PMBOK 5th Edition is Underway

According to PMI, the 5th edition of the PMBOK is underway:

http://www.pmi.org/PMBOK-Guide-and-Standards.aspx

So far, we have not been given much information on what will be the change and what will be included in the latest exam.  If anyone who has such information, please share with all of us in this site.

Matrix Organizations, What Are They?

From PMP Resources, they email me a very good article on Matrix Organization and you can find the information below.

Until the 1970's, typical, large organizations tended to function in "silos", logical divisions where essentially isolated groups of workers reported to a line manager or functional manager. Imagine columns on a page with a line manager at the top of each column and a group of workers inside each column under the manager.

As these groups operated autonomously, it was not unusual to find functions replicated in each silo.

In an Information Technology company for example, you might find software programmers in the development area, some more in the customer support area, and yet more in the quality assurance area, because each of these functional units had a programming need.
If your organisation still operates in this manner, give your boss a copy of this article.

And so it was in the 1970s that attempts to improve traditional organization structures, led to the creation of the “Matrix" organizational structure.

In the matrix organisation, considering our IT example above, all programmers are now in a separate programming department and report to a functional manager in charge of programming, and that manager would control almost all of their work. In a matrix we usually refer to the line manager as a functional manager because all of their workers perform similar functions.

So workers in a matrix organisation are compartmentalized by their required skills into silos, like columns in a matrix, each with its dedicated manager. The workers report to and are responsible to their functional manager, who in turn usually has sole responsibility for the advancement of their workers, as well as the administration of their area, including budgeting.

So far the matrix organization sounds much like the traditional organization, except that all workers within a silo (a column in the matrix) are partitioned by a particular skill-set.

The other difference between traditional organisations and matrix organisations is that matrices have rows (lines running across the columns, not fights).

Traditional organizations operated quite well, but they were inefficient, with lots of duplication of skills around the company. But their major weakness was when they tried to manage projects.

The problem was that in the traditional organisation, the concept of a project team, which is my nature cross-functional, did not exist, because the project manager's "team" team comprised of people from different functional areas, managed and controlled by different functional managers -- not by the project manager. And this is not a recipe for successful projects.

So we have our columns of functionally similar workers in each column of our matrix, with a functional manager at the head of each column.
Now picture rows running across the page, with a project manager at the "head" (i.e. the left hand side) of each row. The rows intersect the columns and so intersect the columns of workers. So each row is a silo of workers of differing functionality, headed by a project manager.
In such a matrix structure there is an obvious tension between the project managers at the head of each row (each project) and the managers at the head of each column (each functional area) as they are sharing the same workers, and as each manager (project and functional) has a job to do, we have a conflict of interest.

There are different types of matrix organization, designed to balance the power struggle-struggle between the managers conflicting needs. The main types are listed below.

The Weak Matrix

This type of organizational structure is a bit of a nightmare for Project Managers because they are effectively reduced to being project facilitators. They make plans and monitor the execution, but they have no real authority over staff, and are almost totally reliant upon the functional managers to provide resources.

The workers have little loyalty to the project managers (or the project), because it is the functional managers who decide the advancement of the workers within the organization. And the workers' performance is usually measured only on the work that they do for their functional manager -- not on their project work -- so in fact working on a project may be seen by the worker as undesirable as they will have less time to do their regular work, so the project manager may find them unmotivated.

And as the PM has no real authority over the team members, then they often have to report the problem of workers not performing, to the functional managers in the hope that they will encourage the workers to work more on the project.

But remember that the functional managers are primarily responsible for the performance of their own functional areas, so their workers performing project tasks can actually reduce the productivity of their area (often projects are ignored in the benchmarks). So this leads to a clear conflict of interest between the PM, the functional managers and the various workers.

In this situation the PM usually loses -- and that’s the easy to remember it -- the PM is weak in a weak matrix.

