Project Management

Glossary of Terms for Earned Value

Actual Cost (AC): Total costs actually incurred and recorded in accomplishing work performed during a given time period.

Actual Cost of Work Performed (ACWP): See Actual Cost (AC).

Apportioned Effort (AE): Effort applied to project work that is not readily divisible into discrete efforts for that work, but which is related in direct proportion to measurable discrete work efforts.

Contrast with Discrete Effort.

Budget at Completion (BAC): The sum of all the budgets established for the work to be performed on the project. The total planned value for the project.

Budgeted Cost of Work Performed (BCWP): See Earned Value (EV).

Budgeted Cost of Work Scheduled (BCWS): See Planned Value (PV).

Control Account: A management control point where scope, budget (resource plans), actual cost, and schedule are integrated and compared to earned value for performance measurement. Control accounts are placed at selected management points (specific components at selected levels) of the work breakdown structure.

Cost Performance Index (CPI): A measure of cost efficiency on a project. It is the ratio of earned value (EV) to actual costs (AC). CPI _ EV divided by AC. A value equal to or greater than one indicates a favorable condition and a value less than one indicates an unfavorable condition.

Cost Variance (CV): A measure of cost performance on a project. It is the algebraic difference between earned value (EV) and actual cost (AC). CV _EV minus AC. A positive value indicates a favorable condition and a negative value indicates an unfavorable condition.

Discrete Effort: Work effort that is separate, distinct, and related to the completion of specific end products or services, and that can be directly planned and measured.

Earned Value (EV): The value of work performed expressed in terms of the budget assigned to that work. It is also referred to as the Budgeted Cost of Work Performed (BCWP).

Earned Value Technique (EVT): This is a technique or method for measuring the performance of work, and used to establish the performance measurement baseline (PMB).

Estimate at Completion (EAC):  The expected total cost of completing project work. EAC is equal to the actual cost (AC) plus the estimate to complete (ETC) for all of the remaining work. The EAC may be calculated based on performance to date or estimated by the project team based

on other factors.  

Estimate to Complete (ETC): The estimated cost of completing the remaining work.

Level of Effort (LOE): Support-type activity (e.g., seller or customer liaison, project cost accounting, project management), which does not produce definitive end products.

Management by Exception:  A management technique that emphasizes attention to performance behavior that falls outside of some predetermined range of normal or expected outcomes. This technique is characterized by containment and conservatism.

Organizational Breakdown Structure (OBS): A hierarchically organized depiction of the project organization arranged so as to relate the work to the performing organizational units. (Sometimes OBS is written as Organization Breakdown Structure with the same definition.)

Performance Measurement Baseline (PMB): An approved, integrated scope-schedule-cost plan for the project work against which project execution is compared to measure and manage performance.

Physical Work Progress: The amount of work physically completed on the project or task. This may be different from the amount of effort or money expended on the project or task. Predetermined techniques of claiming physical work progress that were selected during project planning are

used to credit Earned Value when work is partially complete at the time of progress reporting.

Planned Value (PV). The authorized budget assigned to the scheduled work to be accomplished. This is also referred to as the budgeted cost of work scheduled (BCWS).

Responsibility Assignment Matrix (RAM): A structure that relates the project organizational breakdown structure to the work breakdown structure to help ensure that each component of the project’s scope of work is assigned to a responsible person/team.

Schedule Performance Index (SPI):  A measure of schedule efficiency on a project. It is the ratio of earned value (EV) to planned value (PV). The SPI _ EV divided by PV. An SPI equal to or greater than one indicates a favorable condition and a value of less than one indicates an unfavorable condition.

Schedule Variance (SV): This is a measure of schedule performance on a project. It is the algebraic difference between the earned value (EV) and the planned value (PV). SV _ EV minus PV.

S-Curve:  Graphic display of cumulative costs, labor hours, percentage of work, or other quantities, plotted against time. Used to depict Planned Value, Earned Value, and Actual Cost of project work.

Time-Phase Budget: A project budget that identifies how much money or labor is to be expended on each task for each time period (e.g., month) in the project schedule (see Planned Value).

