PMI RMP – TOOLS AND TECHNIQUES –ADVANCED part 1
Hi, welcome back again to one of the most important sections of this course the tools and techniques used in project management and Advanced. So in this introduction lecture, I’m just going to give you a brief about the categories of the tools and techniques before we start moving to few important and critical tools and techniques used in the project management. So in this section you will benefit by gaining an indepth understanding of many of the techniques and tools you will find on the exam. We will explain commonly used tools and techniques in project management in addition to few techniques which students found them hard to apply. First of all, we have the data gathering techniques. This is the first category.
They are often the first technique we employ in a process. Before we can transform the process inputs into outputs, we often need to gather additional information. Some of the data gathering techniques entail collecting data from individuals or groups such as focus groups and brainstorming. I’m going to explain both techniques in depth in this section. They are the most commonly used techniques for the data gathering purposes. Some other techniques include collecting information by using tools such as checklists and check sheets. The second category is the data analysis techniques used to assess and evaluate data in order to discover or gain deeper information about a topic. They can also be used to support decision making.
We use many different methods of data analysis and project management. Some of these data analysis techniques are very proud, like the alternative analysis used in multiple project management processes and the decision fee analysis used for the risk management purposes. Some are specific to a particular knowledge area like the stakeholder analysis used in the stakeholder management knowledge area or the make or by analysis used in the procurement management knowledge area. The third category would be the data representation techniques used to really understand what data is telling you. Sometimes you need to see in a graphic representation. As they say, a picture is worth a thousand words.
This is the benefit of using the data presentation techniques. The techniques in this category are used to help create a visual display of data to aid and organizing and understanding what’s happening on your project. So data representation techniques are used to transfer the data and text into graphical presentation. The fourth category will be the estimation techniques. Estimating is a way of life on projects. We are continually estimating durations, costs and resources. In this category we are covering the estimation techniques that are most commonly used in project management, like the analog estimating, the parameter estimating, and the three point estimating.
Even the forecasts are also estimates. So forecasting techniques such as estimate, as, complication, estimate to complete, and various accomplishment are all considered as estimation techniques. Category number five will be the interpersonal and team skills. Some of the most common or the most important skills you can have when leading a project. Many of the leadership skills we need to exhibit as project managers are interpersonal and team skills like the communication skills, the active listening, the conflict management these are all interpersonal and team skills. And the last category will be the other category of techniques.
A catch all for techniques that don’t fit in any of the other techniques which I just explained but they are important techniques to know about when managing a project. Some of them are foundational techniques that the project management is built on such as the president’s diagramming, methods used in the sequence activities process, the critical path method in developed schedule and the rolling wave planning. You will also see some more specialized techniques like the prompt lists used to identify the project risks, the context diagram and the proto types. This is all for the introduction. We will start with the brainstorming tool and technique in the next lecture. Thank you so much.
Hi and welcome to the first tool. I’m explaining in this section the brainstorming sessions. This is the name of this tool and technique. It falls into the data gathering techniques. So we are using the brainstorming tool in the identify rest process, develop project charter, identify stakes holders, develop project management, plan collect requirements and plan quality management. The Brain Storming is used as a technique for generating ideas and options and solving problems. It is generally a group activity that has a facilitator to manage the process. So while we are performing the brainstorming and project management either to generate ideas, to generate options or to solve a problem, you will never brainstorm alone.
Brainstorming is performed with a group and usually there is a facilitator who will manage this group during this session. Brainstorming focuses on generating quantity with the assumption that having a good quantity of ideas will lead to having a good quality outcome. In the brainstorming session there is no criticism. All ideas are equal, all ideas are welcome and all are welcomed, including those that seem like they are wild ideas. Various techniques can then be used to evaluate ideas gathered in order to help identify viable alternatives. Often during the process, ideas will build on each other and the synergy of the group will produce better results than one person alone could come up with. This is the core benefit of applying the brainstorming session.
People can build on each other ideas. Brainstorming is commonly used in a facilitated risk identification workshop to identify the project risks. It’s very useful, especially in the identify risks process and the Identify stakeholders process. The standard rules of brainstorming are often modified when the technique is applied to risk identification. For example, it’s common to structure the risk identification and brainstorm using risk categories or risk breakdown structure. Some evaluation of proposed risks is often included in the risk identification of brainstorm. To remove the nonrest, it’s important to ensure active participation of all relevant stakeholders in arrest identification and brainstorming session.