The Strong Matrix

All these problems led to the creation of the “strong matrix” organization

In the strong matrix the tables are turned, it is the project managers that have responsibility for the workers, not the line managers. But the PMs are not responsible for the human resource administration.

This empowers the project managers to manage the workers directly, and thus properly manage the whole project, but without tying the PMs up in HR administration.

I have worked in organizations like this, where I managed my teams and was responsible for everything except the HR functions, and I found it a very satisfying environment from a project point of view. So my teams would have me as project manager and I had sole authority and responsibility to direct their work, but they also had staff managers who looked after anything that was not project-related, i.e. performance reviews (but I provided the key input to these) training, vacation administration, employment contracts etc. And this meant that I could focus on the projects.

So when a project manager starts a new project, they discuss their staffing requirement with the functional managers and the functional managers try to make the resources available (and provide training fro them, where necessary). Usually the functional managers will draw up plans and charts (e.g. Gantt charts) of how “their people” will fit inside projects, and they might move staff between projects and project managers as required (after consulting with the project managers).

Effectively the PM and the functional managers work together, but overall control of everything project-related is the function of the project manager -- so in a strong matrix, the project manager is the stronger party.

The Balanced Matrix

There is an old saying, “power corrupts, and absolute power corrupts absolutely”. In each type of matrix organization there is a struggle for power, and so there needs to be some way to bring this into balance, otherwise one group will dominate the other, to the detriment of the project, and ultimately to the detriment of the organization as a whole (although individual projects or functional areas may blossom for a while). A very dominant project manager for example may bully the functional managers into always giving them the best team members for their projects.

One way of reducing the problem is to make rules within the organization that varies who can manage a worker, depending upon certain circumstances. For example there could be a rule that says if an worker is to work on a project for less than one week then the functional manager (or project manager) has sole control over the worker, but if the requirement is for more than one week, control changes hands.
Or there may be rules that the same worker can’t work for the same PM, on two consecutive projects.

There are many possible rules that could be made of course, but the goal is to balance the power between the PM and the functional managers so that we don’t have a win/lose situation, and I’m sure you can guess that this type of organizational structure is called a “balanced matrix”.

So weak, strong, or balanced, the "strength" is always from the viewpoint of the project manager.

Summary
Until the 1970's, typical, large organizations tended to function in "silos", logical divisions where essentially isolated groups of workers would report to a line manager or functional manager. Matrix organisations are an attempt to restructure to make project management possible.

Project Management Knowledge Areas Summary

I was reading the Project Management Knowledge Areas Summary by PMP Exam Resource and found that they have a very good summary on the Project Management Knowledge Area.

I have enclosed it below for your reference:

The PMBOK® Guide defines project management knowledge areas as:

• Project Integration Management,
  the processes required to ensure that the various elements of the project are properly coordinated. It consists of project plan development, project plan execution, and overall change control.
  
  
• Project Scope Management,
  the processes required to ensure that the project includes all the work required, and only the work required, to complete the project successfully. It consists of initiation, scope planning, scope definition, scope verification, and scope change control.
  
  
• Project Time Management,
  the processes required to ensure timely completion of the project. It consists of activity definition, activity sequencing, activity duration estimating, schedule development, and schedule control.
  
  
• Project Cost Management,
  the processes required to ensure that the project is completed within the approved budget. It consists of resource planning, cost estimating, cost budgeting, and cost control.
  
  
• Project Quality Management,
  the processes required to ensure that the project will satisfy the needs for which it was undertaken. It consists of quality planning, quality assurance, and quality control.
  
  
• Project Human Resource Management,
  the processes required to make the most effective use of the people involved with the project. It consists of organizational planning, staff acquisition, and team development.
  
  
• Project Communications Management,
  the processes required to ensure timely and appropriate generation, collection, dissemination, storage, and ultimate disposition of project information. It consists of communications planning, information distribution, performance reporting, and administrative closure.
  
  
• Project Risk Management,
  the processes concerned with identifying, analyzing, and responding to project risk. It consists of risk identification, risk quantification, risk response development, and risk response control.
  