To-Complete Performance Index (TCPI): The calculated projection of cost performance that must be achieved on remaining work to meet a specified goal, such as the BAC or the management EAC. For example: To-Complete Performance Index _ (remaining work) / (budget remaining)

_ (BAC _ EV) / (BAC _ AC). The difference between the total budget assigned to a project (BAC) and the total cost estimate at completion (EAC). Variance at Completion _ Budget: at Completion _ Estimate at Completion. It represents the amount of expected overrun or under-run.

Variance Threshold: A predetermined range of normal outcomes that is determined during the planning process and sets the boundaries within which the team practices management by exception.


[i] Guide to the Project Management Body of Knowledge (PMBOK@ Guide) Third Edition @2004 Project Management Institute, Four Campus Boulevard, Newtown Square, PA 19073-3299 USA


September 18, 2008 Posted by | earned value, PMBOK | , , , , , , , | Leave a comment

Summary of Project Management Knowledge Areas




A subset of project management that includes the processes required to ensure that the various elements of the project are properly coordinated. It consists of:


·         Project plan development—integrating and coordinating all project plans to create a consistent, coherent document.

·         Project plan execution—carrying out the project plan by performing the activities included therein.

·         Integrated change control—coordinating changes across the entire project.





A subset of project management that includes the processes required to ensure that the project includes all the work required, and only the work required, to complete the project successfully. It consists of:


·         Initiation—authorizing the project or phase.

·         Scope planning—developing a written scope statement as the basis for future project decisions.

·         Scope definition—subdividing the major project deliverables into smaller, more manageable components.

·         Scope verification—formalizing acceptance of the project scope.

·         Scope change control—controlling changes to project scope.





A subset of project management that includes the processes required to ensure timely completion of the project. It consists of:


·         Activity definition—identifying the specific activities that must be performed to produce the various project deliverables.

·         Activity sequencing—identifying and documenting interactivity dependencies.

·         Activity duration estimating—estimating the number of work periods that will be needed to complete individual activities.

·         Schedule development—analyzing activity sequences, activity durations, and resource requirements to create the project schedule.

·         Schedule control—controlling changes to the project schedule.





A subset of project management that includes the processes required to ensure that the project is completed within the approved budget. It consists of:


·         Resource planning—determining what resources (people, equipment, materials) and what quantities of each should be used to perform project activities.

·         Cost estimating—developing an approximation (estimate) of the costs of the resources needed to complete project activities.

·         Cost budgeting—allocating the overall cost estimate to individual work activities.

·         Cost control—controlling changes to the project budget.





A subset of project management that includes the processes required to ensure that the project will satisfy the needs for which it was undertaken. It consists of:


  • Quality planning—identifying which quality standards are relevant to the project and determining how to satisfy them.
  • Quality assurance—evaluating overall project performance on a regular basis to provide confidence that the project will satisfy the relevant quality standards.
  • Quality control—monitoring specific project results to determine if they comply with relevant quality standards and identifying ways to eliminate causes of unsatisfactory performance.





A subset of project management that includes the processes required to make the most effective use of the people involved with the project. It consists of:


  • Organizational planning—identifying, documenting, and assigning project roles, responsibilities, and reporting relationships.
  • Staff acquisition—getting the needed human resources assigned to and working on the project.
  • Team development—developing individual and group skills to enhance project performance.





A subset of project management that includes the processes required to ensure timely and appropriate generation, collection, dissemination, storage, and ultimate disposition of project information.


Communication takes at least 90% of a Project Manager’s time! It consists of:


·         Communications planning—determining the information and communications needs of the stakeholders: who needs what information, when they will need it, and how it will be given to them.

·         Information distribution—making needed information available to project stakeholders in a timely manner.

·         Performance reporting—collecting and disseminating performance information. This includes status reporting, progress measurement, and forecasting.

·         Administrative closure—generating, gathering, and disseminating information to formalize phase or project completion.




Risk management is the systematic process of identifying, analyzing, and responding to project risks. It includes maximizing the probability and consequences of positive events and minimizing the probability and consequences of adverse events to project objectives. It includes:


·         Risk management planning—deciding how to approach and plan the risk management activities for a project.

·         Risk identification—determining which risks might affect the project and document their characteristics.

·         Qualitative risk analysis—performing a qualitative analysis of risks and conditions to prioritize their effects on project objectives.

·         Quantitative risk analysis—measuring the probability and consequences of risks and estimating their implications for project objectives.

·         Risk response planning—developing procedures and techniques to enhance opportunities and reduce threats from risks to the project’s objectives.

