THE PMP® EXAM CONTENT FROM THE INITIATING THE PROJECT PERFORMANCE DOMAIN COVERED IN THIS CHAPTER INCLUDES THE FOLLOWING:
✓ Task 1: Perform project assessment based upon available information, lessons learned from previous projects, and meetings with relevant stakeholders in order to support the evaluation of the feasibility of new products or services within the given assumptions and/or constraints.
✓ Task 2: Identify key deliverables based on the business requirements in order to manage customer expectations and direct the achievement of project goals.
✓ Task 3: Participate in the development of the project charter by compiling and analyzing gathered information in order to ensure project stakeholders are in agreement on its elements.
✓ Task 4: Identify high-level risks, assumptions, and constraints based on the current environment, organizational factors, historical data, and expert judgment, in order to propose an implementation strategy.
✓ Task 5: Obtain project charter approval from the sponsor, in order to formalize the authority assigned to the project manager and gain commitment and acceptance for the project.
✓ Task 6: Perform stakeholder analysis using appropriate tools and techniques in order to align expectations and gain support for the project.
✓ Task 7: Conduct benefit analysis with relevant stakeholders to validate project alignment with organizational strategy and expected business value.
✓ Task 8: Inform stakeholders of the approved project charter to ensure common understanding of the key deliverables, milestones, and their roles and responsibilities.
Initiating is the first of the five project management process groups as defined by the Project Management Institute (PMI®). Initiating acknowledges that a new project (or the next phase within a project) should begin. This process group culminates in the publication of a project charter and a stakeholder register.
Before diving into the Initiating process group, we’ll provide a high-level review of the ten Project Management Knowledge Areas, which is another way of classifying the project management processes. This review offers a high-level look at the Knowledge Areas and insight as to how they are tied into the five process groups.
The Initiating process group accounts for 13 percent of the questions on the Project Management Professional (PMP®) exam.
Understanding the Project Management Knowledge Areas
Throughout the project life cycle, a project utilizes a collection of processes that can be classified by the five process groups mentioned in Chapter 1, “Project Foundation.” They are Initiating, Planning, Executing, Monitoring and Controlling, and Closing. Processes can also be classified into 10 categories called the Project Management Knowledge Areas, which bring together processes that have characteristics in common. According to the PMBOK®Guide, the 10 Knowledge Areas are as follows:
Project Integration Management
Project Scope Management
Project Time Management
Project Cost Management
Project Quality Management
Project Human Resource Management
Project Communications Management
Project Risk Management
Project Procurement Management
Project Stakeholder Management
Processes within the Knowledge Areas are grouped by commonalities, whereas processes within the project management process groups are grouped in more or less the order in which you perform them. Once again, these are two ways of classifying the same set of project management processes. Processes interact with other processes outside of their own Knowledge Area and, in many cases, are repeated multiple times as needed.
Project Integration Management
The Project Integration Management Knowledge Area consists of six processes. Table 2.1 lists the processes and the process group for each. The Project Integration Management Knowledge Area involves identifying and defining the work of the project and combining, unifying, and integrating the appropriate processes. This is the only Knowledge Area that contains processes across all five of the project management process groups. The processes within Project Integration are tightly linked because they occur continually throughout the project, meaning that they are iterative in nature.
Table 2.1 Project Integration Management Knowledge Area
Process name
Project Management process group
Develop Project Charter
Initiating
Develop Project Management Plan
Planning
Direct and Manage Project Work
Executing
Monitor and Control Project Work
Monitoring and Controlling
Perform Integrated Change Control
Monitoring and Controlling
Close Project or Phase
Closing
The Project Integration Management Knowledge Area involves the following:
Identifying and defining the work of the project
Combining, unifying, and integrating the appropriate processes
Managing customer and stakeholder expectations and meeting stakeholder requirements
The following tasks are typical of those performed during work covered by the Project Integration Management Knowledge Area:
Making choices about where to concentrate resources
Making choices about where to expend daily efforts
Anticipating potential issues
Dealing with issues before they become critical
Coordinating the work for the overall good of the project
Making trade-offs among competing objectives and alternatives
Figure 2.1 shows the highlights of the Knowledge Area’s purpose.
The Project Scope Management Knowledge Area consists of six processes. Table 2.2 lists the processes and the process group for each. These processes are interactive and define and control what is strategically included versus intentionally excluded from the project scope.
