BUS402 Study Guide

Unit 3: Executing and Monitoring Phases

3a. Identify the methods and processes involved in managing project risk

• What are the different methods that can be implemented to manage risk on a project?
• In what situations might a project manager accept a risk, and what plans might they make to mitigate a risk?
• Why do project managers concern themselves with managing risk in terms of the triple constraint?

During the executing and monitoring phases of project management, understanding the risks and planning for those risks is important. Project risk is an uncertain event or condition that, if it occurs, affects at least one project objective. Risk management focuses on identifying and assessing the risks to the project and managing those risks to minimize the impact on the project. There are no risk-free projects because there are an infinite number of events that can hurt the project. Risk management is not about eliminating risk but about identifying, assessing, and managing risk.

There are four main ways to manage project risk as a project manager. The project manager can avoid the risk, which means to prevent it from happening. They can mitigate the risk, which means taking some sort of action that won’t cause as much damage to the project if it occurs. Transferring the risk is to pay someone else to accept the risk, such as by buying insurance. Accepting the risk means you know the risk could happen, and the project manager plans ways to manage the risk should it occur.

To review, see:

• Defining Risk
• Planning for Project Risks

3b. Identify methods for procurement and quality assurance

• How does quality management relate to meeting stakeholder expectations?
• What methods might be used to measure quality?
• What is procurement management, and what is involved in this process?

Quality in project management is the degree to which a set of inherent characteristics fulfill requirements. There are many ways to measure quality, such as through the use of statistics. Of course, the goal in project management is to ensure the quality meets the expectations of the client or customer. Many companies will use a cost-benefit analysis which means to look at how much the quality of activities will cost versus how much value is expected. They can also use cause and effect diagrams, such as the fishbone method, to help understand the root cause of quality problems. A fishbone diagram is a means for visually assessing cause and effect by identifying a particular outcome and working backward to assess the interaction between causes in the process and the outcome.

Procurement management in project management is the process of getting the materials needed to complete a project. It involves researching and selecting vendors, managing contracts with those vendors, and ensuring the items received meet quality standards. This is an important part of project management because, for example, if a raw material needed for a project isn’t delivered on time, it can impact the project schedule.

To review, see:

• What is Quality in PM?
• Managing Procurement

3c. Apply methods to identify and manage stakeholders

• What are internal and external stakeholders?
• How are stakeholders managed?
• What can occur if stakeholders are not properly managed?

Stakeholders include anyone with an interest in a project, and different stakeholders may be managed differently. If stakeholders are not identified properly, the project and its outcomes cannot address all the stakeholders’ expectations and concerns. Incomplete elicitation of the requirements from stakeholders might leave some key requirements out of the equation, putting the project and its outcomes in danger.

Internal stakeholders might include the project sponsor, team members, company owners, and management. External stakeholders might include customers, suppliers, government agencies, and any user outside of the organization. To effectively manage both types of stakeholders, project managers will often create a stakeholder register, which is a document that lists all external and internal stakeholders, with a plan on how often and what method will be used to communicate with them about the project progress.

To review, see:

• Identifying Stakeholders
• The Stakeholder Register

3d. Identify methods to manage project change

• What types of changes are often made to projects?
• Why do project changes need to be documented?
• What might occur if a formal change request process is not implemented?

In most projects, it is likely that changes will need to occur, such as changes to team members, schedule or budget. Project managers can’t just make a change, though, there needs to be a process in place to manage project changes. This process is called change control. When considering making a change to a project, the project manager must consider the triple constraint, and how the project will be impacted by the change.

The change process usually starts with a change request, which is a document that either the project manager or the client must complete. This formalizes the change process and provides needed documentation throughout the lifecycle of the project.

To review, see:

• Change Control Methods
• Documenting Change Requests

3e. Identify techniques for project monitoring and reporting

• What quantitative methods are used to monitor projects?
• Why is it important for project managers to monitor projects?
• What questions can be answered using earned value management (EVM)?

The monitoring and controlling phase of a project occurs throughout the lifecycle of the project. This process ensures everything is on track such as the scheduled activities and the budget. One of the most useful ways for project monitoring is to use a method called earned value management (EVM). Earned value management is a quantitative monitoring technique that uses metrics and indexes to assess performance. It compares the performance baselines to actual figures.

EVM can help answer questions at any point, such as: Are we delivering more or less work than planned? When is the project likely to be completed? Are we currently over or under budget? What is the remaining work likely to cost? What is the entire project likely to cost? How much will we be over or under budget at the end of the project? What is driving the significant cost and/or schedule variances?

Project managers will use EVM throughout a project lifecycle to continually monitor project progress.

To review, see:

• Earned Value Management for Controlling
• Methods to Monitor Projects

Unit 3 Vocabulary

This vocabulary list includes terms you will need to know to successfully complete the final exam.

• change control
• change request
• cost-benefit analysis
• earned value management
• external stakeholders
• fishbone diagram
  
• internal stakeholders
• quality
• procurement management
• project risk
• risk management
• stakeholders