And for the facilitator to manage the group dynamics carefully, the facilitator needs to make sure that all participants of the brainstorming session are providing new ideas. Now use the steps below as a guideline and tailor the steps as necessary to work within your project environment. First of all, you need to identify the problem, goal or outcome for the brainstorming session, all members of the group state their ideas. All participants should provide a new idea. You need to record and that’s all these ideas. If time allows, the ideas can be elaborated, analyzed or pride retired. This is all for the brainstorming session. It is very useful for the risk identification and for the stakeholders identification. Thank you so much. I will see you at the next lecture.
Hi and we’ll come back again. The second tool will be the check lists commonly used especially in the construction project. It falls into the data gathering techniques it’s used in the developed project management plan process as a part of the Integration Management Area Identifiers within the Risk Management Knowledge Area area Manage Quality and Control quality within the Quality Management knowledge area. A checklist is a list of activities, steps or procedures that need to be done. It’s often used as a reminder, a reminder of things you did not do. Checklists are compiled to capture previous project experience and allow it to be used for subsequent similar projects. It’s possible to structure the risk identification checklist on the risk breakdown structure.
Usually the checklists are available within organizational process assets. They are prepared and created based on previous project experience in projects. Checklists are used to reduce or eliminate risks or defects. They contain a series of steps that must be taken or processes that must be completed. The checklists are very useful based on my practical experience in the risk identification in the quality control process.While performing audits and inspections. A few of the downfalls associated with using checklists are first of all, people can rely on the checklist and fail to look outside the items of the checklist for other risks or causes of failure. Use the checklist as a starting place, not an indict place. You should not 100% depend on the checklist.
It can be used at the starting place only, not as an ending place. Over the lens on checklists can replace common sense on critical thinking. A checklist can act as a prompt, but should not take the place of looking at the situation and taking appropriate actions. It means that checklist can be used as supporting tools only as 100% tool of performing the process. Here is an example of a checklist when it comes to the risk identification. The risk category here is the technical. The subcategories are the scope definition and the technician interfaces. You just need to check if all these rests mentioned in the checklist are inspected already or not. This is why it’s commonly used as a reminder. This is all for the checklist. Thank you so much. I see you at the next page.
- COST BENEFIT ANALYSIS
Hi and welcome back again. Now we are going to talk about the cost benefit analysis technique. It falls into the data analysis technique. In this technique we are going to analyze the data after we gather it through the data gathering techniques. Cost benefit analysis is used in the Monitor and Control project work as a part of the Integration Management knowledge area per full integrated change control. Also as a part of the Integration management plan. Quality management quality management knowledge area control resources from the resources management plan as responses from the risk management knowledge area the cost benefit analysis is a primary technique used while analyzing and assessing the project change requests through the performance rate exchange control process.
You need to check the cost of the changes versus the benefits that might come from this change. The definition It’s a cost benefit analysis is used to add options that provide the best approach to achieving benefits while minimizing the costs. It can be used to assess the viability of a product and to run various approaches or alternatives for meeting the project objectives. When looking from a short range financial perspective, actual costs and benefits are assessed. When looking from a longterm perspective, the time value of money is taken into consideration. You need to take the time value of money through the future value and the present value formula. This is accomplished by converting the future payouts and expenditures into the present value.
If you remember the equation in the project selection methods, the present value equals the future value divided by one plus the interest rate to the power n, where N is the number of years. This is very useful when we are performing the cost benefit analysis for a longterm financial perspective. Some projects take into consideration the life cycle cost of the product. Others focus on the project costs only. It depends. So the cost benefit analysis is applied on the project level, also on the alternatives and options list. When assessing whether to do a project, such as when preparing the business value. On the business case, the present value costs are subtracted from the present value benefits.
The sum of benefits list the cost is called the NPV or the net present value, which I explained earlier. The total present values of the benefits minus the total present values of the costs. If the net present value is positive, the project is expected to return a profit. The higher the net present value, the more profitable the project. When assessing various approaches to a project or responses to arrest, you can rank the prevalence of options by putting those with the highest net present value first. When you are comparing between two or three alternatives, you will pick the alternative with the highest net present value.
Now use the steps below as a guideline and tailor the steps as necessary to work with your environment. When performing the cost benefit analysis. First of all, you need to list the options you are evaluating. Then you need to document the costs for each year. For each option, you need to document the benefits, also translated into currency. For each year, for each option, apply the interest or the discount rate, the expected cost of money for each year. At the end you need to calculate the NPV, the net present value by subtracting the costs from the benefits. And then you will select the option or the alternative with the highest net present value. This is all for this technique. Thank you so much and we’ll see you at the next.
