#1 Frame Work v001

Project Management Framework
PMBoK 5th Ed
Project Management Framework
1
International Standards for Project Management
There have been several attempts to develop project management
standards, such as:
GAPPS, Global Alliance for Project Performance Standards an open
source standard describing COMPETENCIES for project and program
managers.
A Guide to the Project Management Body of Knowledge from the Project
Management Institute (PMI)
The ISO standards ISO 21500, Guidance on Project Management
PRINCE2, PRojects IN Controlled Environments.
Association for Project Management Body of Knowledge
Total Cost Management Framework, AACE International's Methodology for
Integrated Portfolio, Program and Project Management.
IAPPM, The International Association of Project & Program Management,
guide to project auditing and rescuing troubled projects.
Project Management Framework 2

What a Project is?
According to the PMBOK, a project is a temporary endeavor
undertaken to create a unique product, service, or result.
Therefore, a project has two main characteristics that differentiate
it from regular, day-to-day operation;
a) The nature of the project is temporary, and
b) The project is undertaken to produce a unique output, for
example, a product, service, or a result.

Why temporary?
Temporary means having a definite beginning and end.

The end is reached when the projects objectives have
been achieved, or if the project is terminated for any
reason

What does Unique means?
Project is said to be unique when the project reach it

purposeful objective because it is carryout through a
series of interdependent task. It has a specific time
frame.it has a customer.it has a degree of uncertainty

Progressive Elaboration
Progressive elaboration, in general, means developing

something in incremental steps. The project plan will be
broadly defined to start and will get more accurate,
detailed, and explicit in an incremental fashion as better
understanding about the project deliverables and
objectives develops. It involves successive iterations of
the planning process resulting in a more accurate and
complete plan.

What is an Operation?
Operations are the ongoing execution of activities that produce
the same output, or provide a repetitive service.
Operations dont produce anything new, but they are necessary to

maintain and sustain the system.

Project versus Operation
Projects have a fixed budget; on the other hand Operations
have to earn profit in order to run the business.
Projects are executed to start a new business objective and
terminated when it is achieved, while Operational work does not
produce anything new and it is ongoing.
Projects create a unique product, service, or result; Operations
produce the same product, aim to earn profit, and keep the
system running.

Portfolio, Program and Project
PORTFOLIO
1st Q 2nd Q 3rd Q 4th Q Next Year
Program: Refresh Infrastructures
Project: Replace Network

Four Basic Project Type
PROJECT
WORK CRAFT INTELLECT
PRODUCT
PHYSICAL
Physical Craft Physical Intellect
(VISIBLE)
NON-PHYSICAL
Non-Physical Craft Non-Physical
(INVISIBLE)
Intellect

What is Project Management?
The project management is the application of

knowledge, skill tools, and techniques to project
activities to meet the project requirements.
Project management is accomplished through the

appropriate application and integration of the 47
project management processes logically grouped into
the 5 process groups.

Triple Constraint

Project Constraint NOW!!
The idea is that you need to

balance scope (the features
that will go into the software,
and the work needed to build
them), time ( how long it ), g
takes to build the software),
and cost (in money or hours)
in order to get your project to
the level quality that you
need.
Any time your project changes, you'll need to know how that change affects all three
constraints.

Typical Project Life Cycle
Projects are divided into phases
The project will have at least a beginning, intermediate and ending
phase
Number of phases depends on complexity and size of the project.
Phase Examples - Analysis, Development
Reviews are conducted at the end of each phase to measure
performance
Phase end reviews allows to decide if the project should continue
The collection of phases is called project life cycle
The project life cycle defines the beginning and end of a project
Fast tracking is running the project phases concurrently. Example of
phases Analysis, Design etc.

Business Case / Why Do a Project?
Market Demand
Strategic opportunity or business need
Customer request
Technological advance
Legal requirement
Ecological impact
Social Need

Project Selection Method (1 of 5)
Mathematical Approach (Constrained Optimization Methods)
Linear Programming
Integer Programming
Dynamic Programming
Multi-objective Programming
Cooperative Approach (Benefit Measurement Methods)
Scoring models
Peer review
Murder Boards (panel that tries to poke holes in your argument)
Economic models
Benefit-Cost Analysis
Payback period
Discounted cash flows
Net Present Value
Internal Rate of Return (IRR)

Benefit-Cost Analysis
Compares the project benefit to the costs to derive a ratio from which a
decision can be made. Ex: if a project generates $125,000 in profits and
costs $50,000, the benefit-cost ratio would be 2.5 (also written as 5:2)
Payback period
Number of periods to pay back a projects cost. Ex: if a project costs $1
million and will generate revenue of $100,000 per year, then the
payback period would be 10 years.

