1. PM Study Circle.
  2. Information Technology Project Management

Statement of work

This Statement of Work template helps you to define the work requested from an external supplier. By using this Statement of Work template, you can clearly define your requirements to your supplier, so they know what needs to be delivered, how and by when. This will help you to manage the performance of your supplier, ensuring that you receive exactly what it is that you’re paying for.

When do I use a Statement of Work?

Every time you need to request work from an external supplier, you need to issue a Statement of Work. It helps you clarify what it is that you want from your supplier and the timeframes in which to complete it. Writing a Statement of Work is easy, by using this comprehensive template.

This Statement of Work template helps you by:

  • Defining the type of supplier that you wish to appoint
  • Describing the materials and equipment you need
  • Specifying the deliverables to be provided by the supplier
  • Stating your terms and conditions for payment

Project Chart

This is the document which authorizes the existence of the project and tells you when a project starts. The project charter is also known as a “Project Definition Document”.

Please note that a project start from the moment when the sponsor thought of it, or when they got an idea from their friend or the night they dreamed of it.

If the project is feasible, they will take the decision to go with it and call someone (the project manager) to lead the project. Then they will create the project charter and give the project manager the authority to lead and complete the project. The project starts officially the moment the project sponsor signs the project charter. Although the sponsor may have been working on the project behind the scenes, the project will only start once they sign the project charter.

According to the PMBOK Guide, “the project charter is an official document that formally authorizes a project or a phase and documents the initial requirements that satisfy the stakeholders’ needs and expectations.”

Characteristics of the Project Charter

The following are a few characteristics of the project charter:

  • It recognizes the existence of the project
  • It appoints the project manager
  • It sets the authority of the project manager to apply resources to the project
  • It defines the project objectives
  • It contains the list of main stakeholders
  • Usually, it consists of only one or two pages maximum
  • It may be created by the project manager
  • It must be signed by the project sponsor or someone from top management (external to the project)

Keep in mind that the project charter may be created by the project manager, but it must be authorized by someone external to the project. The project manager may help the project sponsor to create a project charter, or provide the input to create it, but only top management has the authority to sign it.

Content of the Project Charter

A project charter may contain the following information:

  • Project title and description
  • Project purpose or justification
  • Measurable project objectives
  • Description of output of the project
  • Assigning the project manager and setting his authority level
  • High-level assumptions and constraints
  • Pre-assigned resources
  • Name of main stakeholders
  • Expectations
  • High-level project and product requirements
  • Acceptance criteria
  • Summary of important milestones
  • Estimated budget
  • High-level risks
  • Name of the sponsor
  • Project’s approval criteria

Project plan VS. Project management plan

Project Plan

In some organizations, this plan is also referred to as a work plan.

Simply put, you can say that the project plan is a formal approved document used to broadly guide the project, and facilitate communication among the stakeholders. The project plan takes its objective from the project charter and the scope statement.

The project plan speaks in general, for example:

  • Why is the project undertaken?
  • What value will it add to the organization?
  • What will the output or deliverables of the project be?
  • Who will be involved in the project?
  • What is the deadline?
  • What are the milestones?
  • What is the scope, budget and schedule?
  • What technology is going to be used to accomplish the task?

Project Management Plan

The project management plan is a formal approved document that guides you precisely on how you are going to proceed.

For example:

  • How will the project work be carried out?
  • How will the scope be managed?
  • How will you monitor and control the various project activities?
  • How will you deliver the product and close the project?

A project management plan is composed of many subsidiary plans, for example, scope management plan, cost management plan, risk management plan, procurement management plan, etc.

The project management plan is a meta-plan of the project plan. It is the actual plan which is followed by the project management team to successfully complete the project.

Enterprise Environmental Factors (EEF)

The enterprise environmental factors influence the organization, the project, and its outcome. Every organization has to live and work within the EEF.

The enterprise environment factor can be either internal or external. Examples of external enterprise environmental factors are as follows:

  • Government regulation
  • Market conditions
  • Infrastructure
  • External political conditions

The following are a few examples of internal enterprise environmental factors:

  • Organizational culture
  • Type of organizational structure
  • Internal political conditions
  • Available resources

Organizational Process Assets (OPA)

The definition of assets says: “It is a useful or valuable thing or property owned by a person or company, regarded as having value and available to meet debts, commitment, or legacies.” Simply put, assets are something that you can own, keep, and make use of.