The Project Scope Management Knowledge Area encompasses the following:
Project Scope According to the PMBOK® Guide, project scope identifies the work that needs to be accomplished to deliver a product, service, or result with the specified features and functionality. This is typically measured against the project management plan.
Product Scope Product scope addresses the features and functionality that characterize the product, service, or result of the project. This is measured against the product specifications to determine successful completion or fulfillment. Product scope entails the following:
Detailing the requirements of the product of the project
Verifying those details using measurement techniques
Creating a scope management plan
Creating a work breakdown structure (WBS)
Controlling changes to these processes
The following tasks are typical of those performed during work covered by the Project Scope Management Knowledge Area:
Collecting the project requirements
Defining the overall project scope
Measuring the project against the project management plan, project scope statement, and WBS
Measuring the completion of a product against the product requirements
Keep in mind that the Project Scope Management Knowledge Area is concerned with making sure the project includes all the work required to complete the project—and only the work required to complete the project successfully.
Figure 2.2 shows the highlights of the Knowledge Area’s purpose.
The Project Time Management Knowledge Area consists of seven processes. Table 2.3 lists the processes and the process group for each. On small projects, the Sequence Activities, Estimate Activity Durations, and Develop Schedule processes are completed as one activity.
The Project Time Management Knowledge Area involves the following:
Keeping project activities on track and monitoring those activities against the project plan
Ensuring that the project is completed on time
The flow of the Project Time Management Knowledge Area is very intuitive. First, the project activities are identified and put into the order in which they will occur. Next, the resources are estimated for each activity, along with the estimated duration. Finally, the project schedule is developed and controlled as the project work moves forward.
Figure 2.3 shows the highlights of the Knowledge Area’s purpose.
The Project Cost Management Knowledge Area consists of four processes. Table 2.4 lists the processes and the process group for each. For small projects, Estimate Costs and Determine Budget may be combined into a single process. Remember that your ability to influence cost is greatest at the beginning of the project. Minimal resources have been used in comparison with other stages. Therefore, changes made during these processes have a greater impact on cost reduction, and your opportunities to effect change decline as you move deeper into the project.
The Project Cost Management Knowledge Area involves the following:
Establishing cost estimates for resources
Establishing budgets
Ensuring that the project is executed within the approved budget
Improving the quality of deliverables through two techniques: life-cycle costing and value engineering
Life-cycle costing and value engineering are used to improve deliverables. The following is a brief overview of these two techniques:
Life-Cycle Costing Life-cycle costing is an economic evaluation technique that determines the total cost of not only the project (temporary costs) but also owning, maintaining, and operating something from an operational standpoint after the project is completed and turned over.
Value Engineering Value engineering is a technique that looks for alternative product ideas to make certain the team is applying the lowest cost for the same or better-quality results. So, for example, if the original engineer suggests a custom part for a step of the production process, a value engineering review might suggest an alternative that can use a readily available, lower-cost standard part that will produce the same output for a better value.
These are typical tasks performed during work covered by the Project Cost Management Knowledge Area:
Developing the cost management plan
Considering the effects of project decisions on cost
Considering the information requirements of stakeholders
Figure 2.4 shows the highlights of the Knowledge Area’s purpose.
The Project Human Resource Management Knowledge Area consists of four processes. These processes organize, develop, and manage the project team. Table 2.6 lists the processes and the process group for each. Because the makeup of each team is different and the stakeholders involved in the various stages of the project might change, project managers use different techniques at different times throughout the project to manage these processes.
The Project Human Resource Management Knowledge Area involves the following:
Overseeing all aspects of people management and personnel interaction
Ensuring that the human resources assigned to the project are used in the most effective way possible
Practicing good project management by knowing when to enact certain skills and communication styles based on the situation
The Project Human Resource Management Knowledge Area also includes enhancing the skill and efficiency of the project team, which, in turn, improves project performance.
Keep in mind that the project management team and project team are different. The project management team is the group of individuals responsible for planning, controlling, and closing activities. They are considered to be the leadership team of the project. The project team is made up of all the individuals that have assigned roles and responsibilities for completing the project. They are also referred to as the project staff.
Figure 2.6 shows the highlights of the Knowledge Area’s purpose.
The Project Communications Management Knowledge Area consists of three processes. Together, these processes connect people and information for successful communication throughout the project. Table 2.7 lists the processes and the process group for each.
The Project Communications Management Knowledge Area involves the following:
Ensuring that all project information is collected, documented, archived, and disposed of at the proper time.
Distributing and sharing information with stakeholders, management, and project team members.