- DECISION TREE ANALYSIS
Hi and welcome back again the decision tree analysis which is considered as a data analysis technique and it’s only used in the performing quantitative risk analysis of process as part of the risk management knowledge area and the planning process group. So what’s the decision analysis? It evaluates uncertainty and risk using a diagram with branches that model various options or outcomes and their implications. In project management we use it to evaluate which projects to invest in and which approaches to take and to model uncertainty associated with cost, schedule or risk events. So it’s a model very useful when selecting a project from a group of projects.
It’s also very useful when performing the quantitative risk analysis on your project. The decision tree analysis is usually performed using specialized but widely available software. The software allows the user to specify the structure of the decision with decision nodes, chance nodes, costs, benefits and probabilities. The user can also evaluate the different decisions using linear utility functions based on the Emb, the expected monetary value or nonlinear utility functions of various shapes. In project management we are applying the decision tree analysis using linear utility functions and the expected monetary value formula that equals the probability by the impact.
The decision tree is just a model of what could happen. It’s not factual. It’s a technique used to model uncertainty. As with any model, the fidelity is only as good as the data behind it. In other words, if garbage is in, garbage will be out. The primary objective of the decision tree analysis is selecting the scenario that provides the best overall expected monetary value. This is the highest expected monetary value return or lowest expected monetary value costs. Here is an example of the decision tree for choosing between an experimental technology versus commercial of the shelf technology. So as shown here, this is the technology decision. You either you will go with the experimental or with the commercial of the shelf.
Here are the branches with all the probabilities and the impact. In order to perform the decision tree analysis you need to have the data about the probability and the impact or the effect of each option and the decision. Three in order to be able to find out the value of each path and selecting the path with the best expected monetary value. Now use the steps below as a guideline and tailor the steps as necessary to work within your environment. First of all, you need to identify the various scenarios or outcomes that could occur. In some situations, none of the outcomes may occur. However, the point is to develop a model that represents what could happen given the information you have as the zone.
Then you need to create a diagram or a model at the session tree where each option is a branch. Determine the probability of each scenario in each branch so that the total for each branch is 100%. If you have an option with two branches the first branch have a 50% probability automatically. The second one will have also 50% probability. Determine the monetary value associated with each outcome or the impact. Then multiply the probability times the monetary value for each outcome. To find out the expected monetary value at the end, you need to sum the outcomes for each branch to derive the expected monetary value for each option. These are the six steps of performing the decision tree analysis. Thank you so much. I will see you at the next lecture.
- INFLUENCE DIAGRAMS
Hi and welcome back again. So in this lecture we will explain the influence diagram techniques as a category of the data analysis techniques. The influence diagrams are used only in one project management process, specifically in the perform quantitative risk analysis process. Now, an influence diagram is a diagrammatic representation of a project situation showing the main entities of a system or a situation or a project case the decision points, the uncertainties and the outcomes and indicating the relationships or the influences between them. So the influence diagrams are mainly used in the quantitative risk analysis process but it can be also used to identify additional project risks when combined with a sensitivity analysis or the Monte Carlosimulation to reveal sources of risk within the project.
And both the sensitivity analysis and the Monte Carlos emulation are used as a part of the performing quantitative risk analysis. An example of an influence diagram in a bidding situation here is the influence diagram in front of you showing the decisions, the uncertainties and the influences of the relation shifts. Here we are going to issue the invitation to bid. Here we have the competence of the bidders, the quality of the invitation to bid information, the quality of bids, the competence of assessment team at the end we have to select a bid. Now, the influence diagrams use various shapes to indicate notes. The notes are connected by arrows to show uncertainty, decisions and objectives. Common shapes for notes and their meanings are shown below.
Now these are the most commonly used shapes when applying the influence diagrams an oval note indicates an area of uncertainty or risk within the situation. A rectangular note shows a decision to be taken, an octagonal note or sometimes a diameter indicates the objective or desired outcome. These are the notes we are using in an influence diagram. An influence diagram is sometimes used in place of the decision three analysis because the propheturation of branches based on the notes of uncertainty can quickly cause a decision tree to get overly complicated and difficult to interpret. So sometimes when the case is very complicated, the influence diagrams are preferred upon the decision tree diagrams.
Now, what are the steps to follow? First of all, you need to identify the objective you want to achieve and this will be represented by an octagon on the influence diagram.Then you need to identify the decisions or choices you will need to make to achieve that objective. These are your rectangles. Then you need to determine all the variables that influence that decision or choice. Variables can be things inside your control like the availability of the resources on the project or outside your control like the weather or the governmental regulations. These are your ovals. At the end you need to draw an arrow that show the influence of each node on the other nodes you need to determine the relationships and influences in between the nodes. This is all for the influence. Thank you so much. Receive the next click.