Organizations also have assets which help them in achieving their objectives. Here these assets are called organizational process assets (OPA). These organizational process assets are kept in some central repository so that they can be used whenever required.

Organization process assets can be divided into two categories. The first category is for processes and procedures for conducting work, which includes the following:

  • Policies
  • Procedures
  • Standard template
  • General guidelines

The second category includes corporate knowledge base for storing and retrieving information. For example:

  • Risk register
  • Lessons learned
  • Stakeholder register
  • Past project files
  • Historical information

Net Present Value (NPV)

It equals the present value of net cash inflows generated by a project less the initial investment on the project. It is one of the most reliable measures used in capital budgeting because it accounts for time value of money by using discounted cash flows in the calculation.

  • The first step involved in the calculation of NPV is the estimation of net cash flows from the project over its life.
  • The second step is to discount those cash flows at the hurdle rate.


$i$ is the target rate of return per period;

$R_1$ is the net cash inflow during the first period;

$R_2$ is the net cash inflow during the second period;

$R_3$ is the net cash inflow during the third period, and so on…

Decision Rule

In case of standalone projects, accept a project only if its NPV is positive, reject it if its NPV is negative and stay indifferent between accepting or rejecting if NPV is zero.

In case of mutually exclusive projects (i.e. competing projects), accept the project with higher NPV.

Failure Mode and Effect Analysis (FMEA)

Despite its complex name, FMEA is a very simple qualitative technique which involves brainstorming with experts and listing their comments in a table format.

It is similar to the process of creating a probability and impact matrix.

In this technique, experts identify possible causes for product failure, the chances of these failures happening, the impact of these failures, how easy it is to detect failure, etc. These opinions are noted in a table for further review.

With the use of this technique, you can identify many key failures which might affect your product.

Control Chart and Run Chart

Control charts and run charts are important tools in quality management, which help you to identify trends or errors in the product or the process. A short look at these charts can give you the answers to many questions, such as:

  • How is the process performing?
  • How is today’s performance vs yesterday’s performance?
  • Are we doing good or bad?

Run Chart

A run chart is the simplest chart of all. It shows the variation in a single data group over a period of time. A run chart helps you analyze the following:

  • Trends in the process; i.e. whether the process is moving upward or downward.
  • Trends in the output of the manufacturing process.
  • If the process has any cycle or any shift.
  • If the process has any non-random pattern in behavior over a period of time.

Limitations of Run Charts

The drawbacks of run charts are that they don’t have any statistical control limits. Simply put, they don’t show you the upper and lower tolerance and threshold limits. Run charts are not capable of showing you if the process is stable and in control.

Control Chart

It is an updated version of the run chart. If you add control limits to the run chart, it will become a control chart.

In control chart, there is a center line (red line) called the mean or goal which is surrounded by other lines (dotted green lines) called limits. These lines are the upper control limit and lower control limit (UCL and LCL). These lines are again surrounded by two another lines (purple lines) known as the upper specification limit and lower specification limit.

Upper and lower specification limits are provided in the contract and you cannot cross them. This is your final limit. The upper and lower control limit are determined by the project manager so that specific limits are not crossed, and if the process goes above this limit, a corrective action must be taken.

If the 99.73% (3-sigma)(This is a concept of normal distribution in Probability Theory) of all the points fall between the upper and lower control limits, you will say that the process is under control.

Rule of Seven

This rule says that if seven or more consecutive data points fall on one side of the mean, then there must be an investigation initiated to find out the reason for it, even if these points fall within the control limits.

Quality Assurance & Quality Control

The following are a few differences between the quality assurance and quality control processes:

  • Quality assurance focuses on defect prevention and quality control focuses on defect identification.
  • In quality assurance, you check if the plan was efficient to avoid any anticipated defect. In quality control, you try to find defects and correct them while making the product.
  • Quality assurance is a proactive process while quality control is a reactive process.
  • Quality assurance is a process based approach while quality control is a product based approach.
  • Quality assurance involves processes managing quality, and quality control is used to verify the quality of the product.
  • Quality audit is an example of quality assurance. Inspection and testing are examples of the quality control process.