Archiving information after project closure to be used as reference material for future projects; this information is known as historical information.
As mentioned in Chapter 1 of this book, good project managers spend up to 90 percent of their time communicating. Overall, much of a project manager’s work involves managing project communication.
Figure 2.7 shows the highlights of the Knowledge Area’s purpose.
The Project Risk Management Knowledge Area consists of six processes, some of which may be combined into one step. Table 2.8 lists the processes and the process group for each. Risks include both threats to and opportunities within the project.
The Project Risk Management Knowledge Area involves the following:
Identifying, analyzing, and planning for potential risks, both positive and negative, that may impact the project
Minimizing the probability and impact of negative risks, and increasing the probability and impact of positive risks
Identifying the positive consequences of risk and exploiting them to improve project objectives or discover efficiencies that may improve project performance
According to the PMBOK® Guide, a risk is an uncertain event or condition that has a positive or negative effect on one or more project objectives. Every project has some level of uncertainty and, therefore, some level of risk. Keep in mind that a risk is different from an issue. A risk may or may not occur. But when a negative risk materializes and impacts the project, it becomes an issue that must be handled.
Figure 2.8 shows the highlights of the Knowledge Area’s purpose.
The Project Procurement Management Knowledge Area consists of four processes. Table 2.9 lists the processes and the process group for each. While reviewing the procurement processes, remember that you are viewing the process from the perspective of the buyer, and that sellers are external to the project team. Together, these four processes allow you to manage the purchasing activities of the project and the life cycle of the procurement contracts.
The Project Procurement Management Knowledge Area involves purchasing goods or services from vendors, contractors, suppliers, and others outside the project team.
Keep in mind that a contract can be simple or complex; contracts can be tailored to the needs of the project. The PMBOK® Guide defines a contract as an agreement that binds the seller to provide the specified products or services; it also obligates the buyer to compensate the seller as specified.
Figure 2.9 shows the highlights of the Knowledge Area’s purpose.
The Project Stakeholder Management Knowledge Area consists of four processes. Table 2.10 lists the processes and the process group for each. This Knowledge Area is concerned with both internal and external stakeholders.
The Project Stakeholder Management Knowledge Area is concerned with identifying all of the stakeholders of the project. These processes also assess stakeholder needs, expectations, and involvement on the project.
According to the PMBOK® Guide, stakeholder engagement and satisfaction should be managed as a key project objective.
Figure 2.10 shows the highlights of the Knowledge Area’s purpose.
Before an organization decides to embark on a project, several considerations must take place, such as an assessment of the various potential projects. As part of performing a project assessment, management will need to evaluate existing needs and demands, perform feasibility studies, and use project selection methods to help in making good decisions.
Project assessment should entail a careful evaluation of information carried out through meetings with the sponsor, customer, and other subject matter experts. This group of key individuals will then determine whether the new products or services are feasible under the existing assumptions and constraints.
Initiating a Project
Project initiation is the formal recognition that a new project, or the next phase in an existing project, should begin and that resources may be committed to the project. A project may come about as a result of a need, demand, opportunity, or problem. Once those needs and demands are identified, the next logical step may include performing a feasibility study to determine the viability of the project.
Identifying Needs and Demands
Needs and demands represent opportunities, business requirements, or problems that need to be solved. Management must decide how to respond to these needs and demands, which will, more often than not, initiate new projects. According to the PMBOK® Guide, projects come about as a result of one of the following seven needs or demands:
Market Demand The demands of the marketplace can drive the need for a project. Some companies must initiate projects in order to take advantage of temporary and long-term market changes.
Strategic Opportunity/Business Need An organization may respond to an internal need that could eventually affect the bottom line. For example, this may include addressing company growth or even the need to downsize.
Customer Request A new project may emerge as a result of internal or external customer requests.
Technological Advance New technology often requires companies to revamp their products as a way of taking advantage of the latest technology.
Legal Requirement Both private industry and government agencies generate new projects as a result of laws passed during every legislative season.
Environmental Consideration Many organizations today are undergoing a greening effort to reduce energy consumption, save fuel, reduce their carbon footprint, and so on.
Social Need Projects arise out of social needs, such as a developing country that offers medical supplies and vaccination in response to a fast-spreading disease.
Conducting a Feasibility Study
Some organizations require that a feasibility study take place prior to making a final decision about starting a project. Feasibility studies may be conducted as separate projects, as subprojects, or as the first phase of a project.
