5.3Project Management

Completing a project as planned requires the skill of quantitatively managing what to build, when it must finish, and how much it will cost. Among the body of knowledge that PMBOK organizes, the calculation-heavy areas of scope, schedule, and cost are especially important and carry into the Applied Information Technology exam--reading arrow diagrams and calculating EVM metrics are must-master skills.

5.3.1PMBOK and WBS

• PMBOK (Project Management Body of Knowledge) is an internationally recognized standard guide that systematizes project management knowledge. It is organized into multiple knowledge areas--scope, schedule, cost, quality, risk, stakeholders, and more--and forms the foundation for many project management methods and certifications.
• WBS (Work Breakdown Structure) is the technique of hierarchically decomposing a project's deliverables and work into manageable units (work packages). It is used to exhaustively surface the scope (the range of work the project will perform) and serves as the basis for estimation, progress tracking, and staff assignment. Decomposing too far raises management overhead, so stopping at an appropriate level of granularity matters.

5.3.2Schedule management: arrow diagrams, PERT, and the critical path

• Arrow diagrams represent activities (work items) as arrows and junctions (events) as circles, visualizing the sequencing of work and its required duration as a network diagram. PERT (Program Evaluation and Review Technique) is the umbrella term for the technique of using arrow diagrams to analyze and manage the schedule of an entire project, computing the required duration by summing along each path.
• The critical path is the path with the longest total duration among all paths from start to finish. If work on this path slips by even one day, the entire project's completion slips by the same number of days, making it the most important thing to manage. Conversely, work not on the critical path has slack (float), and a delay within that slack does not directly delay the whole project.
• Finding the critical path: sum the duration for every path from start to finish, and select the path with the longest total. When multiple paths exist, carefully summing and comparing the duration of each path is the key to an accurate determination.

5.3.3Cost management: EVM, and quality/risk/stakeholders

• EVM (Earned Value Management) is a method for managing progress and cost together using a common metric expressed in monetary terms. PV (Planned Value) is the budgeted amount of work that should have been completed by a given point according to the plan. EV (Earned Value) is the budgeted amount of work actually completed (progress expressed in money). AC (Actual Cost) is the actual amount of cost incurred so far.
• EVM variance metrics: SV (Schedule Variance) = EV - PV (negative means behind schedule). CV (Cost Variance) = EV - AC (negative means over budget). Correctly remembering the direction of the subtraction--"how much the earned value exceeds or falls short of the plan or the actual cost"--prevents mistakes on calculation questions.
• Other knowledge areas: quality management (managing whether deliverables meet the required standard), risk management (identifying possible problems in advance and preparing responses according to their probability and impact), and stakeholder management (identifying parties with a stake in the project and managing their expectations and involvement). Each stands alongside scope, schedule, and cost as a major PMBOK knowledge area.

Take a system development project as an example of managing schedule and cost concretely. First, WBS decomposes the project's work from broad categories like "design," "implementation," and "testing" down to manageable units, estimating the duration of each. Next, the sequencing of this work is laid out in an arrow diagram. Suppose there are two paths from start to finish: "design (5 days) -> implementation (10 days) -> testing (5 days)" (total 20 days), and a parallel path of "environment setup (3 days) -> data migration prep (8 days)" (total 11 days). After computing every path, the 20-day "design -> implementation -> testing" path, having the longer total, is determined to be the critical path. If implementation on this path slips by 2 days, the whole project's completion also slips by 2 days. Meanwhile, the environment-setup path has 20 - 11 = 9 days of slack (float), so a modest delay there does not affect the overall schedule. On the cost side, suppose that 10 days into the project, the plan called for 3,000,000 yen of work to be complete by now (PV = 3,000,000 yen). In practice, only 2,500,000 yen of work has actually been completed (EV = 2,500,000 yen), and 2,800,000 yen of cost has been incurred so far (AC = 2,800,000 yen). From these: SV = EV - PV = 2,500,000 - 3,000,000 = -500,000 yen (behind schedule), and CV = EV - AC = 2,500,000 - 2,800,000 = -300,000 yen (over budget)--letting you instantly grasp, on the common yardstick of money, that "both progress and cost are trending unfavorably." Building on these numbers, risk management identifies early the risk that "continuing on this trajectory will worsen both the deadline and the budget," and a response--adding staff, adjusting scope--is coordinated with stakeholders, completing a management cycle that spans multiple PMBOK knowledge areas.

5.3.4Section summary

• PMBOK = the international standard guide for project management. WBS hierarchically decomposes work to exhaustively surface scope
• Critical path = the path with the longest duration among all paths. A delay on it = a delay to the whole project. Non-critical paths have float (slack)
• EVM = SV = EV - PV (schedule check) and CV = EV - AC (budget check). In both, negative means things are worse