Discounted cash flows
Calculates in todays (discounted) terms what the value of a project
would be given cash inflows and/or outflows over a period of time
Net Present Value (NPV)
A formula that calculates the value today of a future cash flow
Ex: if you will receive a future cash flow in 3 years of $1,157.62, what
would that be worth today if the interest rate is 5%?
PV = FV / (1 + i) n
PV = $1,157.62 / (1 + .05)3
PV = $1,000
*Always choose projects with the biggest positive NPV, reject
negative NPV
Internal Rate of Return (IRR)
The discounted interest rate when NPV equals zero
Always choose the project with the highest IRR
Assumes that cash flows are reinvested at the IRR value

Example:
A project costs $10,000 today and will return $2,500 per year for 5 years.
Assume your required return on investment is 10%. Should you do the
project?
Benefit-Cost Ratio
(5 x $2,500) / $10,000 = 1.25 or 5:4
Payback Period
$10,000 / $2,500 = 4 years
Net Present Value
NPV p = Sum of [Future Cash Flows / (1 + i) n]
- $10,000 + [$2,500 / (1.10)1] + [$2,500 / (1.10)2] + [$2,500 / (1.10)3] +
[$2,500 / (1.10)4] + [$2,500 / (1.10)5] = -$523.03
IRR
The value of I where NPV equals zero = 7.93%

Terminology:
Opportunity Costs: the opportunity given up by choosing another
project
Sunk Costs: costs spent to date, these costs are already spent
Law of Diminishing Returns: adding more resources doesnt
proportionately increase productivity
Working Capital: current assets minus current liabilities
Depreciation: straight-line (same amount each year), accelerated (ex.
Double-declining balance and sum of years digits)
Assumptions: something that is believed to be true or something that is
taken for granted. *Needs to be continually evaluated throughout the
project
Constraints: a factor that limits the project teams options; any restriction
placed on the project

Constraint vs Assumption
Constraints Assumption
Applicable restriction or Factor that, for planning
limitation, either internal or purpose, are considered to be
external to the project, that will true, real or certain without
affect the performance of the proof or demonstration.
project or a process. Assumptions need a
continuous monitoring to
It will limits your options to determine if they are going to
execute the project. These be false or invalid.
restrictions could be internal or Furthermore, Assumption
external, imposed by the Analysis is performed as part of
customer, management, your risk planning to identify
enterprise environmental the risks associated with each
factorsetc. assumption.

Constraint vs Assumption (example)
Constraints Assumption
Hire national labor only. All required materials are
Mr. X has to approve any available in the local market.
vendor before final decision is The approvals needed from
taken by the performing Mr. X will not take more than
company. 2 days.
Must finish 25% of the project Raw material prices not to
work within 30 days. increase more than 6% during
execution.

Professional Responsibility
Covers legal, ethical and professional behavior of a PMP
A PMP must follow the Project Management Institute Code of
Ethics and Professional Conduct
The responsibilities includes:
Doing the right things
Making good choices
Keep learning and getting better
Respecting others culture

Thank you

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Project Management Framework

Project Management Framework

Project Management Framework 2

Project Management Framework 3

Temporary means having a definite beginning and end.

Project Management Framework 4

Project is said to be unique when the project reach it

Project Management Framework 5

Progressive elaboration, in general, means developing

Project Management Framework 6

Operations dont produce anything new, but they are necessary to

Project Management Framework 7

Project Management Framework 8

Program: Refresh Infrastructures

Project: Replace Network

Project: Replace Network

Project: Replace Network

Project: Replace Network

Project: Replace Network

Project: Replace Network

Project Management Framework 9

Project Management Framework 10

The project management is the application of

Project management is accomplished through the

Project Management Framework 11

Project Management Framework 12

The idea is that you need to

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