When evaluating the feasibility of new products or services, it’s generally a good idea to meet with the sponsor, customer, and other subject matter experts. Here are some of the reasons that a feasibility study may be undertaken:
To determine whether the project is viable
To determine the probability of success
To examine the viability of the product, service, or result of the project
To evaluate technical issues related to the project
To determine whether the technology proposed is feasible, reliable, and easily assimilated into the existing technology structure
Selecting a Project
As shown in Figure 2.11, an organization may choose to use a variety of selection methods. Selection methods help organizations decide among alternative projects and determine the tangible benefits to the company of choosing or not choosing a project. Project selection methods are also used to evaluate and choose between alternative ways to implement the project.
Depending on the organization, a steering committee may be responsible for project review, selection, and prioritization. A steering committee is a group comprising senior managers and, sometimes, mid-level managers who represent each of the functional areas in the organization.
There are generally two categories of selection methods:
Mathematical models (also known as constrained optimization methods)
Benefit measurement methods (also known as decision models)
Mathematical Models
For the exam, simply know that mathematical models, also known as constrained optimization methods, use the following in the form of algorithms:
Linear
Dynamic
Integer
Nonlinear
Multi-objective programming
Benefit Measurement Methods
Benefit measurement methods, also known as decision models, employ various forms of analysis and comparative approaches to make project decisions. These methods include comparative approaches such as these:
Cost-benefit analysis
Scoring models
Cash flow analysis techniques
Let’s take a closer look at the benefit measurement methods.
Cost-Benefit Analysis
Cost-benefit analysis, also known as cost analysis or benefit analysis, compares the cost to produce the product, service, or result of the project with the benefit that the organization will receive as a result of executing the project.
Scoring Models
For weighted scoring models, the project selection committee decides on the criteria that will be used on the scoring model. Each of these criteria is then assigned a weight depending on its importance to the project committee. More important criteria should carry a higher weight than less important criteria. Each project is then rated on a numerical scale, with the higher number being the more desirable outcome to the company and the lower number having the opposite effect. This rating is then multiplied by the weight of the criteria factor and added to other weighted criteria scores for a total weighted score. The project with the highest overall weighted score is the best choice.
For example, if Project A contains a weighted score of 31, Project B contains a weighted score of 42, and Project C contains a weighted score of 40, which project would you choose? The correct answer is Project B, since it has the highest weighted score.
Cash Flow Analysis Techniques
The final benefit measurement methods involve a variety of cash flow analysis techniques:
Payback period
Discounted cash flows
Net present value
Internal rate of return
Figure 2.12 provides an overview of the cash flow analysis techniques.
FIGURE 2.12 Overview of cash flow analysis techniques
Let’s take a closer look at these techniques.
Payback Period
The payback period is the length of time it takes the company to recoup the initial costs of producing the product, service, or result of the project. This method compares the initial investment to the cash inflows expected over the life of the product, service, or result.
Discounted Cash Flows
Money received in the future is worth less than money received today. Therefore, you can calculate what the value of funds will be in the future by using the following formula:
This formula says that the future value (FV) of the investment equals the present value (PV) times (1 plus the interest rate) raised to the value of the number of time periods (n) the interest is paid.
The discounted cash flow technique compares the value of the future cash flows of the project to today’s dollars. It is literally the reverse of the FV formula. To calculate discounted cash flows, you need to know the value of the investment in today’s terms, or the present value (PV). PV is calculated using the following formula:
To calculate discounted cash flow for the projects you are comparing for selection purposes, apply the PV formula, and then compare the discounted cash flows of all the projects against each other to make a selection.
Net Present Value
Net present value (NPV) allows you to calculate an accurate value for the project in today’s dollars. NPV works like discounted cash flows in that you bring the value of future monies received into today’s dollars. With NPV, you evaluate the cash inflows using the discounted cash flow technique applied to each period the inflows are expected instead of in one sum. The total present value of the cash flows is then deducted from your initial investment to determine NPV. NPV assumes that cash inflows are reinvested at the cost of capital.
Here are some important notes on NPV calculations:
If the NPV calculation is greater than zero, accept the project.
If the NPV calculation is less than zero, reject the project.
Projects with high returns early in the project are better projects than projects with lower returns early in the project.
Internal Rate of Return
Internal rate of return (IRR) is the discount rate when the present value of the cash inflows equals the original investment. When choosing between projects or when choosing alternative methods of doing a project, projects with higher IRR values are generally considered better than projects with low IRR values.