·         Risk monitoring and control—monitoring residual risks, identifying new risks, executing risk reduction plans, and evaluating their effectiveness throughout the project life cycle.




A subset of project management that includes the processes required to acquire goods and services to attain project scope from outside the performing organization. It consists of:


  • Procurement planning—determining what to procure and when.
  • Solicitation planning—documenting product requirements and identifying potential sources.
  • Solicitation—obtaining quotations, bids, offers, or proposals, as appropriate.
  • Source selection—choosing from among potential sellers.
  • Contract administration—managing the relationship with the seller.
  • Contract closeout—completion and settlement of the contract, including resolution of any open items.[i]


[i] Guide to the Project Management Body of Knowledge (PMBOK@ Guide) Third Edition @2004 Project Management Institute, Four Campus Boulevard, Newtown Square, PA 19073-3299 USA

September 18, 2008 Posted by | PMP, Project Management | | 6 Comments

Formulas for Project Management

These are the formulas used in the Project Management Book of Knowledge (PMBOK).

Present Value (PV) = FV/(1+i)n


Future Value = amount x 1/PV


Variance = Plan – Actual


EV = Earned Value, or budgeted cost of work performed (BCWP), is a percentage of the total budget equal to the percentage of the work actually completed. What is done.

PV (BCWS) = budgeted cost of work scheduled is that portion of the approved cost estimate planned to be spent on the activity during a given period. What should be done.


AC (ACWP) = actual cost of work performed (ACWP), is the total of direct and indirect costs incurred in accomplishing work on the activity during a given period. Cost to achieve what is done.


Cost Variance  CV = EV – AC <0 means Trouble


Schedule Variance  SV = EV – PV <0 means Trouble


Variance At Completion à VAC = BAC – EAC


Cost Performance Index CPI = EV / AC <1 means Trouble


Schedule Performance Index SPI = EV / PV <1 means Trouble


Percent Complete = (EV/BAC) x 100


BAC = total amount of workhours we budget for the work


Estimate At Completion EAC = BAC/CPI = AC + ETC (Forecast of work to complete)

1.  AC + remaining project budget modified by a performance factor (BAC/CPI)

2.  AC + new estimate for all remaining work

3.  AC + remaining budget (BAC)


Estimate To Complete ETC = BAC – EV


Management Reserve (Contingency) MR


Cost Baseline = BAC + MR




September 18, 2008 Posted by | PMP | , , , | Leave a comment

Team Building

Team Spirit is vital to the making of a team that works. It is the ability to work on ones’ own, feel free to ask for help and share the glory of your combined work. That is the reason why team communication and team building is so important.

When I first start a team, I have everyone take an assessment and share the results with each other. Everyone communicates differently and if you know the style of your team member it will go a long way in making that relationship successful. I also take the assessment and share it with the team. Pretty soon it gets to be fun when person A witnesses Person B reacting to Person C in a way that is uncomfortable for person C. If it is caught in the moment, people can laugh about it and not let it get in their way. Some teams I’ve worked on even go so far as wearing a badge that signifies their personality traits.

If a team is built with these suggestions in mind, they will work towards the goal of overall team success and not individual success. You may find a person or two who won’t follow this team building activity. If you run into this case, either remove the person from the team, or if this is not possible, give them a chance to see others make it work. People in general, want to do a good job and want their team to succeed.

On-going training for the team is essential and will keep the ideas fresh in their heads. It is also beneficial to have some bonding time like playing softball or some activity outside of work.

Another technique that is beneficial is to have a scoreboard that states how the team is doing towards making their goals. This should not be used to single out anyone, but to find areas where mentoring or training can help the overall team. Whenever the team beats its goals, the success should be celebrated. You’d be amazed how quickly the team will strive for high results.

There are two major types of teams: the ongoing team and the project team. We are going to concentrate on project teams since work that is of an ongoing nature is defined as an operation, not a project. The exception to this is in a matrix organization where the functional managers are in charge of the teams and loan them to the project manager for the duration of the project. IT team, the marketing-research team, and the accounts payable team.

Project teams are formed for a particular purpose; to complete the project. They usually disband when their mission is accomplished. The mission that binds them is the project’s mission and it falls upon the project manager to instill the leadership required to build followers of the project’s mission.