  
• Project Procurement Management,
  the processes required to acquire goods and services from outside the performing organization. It consists of procurement planning, solicitation planning, solicitation, source selection, contract administration, and contract close-out.
  
  
• Professional Responsibility,
  the tasks, knowledge, and skills required to ensure integrity, contribute to knowledge base, apply professional knowledge, balance stakeholder interest, and respect differences.

How to Select a Project?

Selecting an project should be based on the Project Strategy Plan.

It should meet:

• A market demand
• An organisation need
• A customer request
• A technological advance
• A legal requirement

Project Portfolio Management

What is Project Portfolio Management:

• A collection of projects
• A line of business
• Based on strategies within an organisation
• A guidance of senior management

Project Selection Method Key Terms - Opportunity and Sunk Cost

Opportunity Cost is:

• The opportunity given up by selecting one project over another.
  

Sunk Cost is:

• Non-recoverable project spent on the existing or last project. This is not related to bad debt as bad debt is over budget).

Project Selection Methods Key Terms - Depreciation

For Depreciation, it means that large assets (eg equipment) purchased by the company lose value over a period of time. In accounting terms, there are:

• Straight Line Depreciation
  The same amount of depreciation is taken each year.
  
  
• Accelerate Depreciation
  Depreciates faster than straight-line (eg Double declining Balance).
  
  

Project Selection Methods Key Terms - Benefit Cost Ratio

For Benefit Cost Ratio, it relates to the project cost and to determine what work should be done. In general,

• if the value is > 1, it means the benefits are greater than the cost.
• if the value is < style="font-weight: bold;">costs are greater than the benefits.
• if the value is = 1, it means the costs and benefits are the same.

Project Selection Methods Key Terms - Payback Period

In PMP, the term "Payback Period" means:

• The time period it takes to recover your investment in the project before the company starts to accumulate profit.
  

Present & Net Present Value

What are Present Value and Net-Present Value (in terms on PMI PMP)?

Present Value is:

• future value of the money in the today's terms.
• Formula: PV = FV / (1+r)ⁿ
  (where PV = Present Value, FV = Future Value, r = interest rate, n = number of period)

Net Present Value is:

• the present value of the otal benefits (income or revenue)
• allowed for a comparison of many projects and to select the best to initiate
  

Project Measurement

Benefit Measurement Methods that are comparative approaches which include:

• Scoring models
• Peer review
• Economic models

Mathematical models (Constrained Optimisation) that use:

• Linear programming
• Dynamic programming
• Integer programming
• multi-objective programming
  

Project Selection Method

In PMP, Project Selection Method is any systematic approaches used to analyse the value of a proposed project. The evaluation may be formal or informal.

• Feasibility analysis may be conducted using a formal study or an informal brainstorming session. It may also be used to compare alternative solutions to select the one that is the best fit for the organization.
• Cost-Benefit analysis compares the predicted costs and benefits of a project.
  

Configuration Management System

In PMP, all change systems should integrate with Change Control System. On the other hand, all project related matter should be stored into Configuration Management Systems.

The following areas should be integrated into Change Control System:

• Scope
• Cost
• Schedule
  
• Contract
• Risk
• Manage Team
• Manage Stakeholder
• Quality

Common Project Estimation Techniques

In PMP, the common project estimation techniques include:

Analogous Estimation (Top-down)

• Pros
  Can ensure no work is inadvertently omitted from work estimate
• Cons
  Can sometimes be difficult for lower-level managers to apportion cost estimates.

Bottom-up Estimation

• Pros
  Is very accurate and gives lower-level managers more responsibility.
• Cons
  May be very time consuming and can only be used after the work breakdown structure (WBS) has been well defined.

Parametric Estimation

• Pros
  Using parametric model is not time consuming.
• Cons
  May be inaccurate depending on the integrity of the historical information used.