Keep the following in mind:
IRR is the discount rate when NPV equals zero.
IRR assumes that cash inflows are reinvested at the IRR value.
You should choose projects with the highest IRR value.
Defining the High-Level Project Scope
During the Initiating process group, the high-level project scope is defined and documented. As the project moves into the Planning process group, the high-level scope is further elaborated and defined. This is typically based on the business and compliance requirements and is documented to meet the customer’s expectations. According to the PMBOK® Guide, the high-level project scope is contained within the project charter.
Identifying High-Level Risks, Assumptions, and Constraints
The Initiating process group focuses on documenting not only the high-level project scope, as mentioned previously, but also high-level risks, assumptions, and constraints. This information will be documented in the project charter and will be largely based on the existing environment, historical information, and expert judgment.
As you may have noticed, this process group is concerned with setting a foundation and common understanding of what the project is setting out to achieve. The Planning process group will later expand on this high-level information by working out the granular details.
Developing the Project Charter
Creating the project charter is an important initial step to beginning any project because it formally initiates the project in an organization and gives authorization for resources to be committed to the project. The creation of this document involves gathering and analyzing stakeholder requirements, which will lead the way for properly identifying and documenting the project and product scope, milestones, and deliverables.
The project charter document is created out of the first process within the Project Integration Knowledge Area, called Develop Project Charter. This document attempts to not only formally recognize the project, but also identify project limitations and propose an implementation approach. Until the project charter is created and formally approved, many organizations do not recognize the project.
The project charter documents the name of the project manager and gives that person the authority to assign organizational resources to the project. It also documents the business need, justification, and impact; describes the customer’s requirements; sets stakeholder expectations; and ties the project to the ongoing work of the organization. The project is officially authorized when the project charter is signed.
Figure 2.13 shows the inputs, tools and techniques, and outputs of the Develop Project Charter process.
For the exam, you should know the following inputs of the Develop Project Charter process:
Project statement of work (SOW)
Business case
Agreements
Enterprise environmental factors
Organizational process assets
Let’s look at each of these inputs more closely.
Project Statement of Work The project statement of work (SOW) describes the product, service, or result the project was undertaken to complete. When the project is internal, either the project sponsor or the initiator of the project typically writes this document. When the project is external to the organization, it is the buyer that typically writes the SOW. According to the PMBOK®Guide, a project SOW should contain or consider all of the following elements:
Business need
Product scope description
Strategic plan
Business Case The purpose of a business case is to understand the business need for the project and determine whether the investment in the project is worthwhile. Performing a feasibility study is a great first step in building the business case. Most business case documents contain the following items:
Description of the business need for the project
Description of any special requirements that must be met
Description of alternative solutions
Description of the expected results of each alternative solution
Cost–benefit analysis
Recommended solution
Agreements The agreements input is applicable only when the organization you are working for is performing a project for a customer external to the organization. The agreement is used as an input to this process because it typically documents the conditions under which the project will be executed, the time frame, and a description of the work.
Enterprise Environmental Factors Enterprise environmental factors refer to the factors outside the project that may have significant influence on the success of the project. According to the PMBOK®Guide, the environmental factors, in relation to this process, include but are not limited to the following items:
Governmental or industry standards, which include elements such as regulatory standards and regulations, quality standards, product standards, and workmanship standards
Organizational culture and structure
Marketplace conditions, referring to the supply-and-demand theory along with economic and financial factors
Organizational Process Assets Organizational process assets are the organization’s policies, guidelines, procedures, plans, approaches, or standards for conducting work, including project work.
These assets include a wide range of elements that might affect several aspects of the project. In relation to this process, organizational process assets refer to the following items:
Processes, policies, templates, and procedures of the organization
Corporate knowledge base, such as historical information and lessons learned
Tools and Techniques of the Develop Project Charter Process
The Develop Project Charter process has only two tools and techniques that you should be familiar with: expert judgment and facilitation techniques. The concept behind expert judgment is to rely on individuals, or groups of individuals, who have training, specialized knowledge, or skills in the areas you’re assessing. These individuals may be stakeholders, consultants, other experts in the organization, subject matter experts, the project management office (PMO), industry experts, or technical or professional organizations. Facilitation techniques refer to the application of the project management processes through the use of brainstorming, meeting management, conflict resolution, and other techniques employed by the facilitators.
