessen either the impact or the likelihood of the risk

– Hold an outdoor event in summer for less chance of

a snowstorm

– Build a house to certain specifications to lessen the

impact of a hurricane

121

Strategies for Positive Risks

Exploit:

– Attempt to remove uncertainty and make sure event

will happen

– If there's a risk that the project will be more profitable

than anticipated, make sure contributing factors are

identified and continued

122


Share:

– Improve chances of risk occurring by working with

another party

– Partner with a complementary vendor to respond to

an RFP

123


Enhance:

– Increase either the impact or the likelihood of the risk

– Increase risk of winning Lotto by buying more tickets

124

Strategy for Both

Accept:

– If cost or impact of response is greater than cost or

impact of risk, best strategy may be to accept it

– Cost of buying enough Lotto tickets to guarantee a

win is greater than the prize – don't buy Lotto tickets!

125

Contingencies and Workarounds

Workaround – temporary solution to get you through the

risk

Contingency plan, or Fallback plan – your plan to deal

with unforeseen risks triggered by pre-set conditions

126

127



.2 Risk register



.1 Risk reassessment

.2 Risk audits

.3 Variance and trend analysis

.4 Technical performance

measurement

.5 Reserve analysis

.6 Meetings

.1 Work performance

information

.2 Change requests


updates



assets updates

Control Risks


Control Risks

You’ve done all your planning – now its time to do the

controlling

128

Tools & Techniques

Risk Reassessment: reassess as often as necessary for

your project

Risk Audits: about Risk Management, not about

individual risks!

Variance and Trend Analysis: can highlight increasing or

decreasing likelihood of risk

129

Tools & Techniques

Technical Performance Measurement

– Looking at technical measures and understand variations – i.;

weight, transaction times, escaped defects, storage capacity.

Reserve Analysis

Meetings

130

Practice Questions

Pass the PMP® Exam, p. 265

131

Next Session

Read chapters 12 and 13 of the PMBOK® Guide, and

Chapters 10, 11 and 12 of Pass the PMP® Exam

Will have a practice the PMP exam on ALL the PMP

material in the afternoon

Create your own the PMP style multi-choice practice

questions

132

pmp exam prep course · 2019-08-04 · practice the pmp exam… chapters 7-8 the pmbok® guide (5...

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