Responsibilities of Project Management Office (PMO)

In PMP, the role and responsibilities of Project Management Office (PMO) includes:

• Manage the interdependence between projects
• Help provide resources including software, tools, templates, policies, etc
• Help gather lessons learned and make them available to other projects
• Terminate projects
• Involves more heavily during project initiation than later in the project.

Project Management Process

In a project, it includes the following processes:

• Initiating Process
  
  Involve defining the need for the project and obtain a commitment to proceed.
  


• Planning Process
  
  Use to develop a strategy for how to accomplish the work in a project.
  


• Executing Process
  
  Involve carry out the strategy for the project.
  


• Controlling or Monitoring the Process
  
  Check and measure the required progress in the project. This also includes any corrective actions needed to get back on track.
  


• Closing Process
  
  Involve handing off the project, gain formal acceptance and perform administrative and contractual closure.

Project Management Balance Contraints

The balance constraints include:

• Customer satisfaction
• Cost
• Time
• Risk
• Scope
• Quality

These constraints are set by priority and impact of changes involved directly or indirectly.

Furthermore, it is to note that a change to anyone of the constraints, the overall project should be evaluated to ensure that other constraints are not affected.

Organizational Structures in PMP

In most company, the organization is structured into 6 models. They are Functional, Weak Matrix, Balance Matrix, Strong Matrix, Projectized and Composite models. Details of each structure and the attributes of the project manager are listed below:

Functional

Functional organizations are entities that have a clear division regarding business units and their associated responsibility. Project managers in functional organizations have the following attributes:

• Little power
• Little autonomy
• Report directly to a functional manager
• The project manager may be known as a Project Coordinator or Team Leader
• The project manager's role is part-time
• The project team is part-time
• The project manager may have little or no administrative staff to expedite the project management activities

Matrix Structure

Matrix structures are organizations that have a blend of departmental duties and employees together on a common project. The project team member to be from multiple departments working toward the project completion. Team member will report to multiple project managers and functional managers.

Weak Matrix

In a weak matrix structure, the project team may come from different departments but the project manager reports directly to the functional manager. The project manager has the following attributes:

• Limited authority
• Management of a part-time project team
• Project role is part-time
• May be known as a project coordinator or team leader
• May have part-time administrative staff to help expedite the project

Balance Matrix

In a balance matrix, the project manager has more time and power regarding the project than a weak matrix. The attributes of a project manager in this structure are:

• Reasonable authority
• Management of a part-time project team
• Full-time role as a Project Manager
• May have part-time administrative staff to help expedite the project

Strong Matrix

Strong matrix equates to a strong project manager. The project manager has the power and time required for the project. The attributes are:

• A reasonable to high level of power
• Management of a part-time to nearly full time project team
• Full-time role as a Project Manager
• Has a full-time administrative staff to help expedite the project

Projectized Structure

The project manager in a projectized structure may have complete power over the project team. Project manager in a projectized structure enjoy a high level of autonomy over their projects but also have a higher level of responsibility regarding the project success. The attributes are:

• High to complete authority over the project
• Work full-time on the project with his team
• Has a full-time administrative staff to help expedite the project

Composite Organizations

A composite organization is a blend of multiple organization types as listed above.

PM Work Objective and Approach

As a Project Manager, the work objective includes the application of:

• Knowledge
• Skills
• Tools
• Techniques

to the project activities to meet project requirements.

As for the work approach, it includes:

• SMART (Specific, Measureable, Archievable, Realistic and Time Bound)
• Identify Requirements
• Establish Clear and Achievable Objectives
• Balance Contraints
• Adapt specifications and plans to address the different concerns of the stakholders

How to Manage Stakeholder in Project Lifecycle?

• Identify stakeholders in all phases of the project.
• Access their knowledge and skills to have a common background.
• Analyze and keep them involved (work as a team).
• Get their signoff and formal acceptance during closure.

In PMP, getting the signoff from the stakeholder is the most important point.