Six Sigma is a quality management methodology which helps you reduce defects and maintain consistent quality in products.

Six Sigma can be defined as a “data-driven, customer-focused and result-oriented methodology.” Six Sigma is a data-driven process and product improvement methodology, the goal is to improve quality to the extent where no more than 3.4 failures per million are allowed, or 99.9967% accuracy.

Stakeholders in Six Sigma Projects

The following are the main stakeholders in any Six Sigma project:

  • Customer
  • Employee
  • Supplier
  • End users

Six Sigma Methodologies

You can achieve Six Sigma objectives by using two Six Sigma sub-methodologies:

  • DMAIC: Define, Measure, Analyze, Improve, and Control. used to improve an existing business process.
  • DMADV: Define, Measure, Analyze, Design, and Validate. used to create new product or process designed to achieve predictable, defect-free performance.


  1. Tally Sheet

    Also known as the check sheet or checklist.

    With a tally sheet, you record the data by marking it in real time. To record the data you go to the location and observe the process and record it on the sheet. Most of the time you only have to tick or cross it off.

  2. Flow Chart

    This diagram shows you the workflow, process procedure or an algorithm. The flowchart helps you visualize the process flow and find any issues or bottlenecks.

  3. Histograms

    It is similar to a bar chart and displays the graphical distribution of numerical data. It is primarily used to show frequency distribution.

  4. Cause and Effect Diagram

    Ishikawa or fishbone diagram.

    It helps you find possible causes for a problem or effect.

  5. Pareto Diagram

    A Pareto Diagram is a bar chart where the longest bar is on the left side, and shortest is on the right side. The height of bar decreases gradually from left to right and displays the frequency of various errors.

    With the help of a Pareto Diagram, you can focus on the problem with the most frequent occurrence.

  6. Scatter Diagram 散点图

    After determining the correlation between the variables, you can easily predict the behavior of the other variable.

  7. Control Charts

    With the help of this chart, you can determine if a process is stable or not.

Project Scope Management

Project scope management includes the processes involved in defining and controlling what is or is not included in a project.

Configuration Management

In the configuration management system, changes related to product specification are managed. For example, suppose you’re developing a product and the client comes to you and requests some changes in the product such as the addition of a feature or the dimensional change, etc.

You will deal this type of change with the configuration management system, because the change is related to the configuration of the product.

Change Management System

Changes can occur to your projects at any time.

For example, you may run out of money and you need to change the cost baseline. Or you may not able to complete your project within a given time, and may require a time extension.

These types of changes involving the project processes or the project baselines are managed through the change management system.

The purpose of the change management system is to implement the approved changes into the project with a minimum amount of disruption.

The change management system ensures that every change request is received, analyzed, and either approved or rejected. If it is approved, all other project constraints will also be analyzed for any possible impact.

A good change management system ensures that all affected parameters are identified and analyzed for any impact before the change is implemented to the system, in order to minimize the adverse effects.

Precedence Diagramming Method — PDM

based on 4 fundamental relationships:

  • finish-to-start(FS) (most commonly used)
  • start-to-start(SS)
  • finish-to-finish(FF)
  • start-to-finish(SF)

Lead and Lag times

  • Lead is starting the next task before the first task is complete. Example: Begin installing the operating systems when half of the PCs are set up.
  • Lag (or negative lead) is the adding of a buffer of time before the next task begins. Example: Once the walls have been painted, wait one day before laying the carpet so that the walls have had a chance to dry.

A lead means a successor activity can be started prior to the completion of a predecessor activity. A lag directs a delay in the successor activity.

Critical Chain Project Management (CCPM)

Introduced in 1997 in a book called Critical Chain by Eliyahu Goldratt. CCPM is based on the idea that people often inflate or add cushioning to their estimates to create a form of “safety” to compensate for uncertainty or risk.

According to this theory, in order to reduce risk in project schedule, we can add buffers to the critical chain.

PERT (program evaluation and review technique)

Most Likely Estimate (Tm)

This is the time duration where there is a high probability of completing the task within the given time duration.