In addition, you should be familiar with who is considered to be a key stakeholder. Key project stakeholders include the following individuals:
Project Manager The project manager is the person who assumes responsibility for the success of the project. The project manager should be identified as early as possible in the project and ideally should participate in writing the project charter. The following are examples of what the role of project manager entails:
Project planning and managing the overall work of the project
Setting the standards and policies for the projects on which they work
Establishing and communicating the project procedures to the project team and stakeholders
Identifying activities and tasks, resource requirements, project costs, project requirements, performance measures, and more
Keeping all stakeholders and other interested parties informed
Project Sponsor The project sponsor is usually an executive in the organization who has the power and authority to make decisions and settle disputes or conflicts regarding the project. The sponsor takes the project into the limelight, gets to call the shots regarding project outcomes, and funds the project. The project sponsor should be named in the project charter and identified as the final authority and decision maker for project issues.
Project Champion The project champion is usually someone with a great deal of technical expertise or industry knowledge regarding the project who helps focus attention on the project from a technical perspective. Unlike the sponsor, the project champion doesn’t necessarily have a lot of authority or executive powers.
Functional Managers Project managers must work with and gain the support of functional managers in order to complete the project. Functional managers fulfill the administrative duties of the organization, provide and assign staff members to projects, and conduct performance reviews for their staff.
Outputs of the Develop Project Charter Process
The Develop Project Charter process results in a single, but critical, output: the project charter.
According to the PMBOK®Guide, a useful and well-documented project charter should include at least these elements:
Purpose or justification for the project
Project objectives that are measurable
High-level list of requirements
High-level description of the project
High-level list of risks
Summary milestone schedule
Summary budget
List of stakeholders known
Criteria for project approval
Name of the project manager and their authority levels
Name of the sponsor (or authorizer of the project) and their authority levels
Obtaining Project Charter Approval
The project charter isn’t complete until sign-off has been received from the project sponsor, senior management, and key stakeholders. Sign-off indicates that the document has been read by those signing it and that they agree with the contents and are on board with the project. The signature signifies the formal authorization of the project. Acceptance of the charter is also important to formalize the assignment of the project manager and their level of authority.
The last step in this process is publishing the charter. Publishing, in this case, simply means distributing a copy of the project charter to the key stakeholders, the customer, the management team, and others who might be involved with the project. Publication can take several forms, including printed format or electronic format distributed via the company email system or the company intranet.
Performing Key Shareholder Analysis
Identifying stakeholders and performing analysis on key stakeholders is an important part of setting the stage for a successful project outcome. Stakeholder analysis is carried out through the Identify Stakeholders process and involves the use of brainstorming, interviewing, and several data-gathering techniques.
By performing stakeholder identification and analysis, the project manager can better document stakeholder expectations and ensure that the expectations are aligned with the project objectives. It also serves as a way of gaining project support.
Identify Stakeholders is the first process of the Project Stakeholder Management Knowledge Area and part of the Initiating process group. This process involves identifying and documenting all the stakeholders on the project, including their interests, impact, and potential negative influences on the project. Stakeholder identification should occur as early as possible in the project and continue throughout its life cycle.
Figure 2.14 shows the inputs, tools and techniques, and outputs of the Identify Stakeholders process.
There are four inputs in the Identify Stakeholders process:
Project Charter In this process, the project charter provides the list of stakeholders along with other individuals or organizations affected by the project.
Procurement Documents When the project is procured, the list of key stakeholders and other relevant individuals or organizations may be obtained through the procurement documents.
Enterprise Environmental Factors The following enterprise environmental factors are used in this process:
Company culture
Organizational structure
Governmental or industry standards
Local, regional, or global trends and practices
Organizational Process Assets The following organizational process assets pertain to this process:
Stakeholder register templates
Lessons learned
Stakeholder register from previous projects
Tools and Techniques of the Identify Stakeholders Process
The tools and techniques of Identify Stakeholders are stakeholder analysis, expert judgment, and meetings.
Stakeholder Analysis During stakeholder analysis, you’ll want to identify the influences stakeholders have in regard to the project and understand their expectations, needs, and desires. From there, you’ll derive more specifics regarding the project goals and deliverables. Stakeholders are often concerned with their own interests and what they have to gain or lose from the project.
According to the PMBOK®Guide, three steps are involved in stakeholder analysis:
Identify all potential stakeholders and capture general information about them, such as the department they work in, contact information, knowledge levels, and influence levels.