There are many benefits to be working on a project team.  The social aspects as well as the opportunities for less experienced members to learn from the more experienced members along with the abilities for the more experienced members to mentor and learn from that experience. The synergy that the team provides allows them to make better decisions than if they were working in isolation. Everyone has a different skill set to bring to the table. As we all have learned “the whole is larger than the sum of its parts”.

I’d like to say a little bit about team leaders. Some schools of thought are that the subject matter experts should be the team leaders. As I said before, everyone has a different skill set to bring to the table and most people who concentrate on becoming the expert in a particular technology are usually introverts and aren’t the one you want to resolve conflict between team members, keep the team on track and keep them energized. These folks usually are better at people skills, negotiations and are typically extroverts. That’s why having a mixture of talent makes up the best team. I once heard a Vice President talk to me about his staff. He said he always looked for people that were not like him, giving him a well rounded staff that came out with better solutions than a bunch of “Yes” men would have.

Another possibility is to train people to take over in leadership positions. The fact is you are born with natural abilities and you can be trained, but in a crisis situation will usually revert back to what you were born with. It is also a very unique individual who is good at everything required to run the business.


September 18, 2008 Posted by | Communications Management | | Leave a comment

Effective Teams

I have often found that the key to any endeavor, including Project Management or Coaching, lies around building a good relationship. Think back to the most effective teams or relationships you have ever had. It should have characteristics such as:


·         Mutual trust should be a top priority

·         Honesty and integrity should also be up there

·         Confidentiality is important to a good team

·         You should make sure the team (and yourself) values differences

·         Teams should have a little fun

·         People like being respected (I once worked on a team where everyone was given a ping pong gun. If they caught anyone disrespecting another, they were allowed to shoot them)

·         The Goals must be clearly defined “SMART: goals. (S = specific, M= measureable, A = attainable, R = realistic and T = time based)

·         Responsibility that is expected in all the members of the team’s work – there is no such thing as “It’s not my job”

·         Shared responsibility, accountability and rewards tied to performance

·         frequent celebrations when called for

·         Ability to make decisions (the only way to learn is to take risks)

·         Mutual support and mentoring

·         AND the most important thing is a Leader who leads, sets a vision and allows sharing of ideas from all team members

September 18, 2008 Posted by | Communications Management | , | Leave a comment

Project Management Recommedations

Here are some recommendations for running a smooth Project.

·         At the end of each milestone, the stakeholders should electronically sign-off on the documents (such as Scope, SOW etc) to avoid scope creep. If new requirements come in after a project phase is signed off, changes will go through a formal change control process. This is not to say that we stop work on a project phase until it is signed off. Work will continue as scheduled while the sign-off process is in progress.

·         All documentation, emails, notes, drawings, meeting minutes, action items, stakeholder contacts, project plans etc. for a project should be stored on the Share Point.

·         It is not necessary to scan in a new copy when they are signed, but we can identify that they’ve been signed electronically.

·         Templates should be created for all project documents done by the Directors group for consistency. We have some very good examples used here already.

·         Minimum set of project documentation  by phase all to be stored on Share Point (or some other intranet area accessible by the whole team):


o    Project initiation Phase: done by PM/PMO formally start a project. At this point, the Projects group will assign an IT PM to the project, create the Share Point site and be the focal point for the PM/PMO group. Initial scope will be delivered to IT by the PM/PMO group. If this is an upgrade, this should include the current production environment and the projected production environment.

o    Project definition Phase:  Scope is finalized between PM/PMO group and IT PM (and team). This is to include all final production environment drawings, infrastructure designs, urls, hardware requirements, desired delivery date and if possible priority. Impact analysis should be done. Integration plan should be done. (Basically a Functional specification for the system should be done during this phase). Communications plan with stakeholders, email addresses, phone numbers, meeting times and status report times will be done by the IT PM.

o    Customer contact list should be provided by PM/PMO group. Initial schedule for IT done by IT PM (and team) and communicated to PM/PMO group. PM/PMO group signs off on Definition phase. Any requirements past this phase will go through a change review process which may change assumptions for delivery date or resource needs. Functional plan signed-off as well.