Optimistic Estimate (To)

In this scenario, the estimate is determined considering all favorable conditions; i.e. it is a best-case scenario. In other words, you can say that this is the shortest time in which you may complete the task.

Pessimistic Estimate (Tp)

Here, estimate is determined considering all unfavourable conditions; i.e. worst case scenario. In other words, this is the longest time the activity might require to complete itself.

The formula to calculate the PERT is as follows:

$PERT \ Estimate = (To + 4Tm + Tp) / 6$.


$Standard\ Deviation = (Tp – To) / 6$.

Some Calculations

Full Name Abbreviation Full Name Abbreviation
Earned Value EV Actual Cost AC
Planned Value PV Cost Variance CV
Schedule Variance SV Budget At Completion BAC
Schedule Performance Index SPI Estimate At Completion EAC
Cost Performance Index CPI Estimate To Complete ETC





$The\ Percent\ Complete=EV/BAC$.



The variance for a project is $D$, the duration of the project is $E$, and the standard variance is $SE$. Therefore, the probability that the actual project completion will fall between the high and low value of the range of values?

Probability Formula (high and low value)
68% E $\pm$ SE
90% E $\pm$ 1.645*SE
95% E $\pm$ 2*SE
99.7% E $\pm$ 3*SE

To Complete Performance Index (TCPI)

To Complete Performance Index is the estimated cost performance for the project to meet the project’s budget goal. Please note that cost performance index is the past performance of the project while to complete performance index is the future cost performance of the project.

The TCPI can be calculated by dividing the remaining work by the remaining funds.

TCPI = (Remaining Work) / (Remaining Funds)

Now, there are two scenarios to calculate the TCPI:

  1. If you are under budget: $TCPI = (BAC – EV) / (BAC – AC)$.
  2. If you are over budget: $TCPI = (BAC – EV) / (EAC – AC)$.

Writing Part

The triple constraint of project management

  • scope
    • What will be done in the project ?
    • What unique product, result, or service does the customer or sponsor expect from the project ?
    • How will the scope verified ?
  • time
    • How long will it take to complete the project ?
    • Who can approve the changes to the schedule ?
    • What’s the project’s schedule ?
    • How will the team track the actual schedule performance ?
  • cost
    • What should it cost to complete the project ?
    • What’s the project’s budget ?
    • How will costs be tracked ?
    • Who can authorize changes to the budget ?

Project Management Framework

management framework.pngmanagement framework.png

10 knowledge areas:

scope; time; cost; quality; human resource; risk; communication; procurement; stakeholder; integration;

Advantages of Using Formal Project Management

  • Better control of financial, physical and human resources
  • Lower cost
  • Shorter development times
  • Improved customer relations
  • Higher quality
  • Improved productivity and increased reliability
  • Better internal coordination
  • Better worker morale
  • Higher profit margins

What Helps Projects Succeed?

  1. User involvement
  2. Executive support
  3. Clear business objectives
  4. Emotional maturity
  5. Optimizing scope
  6. Agile process
  7. Skilled resources
  8. Project management expertise
  9. Execution
  10. Tools and infrastructure

Ten Characteristics of Organizational Culture

  1. Member identity
  2. People focus
  3. Group emphasis
  4. Control
  5. Unit integration
  6. Risk tolerance
  7. Conflict tolerance
  8. Reward criteria
  9. Means-ends operation
  10. Open-systems focus

Phases of the Traditional Project Life Cycle

project life cycle.pngproject life cycle.png

project feasibility: concept + development

project acquisition: implementation + close-out

Concept Development Implementation Close-out
Business case Project management plan Execution of work packages Completed work
Preliminary cost estimate Budgetary cost estimate Definitive cost estimate Lessons learned
2-level WBS 3+-level WBS Performance reports Customer acceptance

Predictive Life Cycle Models

  • Waterfall model (瀑布模型): has well-defined, linear stages of systems development and support.
  • Spiral model (螺旋模型): shows that software is developed using an iterative or spiral approach rather than a linear approach.
  • Incremental build model (渐进构建模型): provides for progressive development of operational software.
  • Prototyping model (原型模型): used for developing prototypes to clarify user requirements.
  • Rapid application development (RAD) 快速应用开发: used to produce systems quickly without sacrificing quality

Scrum Framework

Scrum is a lightweight agile project management framework mainly used to software development. It describes an iterative and incremental approach for project work.