Identify the potential impact or support each may have to the project, and then classify them according to impact so that you can devise a strategy to deal with them. The PMBOK®Guide lists four classification models for classifying the power and influence of each stakeholder on a simple four-square grid:
Power/interest grid
Power/influence grid
Influence/impact grid
Salience model (which charts stakeholder power, urgency, and legitimacy)
Assess the reaction or responses of the stakeholder to various situations. This will assist the project manager in managing the stakeholders.
Expert Judgment Expert judgment is used in combination with stakeholder analysis to ensure that stakeholder identification is comprehensive. This may involve interviewing key stakeholders that are already identified and senior management, subject matter experts, or other project managers.
Meetings Meetings are often used as a mechanism for performing stakeholder analysis. Project managers often gather and analyze information on roles, positions, and interests of stakeholders through meetings.
Outputs of the Identify Stakeholders Process
The Identify Stakeholders process has one output: stakeholder register.
Stakeholder Register A stakeholder register captures all of the information about the stakeholders in one place. This general information includes things like the department they work in, contact information, knowledge levels, and influence levels. In addition, the stakeholder register contains at least the following:
Identifying Information This includes items like contact information, department, role in the project, and so on.
Assessment Information This includes elements regarding influence, expectations, key requirements, and when the stakeholder involvement is most critical.
Stakeholder Classification Stakeholders can be classified according to their relationship to the organization and, more importantly, whether they support the project, are resistant to the project, or have no opinion.
Bringing the Processes Together
As a recap, the Initiating process group kicks off the project and results in the creation of the project charter and the stakeholder register. This phase acknowledges that a new project or phase should begin.
But before a project formally exists, several scenarios may unfold:
First, needs and demands surface within an organization, demonstrating the need for a project to be initiated.
The potential project may then go through a feasibility study to determine whether the project and end result of the project are viable and whether there is an opportunity for success.
A project may also go through a selection process. We looked at mathematical models and benefit measurement methods as two categories of project selection methods.
After a project is selected, a project charter is created (using the Develop Project Charter process) and signed, formally authorizing the project. By the end of the Develop Project Charter process, the project charter contains several documented elements, including the justification for the project, high-level requirements and description, summary milestone schedule and budget, and the sponsor and project manager (if already selected).
Once the project charter is generated, project stakeholders can be identified. This occurs in the Identify Stakeholders process. You learned that stakeholders, along with their interests and levels of influence, are important to identify and define early on within the project. As a result, a stakeholder register, which identifies, assesses, and classifies the individual stakeholders, is created.
Figure 2.15 shows the potential path of a new project, from its inception and through the initiating phase.
In this chapter, we also covered the 10 project management Knowledge Areas, which are summarized in Table 2.11.
Table 2.11 Project management Knowledge Areas summary
Knowledge Area
Description
Project Integration Management
Concerned with coordinating all the aspects of the project management plan to accomplish the project objectives
Project Scope Management
Concerned with managing the project scope and defining and controlling what is (and isn’t) included within the project
Project Time Management
Concerned with completing the project on time
Project Cost Management
Concerned with completing the project within budget
Project Quality Management
Concerned with ensuring that the project satisfies the needs for which it was undertaken
Project Human Resource Management
Concerned with organizing, developing, and managing the project team
Project Communications Management
Concerned with connecting people and information together to result in successful communications throughout the project
Project Risk Management
Concerned with increasing the probability and impact of positive events and decreasing the probability and impact of adverse events
Project Procurement Management
Concerned with managing the purchasing activities of the project and the life cycle of the procurement contracts
Project Stakeholder Management
Concerned with identifying project stakeholders, assessing their needs and expectations, and managing their engagement
With the Initiating phase taken care of, we are ready to move into the next phase of the project’s life cycle: planning.
Review Questions
Identify Stakeholders, Plan Stakeholder Management, and Control Stakeholder Engagement are all processes of which Knowledge Area?
Project Integration Management
Project Stakeholder Management
Project Human Resource Management
Project Procurement Management
Ron is the project manager of a pharmaceutical company that develops multiple products to help fight diseases affecting children. There are currently two new drugs that the company is planning to develop within the next two years. Ron has been tasked with determining which of the two drugs has the greatest opportunity for success in today’s marketplace. This is an example of which of the following?
A business need
A demand
A project selection method
A feasibility study
Your manager has recently given you the responsibility of selecting the next project, which you will manage as the project manager. There are currently three projects on hold to choose from. Using the weighted scoring models method, you determine that Project A has a weighted score of 16, Project B has a weighted score of 14, and Project C has a weighted score of 17. Which project do you choose?