o    Design phase: Microsoft Project Server schedule with resources defined and checked for resource allocation across other Microsoft projects to ensure correct number of resources is available. Project Plan is written by IT PM to include Objectives, Scope Assumptions/Constraints,  Procurement plan, IQ, pointers to supporting documentation (such as test cases, specialized requirements, schedule, milestone sign-off times, completion criteria, screen shots, post upgrade tasks, risk assessments and contingency plans,  installation plan, sustaining work plan etc.). Hardware to be procured should be well defined and more than one vendor should be available to get hardware from. Hardware should be staged at HDC. The Project Plan is now available for PM/PMO to review with customer and sign-off.

o    Implementation Phase: Finalize business process flow. Follow project plan, update project schedule daily with work accomplished and remaining work for each task (all IT members). IT PM to do Earned value analysis (once or twice a week) to make sure we remain on schedule.  Complete required documentation and design any training needed. Weekly meetings should have minutes with action items and roadblocks identified and assigned to be worked.

o    Testing Phase: unit testing by IT (or QA group), performance/stress testing done in house.  UAT should be simulated in house as much as possible before customer installation using customer agreed upon test cases and criteria. Testing reports and results should be written up and put on Share Point. Deviations from expected results should be examined by IT manager to decide if rework or retesting is required. These results should be saved on Share Point.

o    Installation /UAT Phase:  This should be done at customer site. All hardware should be installed and verified before UAT begins. User acceptance testing should use pre-agreed upon testing criteria that was used in house by QA team. Verify all test results. Log and address any deviations from expected results. UAT signed-off by customer and plans signed-off for addressing any deviations.  



September 18, 2008 Posted by | Project Management | , , | Leave a comment

Work Breakdown Stuctures

Have you ever mapped out a family tree? Our family has done this for years tracing us back to Charlemagne. Genealogy is favorite habit started my Grandfather.

A work breakdown structure (WBS) is very similar to a family tree. It maps out the deliverables of the project, with sub deliverables and activities stemming in a tree format. One of my favorite ways to do the WBS is with yellow post it’s so you can move them around to where they belong. Once I worked on a project where we had to tape together all of the papers that included the post it’s and it was at least 25 pages. This served us well when we showed management the magnitude of the scope of the project!

Doing this on large sheets of paper is useful so you can capture the finished product. A Guide to the PMBOK describes a WBS this way: “A WBS is a deliverable oriented grouping of project components that organizes and defines the total scope of the project; work not defined in the WBS is outside of the project”.

A Work Breakdown Structure is break down the work packages to enable you to roll them back up to a schedule that is complete. A work package is usually no more than 40 hours.

The WBS should detail the full scope of work needed to complete the project. Accuracy and completeness are required when composing your WBS.

Decomposition is one of the tools you will use when preparing your WBS. You should be able to break down the deliverables to a point where you can easily plan, execute, control and close out the project deliverables. Each work package should be able to be easily estimated in the Activity Definition Process.

You can think of this process in 4 major steps:

1.    Identify all of the major deliverables. The PMBOK is clear on noting that the deliverables should be defined according to the way the project is organized. One way is to organize a project in phases. The phases become the first level of decomposition, followed by the deliverables.

2.    Step2 involves estimating cost and duration. If that cannot be done, then you have to decompose further until the work package can be estimated. I usually use a work package of 20-40 hours at the most. Not all deliverables will have the same level of decomposition. In any case, a schedule cannot be made until the WBS is complete and has estimates that are as accurate as possible.

3.    Step 3 involves identifying components that make up the deliverables.

4.    Step 4 is the verification step. You need to determine that each component listed is clear, complete and necessary to fulfill the requirements of the deliverable. Also, you need to easily add up all the estimates, budget and assignments to create a solid schedule.

A WBS looks very much like a flow chart. The goal is to break down the work so that each work package can be assigned to a specific person for accountability and the Project Manager can easily manage the schedule knowing that all parts of the project have been broken down to their smallest part.

Each Work package is assigned a unique identifier and these are documented in the WBS dictionary. The dictionary includes a description of the work package, costs, budgets, schedule dates, resource assignments and activity descriptions.

This process sounds like a lot of work, but it is a known fact that the more you plan, the better you will be in the end.  I like to use SharePoint to keep this document and keep for the project records.

The WBS plays a major part of Project Management. For those taking the PMP certification course, I was told that if you didn’t know the answer to a question WBS probably was it!



September 18, 2008 Posted by | Scope Management | , | Leave a comment