  1. Product owner creates prioritized wish list or backlog
  2. Project team creates sprint backlog
  3. Teams have daily Scrum meetings during each 2~4 weeks sprint
  4. Sprint results in a useful product(potentially shippable product increment) + sprint review
  5. repeat steps 1-4 until complete

Project Management Process Groups

Project management can be viewed as a number of interlined processes.

The project management process groups include:

  • initiating processes
  • planning processes
  • executing processes
  • monitoring and controlling processes
  • closing processes

Scrum Roles

It has three roles.

  • The scrum team or development team: A cross-functional team of five to nine people who organize themselves and the work to produce the desired results for each sprint, which normally lasts 2-4 weeks.
  • Scrum master: The people who ensures that the team is productive, facilitates the daily Scrum, enables close cooperation across all roles and functions, and removes barriers that prevent the team from being effective. It’s the job of the scrum master to ensure that the scrum team adheres to the scrum theory, practices and roles.
  • Scrum product owner: The person responsible for the business value of the project and for deciding what work to do and in what order, as documented in the product backlog.

Scrum Artifacts

An artifact is a useful object created by people.

  • Product backlog: a list of features prioritized by business value.
  • Sprint backlog: the highest-priority items from the product backlog to be completed within a sprint.
  • Burndown chart: shows the cumulative work remaining in a sprint on a day-by-day basis.

Scrum Ceremonies

  • Sprint Planning Session: A meeting with the team to select a set of work from the product backlog to deliver during a sprint.
  • Daily Scrum: A short meeting for the development team to share progress and challenges and plan work for the day.
  • Sprint reviews: A meeting in which the team demonstrates to the product owner what it has completed during the sprint.
  • Sprint retrospectives (回顾): A meeting in which the team looks for ways to improve the product and the process based on a review of the actual performance of the development team.

Approaches to Developing WBSs

  • Using guidelines: some organizations, like DOD, provide guidelines for preparing WBSs.
  • The analogy approach: review WBSs of similar projects and tailor to (适用) your project.
  • The top-down approach: start with the largest items of the project and break them down.
  • The bottom-up approach: start with the specific tasks and roll them up.
  • Mind-mapping approach: Mind Mapping is a technique that uses branches radiating out from a core idea to structure thoughts and ideas.

Buffers and Critical Chain

A buffer is additional time to complete task.

Murphy’s law: states that if something can go wrong, it will …

Parkinson’s law: states that work expands to fill the time allowed.

Critical Chain scheduling removes buffers from individual tasks and instead creates:

  • a project buffer or additional time added before the project’s due date
  • feeding buffers or additional time added before tasks on the critical path.

Cost Estimation Tools and Techniques

  • Analogous or top-down estimates: use the actual cost of a previous, similar project as the basis for estimating the cost of the current project. (Use the information from previous, similar projects as a basis for estimation)
  • Bottom-up estimates: involve estimating individual work items or activities and summing them to get a project total
  • Parametric modeling (参数化建模): uses project characteristics (parameters) in a mathematical model to estimate project costs.

Types of Tests

  • Unit testing: tests each individual component to ensure it is as defect-free as possible.
  • Integration testing: occurs between unit and system testing to test functionally grouped components.
  • System testing: test the entire system as one entity.
  • User acceptance testing: is an independent test performed by end users prior to accepting the delivered system.

The 7 Habits of Highly Effective People

  1. Be proactive
  2. Begin with the end in mind
  3. Put first things first
  4. Think win-win
  5. Seek first to understand and then to be understood
  6. Synergize
  7. Sharpen the saw

Tuckman Model of Team Development

  • forming
  • storming
  • norming
  • performing
  • adjourning

Performance Reporting

Performance reporting keeps stakeholders informed about how resources are being used to achieve project objectives.

  • Status reports describe where the project stands at a specific point in time.
  • Progress reports describe what the project team has accomplished during a certain period of time.
  • Forecasts predict future project status and progress based on past information and trends.

Suggestions for Improving Project Communications

  • Develop better communication skills
  • Run effective meetings
  • Use e-mail and other technologies effectively
  • Use templates for project communications