Project A
Project B
Project C
None of the prospects are good selections.
What type of project selection method is multi-objective programming?
Benefit measurement method
Constrained optimization method
Decision model
Scoring model
What is $5,525 four years from now worth today given a 10 percent interest rate?
$3,773.65
$5,022.73
$5,525.00
$6,077.50
Which of the following best describes the characteristics of the product, service, or result of the project?
Strategic plan
Product scope description
Agreement
Project charter
All of the following are inputs to the Develop Project Charter process except:
Project statement of work
Business case
Organizational process assets
Project charter
Maryann has just wrapped up the final draft of the project charter and emailed a copy to the appropriate individuals. A kick-off meeting in two days has already been scheduled to complete the project charter, with all those involved having accepted the meeting invitation. What will Maryann need done during the kick-off meeting to complete the project charter?
Have the charter published
Confirm that the sponsor, senior management, and all key stakeholders have read and understand the charter
Gather excitement and buy-in for the project among the key stakeholders
Obtain sign-off of the project charter from the sponsor, senior management, and key stakeholders
All of the following are inputs to the Identify Stakeholders process except:
Procurement documents
Project charter
Project statement of work
Enterprise environmental factors
The stakeholder register can best be described as:
A document that captures all information about the stakeholders in one place
The documented approach used to minimize negative impacts or influences that stakeholders may have throughout the life of the project
A list of potential strategies for redirecting the support of stakeholders
A classification method that classifies all stakeholders according to their influence, expectations, key requirements, and when the stakeholder involvement is most critical
Polly is a project manager tasked with leading a project that will establish business continuity management practices for a major retail coffee chain. With the guidance of the sponsor, she drafts a document that authorizes her to begin assigning resources to the project once signed. What process will Polly likely perform next?
Identify Stakeholders
Develop Project Management Plan
Develop Project Charter
Plan Human Resource Management
Power/interest grid, salience model, and influence/impact grid are all examples of which of the following techniques?
Expert judgment
Stakeholder analysis
Stakeholder strategy
Stakeholder register
All of the following are processes of the Project Scope Management Knowledge Area except:
Collect Requirements
Create WBS
Validate Scope
Control Requirements
Beans by the Dozen is a company that ships precooked beans to restaurants in the Western United States. Recently, the company has decided to expand their operation to the Northern regions of the country. A business case was developed, citing market demand, and a project manager was informally assigned to formalize and kick off the project. What is the project manager likely to do first?
Obtain sign-off of the business case and celebrate
Form a project team to begin planning the project work
Develop the project charter and obtain sign-off
Develop the project management plan and obtain sign-off
Project scope can best be defined as which of the following?
It addresses the features and functionality that characterize the product, service, or result of the project.
It describes how the scope will be defined, developed, monitored, controlled, and verified.
It contains a list of potential strategies for redirecting the support of stakeholders
It identifies the work that needs to be accomplished to deliver a product, service, or result with the specified features and functionality.
Product scope is measured against the product specifications whereas project scope is measured against which of the following?
The project management plan
The scope management plan
Requirements documentation
Requirements management plan
Beans by the Dozen is a company that ships precooked beans to restaurants in the Western United States. June is the project manager assigned to lead the expansion of the company’s operation. As part of performing stakeholder analysis, she lists all of the known stakeholders and includes various notes about each in a register. What is June likely to do next?
Publish a stakeholder register for the project team to reference
Identify the potential impact or support each may have on/for the project
Document the stakeholder details in a project charter
Obtain sign-off from the sponsor of the stakeholder register
Life-cycle costing is defined as:
A technique that looks for alternative product ideas to make certain the team is applying the lowest cost for the same or better-quality results
A technique that compares the cost to produce the product, service, or result of the project with the benefit that the organization will receive
A decision model that employs various forms of analysis and comparative approaches to make project decisions
An economic evaluation technique that determines the total cost of a product
Which of the following Knowledge Areas is responsible for linking the processes across the project management process groups?
Project Integration Management
Project Scope Management
Project Stakeholder Management
Project Quality Management
Polly is a project manager tasked with leading a project that will establish business continuity management practices for a major retail coffee chain. With the guidance of the sponsor, she drafts a document that authorizes her to begin assigning resources to the project once signed. What process is Polly performing?
Initiating is the first of the five project management process groups as defined by the Project Management Institute (PMI®). Initiating acknowledges that a new project (or the next phase within a project) should begin. This process group culminates in the publication of a project charter and a stakeholder register.
